Cross-Government Funds Review
David Lidington Excerpts(6 years, 8 months ago)
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The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)
I wish to update the House on how the Government have reviewed the cross-Government funds in order to better support poverty reduction, as well as global and UK security and prosperity.
The major cross-Government funds supporting our national security strategy are the conflict, stability and security fund (CSSF) and prosperity fund (PF). They are a flexible instrument of Government policy overseas. The funds use part of the UK’s aid budget to support developing economies, fragile states and regions to prevent conflict and to promote the conditions that drive global prosperity.
As part of the national security capability review (NSCR), the national security adviser (NSA) commissioned a review of the cross-Government funds. The review covered the CSSF, the PF and the empowerment fund (EF). The Government are committed to ensuring accountability and transparency in our aid spending and this review forms part of our ongoing work to ensure we are delivering value for taxpayers and results for the world’s poorest. The report on this review provides more detail on the NSCR’s specific recommendations and findings for the funds.
The review found that the CSSF and PF were effective mechanisms for making strategic, co-ordinated, prioritised and integrated use of overseas development assistance (ODA) and non-ODA resources. They drive greater flexibility, broader geographic and thematic reach, and greater diversity in programming than could be achieved through departmental allocations alone.
The review noted that the funds gain greater strategic importance as delivery mechanisms for the National Security Council (NSC) as a result of the UK’s decision to leave the European Union. Redefining Britain’s place in the world will require us to use our diplomatic, development and defence assets to best effect, which the funds can help deliver. The funds are particularly innovative given their secondary benefits: creating opportunities for international business, including UK business, enhancing UK soft power, and reducing domestic threats.
The empowerment fund was set up to improve links with emerging economies, help tackle extremism globally and support good governance. The review found that the EF’s proposed geographic focus overlapped with that of the CSSF and PF. Integrating its aims into the other two funds would improve efficiency, simplify governance and strengthen delivery. Soft power objectives in support of NSC priorities will therefore now be delivered through the CSSF and PF as well as through other departmental funding mechanisms.
As a result of the review, we will enhance the cross-Government funds by improving strategic direction through the new national security doctrine, the fusion doctrine, governance through a new ministerial committee, and efficient administration by merging the secretariats into a single funds unit.
Implementation of the recommendations of the review across the areas of strategic direction, governance and delivery and capability is now fully under way. I have agreed to chair the new ministerial committee that will set the funds’ strategic direction. A new joint funds unit will be launched in April 2018. All these measures will streamline governance and drive greater coherence. More on the recommendations of the review can be found in the accompanying report.
Further updates on the cross-Government funds will be available on funds’ at GOV.UK pages:
https://www.gov.uk/government/publications/conflict-stability-and-security-fund-cssf
https://www.gov.uk/government/publications/cross-government-prosperity-fund-programme.
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Oral Answers to Questions
David Lidington Excerpts(6 years, 8 months ago)
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Kwasi Kwarteng (Spelthorne) (Con)
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)
The Government are unapologetically committed to the constitutional integrity of the United Kingdom. As the Minister responsible for constitutional issues across the Government and as chair of a number of Cabinet Committees, I have regular discussions with Cabinet colleagues about such issues.
Gavin Robinson
I am grateful to the Minister for that reply and for his commitment to our precious Union. He knows that Northern Ireland will achieve a significant milestone on the day after the transition period: its centenary as part of this Union. Will he agree to meet me and some of my colleagues to discuss how best to advance the celebration and recognition of that achievement?
Mr Lidington
I am happy to meet the hon. Gentleman and his colleagues, as I am always happy to talk to the elected representatives of Northern Ireland constituencies here. It is important that we find a way to mark that centenary appropriately and do so in a way that is genuinely inclusive and recognises the sensitivities associated with many centenary anniversaries affecting the island of Ireland that have fallen in recent years.
Kwasi Kwarteng
Given that we are leaving the EU, will my right hon. Friend assure this House that he will do everything he can to preserve the single market of the United Kingdom, which is infinitely more important to many Unionist Members than the single market of the EU?
Mr Lidington
My hon. Friend is right. The United Kingdom’s common market existed well before we joined the European Union, and it will continue to exist after we leave. The living standards of people in England, Scotland, Wales and Northern Ireland alike benefit from the existence and strength of the internal market of the United Kingdom, and the Government will do their utmost to protect and defend it.
Martin Whitfield (East Lothian) (Lab)
Given that the European Union (Withdrawal) Bill places additional and somewhat unwarranted restrictions on Scottish Government Ministers that do not apply to Ministers down here, does the right hon. Gentleman think that that strategy strengthens the Union or puts it at risk?
Mr Lidington
The withdrawal Bill, in providing for the transfer of considerable additional powers from Brussels to the devolved Governments in Scotland and Wales both strengthens devolution and upholds our constitutional settlement.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Does my right hon. Friend share my frustration at the actions and attitude of the SNP Government regarding clause 11 of the withdrawal Bill? While he has been working on an agreement with the devolved Administrations, they have been blocking, frustrating, agitating and doing everything in their power to manufacture a constitutional crisis in our family of nations.
Mr Lidington
One of the virtues that I have sought to cultivate in this job is patience, as well as endurance, so we continue talking to both the Scottish and Welsh Governments, but the allegations of a so-called power grab are completely unmerited.
Ben Lake (Ceredigion) (PC)
Under a previous UK Government, up to 90% of the Welsh fishing quota was sold to foreign firms. This Union now has more than one Government, so what discussions is the Minister having with colleagues in the Welsh Government about the future allocation of the Welsh fishing quota?
Mr Lidington
One of the tasks that faces us, as the United Kingdom, as we leave the European Union is to devise the appropriate fisheries regime that provides a just result for fishing communities in all parts of the UK. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is looking forward to discussing that future with the devolved Administrations and with parliamentarians.
Chris Philp (Croydon South) (Con)
Mr Gary Streeter (South West Devon) (Con)
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Mr David Lidington)
Today we are publishing the Government’s state of the estate report for 2016-17. That report demonstrates the progress that we have made in transforming the use of the estate and in freeing up property receipts of £620 million to be reinvested in supporting local and national services.
Layla Moran (Oxford West and Abingdon) (LD)
Mr Lidington
These matters are always the subject of keen discussion between the business managers of all political parties. I am sure that the hon. Lady will encourage her party’s spokesman to make those representations.
Alex Burghart (Brentwood and Ongar) (Con)
Mr Lidington
Two weeks ago the Prime Minister launched a £90 million programme to help to tackle inequalities in youth unemployment. That is in addition to targeted employment support already under way in 20 areas across the United Kingdom.
Mike Amesbury (Weaver Vale) (Lab)
The Parliamentary Secretary, Cabinet Office (Chloe Smith)
My right hon. Friend and I are both so keen to answer that question that we are vying to do so.
The Conservative party manifesto was quite clear that we shall not be doing that, and it was that manifesto that won the general election.
Dr Wollaston
The victims of the contaminated blood scandal have waited decades for answers. Will my right hon. Friend update the House on progress on the inquiry? Is there any room to revisit the decision to deny victims and their families legal aid in order to prepare adequately for the inquiry?
Mr Lidington
The inquiry launched a consultation on its terms of reference on 2 March. Details are on its website. The deadline for responses is 26 April. Sir Brian Langstaff wants to hear from as many of those who were affected as possible. As with any such inquiry, it is for the inquiry to decide the level of financial support, including for legal representation for the inquiry proceedings. I am very happy to talk to my hon. Friend and other interested colleagues, or for the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Norwich North (Chloe Smith), to do so, about how the terms of reference are being handled. Sir Brian wants this process to be as user-friendly as possible.
Kerry McCarthy (Bristol East) (Lab)
Northern Ireland and the Republic of Ireland: Border Arrangements
David Lidington Excerpts(6 years, 9 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Emily Thornberry (Islington South and Finsbury) (Lab)
(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs—who seems to have run away—to make a statement on future border arrangements between Northern Ireland and the Republic of Ireland following Britain’s exit from the European Union.
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
Mr Speaker, I have been asked to reply.
The Government have been consistent in their commitments to Northern Ireland as the United Kingdom leaves the European Union. First, we will never accept any solutions that threaten the economic or constitutional integrity of the United Kingdom. Secondly, we will not accept a hard border between Northern Ireland and Ireland, which would reverse the considerable progress made through the political process over recent decades. That position has been consistent from the Prime Minister’s article 50 letter through to our position paper published last summer and the Prime Minister’s Florence speech last autumn.
Most recently, the Government enshrined both these commitments very clearly in the joint report we agreed with the European Union in December. That set out very clearly our
“commitment to preserving the integrity of”
our
“internal market and Northern Ireland’s place within it”.
It also included our
“guarantee of avoiding a hard border”
between Northern Ireland and Ireland, including any related checks and controls. These commitments were agreed collectively by the entire Cabinet, and I believe they have wide support across the House. Those commitments have not changed, nor will they.
Emily Thornberry
Thank you, Mr Speaker, for granting this urgent question, and while I am always pleased to hear from the Minister of State, I have to say that it is an absolute disgrace, and a huge discourtesy to the House, that the Foreign Secretary is not here himself to answer questions on the contents of his memo, especially given that we saw him in London a few hours ago jogging in the snow and stopping to answer questions from the media: if he can answer their questions, he really should be prepared to answer ours. What is he afraid of?
Perhaps the Foreign Secretary is afraid that these questions go to the very heart of his credibility and the credibility of previous statements that he has made in this House. On 21 November, from the Dispatch Box, I asked the Foreign Secretary whether he stood by the statement he made in February 2016—that a vote for Brexit would leave the border arrangements in Northern Ireland “absolutely unchanged”. He told the House in response—just three months ago—that he
“repeated exactly the pledge…there can be no return to a hard border…That would be unthinkable, and it would be economic and political madness. I think everybody…understands the ramifications of allowing any such thing to happen.”—[Official Report, 21 November 2017; Vol. 631, c. 848.]
But last night, despite that clear public statement from the Foreign Secretary, we discovered his private memo to the Prime Minister on the same subject. In it he wrote:
“It is wrong to see the task as maintaining ‘no border’”.
The Government’s task is, he said, to
“stop the border becoming significantly harder. ”
But, he wrote:
“Even if a hard border is reintroduced, we would expect to see 95 per cent plus of goods pass the border”
without checks.
Let us be clear what this memo reveals. Contrary to the Foreign Secretary’s previous statements, he accepts that there will have to be changes to the current border arrangements, and he accepts there will need to be border controls that do not exist at present; the only debate is their degree of hardness. Surely the Foreign Secretary has learned by now that you cannot just be a little bit pregnant: either there is a border or there is not.
My first question for the Minister is that the Foreign Secretary told the House that there would be no new border arrangements and no changes to the status quo, but this memo says the exact opposite, so which is the truth: what the Foreign Secretary said three months ago in public or what he said three weeks ago in private?
The Foreign Secretary has already said what we have heard so many times on this issue: that there is some magical technical solution which will allow goods to be checked, smuggling to be prevented, and points of origin proved as easily as paying the congestion charge and without—here is the truly magical part—even the installation of cameras. As I have pressed the Foreign Secretary repeatedly to tell us, how on earth is that possible, or is it just another addition to his ever-growing list of fantasies from ‘Boris island’ to the ‘channel bridge’?
I welcome the fact that the Foreign Secretary has already promised the media today to publish his leaked memo in full, and I hope that will provide some answers, but may I ask the Minister now—for the benefit of the House, and so that my colleagues can question him on his answer—to spell out in detail how this proposed invisible border will actually work in practice? If he cannot provide that detail, we are left with the conclusion that all of us on this side, and increasing numbers on his side, accept—that the only way to avoid a hard border in Northern Ireland is by staying in a customs union. The fact is that the Government know that—
Emily Thornberry
The truth of this memo is that the Government are saying one thing in public while preparing for the reality in private, and it is about time the deception was ended.
Mr Speaker
Order. Forgive me: I do not wish to be discourteous to the shadow Foreign Secretary, and certainly not to the Minister either, but, by the way, the Minister for the Cabinet Office is not a Minister of State; he is a member of the Cabinet.
Mr Speaker
That was a nice try, and it was very generous of me to allow the right hon. Lady to make it. I call the Minister for the Cabinet Office.
Mr Lidington
Anybody would have thought that the right hon. Lady was nervous about facing me across the Dispatch Box again.
The right hon. Lady started by questioning my credentials to be here. Since I have Cabinet responsibility for constitutional affairs, including the implementation of devolution throughout the United Kingdom, and since I also chair the Cabinet Committee on the domestic implementation of our Brexit arrangements, it seems to me to be perfectly reasonable that I should respond to the right hon. Lady’s urgent question.
The right hon. Lady asked about the position of my right hon. Friend the Foreign Secretary. Like every other member of the Cabinet, he stands four-square behind our support for the Belfast agreement and the December agreements reached between the United Kingdom and the European Union. We are now at the very start of a negotiating period during which we will discuss with our partners in the EU how to give practical effect to the commitments that were entered into then, both to ensure there is no hard north-south border between the Northern Ireland and Ireland and to ensure there is no kind of border, customs or otherwise, between Northern Ireland and the rest of the United Kingdom. The Prime Minister and the Taoiseach have both said publicly that they believe the priority is to settle these issues in the context of the ambitious, deep and special partnership that we are seeking between the UK and the EU in the future, and my right hon. Friend the Prime Minister will set out more detail about her proposed approach to this in her speech on Friday.
Mr Kenneth Clarke (Rushcliffe) (Con)
We have just heard the Prime Minister reconfirm her commitment to full regulatory convergence if necessary to keep the Irish border open, but I did not wholly understand the second half of her reply to me. Does my right hon. Friend really believe it will be possible to negotiate a position whereby the British Government decide what regulatory convergence they are going to have, the British Government decide what regulatory convergence they are not going to have, and the British Government are free to change their mind and move those boundaries at any time? What does my right hon. Friend think the prospects are of agreeing that with 27 other sovereign Governments?
Mr Lidington
With respect to my right hon. and learned Friend, I do not think that there is a need for any misunderstanding about what my right hon. Friend the Prime Minister was saying. On the date when we leave the European Union, the treaties will, in the words of article 50, cease to apply to the United Kingdom. The effect of the European Union (Withdrawal) Bill, which is currently before the House of Lords, is that the direct effect and primacy of European Union law in the United Kingdom will be extinguished. We are now seeking an agreement, which will take the form of a treaty governed by international law, between the United Kingdom and the continuing entity of the European Union. That is what we are seeking to do, and the Prime Minister has said that she will talk about that in more detail on Friday.
Stephen Gethins (North East Fife) (SNP)
We know from the Government’s leaked figures that they are prepared to play fast and loose with jobs and the economy in order to try to prevent another Tory civil war, and there is concern that they might do the same thing in relation to the Good Friday peace process to prevent a Tory civil war. Will the Minister tell us whether it is wrong to see the Foreign Secretary’s task as maintaining no border? Will he also tell us what the impact on the border will be if the implementation period is based on World Trade Organisation principles? Finally, it is always good to see the Minister here, but I have to tell him that, although I enjoy a game of “Where’s Wally” as much as the next person, it is frankly astonishing that the Foreign Secretary is not here.
Mr Lidington
The entire Government are committed to there being no border between Northern Ireland and Ireland, or between Northern Ireland and the rest of the United Kingdom. Both those elements were central to the December joint report, and they are both firm commitments of the entire United Kingdom Cabinet and the Government. The hon. Gentleman’s strictures about the Government’s approach to jobs and employment stand somewhat in contrast to the reality, which is that employment is at a record high in the United Kingdom at the moment and unemployment is at a 40-year low.
Mr John Whittingdale (Maldon) (Con)
Has my right hon. Friend seen the report prepared by the European Parliament’s policy department for citizens’ rights and constitutional affairs, which concludes that a technical solution allowing free movement of persons under a common travel arrangement and a low-friction border for the movement of goods will be possible, and that there is no reason why we should not start to implement that straight away?
Mr Lidington
I have not had the pleasure of reading that particular report from the European Parliament yet, but I shall certainly add it to my reading list. What my right hon. Friend has just said is evidence that there are people here, as well as in the Brussels institutions and the 27 national Governments of our EU partners, who are keen to work constructively together to find an outcome that brings benefits to us all.
Hilary Benn (Leeds Central) (Lab)
Instead of complaining that the draft withdrawal agreement published this morning proposes to keep Northern Ireland in the customs union and subject to the single energy market and to EU rules on the environment and agriculture, is it not time that Ministers finally accepted that it is their continuing failure to explain how they are going to keep an open border while leaving the customs union and the single market that is the cause of this problem? When will they explain how they propose to achieve that?
Mr Lidington
I draw the right hon. Gentleman’s attention to the fact that last December’s joint report contains three options to ensure that there will be no hard border between Ireland and Northern Ireland. The first—which the Government of Ireland and this Government are strongly committed to and want to see as the option that we are able to deliver—is the one that settles this matter in the context of the overall future economic partnership between the UK and the European Union. We are looking forward to beginning the negotiating process that I hope will start after the publication today.
Tom Tugendhat (Tonbridge and Malling) (Con)
We are coming up to the 20th anniversary of the Good Friday agreement—an agreement that allowed the people of this nation, wherever they live in these islands, to have their own identity and yet be citizens of the United Kingdom. That agreement also locked in three conditions. The first was that the agreement could change only with the agreement of the citizens of Northern Ireland. The second was that Dublin would have to agree to a change, and the third was that the United Kingdom would have to agree. Does my right hon. Friend agree that that agreement must not be undermined, and that those who voted against it in the past should hang their heads in shame, because it is an agreement that has kept the peace for 20 years?
Mr Lidington
I am certainly proud of what the Belfast agreement has achieved in making possible a period of peace and reconciliation in Northern Ireland. None of us would claim that that process was complete yet, but the Belfast agreement was an historic start that was attributed to the hard work of successive Governments under John Major and Tony Blair. I am happy to pay tribute to both of them for that. The Government are four-square behind the Belfast agreement, and my hon. Friend made an important point in talking about the principle of consent. The principle of consent, including over the constitutional status of Northern Ireland, was also written into the joint report and signed up to not just by the UK Government but by the European Union as well.
Nigel Dodds (Belfast North) (DUP)
I welcome what the Secretary of State has said in his statement and also what the Prime Minister said at Prime Minister’s questions. It is ironic that some of the people who complain the hardest about creating a hard border between Northern Ireland and the Irish Republic have today welcomed proposals from the EU that would actually create a hard border between Northern Ireland and the rest of the United Kingdom. The fact is that there is a border between north and south: a currency border. There are different currencies, different fiscal regimes, different tax regimes and different economic policies, but this is managed in a sensible and pragmatic way. The same can be done in relation to the future relationship. This has already been spelled out in the Government’s paper last August. To use the Belfast agreement—or, more despicably, the peace process—as an excuse either to thwart Brexit or to shape it in the way that some people want is quite frankly outrageous and disgraceful. Let us back the arrangements that are in place, but let us go forward in a pragmatic, sensible way and not create shibboleths that are not there.
Mr Lidington
I welcome what the right hon. Gentleman has said. Yes, there is of course a jurisdictional border that gives rise to tax and other differences, but they are currently managed in a way that allows people to go about their lives on either side of that jurisdictional border without any hindrance or delay whatever. This Government and the Irish Government are determined to try to ensure that that state of affairs continues, while also respecting the constitutional and economic integrity of the United Kingdom.
Damian Green (Ashford) (Con)
Of all the areas of the Brexit negotiations that give rise to high emotion, perhaps the one that most needs to be treated calmly, rationally and unemotionally is the question of the Irish border. Can my right hon. Friend assure me that the UK Government and their negotiators will continue to deal with this issue in that calm, rational way? In doing that, could they perhaps persuade the Commission’s negotiating side to concentrate not just on one area of the December joint report but on all three areas that were originally put forward by the British Government?
Mr Lidington
I agree wholeheartedly with what my right hon. Friend says. His emphasis on all three strands is correct. It is important that there should be no cherry-picking between the different elements of the December joint report, and it is important that we should try to approach these matters in the calm, pragmatic way that he urges.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The Foreign Secretary claimed that congestion charge technology is the answer to border checks outside a customs union. However, he will know that the congestion charge checks vehicles, not what is in them, and that it includes 197 camera sites around London that no one notices, because they are in built-up areas, and that no one cares about because the last time I looked there had been a long history of peace between inner and outer London. In Northern Ireland last year, there were four attacks on the lives of police officers, 58 shooting incidents and 33 bombing incidents, and the Police Service of Northern Ireland has warned that any infrastructure at the border is a threat. Will the Minister for the Cabinet Office confirm that Ministers rule out any physical infrastructure at the border and that cameras are physical? Do they rule out new cameras at the border—yes or no?
Mr Lidington
We stand by the words to which we committed ourselves in December, which include no physical infrastructure at the border.
Anna Soubry (Broxtowe) (Con)
I support everything that has been said by my right hon. Friend and the comments of my right hon. Friend the Member for Ashford (Damian Green). The country has to wake up and realise that we are not going to tear our nation further apart. We need an approach to Brexit that is not only pragmatic but honest. The only solution to a hard border is membership of the customs union and the single market, and we will get there in the end.
Does my right hon. Friend share my concern about a democratic deficit? We know that 56% of people in Northern Ireland voted remain—I wonder why. In the absence of an Executive, and given the composition of the right hon. and hon. Members who sit in this place to represent Northern Ireland, where is the voice of the 56% in all this?
Mr Lidington
It is the Government’s hope that the political parties in Northern Ireland can agree to reconstitute the Executive and the Assembly as soon as possible. I think there is agreement across the political parties in Northern Ireland that that is what they would want to do, and I hope that the remaining differences can be overcome.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Why does the Minister for the Cabinet Office think that the Foreign Secretary wrote this letter? Was it because he did not know that the Government had committed in paragraph 49 of the December agreement to
“its guarantee of avoiding a hard border”
or was it because any commitment can be set aside in the service of the cause that the Foreign Secretary really cares about: the furtherance of his own career? Or was it something more sinister than Boris’s self-love, which is that faced with the incompatibility of red lines around the customs union and the single market and the commitment to no hard border, there is a concerted ideological attack on that commitment and, indeed, on the Good Friday agreement itself?
Mr Lidington
I do not think that I could be clearer than I have been so far. The Government are absolutely resolved to stand by both the Belfast agreement and all parts of the joint report of last December.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I am encouraged that everybody seems to want to avoid a hard border in Northern Ireland. The only people who seem to be threatening such a border are those who are trying to leverage their political advantage in domestic politics in the Republic of Ireland or trying somehow to blackmail the whole of the United Kingdom into substantially reversing the substance of the referendum result. Far more constituencies voted leave than remain, and it would be as politically unsustainable for issues around Northern Ireland to leverage the whole of the United Kingdom back into some kind of customs unions as it would be to erect any wholly unnecessary infrastructure at the border in Northern Ireland.
Mr Lidington
We are at the very start of the negotiations about the detail of the withdrawal agreement and then of the creation of the future deep and special partnership that we are seeking with our European Union friends and neighbours. The depth and comprehensive nature of the economic partnership that we are seeking is something that the Prime Minister will talk about on Friday.
Several hon. Members rose—
Lady Hermon (North Down) (Ind)
What a task—I will keep to it. Will the Minister take a few moments just to confirm to the House that the Irish Government have accepted that there will be no hard border on the island of Ireland and, just as importantly, that they have accepted that there will no border down the Irish sea?
Mr Lidington
The Irish Government, like the rest of the EU, signed up to and support the joint report of last December in its entirety, and paragraph 42 of the report commits both parties—the UK and the EU—to uphold the “totality” of the relationships embodied in and expressed by the Belfast agreement. That totality embraces east-west every bit as much as north-south.
Sir Desmond Swayne (New Forest West) (Con)
What lies behind the European Commission’s partial decision to develop the options?
Mr Lidington
I am afraid that that is not a question that I can readily answer. However, it is important that the Commission recognises, as the Prime Minister said earlier, that as far as the Government are concerned, whichever side those of us around the Cabinet table voted or campaigned for during the EU referendum, our commitment to the Union of the United Kingdom is absolute. There is no division whatsoever on that matter, and I hope that our negotiating partners understand that.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
I understand the clear frustration of the Minister and many Government Members at the Foreign Secretary saying that it is not his task to try to defend the border, but the Foreign Secretary said this morning—after his jog—that he would publish the memo. When?
Sir Christopher Chope (Christchurch) (Con)
I congratulate my right hon. Friend on not being provoked by the ridiculous statements coming from the European Union on this subject. I commend to my right hon. Friend the wise words of the right hon. Member for Belfast North (Nigel Dodds), because they show that we can have a border with regulatory divergence, as there is at the moment. Why can that not continue into the future?
Mr Lidington
We are certainly seeking no hard border and, helpfully, the Government of Ireland are also committed to that objective. Having served six years as Minister for Europe, I am used to trying to resist provocation, wherever it comes from.
Tom Brake (Carshalton and Wallington) (LD)
The Foreign Secretary’s absence tells us all that we need to know about how accountable he feels he should be to this House. I must therefore ask the Minister instead why the Foreign Secretary was speculating about the Northern Ireland-Ireland border becoming “significantly harder”. What measures was he considering that might be necessary on the border?
Mr Lidington
The right hon. Gentleman served in the coalition Government, so he knows that Government business involves Ministers writing and conversing with each other all the time. The Government’s policy is the policy that has been collectively agreed by the Cabinet, and that is what the Prime Minister and I have set out this afternoon.
Antoinette Sandbach (Eddisbury) (Con)
I welcome the Minister’s commitment to the joint report. Will he confirm that it is Her Majesty’s Government’s intention to stick by the agreements that were outlined in paragraphs 49 and 50 of the report and that there is no intention to renege on any part of them?
Joanna Cherry (Edinburgh South West) (SNP)
Will the Minister for the Cabinet Office confirm for the benefit of his Back Benchers, and perhaps the Democratic Unionist party, that the Northern Irish border backstop provision embodied in today’s draft EU withdrawal agreement is exactly what the Prime Minister agreed to as a backstop in December 2017? If he disagrees, will his Government produce an alternative text explaining what she did agree to?
Mr Lidington
What we have today is something that Monsieur Barnier has described as not necessarily the final version, because this is a draft that the Commission is tabling not for negotiation, but for discussion among the EU27 member states and the European Parliament. When the text comes to the table for negotiation, we will obviously consider that option. As the Prime Minister said earlier, it is important that there is not cherry-picking, and that the text of the withdrawal agreement, when it is eventually concluded, reflects all the paragraphs of the joint report equally. My feeling, from the brief reading I have had so far, is that the current draft does not do that.
James Brokenshire (Old Bexley and Sidcup) (Con)
I welcome what my right hon. Friend has said in pointing back to the joint report from just before Christmas, which underlined the commitment of the UK and the EU both to the Belfast Good Friday agreement and to the constitutional settlement of the UK. In that regard, will he confirm that the joint report highlighted that primarily, we need to focus on dealing with the Northern Ireland border through the broader negotiations, and will he encourage colleagues to focus on the August report that the Government published, which set out in detail how we should do that?
Mr Lidington
My right hon. Friend gives some very good advice. We are certainly committed to taking the negotiations forward in that spirit.
Chris Bryant (Rhondda) (Lab)
If the Chancellor of the Duchy of Lancaster really wants a united United Kingdom, as we move forward with some of the most complicated decisions the nation has had to make for the best part of 100 years, is he not going to have to try to build a bigger consensus than just that around the Cabinet table? He is a fine parliamentarian, so does that not mean that he will have to turn round to his colleagues and say, “Yes you will come to Parliament. You will explain to Parliament what your views are,” and that he will have to say, “Yes, Prime Minister, just sometimes you will not make a speech somewhere else; you will make a speech about the European Union—the most important issue facing this country—in this Chamber”?
Mr Speaker
Order. Before the Minister for the Cabinet Office replies, I advise the House of what I have been advised: namely, that the Prime Minister will make a statement on Brexit policy in this Chamber on Monday. That is extremely welcome.
I should just say, in the name of the intelligibility of our proceedings to people who are not Members of the House, that the decision as to whether to grant an urgent question is a matter for me as Speaker—two have been granted today because I judged that they warranted the attention of the House—but, as colleagues also know and others might not, the matter of whom the Government field to respond to a question is a matter for the Government. That is the situation.
Mr Lidington
I always welcome parliamentary consensus where it can be built, but if the hon. Member for Rhondda (Chris Bryant) looks at the Prime Minister’s record of being here, giving statements after her main European meetings and answering questions at length, he should agree that it is a pretty good one.
Mr Laurence Robertson (Tewkesbury) (Con)
Does my right hon. Friend agree that the European Union continues to put the cart before the horse on this aspect? Surely we cannot know with any degree of certainty what arrangements will be needed on the Irish border, if any at all, until we know what kind of trade agreement we are going to strike.
Mr Lidington
My hon. Friend makes an important point. That is precisely why not just the Prime Minister but the Taoiseach believe that by far the best option is to settle the issue of the border in the context of the overall economic partnership between ourselves and the European Union.
Hywel Williams (Arfon) (PC)
By leaving the European Union, we are taking control of our borders, such as that at Holyhead. The Government have also committed to there being no border between the Republic and Northern Ireland. Can the Minister name any pair of countries where trade between them is regulated by two different customs regimes?
Mr Lidington
This is exactly the point that I made in response to my hon. Friend the Member for Tewkesbury (Mr Robertson): the right way forward is to resolve these matters in the context of the broader negotiation about the future economic partnership.
Crispin Blunt (Reigate) (Con)
It is rightly the determination of the Government to deliver the current effectively open border, with the qualifications that were given by the right hon. Member for Belfast North (Nigel Dodds). Surely all the people of the island of Ireland have the right for that same practical determination to be shared by the EU27, without it being taken hostage by conditions that would, in effect, override the sovereign decision of the British people to leave the European Union—an agenda that is rather transparently on display today.
Mr Lidington
As I said, we are at the start of a process of negotiation, not the end of it. I do not think the Prime Minister could have been clearer. No Prime Minister of any party who has served up until now, including my right hon. Friend, would countenance an agreement that led to a customs border between one part of the United Kingdom and another.
David Hanson (Delyn) (Lab)
The Minister has said that he wants there to be no border between Ireland and Northern Ireland. He has also said that he wants there to be no border between the integral part of the United Kingdom in Northern Ireland and the rest of the United Kingdom. Wales, which I represent, has two borders: one with Northern Ireland through the port of Holyhead and one with the Republic of Ireland. What will happen in that situation?
Mr Lidington
That is precisely why this matter needs to be set within the overall arrangements. I am sure that the right hon. Gentleman will have noted the endorsement in the joint report of the continuation of the common travel area between the United Kingdom and the Republic of Ireland, and the fact that that commitment was reflected in today’s draft text from the Commission.
Mr Nigel Evans (Ribble Valley) (Con)
Would it not be more sensible and logical if Michel Barnier focused more on the trade arrangements between the United Kingdom and the European Union, where the EU has a £70 billion surplus with the United Kingdom, rather than on just one part of the United Kingdom? If we only did that, we might obviate the need to focus on one part of the United Kingdom.
Mr Lidington
The trade surplus that the EU27 enjoy with the United Kingdom, particularly in trade in goods, is just one more compelling reason why it is to our mutual advantage to negotiate a future economic partnership that allows trade to be as frictionless as possible.
Tony Lloyd (Rochdale) (Lab)
The Minister is doing his level best to fudge the principal question: if we go into the negotiations with a view that there will be no hard border between the Republic and Northern Ireland and no hard border down the Irish sea, how do we begin to negotiate—what is the mechanism?
Mr Lidington
The mechanism is that which is set out in the joint report and in the Government’s various speeches and publications over the past 12 months, the latest of which the Prime Minister will deliver this Friday.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
I wonder whether my right hon. Friend has pointed out to the Irish Government that the biggest loser if there is not a sensible agreement and tariffs are imposed on Irish goods coming into the United Kingdom will be the Irish economy. There would be huge devastation to the Irish agricultural economy in particular. I wonder whether he has suggested to the Irish Prime Minister the question of whether he is willing to sacrifice the interests of the Irish economy on the high altar of European political integration.
Mr Lidington
The economies of Ireland and the United Kingdom are indeed intertwined, but I reassure my hon. Friend that the Irish Government and the Taoiseach are committed to trying to resolve these matters through option A, as set out in the joint report—namely, through the means of an overall economic agreement between the United Kingdom and the European Union.
Sammy Wilson (East Antrim) (DUP)
Does the Minister share my astonishment at the obsession that the Labour party now has with a hard border between Northern Ireland and the Irish Republic, when for years its leadership supported Sinn Féin-IRA’s campaign of genocide along the border, which led to border posts, Army patrols, watchtowers and closed roads? Does he agree with me that there are clear, practical proposals to avoid a hard physical border and that this pseudo-concern about the border between Northern Ireland and the Irish Republic is more about undermining the referendum result and keeping us in the single market and the customs union and under the jurisdiction of the European Court?
Mr Lidington
The interventions by the official Opposition Front-Bench team throughout this week have been more about political opportunism than about principle. The way forward is to take forward the negotiations that will shortly commence in a calm, pragmatic spirit.
Bob Blackman (Harrow East) (Con)
Given that goods and services are routinely traded across land borders elsewhere in the EU, is it not possible that the political will to achieve the desired outcome is all that is needed? Will my right hon. Friend ensure that we do not sign up to what the EU dictates now but look at the creative solution that has been used elsewhere in EU borders?
Vernon Coaker (Gedling) (Lab)
This House has received assurance after assurance from the Government that there will be no hard border in Ireland, so why did the Foreign Secretary write in his memo that there was the possibility of such a hard border coming about?
Mr Lidington
The policy of the Government is the policy that has been agreed by the Cabinet, set out in our agreement to the joint report last December and expressed in the speeches that the Prime Minister has given throughout the past 12 months.
Richard Graham (Gloucester) (Con)
The European Union approach to sequencing these negotiations means that the Commission at the moment has a mandate to negotiate only the implementation phase, so these issues cannot be dealt with until after the end of March. Does my right hon. Friend agree that during this period the guiding star for us all has to be the fact that the United Kingdom, the Republic of Ireland and the EU are all agreed that there will be no hard or physical border? Does he also agree that this debate is more about the shadow Foreign Secretary’s continued spat with our Foreign Secretary than anything else?
Deidre Brock (Edinburgh North and Leith) (SNP)
From the Foreign Secretary’s comments, it seems that the Government are happy to contemplate a hard border with Ireland, which would be a disaster for Northern Ireland. Is it not now clear that the Government have been negotiating in bad faith with Ireland and the other countries of the EU?
Mr Lidington
I have sometimes felt that the hon. Lady’s party would be happy with a hard border between Scotland and England. I do not want her or anyone in the House to be under any misapprehension about this: the Government are absolutely committed to what they agreed in the joint report. Ever since the referendum, we have made it clear that we are not going to support a hard border on the island of Ireland.
Henry Smith (Crawley) (Con)
Will my right hon. Friend confirm that trade between Northern Ireland and Great Britain is far greater in volume than that between Northern Ireland and the Republic of Ireland, between Northern Ireland and the European Union and between Northern Ireland and the rest of the world?
Mr Lidington
Not only is that true, but trade between Ireland and Great Britain is more important than trade from south to north—between Ireland and Northern Ireland. That reinforces the point that it is in the mutual interests of all parties to agree on an ambitious economic partnership for the future.
Stephen Timms (East Ham) (Lab)
Can the Minister confirm that cameras count as infrastructure? Can he point us to an example anywhere in the world of an international border with no customs union and no border infrastructure? Can he provide one example, from anywhere?
Mr Lidington
The language of the joint report is very clear that associated physical infrastructure is ruled out.
Paul Masterton (East Renfrewshire) (Con)
Does the Minister agree that the success of modern Northern Ireland can be seen in the fact that my friends, whose parents used to dread the school run, can now wave their kids off in the morning with barely a second thought? Will he assure me that all the options considered by the Government will be accompanied by a full security assessment?
Mr Lidington
A proper analysis of security will be undertaken by the appropriate agencies in any and all circumstances where that is required. My hon. Friend is right to say that one of the great achievements of constitutional politics in Northern Ireland over the past 25 years has been to bring about a measure of peace and security, after decades when people lived under the threat of terrorism. We should welcome that and re-dedicate ourselves to making sure that that process continues.
Ian Murray (Edinburgh South) (Lab)
The Secretary of State is in danger of forgetting that he is in the Chamber this afternoon for no other reason than the memo the Foreign Secretary wrote. Will he therefore answer the question from my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) and my hon. Friend the Member for Gedling (Vernon Coaker) and tell us why the Foreign Secretary wrote the memo to the Prime Minister?
Mr Lidington
As I said to the right hon. Member for Carshalton and Wallington (Tom Brake), in any Government, Ministers write letters and memorandums and have conversations from time to time. The policy of the Government under our system is the policy that is agreed collectively by the Cabinet, and the policy of the Cabinet and the Government is what I have set out today.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
May I associate myself with what the Minister has said and with what the Prime Minister said at Prime Minister’s questions about the inconceivable nature of the EU’s proposals to date? Does he agree that the evidence given by the permanent secretary of Her Majesty’s Revenue and Customs to the Public Accounts Committee that a two-tier system, including a trusted trader scheme and derogations for small business, could help to avoid the physical infrastructure that we all want to avoid at the border?
Mr Lidington
Those items were also mentioned in the Government’s position paper that was published last summer about the Irish border. I am not saying that those will necessarily provide a comprehensive solution, but that is evidence of our good will in seeking pragmatic, constructive ways forward.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I am sorry to say this, but the Foreign Secretary’s conduct in this has been deeply disrespectful to this place and deeply irresponsible on such a sensitive issue. Let me ask the Chancellor of the Duchy of Lancaster something very clearly. In that memo, the Foreign Secretary wrote the words
“if a hard border is reintroduced”.
The Chancellor of the Duchy of Lancaster has been clear about what the Cabinet position is and what the Government’s position is. Was the Foreign Secretary wrong to write that—yes or no?
Mr Lidington
When Ministers have private conversations or private correspondence, they engage in all sorts of speculative thinking to test out ideas before they are brought for collective discussion and decision. The Government collectively are accountable to this House for the policies they have adopted. The Government have ruled out both a hard border between Northern Ireland and Ireland and a border in the Irish sea.
Mr Philip Hollobone (Kettering) (Con)
How dare the EU propose the break-up of the United Kingdom into two separate trading zones? Some 61% of my constituents voted to leave, but both leavers and remainers are increasingly angered by the stroppy, petulant and unreasonable approach to these negotiations taken by the EU. Will my right hon. Friend tell the EU that it has not got off to a very good start in these negotiations?
Mr Lidington
What we learned at the end of 2017 was that despite all the predications about the imminent collapse of the negotiating process at that time, with political will, both from London and from our 27 partners and the European Commission, an agreement could be reached. That provides a good basis on which to move further forward now.
Wes Streeting (Ilford North) (Lab)
Sir John Major and Tony Blair warned during the EU referendum campaign that this would be an issue, and I am sorry to say that what the Minister for the Cabinet Office, who is a serious person, has said today at the Dispatch Box is simply implausible. We are not talking about a Back Bencher or the Parliamentary Under-Secretary of State for paper clips; we are talking about the Foreign Secretary, who has a central role at the heart of the Brexit negotiations. He is entertaining, in memos to the Prime Minister, the prospect of a hard border, which the Minister for the Cabinet Office says has been ruled out. So the only question, which he has not answered, is: if what he says is the settled position of the Government, why is the Foreign Secretary setting this out in the memo? If the Foreign Secretary says he is going to publish the memo, when is he going to do it? If the Minister cannot answer those questions, should the Foreign Secretary not have had the guts to come here to answer for himself and clean up his own mess?
Mr Lidington
The Government’s policy is as I have set out. We are now, at the very start of the negotiating process, bringing forward ideas about how we would wish to give practical application to the commitments that we have entered into and developing them internally among the Government. The Prime Minister will say more about that on Friday.
Craig Mackinlay (South Thanet) (Con)
The differences in tax, economic strategy and, indeed, currency have proven to be no hindrance to the free and open land border. I recommend to my right hon. Friend that we give an absolute declaration that the UK will not, under any circumstances, implement a new Northern Ireland-Republic of Ireland border. If the EU requires a new hard border, that is a matter for it and the Republic to decide and implement. We—unilaterally, if necessary—will honour the Belfast agreement and, indeed, strengthen the Union of the UK.
Mr Lidington
My hon. Friend is right to talk about the United Kingdom Government’s resolution, but in fairness we must acknowledge that the Government of Ireland is absolutely committed to trying to make sure that no hard border is created. The Taoiseach and his Government are committed to working with us constructively, as part of the EU27, to find a way forward in the context of a future economic partnership.
Mr Gregory Campbell (East Londonderry) (DUP)
I live closer to the Northern Ireland border than anyone else in this Chamber. On this bogus issue of a hard border, do the Minister and all his Government colleagues, the Irish Government and the EU negotiators understand that any talk about a hard border, even in principle, is irrelevant because it would be totally and utterly impossible to police 310 crossing points? Even if that was tried, everyone locally would know how to circumvent them.
Mr Lidington
I am particularly conscious that in County Londonderry people commute to and from work, businesses supply customers and people travel to and from the doctors across the international jurisdictional border. For people to be able to go about their everyday lives, it is important that we reach the kind of agreement to which our Government and the Irish Government are committed.
Nigel Mills (Amber Valley) (Con)
Will my right hon. Friend define for the House what the Government meant when they said that they would guarantee that there would be no hard border? What would such a hard border involve and what are we guaranteeing will not exist?
Mr Lidington
It is exactly what we said in our commitment to the joint report in December and in the position paper that we published last summer.
Karin Smyth (Bristol South) (Lab)
Last night, the Haulage Permits and Trailer Registration Bill—the first piece of contingency planning—had its Second Reading in the other place. Will the Minister clarify how the Government are going to ensure that there will be no checks on the registration for trucks and trailers between the Republic of Ireland and Northern Ireland? How will that be consistent with the haulage Bill?
Mr Lidington
We believe that that Bill is completely compliant with our commitments under the joint report, but I shall ask the Secretary of State for Transport to write to the hon. Lady with the detail.
Peter Grant (Glenrothes) (SNP)
The Good Friday agreement is an international multi-party agreement that was overwhelming endorsed by referendums on both sides of the Irish border. The decisions to leave the customs union and single market were taken by the Government unilaterally, without being put to any referendum anywhere. Does the Minister accept that it is entirely his Government’s responsibility to bring forward detailed, workable proposals on how his Government’s unilateral red lines can be made compatible with the multilateral agreement? How much longer do we have to wait before we see those proposals in print?
Mr Lidington
We are at the start of a process of negotiation. The hon. Gentleman would not expect this or any other Government to go into detail about their entire negotiating position. I hope that when he hears what my right hon. Friend the Prime Minister says on Friday and when he has the opportunity to question her after her statement next Monday, he will feel reassured.
Oral Answers to Questions
David Lidington Excerpts(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Liz McInnes (Heywood and Middleton) (Lab)
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
The Government stated in their manifesto a commitment to maintaining the voting age at 18. We therefore have no plans to lower the voting age in elections. We continue to believe that the voting age should remain aligned with the age of majority at 18. This is the point at which many other key rights and obligations are acquired and is in line with international comparators.
Lucy Powell
With growing support for votes at 16 on the Government’s own Benches, including from two former Education Secretaries, the right hon. Members for Putney (Justine Greening) and for Loughborough (Nicky Morgan), is not the right honourable George Osborne right when he says that the Government do not have a majority to stop this anymore and might as well get on and embrace it and get the credit?
Mr Lidington
The responsible thing for the Government to do is to stand by not just the policy we stood on in the recent general election but what we believe to be right, and it is right that the age of majority at 18 is the age at which every man and woman in this country acquires the full rights and responsibilities of adult citizenship.
Alex Cunningham
If 16 and 17-year-olds are too childish and irresponsible to vote in local or Westminster elections, should that not also apply to their ability to vote in Conservative leadership elections?
Mr Lidington
We are talking here about electing the Parliament and the Government of the country, and although some 16 and 17-year-olds exercise and demonstrate enormous responsibilities, it is also the case that we make a general protection in our law for 16 and 17-year-olds—for example, through the criminal justice system. That is another way we recognise that 18 is, on average, the right point to make that judgment.
Liz McInnes
Last week, my local authority, Rochdale Borough Council, approved a motion supporting votes at 16 that received cross-party support. When will the Minister drag himself into the 21st century and get in line with the progressive and forward-thinking councillors representing the borough of Rochdale?
Mr Lidington
I am always genuinely interested to hear what is happening in Rochdale Council, but I draw the hon. Lady’s attention to the fact that 26 of our 27 EU partners, as well as Canada, Australia, New Zealand and the United States, all have a voting age that begins at 18. I do not think that those countries can fairly be said to be not in the 21st century.
Mr Gary Streeter (South West Devon) (Con)
May I encourage my right hon. Friend to follow the wise example of the last Labour Government, who, though they were in office for 13 years and made many radical constitutional changes, none the less did not bring forward proposals to reduce the voting age to 16—for very good reasons?
Mr Lidington
My hon. Friend is spot on, and not only that, but the last Labour Government took a deliberate decision to increase from 16 to 18 the age at which somebody could buy cigarettes and knives and use a sunbed.
Anna Soubry (Broxtowe) (Con)
I agree very much with everything my right hon. Friend is saying. Is not the answer to look at all the laws pertaining to the age of majority and actually have laws that make sense? As he identifies, someone is not deemed old enough to use a sunbed at 17; can get married at 16 with their parents’ permission but cannot go out and buy a drink to celebrate; and cannot drive a car until they are 17. The law is all over the place and needs a proper review. Is that not the way forward?
Mr Lidington
My right hon. Friend makes an interesting and valid point. I would add, of course, that we make specific protections in our law in respect of criminal justice and the asylum system, recognising that people under 18 need special protection.
Laura Smith (Crewe and Nantwich) (Lab)
During a debate in 2015, the hon. Member for Norwich North (Chloe Smith), said:
“I am one of those who believes that we should allow voting at 16”.—[Official Report, 17 November 2015; Vol. 602, c. 572.]
Since then, a range of senior Conservatives have outlined their support, including the former Chancellor, who said that the Conservative party risked
“being on the wrong side of history”
if it refused to back the measure. Does the Minister agree with his colleague and will does he support votes at 16?
Mr Lidington
I stand by the manifesto on which I stood in 2017, and, as has been made clear this morning, by the position that the Labour party took for the 13 years during which it was last in government.
Tom Pursglove (Corby) (Con)
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
We are working hard to ensure that United Kingdom producers of steel have the best possible chance of competing for and winning contracts. I believe that the Government’s changes in procurement guidelines make that opportunity greater for UK producers, including those in Corby.
Tom Pursglove
As my right hon. Friend is well aware, we produce brilliant-quality steel tubes in Corby. What positive difference does he believe those public-sector procurement rules are making to our steel industry, and will he join me in promoting the use of British steel at every opportunity?
Mr Lidington
I am happy to join my hon. Friend in his tribute to the steelworkers of Corby, and the steel industry in the United Kingdom more generally. The guidelines that we have introduced mean that purchasing authorities must take account of the wider social and economic benefits that UK producers can bring, so that contracts are not awarded on the basis of cost alone. Moreover, every public authority is now required to incorporate relevant social and economic criteria in all major construction and infrastructure projects.
Nic Dakin (Scunthorpe) (Lab)
When will the Government fulfil their commitment in procurement policy note 11/16 to publish the performance of each Department?
Mr Lidington
I hope that we shall be able to do that later this year. According to the most recent information that I have, Government Departments are committed to following the guidelines, but we are carrying out checks to ensure that that is being followed through to the spirit as well as the letter.
Chris Green (Bolton West) (Con)
Severfield, in Lostock at the heart of my constituency, produces architecturally significant steel structures such as the 2012 Olympic stadium and the ArcelorMittal Orbit sculpture. Will my right hon. Friend do all that he can to ensure that Government procurement buys beautiful, buys British, and buys from Bolton?
Mr Lidington
We want both public and private sector customers to buy British steel whenever possible. The Government have published a pipeline of future public procurement in which steel is needed, so that British producers can plan to bid to take part in the process.
Kerry McCarthy (Bristol East) (Lab)
Chris Davies (Brecon and Radnorshire) (Con)
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
Small businesses are the backbone of our economy and we are committed to supporting them in securing public sector contracts. Our aspiration remains to spend a third of our procurement spend with them by the end of 2022.
Chris Davies
I thank my right hon. Friend for his answer. Does he agree that individual Government Departments have crucial roles to play in promoting the use of small businesses in Government procurement, in order to deliver greater diversity in the firms that are awarded Government contracts?
Mr Lidington
I completely agree. We are working with Departments through the Crown Commercial Service to develop detailed SME action plans Department by Department, with every Department putting in place both a ministerial lead and a senior official with a role to champion small businesses. The figures so far show that more than half of Government Departments have increased the proportion they now spend on SMEs.
Chris Bryant (Rhondda) (Lab)
When we start the major work on this building, which will be a massive multibillion-pound infrastructure project, will the Government ensure that small businesses all around the country get contracts, not just the big corporations?
Mr Lidington
I certainly hope that that will be the case, and I believe our guidelines and approach to different Government Departments will encourage small business to secure those opportunities, but it will also be a matter for the Commons Commission.
Nick Smith (Blaenau Gwent) (Lab)
Nigel Mills (Amber Valley) (Con)
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
I was pleased to be able to announce that Mr Justice Langstaff will serve as chair for the independent inquiry into the infected blood scandal. He is a highly experienced judge who I am confident will conduct a thorough inquiry. Over the coming weeks, he will be talking to those affected to set comprehensive terms of reference, and the Government will provide him with all the support he needs. [Interruption.]
Mr Speaker
Order. There is far too much noise in the Chamber. The Minister’s answer could hardly be heard. Let us hear the voice of Amber Valley. I call Mr Nigel Mills.
Matt Western (Warwick and Leamington) (Lab)
Mr Lidington
Any such death is a tragedy. The Government have established an inter-ministerial group to drive forward our objective of halving rough sleeping by 2022 and eliminating it altogether by 2027. I am playing an active part in that work.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Mr Lidington
I completely understand the importance of Dounreay to the hon. Gentleman’s constituency. The Government’s industrial strategy is all about trying to ensure that every part of the United Kingdom benefits from the new industrial opportunities now open to us, and my right hon. Friend the Business Secretary will be working with the Scottish Government to ensure that it delivers for Caithness and Sutherland.
Mark Pawsey (Rugby) (Con)
Patrick Grady (Glasgow North) (SNP)
Mr Lidington
Work on clause 11 has been going on for a long time, to deliver on our commitment to table amendments during proceedings in the House of Lords—with the agreement of the Scottish and Welsh Governments if humanly possible.
Mr Philip Dunne (Ludlow) (Con)
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I wish my right hon. Friend every success in his forthcoming meeting with the Scottish and Welsh Governments this week. Will he bear in mind that he is being compromising and open, and will he invite them to be the same?
Mr Lidington
My hon. Friend is right to point to the importance of all parts of the United Kingdom working together to deliver an orderly, smooth Brexit. We want to work in partnership with the Scottish and Welsh Governments to deliver a big increase in the powers devolved to their Parliaments and Governments.
Diana Johnson (Kingston upon Hull North) (Lab)
I welcome the Minister’s announcement about the appointment of Sir Brian Langstaff as the judge for the public inquiry into contaminated blood, but will he reassure the House that the inquiry will have a families-first approach, that an outward-facing secretariat will support all those affected, and that meetings will be held around the regions and nations of this country?
Mr Lidington
The hon. Lady will understand that Sir Brian, as the independent chair, will ultimately determine such matters, but I was struck when I met him by his determination both to listen to the views of the families who have been worst affected by the tragedy and to ensure that those views are fully taken into account.
Infected Blood Inquiry
David Lidington Excerpts(6 years, 9 months ago)
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The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
I am announcing today the appointment of Sir Brian Langstaff to head the public inquiry into the infected blood scandal. The inquiry will be established under the 2005 Inquiries Act, with full powers, including the power to compel the production of documents, and to summon witnesses to give evidence on oath.
In relation to the appointment of the chair, the Lord Chief Justice was asked to recommend a judge who, in his view, would be best suited to the task. The Lord Chief Justice recommended Sir Brian Langstaff: a highly respected and hugely experienced High Court judge. I have accepted the Lord Chief Justice’s recommendation.
Sir Brian will be the full-time chair of the inquiry from 1 May following his retirement from the High Court. However, in order that those who have been affected by this tragedy face no further undue delay, he will use the intervening period to conduct a further consultation on the inquiry’s terms of reference.
The infected blood scandal of the 1970s and 1980s was an appalling tragedy that should never have happened. The victims of this tragedy who have endured so much pain and hardship deserve answers. It is crucial that their views are properly reflected in the inquiry’s terms of reference. Sir Brian will want to listen carefully to the voices of those that have suffered before making a recommendation to me on what the scope of the inquiry should be. I will return to Parliament with the final terms of reference as soon as this process has been completed.
The Government will ensure that the inquiry has the resources that it needs to complete its work. The inquiry will, of course, also be independent of the Government.
It is very important that the inquiry can identify why and how this tragedy occurred and provide answers for all the victims who have suffered so terribly, and can identify lessons to be learned so that a tragedy of this scale can never happen again.
[HCWS464]
Cabinet Committees and Implementation Task Forces
David Lidington Excerpts(6 years, 9 months ago)
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The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
Today I am publishing the updated list of Cabinet Committees and Implementation Task Forces (ITFs). The updated list includes several key changes:
Housing taskforce: the ITF will now be chaired by the Prime Minister.
Industrial strategy taskforce; a new ITF has been established to oversee the delivery of the industrial strategy.
Rough sleeping and homelessness reduction taskforce: a new ITF has been established to co-ordinate action to reduce homelessness and halve rough sleeping over the course of the Parliament.
Copies of the associated documents will be placed in the Libraries of both Houses and published on gov.uk.
[HCWS441]
Oral Answers to Questions
David Lidington Excerpts(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ian Mearns (Gateshead) (Lab)
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
I have been asked to reply. Mr right hon. Friend the Prime Minister is in China, building on the existing strong ties between our two countries, and she is accompanied by the largest business delegation that this Government have yet led.
Ian Mearns
A number of Carillion employees and former employees live in my constituency; indeed, the company has an apprenticeship training centre in Gateshead. They all still face an uncertain future. Will the Government act now to prevent similar corporate theft, whereby pirate directors have syphoned off what should have been hundreds of millions of pounds in pension contributions to pay bogus dividends and unearned corporate bonuses to themselves? Exactly what action do the Government propose to take?
Mr Lidington
I completely understand the anxiety that must be affecting the apprentices and their families in the hon. Gentleman’s constituency. He probably heard me say during last week’s debates that the Construction Industry Training Board has taken responsibility for finding alternative employers to enable all those apprentices who were with Carillion to continue and complete their qualifications. It is making good progress in that work, but I shall ensure that the particular concern that he has expressed about Gateshead is brought to its attention.
On the broader question, the House will understand that it would be wrong for me to pre-empt findings by an independent inquiry by the official receiver, but we have already made it clear that we will be publishing proposals later this year to stop directors being able to siphon off pension funds in the way the hon. Gentleman described.
Mr Mark Harper (Forest of Dean) (Con)
Mr Lidington
My right hon. Friend is absolutely correct and I am happy to give him that assurance on behalf of the Government. The sad truth is that, in this country, we face a growing threat of cyber-attacks from states, from serious crime gangs and from hacking groups. We do have a robust national cyber-security strategy to protect critical services, including our democratic processes, and that is underpinned by nearly £2 billion of Government investment.
Emily Thornberry (Islington South and Finsbury) (Lab)
Let me start by welcoming the Minister back to his role deputising for the Prime Minister. The last time he did so was in December 2016, when the Conservative party was 17 points ahead in the polls, and he told the House that the Labour party was “quarrelling like” in the film
“‘Mutiny on the Bounty’ as re-shot by the ‘Carry On’ team.”—[Official Report, 7 December 2016; Vol. 618, c. 208.]
Well, what a difference a year makes.
But I am not going to intrude further on the Government’s public grief, because I genuinely hope that we can reach consensus across this House today on a very important issue. Next Tuesday will be the centenary of women gaining the right to vote in Britain; that was followed later in 1918 by a second right, to stand for Parliament. I am sure that the Minister will agree that we have a long way to go with regard to the second right; after all, I am the only Emily elected since 1918, and he is one of 155 Davids. The women behind me on the Labour Benches represent one quarter of all the women elected in the last 100 years, but it is still not good enough. Will the Minister tell us how we can best increase female representation in this House?
Mr Lidington
May I first thank the right hon. Lady for her words of welcome? Clearly, my previous remarks struck a chord with her, to have been treasured in the way that they have. It is a delight to me to see the right hon. Lady still in her place, when no fewer than 97 members of her Front Bench have either been sacked or have resigned since the Leader of the Opposition took office. I pay credit to her sticking power, although she must sometimes whisper to herself, “Surely, I’m a celebrity. Please get me out of here!”
The point that the right hon. Lady raised is a serious one. I think that all political parties represented here—she is right to seek to make this consensual—want to encourage more women candidates to come forward. I am pleased that the Conservative party, since I was first elected 25 years ago, has made very considerable progress, but I also accept that there is more to be done. I hope that she, for her part, will accept that we have now had two women leaders and Prime Ministers, so the Labour party has a bit of catching up to do.
Emily Thornberry
If the Conservative party is so proud of having a female leader, why are so many of them trying to get rid of her and why has she had to run away to China to get away from them? However, I thank the right hon. Gentleman for that answer and I totally agree with his sentiments. Let me ask him about the first right that I mentioned, a right that millions of women received 100 years ago this week: the basic right to vote. It was originally restricted to women with property over the age of 30. Then 90 years ago, it was extended to all women over 21. Almost 50 years ago, it was extended to all men and women over the age of 18. I ask the right hon. Gentleman a simple question: how many more years do we have to wait until the vote is extended to everyone over 16?
Mr Lidington
The age of 18, rather than 16, is widely recognised as the age at which one becomes an adult and that is when full citizenship rights are attained. Only a handful of countries have a nationwide voting age below 18 and we believe that it is right that the age of majority—18—should continue to be the age at which people become eligible to vote.
Emily Thornberry
The right hon. Gentleman makes international comparisons, but I have to say to him that it was this country and a Labour Government that led the way in Europe and the English-speaking world in reducing the voting age to 18 in 1969. Where we led, others followed, and it will be the same here.
Let me move on to a second question that I would like to ask the right hon. Gentleman. I have listened carefully to his answer, but I did not hear any logical explanation for the different rights that we give to 16-year-olds in this country. At 16, we are free from parental control, we can leave home, we can start a family, we can get married, we can start work, we can pay taxes and we can join the forces, so can he give us a logical explanation of why a 16-year-old should not have the right to vote?
Mr Lidington
I am slightly baffled by the right hon. Lady’s comments when compared with what her party did in office, because it was the last Labour Government who raised the legal age for buying cigarettes to 18, raised the age for sales of knives to 18, raised the age for buying fireworks to 18 and raised the age for using a sunbed to 18. If she wants a lesson in inconsistency, she might like to examine the mirror.
Emily Thornberry
The right hon. Gentleman mentions a range of restrictions that we have until the age of 18, but those are for the most part to do with public health, public safety and the prevention of crime. They are not the same as the basic right to vote on issues that affect your life once you are considered old enough to make other independent decisions about your life, such as leaving school, leaving home and getting married. Let me give him a specific example—[Interruption.]
Emily Thornberry
Thank you very much, Mr Speaker.
I want to give the right hon. Gentleman a specific example to illustrate what I am talking about. According to the Government’s own figures, the number of 16 and 17-year-olds receiving carer’s allowance for looking after disabled relatives at home has risen by more than 50% over the past four years, so last year, over 2,000 16 and 17-year-olds gave up their youth and often their schooling to care for relatives at home. How can it be fair and how can it be logical to expect them to take on that responsibility because of failures of the state and then to deny them a say on how that very state is run?
Mr Lidington
The logic of the right hon. Lady’s argument is that she wishes to lower the age of majority from 18 to 16. She listed a number of areas in which she supported the age at which activity should be allowed to 18, on the grounds that only then could people be expected to have sufficient maturity and responsibility to have those rights. My argument to her is that the age of majority should be set matching both rights and responsibilities. I think that it is perfectly reasonable to say that, from the age of 18, we entrust young men and women to exercise those rights and responsibilities in full. On the final point she made, it is right that sensible local authorities have particular care for the role of young carers. In my experience, local authorities, whichever party runs them, make every effort to do that.
Emily Thornberry
I am genuinely surprised at the Minister’s response. This is what he said two years ago, speaking to the Youth Parliament:
“When the voice and the vote of young people is absent, decisions are taken that affect young people’s lives that they have not always chosen”.
Not for the first time in these exchanges, I have to say that I agree with him—all of us on the Labour Benches agree with him. Why does he no longer agree with himself?
Mr Lidington
If the right hon. Lady had been with me at the Youth Parliament, which was indeed both a memorable and an enjoyable occasion, she would have discovered that a significant number of the young men and women there were actually over the voting age. I fully support the role that the Youth Parliament plays, the role that its members play throughout the country and the role that organisations such as school councils play in getting young people used to the idea of exercising democratic responsibility. That seems to me to be excellent training for the full adult responsibilities they will inherit when they turn 18, and I hope that it will encourage more young people to go out and vote.
Emily Thornberry
The Minister says that he was only talking about 18 year olds, but you were there, Mr Speaker; he was talking to 370 under-18s. These discussions have revealed that there is no logical principled objection to votes at 16. That is why the Welsh and Scottish Governments support it and why every single political party in the House supports it, except, of course, the Conservative party and the Democratic Unionist party—joined, once again, in opposition to change. They are not the coalition of chaos; they are the coalition of cavemen. [Interruption.] Does he not realise—
Emily Thornberry
I was talking about cavemen, Mr Speaker. Why does the Minister not realise the lesson that we women taught his predecessors 100 years ago? When change is right it cannot be resisted forever, and this is a change whose time has come.
Mr Lidington
My advice to the right hon. Lady is to wean herself off the habit of watching old versions of “The Flintstones” on the relevant cartoon channel.
We ought to salute the fact that not just the Youth Parliament but many schools and other youth organisations throughout the country are working hard to get young people used to the idea that, as they grow up, they should take an interest in current affairs and then, when they reach the relevant age, exercise the full rights and responsibilities of an adult by participating in elections and political campaigning, The situation here, with the national voting age at 18, is one that is followed by 26 out of the 27 other members of the EU and by the United States, Canada, New Zealand and Australia. Unless she is going to denounce all of those countries as somehow inadequate by her own particular standards, she ought to grow up and treat this subject with greater seriousness.
Colin Clark (Gordon) (Con)
Mr Lidington
I am very happy to agree with my hon. Friend. We devolved new powers from this House to Holyrood, and it is obviously for the Scottish Government to determine how to use them. It is a matter of great regret, however, that they have chosen to use those powers to break their promises and penalise aspiration in Scotland. In our Budget, we increased the Scottish Government’s spending power by £2 billion, so the SNP has no excuse for hiking the taxes of hard-working people, including public servants, and penalising businesses. The leader of the Scottish nationalists in Westminster used to champion wealth creation and free enterprise. I hope he will ask the First Minister of Scotland to think again.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I welcome the Minister to his place. If the reports are true, he may be auditioning for a new role. I wonder if he is sending a “round robin” letter.
The Minister has previously said that
“the Single Market is essential to this government’s agenda for trade and competitiveness.”
Since BuzzFeed published the leaked Brexit analysis, has the Minister recognised that the single market is essential to jobs and prosperity?
Mr Lidington
When we leave the European Union in March next year, we will, as a matter of legality, leave the single market and the EU customs union. The Prime Minister and the entire Government have also made it clear, in both the Lancaster House speech and the Florence speech, that we are seeking a new partnership with our neighbours in the European Union that will ensure that we continue to have frictionless trade, which is in the interest of not just our people but the people of every one of the 27 other EU countries.
Ian Blackford
I must say that I am surprised at the Minister, because it is not a question of legality. We are going to be in a transitional deal, so we will still be in the single market when we leave the EU.
This is a Government who are in crisis, and an international embarrassment. The Chancellor, the Secretary of State for Scotland, the Scottish Conservatives and the Home Secretary have all supported membership of the single market, but despite that, the Government are still prepared to make everyone poorer. Where is the leadership?
Mr Lidington
The leadership that the right hon. Gentleman wants was set out very clearly at Lancaster House and then again in Florence, and my right hon. Friend the Prime Minister will be making further speeches on these issues in the weeks and months to come. Let me point out to him, however, that the single market that is most important to the people of Scotland is the single market of the United Kingdom, which is worth nearly £50 billion every year to the Scottish economy—four times more than trade with the European Union. It is our deep and special partnership with the EU in the future, not the separatist policies pursued by the Scottish National party, that will help to deliver prosperity to Scotland.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Mr Lidington
My hon. Friend is absolutely right. The Government’s clear ambition and purpose is to ensure that our school system works for every child in every community in this country. Our reforms have already raised school standards. Nearly 2 million more children are attending good and outstanding schools, and since 2011 the attainment gap between disadvantaged pupils and their peers has shrunk by 10% at GCSE and by 10.5% at key stage 2. I know that Education Ministers will be happy to talk to my hon. Friend about their plans to further improve standards in schools.
Mr David Lammy (Tottenham) (Lab)
Mr Lidington
I, like every other Member of this House, have nothing but the most heartfelt sympathy for Reece and his family and friends for the most appalling experience that they have endured and are still living through. The right hon. Gentleman rightly says that there are complex causes of the knife crime we are seeing. I agree that there is no doubt that organised crime is contributing to this, and is exploiting young people; organised criminals try to groom young people and attract them into criminal gangs. The Government will publish later this year a violent crime strategy looking not just at the criminal justice system, but at how we can work effectively with all other agencies to ensure that young people are diverted away from that sort of activity in the first place. But it is also true that those carrying a knife can now expect to end up in jail; we have toughened the sentences. And despite what the right hon. Gentleman said, we have also protected police budgets; a quarter of all police are in London.
Robert Neill (Bromley and Chislehurst) (Con)
Mr Lidington
Either I or my right hon. Friend the Education Secretary will be happy to talk to my hon. Friend. The purpose of the ESFA, formed at the start of this financial year, is to provide a more joined-up approach to funding, covering both schools and colleges and other providers. I note that Bromley has increased both primary and secondary school capacity by more than 6,300 places since 2010, and the ESFA is delivering nine schools in Bromley, but there is clearly more work to be done, and Ministers will gladly talk to my hon. Friend about that.
Daniel Zeichner (Cambridge) (Lab)
Mr Lidington
The facts say that we are the second most popular destination in the world for students and university-sponsored visa applications are up by nearly one fifth since 2010, so I would argue that, contrary to what the hon. Gentleman alleges, we are doing a good job in attracting international students.
Richard Drax (South Dorset) (Con)
Mr Lidington
As my hon. Friend will know, the Chancellor last year set aside very considerable sums of money—more than £20 billion—to finance infrastructure improvements in rail, road and broadband, in order to generate growth around the country and facilitate housing developments; my hon. Friend’s constituency has seen considerable new housing development in recent years. I will ensure that Transport Ministers talk to him about the particular concerns he has expressed.
Alex Cunningham (Stockton North) (Lab)
Mr Lidington
The hon. Gentleman will have to forgive me, but my memory for statements that were given in 1985 is a little bit rusty. That was seven years before even I was first elected to this House. I will look into the point that he has raised and write to him to set out the position.
Iain Stewart (Milton Keynes South) (Con)
Mr Lidington
I join my hon. Friend in congratulating the Open University on securing that lead role in the Institute of Coding, which is an important new initiative to get universities to work closely with business to develop specialist coding skills. The Government are investing £84 million to deliver a comprehensive programme to improve the teaching of the computing curriculum, and we look forward to working closely with the university and the institute.
Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)
Mr Lidington
Obviously I know no more details of the case than those that the hon. Gentleman has just described, but, like many Members, I have immigration casework in my constituency, so I am familiar with the type of problem that he describes. If he would like to write to me after these exchanges to set out the details, I will discuss the matter with my right hon. Friend the Home Secretary, and the relevant Minister will certainly meet him.
Craig Tracey (North Warwickshire) (Con)
Mr Lidington
My hon. Friend raises an important point. I know about the important role that Culdrose plays in the life of Cornwall, but he has highlighted the fact that its work deserves to be in the national spotlight as well. We want and need to build the science, technology, engineering and mathematics skills that we will need in a growing and rapidly changing economy, as we highlighted in the Government’s industrial strategy, and the initiative at Culdrose will contribute to the success of those objectives.
John Mann (Bassetlaw) (Lab)
Mr Lidington
I am not sure whether that was meant as an attack on the right hon. Member for Islington North (Jeremy Corbyn) or the right hon. Member for Islington South and Finsbury (Emily Thornberry), but I can say to the hon. Gentleman that if there is a particular bid that he feels has been unfairly treated, he is welcome to take that up with the new arts Minister, who I know will want to examine the case carefully. In general terms, however, more than half the arts funding in England is awarded to arts activities outside Greater London.
Steve Double (St Austell and Newquay) (Con)
Mr Lidington
My hon. Friend raises a valid point, and it is right that holiday home owners should pay the correct tax. Obviously, individual decisions on whether a property should pay council tax or business rates rests with the Valuation Office Agency, which rightly operates independently of Ministers. However, if a property is available for rent for 140 days or a more a year, it will be subject to business rates. If it does not meet that test, council tax will be due. If an individual provides false information in order to seek business rates relief, that person is liable to summary conviction or a fine or both.
Angela Crawley (Lanark and Hamilton East) (SNP)
Mr Lidington
A Government consultation on this matter is imminent, and I urge the hon. Lady to make her representations to that consultation and also directly to the relevant Minister.
Mary Robinson (Cheadle) (Con)
Following last year’s terrorist attack in Manchester, the Government committed £24 million to the city. With the effects still being felt across the area, including in my constituency, will the Government provide an assurance that they will continue to support Manchester?
Mr Lidington
We will certainly continue to support Manchester right across Government through the various agencies and spending programmes that the Government have available. Manchester demonstrated its resilience and its strong sense of community identity and purpose last year, and they will serve it well both economically and socially in the years to come.
Nigel Dodds (Belfast North) (DUP)
The whole House will warmly welcome the fantastic news that has saved thousands of jobs at Bombardier in Northern Ireland. We should pay tribute to Bombardier’s management, both in Belfast and in Canada, the workforce and the unions, which worked well together, hon. Members on the Democratic Unionist party Bench, including my hon. Friend the Member for Belfast East (Gavin Robinson), and the Government, which rode in strongly to support the company. I urge the Chancellor of the Duchy of Lancaster to get behind improving manufacturing in Northern Ireland, because vital decisions are outstanding. I also gently urge the Government, who always listen very carefully, to get on with it.
Mr Lidington
May I first thank the right hon. Gentleman for his words? Although it is now a few years since I had the opportunity to visit Bombardier in Belfast, I still remember how important that enterprise is for the provision of high-quality, well-paid skilled work both in the city and more widely in Northern Ireland. He is right to say that the Government worked closely with Northern Ireland leaders and politicians. The Prime Minister raised the matter personally more than once with President Trump and with Prime Minister Trudeau, and my right hon. Friend the Business Secretary has also been active on Bombardier’s behalf. We are pleased by the outcome. The right hon. Gentleman can rest assured that the Government will remain a strong supporter of business in Northern Ireland, but the sooner that we can get back to devolved government in Northern Ireland, the easier it will be to ensure that practical benefits flow back to Northern Ireland.
Andrew Jones (Harrogate and Knaresborough) (Con)
A vibrant high street is critical in traditional market towns such as Knaresborough, which has had a market since 1310. In this age of internet shopping, will my right hon. Friend confirm the Government’s support for traditional markets and for policies that will boost our high streets?
Mr Lidington
My hon. Friend is right to speak up on behalf of his constituents, and I know he is a tireless campaigner for Harrogate and Knaresborough. Markets like the one in Knaresborough are part of the local fabric and tradition of towns right across this country. The Government want to help those markets and town centres to prosper in a rapidly changing retail environment. I am sure my right hon. Friend the Communities Secretary will be happy to write to him with further details.
Karen Lee (Lincoln) (Lab)
Lincoln’s walk-in centre will close in a few weeks, despite there being inconsistent and insufficient service provision in place to mitigate the closure. Will the Minister pass on to the Prime Minister my request for her to meet me both to discuss and review that closure?
Mr Lidington
If the hon. Lady would like to provide a bit more detail than she has had the time to set out today, I will ensure that a Minister sees her about this.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Next Wednesday we will be assessing and voting on the local government finance settlement. A group of us from the shire counties are very concerned that there is not enough money for rural counties like ours, where adult social care costs are spiralling out of control. My own county is facing a black hole of £10 million because of adult social care costs. What message should I take back to the leader of my council?
Mr Lidington
One message is that the Government have made an extra £2 billion of funding available to local authorities for social care. Obviously, local authorities are currently deciding whether to use the more flexible precepting powers they have in respect of social care. My hon. Friend met my right hon. Friend the Communities Secretary a few days ago, and I would encourage him to continue talking to the Communities Secretary and other Ministers in the Ministry of Housing, Communities and Local Government about the particular circumstances in Shropshire.
Richard Burden (Birmingham, Northfield) (Lab)
The current edition of The Economist carries an article that says the hostile takeover bid for GKN by Melrose
“casts doubt not only on the survival of GKN, Britain’s third-largest independent aerospace and defence firm, but on much of the rest of the industry, too.”
The right hon. Gentleman knows that, where national security issues are involved, Ministers have the power to intervene to protect the public interest. Will they do so in this case?
Mr Lidington
As I understand it, the bid for GKN is being examined by the relevant independent authorities. Clearly this is also something that the appropriate Ministers in the Ministry of Defence and the Department for Business, Energy and Industrial Strategy will be monitoring very closely. For now, it would be wrong of me to speculate about this case in more detail.
Vicky Ford (Chelmsford) (Con)
My constituency of Chelmsford is a very popular place to live, and this week we have had the very good news that more first-time buyers are getting on the housing ladder than at any time in the past decade. Will my right hon. Friend update us on the Government’s progress on helping people to buy a house?
Mr Lidington
I am pleased to be able to say that the number of first-time buyers is now at the highest level for about 10 years, which is a tribute to the various initiatives that both the Communities Secretary and the Chancellor of the Exchequer have put in place to encourage first-time buyers—the cut in stamp duty, for example, will benefit about 95% of first-time buyers—but we also need to improve housing supply. Constituencies like hers and mine are showing the way to much of the rest of the country on the need to build houses to meet the legitimate demands and expectations of young people who are working incredibly hard and want to get a foot on the housing ladder.
Carillion and Public Sector Outsourcing
David Lidington Excerpts(6 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
Mr Deputy Speaker, I take comfort in the fact that I can at least join the hon. Member for Hemsworth (Jon Trickett) in expressing a wholehearted welcome to you, Sir, on your return to the Chair of the House.
I want to start by addressing the motion and to make it clear that, if the motion passes, the Government will of course comply with the will of the House. The Public Accounts Committee, as the House will know, already possesses powers to require the Government to supply it with papers. Whether or not the motion passes, it is my intention to share with the Public Accounts Committee as much information as I reasonably can that will help it with its inquiries. I hope, too, that in debating the motion hon. Members on both sides will understand that the information cited in the Humble Address is highly commercially sensitive.
I agree that the Public Accounts Committee is a vital mechanism by which Parliament can hold Government to account, but the Government also have an overriding obligation to ensure that information is not placed in the public domain when that would be either improper or give rise to particular risk. There are important considerations not only for Government but for the House to consider about the impact of releasing the documents.
First, we must bear in mind the impact on markets, whether good or ill, of making such documents public. Because the information requested is highly commercially sensitive, if made public it could have damaging impacts not only on market confidence, individual suppliers and the Government’s ability to manage our relationship with those suppliers effectively, but more widely on the jobs of people employed by those companies—constituents of Members on both sides of the House—the delivery of public services and, potentially, the broader economy. We also need to act in a way that is consistent with our legal obligations and mitigate any litigation risks to Government. If the motion is passed, I will undertake to discuss in short order with the Chair of the Public Accounts Committee the best way to make information available to her and her Committee, while ensuring that those genuine risks are minimised.
In his speech, the hon. Member for Hemsworth asked several questions about the Government’s contingency planning ahead of what turned out to be the collapse of Carillion a couple of weeks ago, and he also asked about the role of the Crown representative. To be clear, a new Crown representative was appointed in October last year and started work in November. He was appointed just after the regular quarterly list of named Crown representatives was published. The new list, which will include the name of the new representative, is due to be issued imminently, so the House will then be able to see the name of the new Crown representative to Carillion, along with all the others.
There was a longer-than-usual delay in the decision on the new nominee because, in the wake of Carillion’s first profit warning in July last year, my predecessors rightly took the decision that, rather than a Crown representative who was experienced in finance, they wanted somebody who was experienced in the restructuring of corporations: it was apparent that Carillion would need to undertake some considerable corporate restructuring and refinancing if it was to get its house in order, as it was then confident of doing.
Crown representatives are experienced board-level executives—they are not civil servants—who work on a part-time basis in the Cabinet Office to advise on commercial matters with suppliers and sectors. They help the Government to act as a single customer, but they do not advise suppliers on their finances or future business strategy. In the course of normal events, they do not have access to privileged information. Given the hon. Member for Hemsworth’s remarks, I should make it clear that Crown representatives are not politically appointed. They are contractors assigned to companies where they have knowledge of the sector and where there is no conflict with other concurrent roles that the individual man or woman may have. They have no authority to take procurement decisions.
Gareth Snell
Does the Minister agree that, even if it is within the letter of the law, the perception of people who have donated money to a political party subsequently getting a paid Government position looks bad and undermines the integrity of the work they are trying to do?
Mr Lidington
As I have already said to the House, these are not political appointments so there is no political intervention in them. It is quite right that donations to all political parties are made public. That is what the House has voted for and embodied in legislation, and it makes the situation clear to everybody.
Let me turn to Carillion’s liquidation. Along with all my fellow Ministers and, I believe, the whole House, I recognise that the collapse of Carillion has caused huge anxiety for the people who work for Carillion companies, the people in Carillion pension schemes, the suppliers and subcontractors and, of course, the people who use the public services provided by the company’s workers.
I reiterate the priorities that have animated the Government throughout the process. They have been: first, to make sure that public service delivery continued without interruption, which has been the case, as no public bodies have reported any major service disruptions; secondly, to reassure the workers employed on public service contracts that they will continue to get paid for their work; thirdly, to make sure that the right support is in place for pensioners; and fourthly, to protect taxpayers from an unacceptable bail-out of a public company, the risk of which is rightly borne by the shareholders and the banks that have lent to it.
The situation today is that the official receiver is now effectively running Carillion, and in the course of time his investigations will show exactly how the company ran into trouble. Although Carillion was under some financial pressure from three UK public sector construction projects—two hospitals and a road scheme in Scotland—it is already clear from the company’s statements to the stock market and from information that has become public since the liquidation that the problems it faced lay largely in its overseas construction projects and in the level of financial risk that it took on.
Within days of the first profit warning in July 2017, the Government retained legal and accountancy support and started an intense period of contingency planning. Preparing these plans involved considerable effort by officials from right across Government. The Department of Health and Social Care co-ordinated a similar exercise for NHS bodies, including trusts, and the Ministry of Housing, Communities and Local Government worked with local authorities that had exposure to Carillion. The key aim of all these contingency plans was to ensure that public services were kept running safely and smoothly in any possible scenario. The solution had to be specific to the contract in question, had to be affordable and had to be capable of being executed, if necessary, at short notice.
As a result of that planning, the work covered by the service contracts has continued with minimal disruption: the school meals have been served, the hospitals have been cleaned and the maintenance staff have continued to go about their work. With regard to the construction contracts, some infrastructure work, such as that on the Aberdeen bypass, now continues uninterrupted. Other construction sites where work has paused have been put into a safe state so that work can be resumed quickly. The official receiver is working hard to resume work on these sites at the earliest possible date. This work requires customers to find new project management firms that can oversee the completion of their projects.
John Spellar (Warley) (Lab)
I thank the Minister for giving way and for the information that he is providing to Members of Parliament. The Midland Metropolitan Hospital has a site management in place and a series of contractors. Given that those contractors are now locked out of the site, they will be going off to undertake other work, so increasing costs will have to be borne. There will also be disruption to the work from the delay on an already delayed hospital, which has nothing to do with the workforce.
Mr Lidington
The right hon. Gentleman makes a perfectly serious and reasonable point. It is crucial that we do all we can within our power to minimise the impact of delay on the public sector construction contracts, and to retain the knowledge held by the Carillion staff employed on those contracts who, in most cases, are undertaking a project management role, managing the work of a number of different subcontractors. In particular, the development of our future hospitals must continue. This is something that the Minister of State, Department of Health and Social Care, my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), is working on day by day.
Mr Lidington
May I come to discussing the particular hospital that the right hon. Gentleman cited?
We are working with the official receiver to ensure that Carillion construction staff working on the Royal Liverpool Hospital, the Midland Metropolitan Hospital and the Southmead Hospital in Bristol continue to be paid. This allows for a more orderly timeframe for the discussions to take place between the private finance initiative contractor and the lenders to ensure that new contractors can replace Carillion and that the work can resume at the earliest possible date.
I say to the right hon. Gentleman that we know that we have a lot of work still to do. We have, for example, to find alternative suppliers both for those hospital contracts and for other contracts, but I regard the hospital contracts as a particular priority. The exact structure of those contracts and the extent to which they are nearing completion obviously varies depending on which hospital contract one looks at. The precise solution will differ from Liverpool to Bristol to the west midlands. I assure him that we regard getting on with that job as a very high priority indeed.
Liz Twist (Blaydon) (Lab)
The Minister is talking about health contracts. Some years ago, I was involved in negotiating one of those contracts with Carillion at South Tees Hospital. As I understand it, those contracts have now been transferred and sold to Serco by Carillion. Serco has seen its own profit warnings raised. What steps will he take to ensure that we do not find ourselves in a similar position in future? These are staff providing vital health services that are an integral part of the hospital, and it is really important that we take preventive steps.
Mr Lidington
It is the statutory responsibility of the official receiver to ensure that contracts previously held by Carillion are transferred as quickly and in as orderly a fashion as possible to alternative contractors. In respect of the public service contracts, the Government are ensuring that payments are made for the continued delivery of those services while that process continues. It would be irresponsible of a Minister to be drawn into speculating about the situation of any named company, but I just say that the company that the hon. Lady mentioned has not issued any profit warnings. I am sure that the official receiver will be going about his job in a responsible fashion.
There have been questions, not least from the hon. Member for Hemsworth, as to why we continued to award contracts to Carillion even after the first profit warning on 10 July last year. It is important to put it on the record again how Government procurement works. When Government advertise opportunities, bidders go through a formal process, which may involve negotiations, and then submit a bid. These bids are looked at on a basis of equality between competing bidders. They are scored formally for quality and price against a published set of evaluation criteria, and the contract is then awarded to the highest-scoring bid. It would be a major legal risk for the Government, having published criteria, then to seek to exclude any bidder from a contracting process on the basis of other, somewhat arbitrary, criteria.
Chris Stephens
I thank the Minister for explaining the process. Given the concerns raised by the shadow Minister, will he confirm that there is no testing of whether a company is engaging, or has engaged, in the practice of blacklisting?
Mr Lidington
The issue of blacklisting is itself a matter of debate internationally about how the various criteria for blacklists are being drawn up. We have a set of criteria that are published in respect of each and every bid that is submitted for a contract being let out to the private sector.
Several hon. Members rose—
Mr Lidington
Carillion announced that it had won eight public sector contracts after its first profits warning in July last year. Three of those, for facilities management for defence establishments, were awarded before the profit warning, but Carillion chose to make the announcement some weeks later. Two out of the remaining five were awarded by HS2 Ltd. Those contracts were awarded to a joint venture including Eiffage—a major French construction firm—and Keir, as well as Carillion. The three companies bid together as a consortium, and as a result all shared responsibility for completing the work. After the profit warning, we asked the board of each of the partners for written assurances that if one partner failed, the other partners had a contractual obligation to pick up the work. Those assurances were given. Since the announcement of Carillion’s liquidation, both Eiffage and Keir have confirmed that the contracts will continue uninterrupted, and the former Carillion employees working on the contracts have been offered jobs with one of those other partners.
Several hon. Members rose—
Mr Lidington
As a further assurance following the announcements of the profit warning, external due diligence was commissioned by HS2 Ltd. This revealed that at the time of award in July last year, Carillion did have the financial capacity to continue with its part of the contract. HS2 let the two contracts to the joint venture because it was confident that the joint venture arrangements were robust, as has proved to be the case.
Rachel Maclean (Redditch) (Con)
The Minister is outlining very coherently the rigorous process that has to be gone through to deliver quality public services on behalf of the taxpayer. Does he recall that it was a Conservative Government who introduced the Public Services (Social Value) Act 2012, which required Ministers to look at a wide range of factors and also to think about social, environmental and economic benefits for consumers and the taxpayer?
Mr Lidington
My hon. Friend is exactly right. The tests we routinely apply take account of quality, not just cost, in assessing bids. I am sure there will be lessons that we want to examine, particularly as we learn about what happened to Carillion from the official receiver. It is interesting, as my hon. Friend points out, that it was a Conservative-led Government who put in place arrangements that had not been so made during the 13 years of a Labour Administration.
Several hon. Members rose—
Mr Lidington
The remaining three announcements concerned contracts with Network Rail. These were not new awards or new contracts, but variations to contracts that had been let three years earlier—in 2014. Two were for electrification work and, in a similar construct to the HS2 work, were let to a joint venture between Carillion and an electrification specialist, SPL Powerlines. One contract variation, for civil work in connection with the London to Corby upgrade, was let directly to Carillion. That is the only public sector contract, post the July 2017 profits warning, that was neither a joint venture nor something already decided and awarded before the profits warning was issued. Network Rail judged in this case—
Mr Kevan Jones (North Durham) (Lab)
On a point of order, Madam Deputy Speaker. I am aware that it is up to the Minister whether he gives way, but would it not be courteous to the House if he actually indicated that he was not going to take any interventions, because he just seems to be reading his speech—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. That is not a point of order, and I am not going to spend any time on it because a lot of people want to speak. There is no more courteous a Minister in this place than this Minister.
Mr Lidington
I am grateful to you, Madam Deputy Speaker. I have given way a number of times already, and I want to make some progress. I certainly intend to give way again, but I am conscious that we have finite time available for the debate, and the time taken up by taking interventions is speaking time taken away from Back Benchers.
Network Rail judged in this case that Carillion was best placed to do the work, because it had been engaged on the project for three years already and had completed all the design work successfully. By agreement with the official receiver, former Carillion employees and suppliers continue to work on these rail projects, and today they are progressing as planned.
Since the liquidation on 15 January, the Government have responded promptly and appropriately, supporting the official receiver to manage the liquidation. We have also made funds available to allow an orderly wind-down of the company’s affairs. It is worth my explaining that this company was in such trouble that it could not even fund its own administration. If the Government had not stepped in and agreed to cover the costs of the official receiver, there would have been a real threat to public services in schools, hospitals and prisons. Staff would not have come to work last Monday, as they would not have been paid.
Nick Smith (Blaenau Gwent) (Lab)
I thank the Minister for giving way—at last. In his letter today, he refers to an investigation into the conduct of Carillion’s directors. Is the chair of Carillion, Philip Green, still an adviser to the Government on corporate responsibility?
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Minister mentioned that the Government are funding the cost of the liquidation. What is the Government’s estimate of that cost?
Mr Lidington
It is not possible to give an estimate because that will be a net figure that has to take into account both the willingness of joint venture partners to step forward and take over the projects in which they were involved—that seems to have been the case—and the speed at which the official receiver is able to find alternative contractors, or in-house contractors in certain cases, to take on the provision of particular public services. Our overall estimate can be only quite an uncertain estimate at this stage, but we are confident that it will in any case be very significantly less than if we had had to cope with the costs of an unplanned, unmanaged liquidation, had the Government not stepped forward and agreed to pay for the official receiver’s administrative and legal costs. Because of the funding we have provided, we have kept those public services running, and that has also provided a breathing space for private sector customers such as the Nationwide building society to continue receiving services while they decide how to react to the crisis.
Mr Jim Cunningham (Coventry South) (Lab)
The partners are going to take over the work, but who will fund it—the partners or the official receiver?
Mr Lidington
I am not sure whether the hon. Gentleman is referring to the partners involved in the special managers at PwC or to Carillion board members.
Mr Cunningham
I am referring to Carillion’s partners who were involved. They have an undertaking to take over the work, but who will pay the costs?
Mr Lidington
Administrative costs fell to the official receiver in the short term. With the HS2 contracts, for example, there was an obligation on the partners to step forward and meet the Carillion’s obligations at the cost that they, collectively as a consortium, had negotiated and agreed with the Government. That contract was with the consortium as an entity. I hope that answers the hon. Gentleman’s question.
Nationwide building society has since offered jobs to 250 Carillion employees and contracts to the subcontractors that employ a further 1,500 people. In total, more than 90% of Carillion’s private sector facilities management service customers have indicated that they will provide funding through the official receiver to maintain interim services while new suppliers can be identified to deliver them, ensuring the retention and employment of staff on those contracts.
Eleanor Smith (Wolverhampton South West) (Lab)
TUPE does not apply when a company goes insolvent, but given the way in which Carillion collapsed, should not the Government make an exception and allow TUPE to apply to private sector employees?
Mr Lidington
PwC, as the special managers working with the official receiver, is looking at such cases to see whether it can offer arrangements whereby workers are no worse off than they were under the terms of their Carillion employment. The hon. Lady and I met yesterday to talk about the constituency concerns that she and other parliamentary colleagues have about the Wolverhampton headquarters. The alternative of a chaotic, unmanaged collapse and liquidation of Carillion would have been far more difficult for the workers concerned, because the liquidator in those circumstances would have had a statutory obligation to terminate all contracts and lay off all workers straight away, not to continue with the provision of public services. That would have been more costly not only for the individuals involved but, obviously, for the public purse.
I welcome the initiative taken last week by the Construction Industry Training Board to help the 1,400 apprentices employed by Carillion. Those apprenticeships were primarily in bricklaying, carpentry and joinery—skills that the country vitally needs to build homes and solve our national housing shortage. To date, the CITB has matched 400 of those apprentices with new employers, and it continues to assess the large number of industry offers it has received to find placements for the remaining Carillion apprentices.
Unfortunately, there will be some redundancies as a result of this company failure. That is why Jobcentre Plus mobilised its rapid response service, and it stands ready to support any employee, at any stage, who is affected by this announcement. I am aware, too, that a significant number of small and medium-sized businesses—either suppliers to or subcontractors of Carillion—will be affected by this collapse because Carillion owed them money. We are doing what we can to keep continuity on service contracts for those companies, and as I said earlier, we are having some success, particularly on the facilities management side.
In addition, we are looking to restart work on construction sites at the earliest safe moment. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, with the assistance of my the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), who has responsibility for small business, has personally led efforts to do what we can to mitigate the risks to subcontractors and suppliers through a taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation on the sector through practical measures that will help SMEs and employees alike. My right hon. Friend has met the banks, and I join him in welcoming their undertakings to take special measures to help those affected, including overdraft extensions, payment holidays and fee waivers.
Sir Geoffrey Clifton-Brown
My right hon. Friend said in his letter to all colleagues that the Government was providing £1 billion-worth of funding to small and medium-sized enterprises, which is a useful start to keep some of them in business. Can he give any indication how that £1 billion is likely to be distributed?
Mr Lidington
The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), may be able to say more when he responds to the debate, but that help will involve things such as credit facilities and loans to enable those companies to trade their way through this period of difficulty, particularly until there is greater certainty about what happens to the contracts on which they were engaged.
Kirsty Blackman (Aberdeen North) (SNP)
I understand that some subcontracts have not been automatically rescinded as result of the process that is under way, so organisations such as county councils and so on cannot provide a new contract. I would appreciate it if the Minister looked into that.
Mr Lidington
If the hon. Lady writes to me with details, I will ensure that she receives a response from the appropriate Department. When I spoke to the Insolvency Service and PwC yesterday evening, they were able to say that some companies in the Carillion group appeared to be solvent. Those companies will still be able to continue trading, and that may be the case with the contracts that were brought to her notice.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Minister explain the advice he would give to SMEs subcontracted by Carillion in cases where Carillion services have been brought in-house to a local authority and where invoices have been unpaid? Should they apply to the official receiver for payment?
Mr Lidington
The practical advice I would give is to go to the website operated by special managers on behalf of the official receiver. There are links for the various categories of people affected, so those SMEs should follow the one for suppliers or subcontractors for advice and frequently asked questions. If they have specific concerns there is an email link to make direct contact with the special managers. That is the best way forward, because every case is slightly different.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I hesitate to interrupt the Minister, but there has been some consternation about the taking of interventions. The Minister has been quite generous in doing so. Twenty people wish to speak in the debate. There is an hour and 31 and a half minutes left. Members will also wish to hear the winding-up speeches. Some people have been sitting patiently in the Chamber all afternoon. The prospective limit on speeches at the moment is three minutes, but it is likely to go down, and some people will not have an opportunity to speak at all, so let us allow the Minister to say what he has to say.
Mr Lidington
Thank you, Madam Deputy Speaker. I will try to make progress.
Her Majesty’s Revenue and Customs will provide practical advice and guidance to those affected through its Business Payment Support Service. That may include help such as agreeing instalment arrangements, suspending any debt collection proceedings and reducing payments on account.
I should say a brief word about the concerns of members of Carillion’s defined-benefit pension schemes who, understandably, are seriously worried at this time. Existing pensioners will continue to receive their pensions at agreed levels, but the significant funding deficit in Carillion funds will mean that some future pensioners will see their pensions reduced. At present, seven Carillon schemes, covering 6,000 members, have moved to the Pension Protection Fund assessment period, which occurs automatically when a sponsoring employer becomes insolvent. The remaining 21,000 members are in schemes that have at least one sponsor not in insolvency and are therefore not in the PPF. When a scheme moves into the PPF, the worst-case scenario is that the fund ensures that all pensions in payment continue to be paid at 100% of their value, and people who have benefits in such schemes for the future will receive those benefits at 90%, at least, of their expected value, subject to an overall ceiling on the amount that any individual can receive from a pension.
The Prime Minister restated on Sunday that the Government will shortly consult on tough new rules to tackle the behaviour of executives who try to line their own pockets by putting their workers’ pensions at risk—behaviour that she rightly labelled
“an unacceptable abuse that we will end”.
The official receiver has also taken immediate action to stop severance and bonus payments to former Carillion directors.
My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service and the official receiver asking that their statutory investigation into the conduct of Carillion’s directors is fast-tracked and extended in scope to include previous directors. He has also asked the Financial Reporting Council to conduct an investigation into the preparation of Carillion’s accounts past and present as well as the conduct of the company’s auditors. I can assure the House that no payments have been made to board directors or the former directors who had severance agreements since the date of liquidation. Directors with such severance agreements became unsecured creditors from the moment of liquidation.
Finally, in his opening remarks the hon. Member for Hemsworth touched—probably more than touched—on the overall questions about the outsourcing policy of this and other Governments. It is worth pointing out that outsourcing, whether in construction or the provision of services, is something that successive Governments—Labour, coalition or Conservative—have been doing since the 1990s. The services provided to the public sector by private companies include IT, back-office services, facilities management and other business services, such as running call centres. In many cases, those services have now been delivered by private sector companies for 10 or 20 years, and many have built up specialist expertise, skilled staff and investment to deliver public sector contracts.
This is a matter not just of cost, but of quality and innovation. If we look at a project such as Crossrail—the largest infrastructure project in Europe—that railway will open on time and on budget later this year. To deliver that project on time and within budget, Network Rail and Transport for London work with a huge range of private sector companies—including Costain, BAM Nuttall, Balfour Beatty, Morgan Sindall and others—and use their specialist expertise, which is something, frankly, that civil servants are not trained to have.
I could list a long catalogue of examples of such successful use of private sector companies to deliver capital investment into our hospitals, schools and transport infrastructure and successfully to deliver the provision of public services in all aspects of the public sector. What I found to be such a pity about the hon. Gentleman’s contribution was that he resorted to ideology, instead of looking at the people—our constituents—who actually use the services and who benefit from the better value for money and innovative quality that private sector contractors are able to bring, and have brought successfully, to that work.
Not only that, but in an enchanting display, the hon. Gentleman disavowed his party’s entire history of 13 years in government. Let us not forget that the majority of outsourcing in the NHS took place under the Labour Governments between 1997 and 2010, as part of an initiative that was championed, in particular, by the current Mayor of Greater Manchester.
Let us look at what the Labour party has said since it left office. The shadow Communities and Local Government Secretary praised Carillion as an example of “good public procurement practice”, and the shadow Foreign Secretary praised it for offering apprenticeships to her constituents. The shadow Housing Secretary has said that PFI helps to deliver better and more cost-effective public services, and the shadow International Trade Secretary described it as
“a staggering investment in the future of…children and…excellence”.—[Official Report, 15 November 2002; Vol. 394, c. 308.]
The shadow Northern Ireland Secretary said PFI provided “good value for money”. [Hon. Members: “When?”] It is very interesting that Labour Members feel they have to conform with the new dear leadership that the hon. Member for Hemsworth wanted to celebrate, but they should have the courage of the convictions they expressed when in office and since about the value of a proper constructive partnership between the public and private sectors in the interests of the constituents we are sent here to represent.
The shadow Health Secretary says that NHS experts accept that only a “handful” of PFI contracts are causing hospital trusts a significant problem. Labour council leaders in Manchester, Birmingham and Hounslow have praised public-private partnerships for delivering growth and urban regeneration in their areas. For all the denunciations of Carillion, one third of the contracts that the state sector still had with it at the time of its liquidation were awarded by the Labour Governments of the early 2000s—Labour Governments in which the hon. Member for Hemsworth served as Gordon Brown’s right-hand man in No. 10 when that outsourcing work was at its zenith.
The Government are committed to ensuring that the public sector continues to benefit from the best of private sector innovation and skills. We do not put ideology first; we put the service user and the citizen first. That is the policy that the Government are committed to and which we intend to continue.
Carillion
David Lidington Excerpts(6 years, 10 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
On Monday 15 January 2018 I notified the House of the steps taken by the Government in regards to the compulsory liquidation of Carillion plc.
Throughout this unfolding situation the Government have prioritised the continued delivery of public services. Taxpayers should not, and will not, bail out a private sector company for private sector losses or allow rewards for failure.
The failure of this company has understandably caused concern for many people over their jobs, their pensions and their local services. The court has appointed an official receiver from the Insolvency Service who has taken control of the delivery of public services contracts and we are supporting them to do so. We will support the official receiver to provide these services until a suitable alternative is found, either through another contractor or through in-house provision.
I would like to provide further reassurance that all employees working on public services should continue to turn up to work, as they have been doing since the announcement of the liquidation, confident in the knowledge that they will be paid for the work they are providing.
In order to safeguard our public services, we have been implementing contingency plans that have been developed since July 2017. Since I last updated the House, there has been no significant disruption to service delivery in schools, hospitals, prisons, defence and other public services as staff have continued to provide services. We have been engaging with all devolved Administrations with exposure to Carillion to ensure that robust contingency plans are being implemented.
A number of Carillion’s joint venture partners such as Kier, Eiffage, Balfour Beatty, KBR, Amey and Galliford Try have committed to stepping into the respective public sector contracts to ensure continuity of these vital services. Public sector construction sites have been secured and construction will begin following the appointment of a new contractor. I would like to express my thanks to all those who have worked hard to ensure the continuity of public services.
Over 90% of Carillion’s private sector facilities management service customers have indicated that they will provide funding for the official receiver to maintain interim services while new suppliers can be identified to deliver these, ensuring the retention and employment of staff on these contracts. In addition, we are making sure the usual level of support from Government to affected employees is available from Jobcentre Plus, the Department for Business, Energy and Industrial Strategy, the Pension Protection Fund (PPF), HMRC and also dedicated websites from the Insolvency Service.
At present, seven Carillon pensions schemes, covering 6,000 members, have moved to the pensions protection fund assessment period, this occurs automatically when all the sponsoring employers become insolvent. The remaining 21,000 members are in schemes which have at least one sponsor not in insolvency, and are therefore not in the Pension Protection Fund (PPF).
Where pensions have moved into the PPF, the PPF is making sure current pensioners continue to receive their pensions at 100% of their usual rate, and are assessing the eligibility of Carillion’s pension schemes to enter the PPF to protect current employees’ future pensions. We have also set up a special additional helpline with the Pensions Advisory Service for members of Carillion’s pension schemes (0800 7561012). We have responded to over 500 calls to the Pensions Advisory Service line since it opened last week.
The Construction Industry Training Board (CITB) has worked with the Education and Skills Funding Agency to ensure funding is available to support former Carillion apprentices. Over 1,400 apprentices have been contacted and the CITB is offering every former Carillion apprentice a face-to-face session with CITB Apprenticeships to find out their individual learning needs. To date, the CITB have matched 400 Carillion apprentices to new employers, and they continue to assess the industry offers they have received to find placements for the remaining Carillion apprentices.
HMRC will provide practical advice and guidance to affected businesses in Carillion’s supply chain through its business payment support service (BPSS). The BPSS connects businesses with HMRC staff who can offer practical help and advice on a wide range of tax problems, providing a fast and sympathetic route to agreeing the best way forward and addressing immediate concerns with practical solutions. HMRC has also offered to provide affected families with cash support through the tax credit system and has published details on how to contact them to arrange.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark), the Economic Secretary to the Treasury (John Glen) and the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths) met with several banks on 17 January 2018 to seek assurances that they will support small businesses affected by Carillion’s liquidation. Lenders are contacting customers and, where appropriate, are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short-term issues can be helped to stay on track. Three lenders have made a fund of £225 million available to support small businesses exposed to Carillion’s liquidation. Furthermore, the Secretary of State for Business, Energy and Industrial Strategy has set up a taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation on construction firms, particularly SMEs and those working in the sector. He chaired the first meeting of the taskforce on 18 January 2018 and will be holding a further series of meetings with stakeholders in the coming weeks.
The official receiver has also taken immediate action to stop severance and bonus payments to former directors. The Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service and the official receiver asking that the statutory investigation into the conduct of Carillion’s directors is fast-tracked and extended in scope to include previous directors. He has also asked the Financial Reporting Council to conduct an investigation into the preparation of Carillion’s accounts past and present, as well as the company’s auditors.
Officials in my Department have been in touch with various Members’ offices last week following their queries through the dedicated helplines we set up. I shall be holding drop-in sessions for Members to meet with Cabinet Office Ministers and relevant officials to answer any further queries. Alongside ministerial colleagues, I will keep the House updated on this ongoing situation.
[HCWS422]
Carillion
David Lidington Excerpts(6 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
With permission, Mr Speaker, I wish to make a statement to update the House on the situation relating to Carillion Plc.
Today the directors of Carillion concluded that the company is insolvent and that it is going into liquidation. The court has appointed the official receiver as the liquidator. It is regrettable that Carillion has not been able to find suitable financing options with its lenders, and I am disappointed that the company has become insolvent as a result. It is, however, the failure of a private sector company and it is the company’s shareholders and lenders who will bear the brunt of the losses; taxpayers should not, and will not, bail out a private sector company for private sector losses or allow rewards for failure.
I fully understand that both members of the public and particularly employees of companies in the Carillion group will have concerns at this time, and the Government are doing everything possible to minimise any impact on employees. Let me be clear that all employees should continue to turn up to work confident in the knowledge that they will be paid for the public services they are providing. Additionally, in order to support staff—and in this instance this will apply to staff working for the private sector as well as for the public sector contracts of the Carillion group—we have established a helpline using Jobcentre Plus through its rapid response service.
The Government are also doing everything they can to minimise the impact on subcontractors and suppliers who, like employees, will continue to be paid through the official receiver. The action we have taken is designed to keep vital public services running, rather than to provide a bail-out on the failure of a commercial company. The role of the Government is to plan and prepare for the continuing delivery of public services that are dependent on these contracts, and that is what we have done.
The cause of Carillion’s financial difficulties is, for the most part, connected not with its Government contracts, but with other parts of its business. Private sector contracts account for more than 60% of the company’s revenue, and the vast majority of the problems the company has encountered come from these contracts rather than the public sector.
Our top priority is to safeguard the continuity of public services, and we have emphasised that to the official receiver. We are also laying a departmental minute today notifying the House of a contingent liability incurred by my Department in indemnifying the official receiver for his administrative and legal costs. The official receiver will now take over the running of services for a period following the insolvency of the company. The Government will support the official receiver to provide these public services until a suitable alternative is found, either through another contractor or through in-house provision. The court appointment of the official receiver will allow us to protect the uninterrupted delivery of public services—something that would not have been possible under a normal liquidation process.
The official receiver is also under a statutory duty to investigate the cause of failure of any company. He is under a duty to report any potential misconduct of the directors to my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy. My right hon. Friend has asked that the investigation look not only at the conduct of the directors at the point of the company’s insolvency but also at that of any previous directors, to determine whether their actions might have caused detriment to the company’s creditors. That includes detriment to any employees who are owed money. The investigation will also consider whether any action by directors has caused detriment to the pension schemes.
Carillion delivered a range of public services across a number of sectors, including health, education, justice, defence and transport, and in most cases the contracts have been running successfully. We have been monitoring Carillion closely since its first profit warning in July 2017, and since then we have planned extensively in case the current situation should arise. We have robust and deliverable contingency plans in place. These are being implemented immediately to minimise any disruption and to protect the integrity of public service delivery. Other public bodies have been preparing contingency plans for the contracts for which they are responsible. The majority of the small number of contracts awarded after the company’s July profit warning were joint ventures, in which the other companies are now contractually bound to take on Carillion’s share of the work. For example, the Kier group, one of the joint venture partners for HS2, confirmed this morning in a release to the stock exchange that it had now put in place its contingency plans for such an eventuality.
I recognise that this is also a difficult time for pension holders. The Pensions Advisory Service has set up a dedicated helpline number for staff and pensioners who have concerns about their pensions. Those who are already receiving their pensions will continue to receive payment from the various pension funds, including the Pension Protection Fund. For those people who have started an apprenticeship programme with Carillion, the Construction Industry Training Board has set up a taskforce to assist apprentices to seek new employment, while also working with the Education and Skills Funding Agency to find new training placements. The official receiver will be in contact with all apprentices. Companies and individuals in the supply chain working on public sector contracts have been asked to operate as usual. Normally, in the event of a company going into liquidation, the smaller firms working for it move across to the new contractor when it takes on the work.
The private sector plays an important and necessary role in delivering Government services—something recognised by this and previous Governments of all political parties. Currently, 700 private finance initiative and private finance 2 contracts reflecting capital investment of up to approximately £60 billion are being delivered successfully, and we also have a number of service provision contracts being delivered successfully by a range of companies. Such contracts allow us to leverage the expertise of specialist providers and to deliver value for money for taxpayers. I would like to reassure the House that we are doing all we can to ensure the continuity of the public services provided by Carillion and to support an orderly liquidation of the company.
I shall write to all right hon. and hon. Members today to summarise the situation and to inform colleagues of a helpline for the use of Members and their staff to provide answers in the fastest possible time to any constituency problems that may arise. Along with other ministerial colleagues, I shall keep the House updated on developments as the official receiver starts to go about his work. I commend this statement to the House.
Jon Trickett (Hemsworth) (Lab)
I thank the Minister for an advance copy of the statement. The House will conclude that it was recklessly complacent for the Government to seek to avoid responsibility and to place it on to the company. After all, Carillion provides 450 separate taxpayer-funded contracts to the public, with 20,000 people working directly for it and many thousands more in the supply chain. All those thousands of people will have heard his reference to Jobcentre Plus with a shudder of fear for their futures at the beginning of a new year.
Will the Minister confirm that Carillion provides services to this Conservative Government in 50 prisons, 9,000 schools, 200 operating theatres and 11,000 hospital beds, as well as across a whole series of infrastructure works? Two fifths of Carillion’s income is paid by the taxpayer, so when did the Government first realise that Carillion was in trouble? After all, it had three chief executive officers in a short space of time, made three separate profit warnings and its stock was already subject to short selling on the stock exchange back in 2015. The Minister says that the Government were monitoring the company, so why did they leave the position of the Crown representative observing Carillion vacant for more than three months? How can they explain that £2 billion-worth of Government contracts—taxpayers’ money—was awarded despite all the information that has clearly been in the public domain? I have been asking questions about Carillion in this House for over three months. Why was it apparent to everyone except the Government that Carillion was in trouble? The Secretary of State for Transport in particular has questions to answer. Can the House be told what the Government knew about Carillion’s financial health when they awarded a £1.4 billion contract for HS2 quite recently?
The Minister has failed to satisfy the House that the jobs of Carillion’s employees and all those in the supply chain will be safeguarded. Will he confirm that the pay, conditions and jobs of those staff are the Government’s priority? Why has he apparently not had a single conversation with representatives of the workforce about their jobs and pensions? Those people should be a higher priority than the executives’ bonuses, which appear to have been safeguarded. Will he assure the House that Carillion is not the first in a series of suppliers that will fall one after the other like dominoes?
The Government have announced that public money will be given, presumably to the liquidator, to carry out vital public service contracts, but does that not mean that decisions about those contracts have now slipped out of the Government’s control and into the hands of an unaccountable administrator? Would not the simplest, most effective and most democratic way to handle all the contracts have been to bring them back into the public sector, where the ethos of serving the public prevails, rather than that of private profit? Is it not the case that the Government themselves and the Conservative party have too cosy a relationship with the chair of Carillion’s board who—believe it or not—is the Government’s chosen corporate responsibility tsar? He also urged people to vote Tory during the 2015 election. It is a chumocracy.
Is it not time that we reversed the presumption in favour of outsourcing once and for all? After all, this is not about the failure of a single company, but of a whole ideological system of contracting out public services. The Government are incompetent in office, reckless with taxpayers’ money and helpless with public services. Is it not time that they made way for an Administration that care, and will exercise due diligence?
Mr Lidington
First, may I correct the hon. Gentleman on one specific point about schools? He said that 9,000 schools have contracts with Carillion, but the figure I have is about 230—219 plus a small number of building contracts—which is much smaller than the exaggerated figure that he gave the House.
As I said in my statement, 60%—roughly three fifths—of Carillion’s revenues are actually from contracts that have nothing to do with the United Kingdom Government. Indeed, the problems that Carillion faced arose in the most part from those contracts, not from Government contracts.
The position of private sector employees is that they will not be getting the same protection that we are offering to public sector employees beyond a 48-hour period of grace, during which the Government will sustain the official receiver to give time for the private sector counter-parties to Carillion to decide whether they want to accept termination of those contracts or to pay for the ongoing costs. That is a reasonable gesture towards private sector employees.
As for those who have been employed by the Carillion group to deliver public service contracts, the Government are continuing to pay their wages for the services delivered —those payments are being made through the official receiver, instead of through Carillion. That money, of course, is budgeted for by various Departments, local authorities and NHS trusts. The best help that one can give to employees delivering vital public services is to give them the assurance that we are continuing to pay their wages and salaries, and not to indulge in the sort of scaremongering to which I am afraid the hon. Gentleman is prone.
The private sector employees are entitled to know that assistance will be there from Jobcentre Plus after the 48-hour period of grace runs out, when a number of them may face termination of the Carillion contracts through which they have been employed.
The hon. Gentleman asked about the contracts that were awarded after the first profits warning in 2017. As I said earlier, there was a small number of those contracts. The defence contracts were actually agreed and signed before the profits warning, although they were announced afterwards. The Government, quite rightly, have to operate a fair and transparent procurement process, guided by the Public Contracts Regulations 2015. There are a number of tests of financial capability for potential contractors. At the time when all those post-July 2017 contracts were bid for and awarded, Carillion met all the mandated tests, so it would have been, to put it mildly, a legal risk to have treated Carillion any differently from other bidders that were able to meet the tests.
In the light of what was in the public domain about Carillion’s profits warning, the Government Departments responsible for the contracts ensured that there were arrangements, such as the joint venture provision, to give protection in the event of Carillion being unsuccessful in its attempts, about which it was confident, to secure an agreement with its bankers. I emphasise that no money is paid to Carillion, or to any other contractor, other than for services that are actually delivered, so there is no question of money being spent twice for the same service.
I am disappointed that the hon. Gentleman resorted to party politics in his response. It is worth reminding ourselves of who awarded Carillion its contracts. Of the Carillion contracts that, until this morning, were still active, roughly a third were awarded by the Conservative Government, roughly a third were awarded by the coalition Government when the right hon. Member for Twickenham (Sir Vince Cable) was Secretary of State for Business, Innovation and Skills, and the other third were awarded by the Labour Government, during which time the hon. Member for Hemsworth (Jon Trickett), as he knows, worked in the office of the then Prime Minister.
When the hon. Gentleman returns to this subject, I suggest he treats it with the seriousness it deserves and does not preach sermons without taking a long, hard look in the mirror.
Nicky Morgan (Loughborough) (Con)
First, let me pay tribute to my right hon. Friend’s calm and workmanlike approach in working through all the contracts and liabilities, which is absolutely the responsible thing to do. I note what he says about the financial capabilities, awarding and the public procurement rules, and I am sure there are many questions to be asked about that and about future arrangements. However, may I just ask him about the small and medium-sized enterprises in the supply chain? Many companies supply Carillion contractors and are in contracts, and they will be concerned about meeting liabilities, perhaps to Her Majesty’s Revenue and Customs or to others. Has he or his Department had discussions with HMRC about things such as time to pay arrangements, so that SMEs are given time, rather than being under pressure to keep paying the taxman?
Mr Lidington
I am grateful to my right hon. Friend for that. Let me make two points in response to her. First, the Government, through the official receiver, are continuing to make provision for payments both to suppliers and subcontractors. If any subcontractor experiences any difficulties, I encourage them to talk in the first place to the Insolvency Service. This is exactly the sort of risk that led us to decide to set up a hotline for Members of Parliament and their staff, so that if anything does seem to be going wrong, Ministers can be alerted to it rapidly. May I also say to her that HMRC and the Treasury have been fully in the loop at all stages of these discussions, but I will make sure the point she has just made to the House is reinforced when I chair a meeting of interested Ministers later today?
Tommy Sheppard (Edinburgh East) (SNP)
I thank the Minister for advance sight of his statement. Obviously, our immediate thoughts are with the workers involved and their families—those affected by this announcement directly and the many thousands more who are indirectly affected. I am aware that the Scottish Government are working with the liquidator to try to work on contingency plans, and I seek an assurance from him that he will assist the Scottish Government in those endeavours. I also want to know what assurances he will give that UK-funded projects in Scotland will continue in light of Carillion’s collapse. What assurances can he give to the workers involved that their jobs will be safe?
Since July last year, the Scottish Government have been setting about trying to manage the risk involved in these contracts, and we have to ask: given that since last July the UK Government have awarded more than £2 billion-worth of contracts to this company, despite it having had three profit warnings, what due diligence has been undertaken by UK Ministers? Is it incompetence or ideology that has led Ministers to sign off multi-million contracts to a company that was on the verge of going bust? It was not the employees or the communities that depend on these contracts that awarded the contracts, so it is for the Government to intervene and pick up the pieces when something like this happens. In recent years, we have had similar things happen in Scotland—we had Tata steel in Motherwell, BiFab engineering in Fife and others—and the Scottish Government worked night and day to save those jobs, and they succeeded. I would welcome a similar commitment from the UK Government to make that effort to try to protect these jobs.
In conclusion, many thousands of people are today worried about whether they will have a job next week and, if they do, who will be paying their wages and will their pension will be protected, so it is important that assurances are given that safeguards will be in place. There will be some joint venture projects, where other companies can take over the contract, and there may be some projects that can be easily transferred to another company. But there will also be some projects where the only solution will be to take the jobs and the project in-house and for them to be directly managed by the Government or their agencies. I seek an assurance from the Minister that where those circumstances pertain, that is what the Government will do in order to safeguard jobs and their services, which these contracts provide.
Mr Lidington
The hon. Gentleman spoke to this issue with the seriousness it deserved and in a constructive fashion. I can give him two assurances. The first is that the Government are certainly going to continue to pay the wages—salaries, as well as those of suppliers and subcontractors—in respect of UK Government contracts in Scotland, in the same fashion as occurs anywhere else in the UK. Secondly, as I think I said in my statement, the Government will be in discussions with the official receiver about the future provision of those services. I believe we will end up with a situation in which some are transferred to an alternative external contractor but others are taken in house by a Department or other agency of government.
On contact with the Scottish Government, we have had regular and constructive communications with them throughout the period in which the UK Government have been monitoring Carillion. Our priority has been to maintain public and essential services in every part of the UK, whether those are the responsibility of UK Government Departments or of devolved bodies. This morning, my right hon. Friend the Secretary of State for Scotland spoke to Keith Brown MSP, the Scottish Government Cabinet Secretary for the Economy, and assured him of the UK Government’s determination to support the Scottish Government in responding to the concerns of pension stakeholders, employees and contractors in Scotland, as well as those everywhere else in the UK.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my right hon. Friend for his swift and urgent action on this issue. I urge him to pay no attention whatsoever to the politicking coming from the Opposition Benches, because it was of course Labour Members who, when in government, drove the process of private sector involvement hard. They did so for a very good reason: they said that it brought expertise that does not exist in the public sector to the running of these kinds of contracts.
Nevertheless, as we look into these matters—I am sure there will be a review—we should bear in mind two elements that when I was a Minister it always struck me were missing in the public sector. The first is direct contract management on a very regular basis, the lack of which was often the reason why some of these contracts drifted. That needs to be looked at very specifically. Secondly, the Government—probably the Cabinet Office—might want to think about having some kind of capability to review regularly the situation for companies that are engaged in large public contracts, to see what their status is on a wider basis.
Mr Lidington
I am grateful to my right hon. Friend for his suggestions. I note that the Chair of the Public Administration and Constitutional Affairs Committee, my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), said today that his Committee is going to launch an inquiry into Government procurement. My right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) makes some important points about the need to have a look at how successive Governments have conducted the procurement process. I hope he will understand if I say that today, and in the immediate future, my wish is for Ministers and officials to focus above everything else on the continuity of the provision of public services and on doing all that we can to give help and reassurance to employees, subcontractors, suppliers and pension holders. There will be an occasion to return to some of the broader questions posed by my right hon. Friend.
Eleanor Smith (Wolverhampton South West) (Lab)
This morning, the 400 employees who work in the Carillion headquarters in my constituency in Wolverhampton, along with many others, woke up to the news that Carillion had gone into liquidation. It probably felt like a bomb had hit them. The Minister says that the Government are going to give them support, but what type of support will that be? It is absolutely not enough to say that people can ring the jobcentre. What other futures are there for those employees? I seek an urgent meeting with the Minister to discuss this issue, because the headquarters are in my constituency. Will the Government commit to investigating why contracts continued to be handed to Carillion despite the company’s known difficulties?
Mr Lidington
On the hon. Lady’s last point, I responded at quite some length to similar points made by her Front-Bench colleague, the hon. Member for Hemsworth (Jon Trickett). The Government are, as I have said more than once in these exchanges, not only offering advice but paying the wages and salaries of people who are involved in the delivery of public services, until such time as the official receiver has found an alternative provider, whether in the public or private sector. I am happy for either I or another Minister in my Department to meet the hon. Lady to talk about her particular constituency concerns.
Sir William Cash (Stone) (Con)
On the HS2 aspect of this—my hon. Friend the Member for Stafford (Jeremy Lefroy) joins me in this question because HS2 carves straight through our constituencies—will my right hon. Friend make publicly available the assessment of the Government and HS2 Ltd of the impact of Carillion’s collapse and the viability of the HS2 project itself and the substituted contracts and subcontracts, and also the effect that he believes it will have on my constituents and the constituents of my hon. Friend?
Mr Lidington
I can certainly well understand the importance of this issue to my hon. Friend’s constituents and those of many other hon. and right hon. Members. The answer in respect of the particular contract that was awarded last year is that the two other private sector parties are now bound contractually to take over the responsibilities previously allotted to Carillion and to do so for exactly the same price as was set for the three-party consortium in the first place. I will refer his broader points about HS2 to my right hon. Friend the Secretary of State for Transport who I am sure will be in touch with him.
Emma Reynolds (Wolverhampton North East) (Lab)
While 20,000 people across the UK, including 400 employees in Wolverhampton at Carillion’s headquarters, are now at risk of losing their jobs, it seems that the senior management of Carillion have changed the rules so that they can keep hold of their exorbitant bonuses. Does the right hon. Gentleman think that that is fair, and if he does not, what will the Government do about it?
Mr Lidington
I can certainly well understand and appreciate that sense of unfairness on the part of the hon. Lady’s constituents. It would be wrong for me from the Dispatch Box to pre-empt the inquiry that the official receiver will carry out into the conduct of both present and previous members of the board of directors, but I can say that the official receiver has the power not only to investigate, but to impose severe penalties if he finds that misconduct has taken place.
Dame Cheryl Gillan (Chesham and Amersham) (Con)
The whole House will be concerned for the employees who are facing an uncertain future, and I preface my remarks by showing my concern as well. On 17 July, I brought the Secretary of State for Transport to this House at 10 o’clock at night to answer the questions that I raised about HS2 contractors and the unacceptable risks to the taxpayer, and that included Carillion. Unfortunately, those words seem to have come true. While my right hon. Friend is looking at the assessment of the effect on the constituency of my hon. Friend the Member for Stone (Sir William Cash), will he also look at the other failures of HS2, management and Government? Would not he and his constituents, as well as my constituents and, perhaps, Mr Speaker, some of yours, feel that now is the time to cancel this ill-fated, poorly run project?
Mr Lidington
My right hon. Friend speaks, as always, both eloquently and forcefully on behalf not only of her constituents, but of very large numbers of people in the constituencies along the HS2 route. As I said in my response to my hon. Friend the Member for Stone (Sir William Cash), the particular HS2 contract that is at issue today will be covered by the joint venture arrangement. In that sense, Carillion’s liquidation today will not make a difference to the cost of delivering those particular services to the HS2 project.
Rachel Reeves (Leeds West) (Lab)
When Carillion collapsed at the weekend, it had debts of £900 million and a pension deficit of £600 million and yet, year after year after year, Carillion paid out dividends to its shareholders. Although the chief executive was jettisoned after the profits warning last July, he is still being paid a salary in excess of £600,000 a year until this coming October. Will the Government confirm that those payments to the former chief executive will stop as of today, and will the right hon. Gentleman agree that it is about time that we reformed our corporate governance laws so that companies cannot siphon off money to the detriment of suppliers, workers and, ultimately, the British taxpayer?
Mr Lidington
As I also said in response to the hon. Member for Wolverhampton North East (Emma Reynolds), I completely understand the concerns that pension contributors and existing pensioners will have. As I said earlier, the official receiver will consider potential detriment to the interests of pension contributors and pensioners as well as to employees of the company, and may seek to impose penalties. In addition, the Pensions Regulator has the powers to recover payments made to executives or others in the company if there is evidence that they have abused their responsibilities.
Sir Desmond Swayne (New Forest West) (Con)
Is my right hon. Friend confident that we are capable of recognising when companies are bidding too aggressively?
Mr Lidington
As I said in response to my right hon. Friend the Member for Chingford and Wood Green, when the initial situation has stabilised there will be a need to take a fresh look at how the Government go about the contracting process. We will certainly wish to take into account the point that my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) makes.
Mr Speaker
Order. I am sure that the people of Woodford Green would prefer to be known as the residents of Woodford Green rather than of Wood Green, and it may be that the residents of Wood Green would rather be known to reside in Wood Green than in Woodford Green.
Mr Lidington
I will look in more detail into that particular case and write to the right hon. Gentleman. The principle will be that one will need to find willing suppliers to take over the role of Carillion in a PFI, but on the basis of the information that I have been given today, no PFI faces an immediate crisis as a result of the liquidation.
James Duddridge (Rochford and Southend East) (Con)
Southend constituents and those in broader Essex will be worrying about how the situation affects their public services. Will my right hon. Friend consider publishing a list—a spreadsheet—of all the contracts and all the affected constituencies and use that as a basis for updating the House on progress on individual projects as mitigation takes place?
Mr Lidington
We are seeking to analyse the spread of Carillion contracts so that we know which Members of Parliament are particularly affected. Some contracts, of course, are specific to a particular location while others provide a service across a much greater swathe of the country. What I can say is that so far today the reports from different Government Departments and agencies, whether one looks at schools, hospitals or other public sector providers, are that workers seem to be responding and services are being delivered as usual. I hope very much that that situation continues.
Stella Creasy (Walthamstow) (Lab/Co-op)
The accounts show that in the last four years, on the PFI contracts alone, Carillion was part of deals that have made nearly £1 billion in profit directly from the public purse.
It is now clear that the notion, which all Governments have dealt with, that PFI is a good way to transfer risk to the private sector is a myth. Will the Government finally bring in a windfall tax to claw back the money so desperately needed for our public services from these companies? Or is it simply that they broke it but we will always end up fixing it?
Mr Lidington
The hon. Lady risks ignoring the £60 billion of capital investment that it has been possible to use to modernise and improve public services, and that would not have been available had this Government and their predecessors not used the PFI and PF2 approaches. The events of the past 24 hours have demonstrated that for private contractors this is not an easy ticket to riches; there are very real risks associated with taking on a contract. In this case it is—and rightly so—Carillion’s shareholders and creditors who are suffering very substantial losses as a consequence of the financial difficulties into which the company has fallen.
Stephen Crabb (Preseli Pembrokeshire) (Con)
Does my right hon. Friend agree that sad occasions such as this demonstrate the importance of the strength and resilience of our model of pension protection? They also serve to underline the real importance of not allowing individual directors who might have put at risk employees’ pensions to walk away from their responsibilities. Will he assure the House that the investigation by the Pensions Regulator will be full and thorough?
Mr Lidington
My right hon. Friend makes a very good point. Obviously, the Pensions Regulator acts independently, but I am sure that both the Pensions Regulator and the trustees of the individual pension schemes will respond appropriately to what has happened. In addition, as I said earlier, the official receiver can take account of detriment to pensioners and pension contributors as part of his analysis.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Secretary of State has said that staff should continue to turn up to work and that they will continue to be paid, but he has also said that he is setting up a helpline at Jobcentre Plus. What assurance can he give the staff—I am thinking particularly of the 400 staff in the Wolverhampton headquarters, as well as staff around the country—that they should continue to turn up, when they face the prospect of that Jobcentre helpline? Also, can he say anything more about investigations into the company’s changes in corporate governance in 2016, which appear to make the clawback of future bonuses more difficult?
Mr Lidington
On the second point that the right hon. Gentleman makes, the issue is covered by the scope of the advice that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has given to the official receiver about how his inquiry into the conduct of existing and previous directors might develop.
On the right hon. Gentleman’s first point, the situation for all employees of Carillion group companies is that for the next 48 hours—even for private sector employees, rather than those who are providing public services—there is that certainty that they can continue to turn up to work. After 48 hours, either the private sector counterparty must agree to fund future provision, including the fees of the official receiver, or those private sector contracts of Carillion’s will be terminated. It is those people whom the helpline from Jobcentre Plus is particularly intended to help.
The Government will, as I said in my statement, continue for the time being to fund wages, salaries and payments to contractors and suppliers where that is necessary for the provision of key public services. That is to give the official receiver the time to arrange, in an orderly fashion, the transfer of service provision, either to a new contractor or to an in-house provider within Government.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Minister has offered reassurance in respect of joint venture partnerships with giants such as KBR and Kier Group, but what assessment has he made of arrangements such as CarillionAmey, which provides services to 50,000 MOD households—the homes of our brave men and women who serve in the armed forces?
Mr Lidington
The Ministry of Defence has been very closely involved in all the cross-Whitehall discussions about our contingency plans. The assessment by the Ministry of Defence is that that contingency planning means that the collapse of Carillion will have minimal impact on service personnel and their families. The facilities management contracts, which provide services to service personnel and their families, and which involved Carillion, are all through joint ventures. The other parties to those joint ventures are now contractually required to deliver all the requirements.
Chris Elmore (Ogmore) (Lab)
Will the Chancellor of the Duchy of Lancaster confirm that by Government contracts he also means those within local government and the NHS? Contracts and running public services are not just about central Government.
Mrs Anne Main (St Albans) (Con)
I am very pleased that the Minister has mentioned apprentices, but the nature of apprentices is that they are young and they are training as well as working. I am concerned that many young people cannot bear the burden of not receiving any money, despite the low remuneration they get as part of the training process, and that it will not be easy midway between training schemes to find another appropriate training scheme for those young people to dovetail into. May I ask that special consideration is given to that particularly unique set of circumstances of being partly trained and having to find somewhere else to go?
Mr Lidington
My hon. Friend makes an important point. I can well understand why apprentices would be worried at the moment. Carillion has 11 training centres across England, with about 1,200 apprentices who are also Carillion employees and who are mostly 16 to 18-year-olds. The Construction Industry Training Board has now agreed to become the training provider for those apprentices, and it will assist apprentices accordingly in finding new employment as rapidly as possible.
Catherine West (Hornsey and Wood Green) (Lab)
There are 1,200 16 to 18-year-old apprentices. May I suggest that the statement that the CITB is going to call together a taskforce does not match the urgency with which Members across the House have raised the issue of these young people, and the crucial question of their future in construction, which we desperately need to fix in advance of the Brexit debate?
Mr Lidington
The 1,200 apprentices obviously needed to be found both a training provider and an employer, and Carillion had been performing both those roles. The CITB has now stepped in and taken up the role of the training provider for all those young men and women. I assure the hon. Lady that the CITB is going to be extremely active—and will be pressed by Ministers to be very active—in ensuring that it reaches out to employers and finds spaces for those young men and women as rapidly as possible.
Mr Philip Dunne (Ludlow) (Con)
This is a very serious day, with a most significant and unfortunate corporate collapse. I urge my right hon. Friend to give as much reassurance as he can to constituents such as mine, working in the Carillion headquarters in Wolverhampton, that there will be a continuing role for them under the administrator while a more permanent solution is put in place. I thank him, his colleagues and officials in the Department for their work in putting this statement together in order to reassure public sector providers of service within Carillion and its subcontractors that they will continue to provide service to the NHS hospitals in particular. Will he ensure that those construction projects where Carillion remains a prime contractor—I am particularly thinking about the NHS hospitals in Birmingham and Liverpool—will not suffer significant delays and that arrangements are put in place rapidly to maintain those contracts?
Mr Lidington
I am grateful to my hon. Friend for his comments. The Department of Health is looking at each of the different hospital construction contracts. Obviously, the way forward depends very much on the exact legal structure of those different contracts and on the stage that they have reached. For example, the chief executive of the Royal Liverpool and Broadgreen University Hospitals NHS Trust said earlier today that he saw no problem with moving forward to the completion of the new hospital construction work in Liverpool. The west midlands projects to which my hon. Friend refers are at a much earlier stage of development. However, I assure him that Health Ministers have this matter very much in their sights and I am sure that they will be in touch with him.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Despite the Minister’s comments, I remain deeply concerned about the future of the new Royal Liverpool University Hospital. When will the new arrangements be made and when will the hospital be completed? The people of Liverpool must not pay the price for Carillion’s failure.
Mr Lidington
I agree with the hon. Lady’s final sentence. I refer her to the very strong words of reassurance from the chief executive of her hospital trust that things are in train to deliver the new hospital within the time that he was forecasting.
Peter Aldous (Waveney) (Con)
Last week, under the ten-minute rule, I introduced, together with 11 colleagues, a Bill to tackle abuse of retentions in the construction industry. In preparing for that Bill, it very quickly became clear that Carillion was one of the worst offenders. Will the Minister give me an assurance that he will take this point into account in addressing the concerns of subcontractors? Will he also consider bringing forward my Bill during Government time?
Mr Lidington
On my hon. Friend’s last point, I promise, on a “without prejudice” basis, to examine the case for doing so and to discuss it with ministerial colleagues. On his broader point, as I have said in response to a number of hon. Members across the House, there is a case for the Government to take a fresh look at the procurement process. However, I do not want that, in the next few days and weeks, to get in the way of our immediate responsibility to make life as easy as it can be made for employees, pensioners and others who are very worried about their futures.
John Spellar (Warley) (Lab)
I echo the concerns of my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman). The new Midland Metropolitan Hospital now towers over the terraced housing in the Smethwick part of my constituency. Despite a delay due to a design failure, work is now proceeding apace and it is two thirds completed. What will the Government be doing about ensuring the flow of funding and work so that the contract can be completed and we can look forward to the opening of this new, much-needed hospital?
Mr Lidington
Discussions are taking place with the trusts, with Carillion managers and contractors, with PwC—as a special manager in the liquidation on behalf of the official receiver—and with the lenders to the project companies so that in coming days construction activities can continue without material disruption on crucial projects that the Government strongly support.
Robert Neill (Bromley and Chislehurst) (Con)
Can my right hon. Friend specifically help us on what arrangements are being made to ensure continuity of the prison facilities management contracts, which, as he knows, already cause great problems, have only some two years to run, and are not joint ventures? Particular issues for staff and for prisoner security and welfare arise around those contracts.
Mr Lidington
I had better not trespass on the responsibilities of the new Secretary of State for Justice, but I can say that contingency plans at the Ministry of Justice included the creation of a Government company that is available to take on the provision of these services at any time.
Liz McInnes (Heywood and Middleton) (Lab)
Carillion is responsible for 11,800 in-patient beds, so what action will the Government take immediately to avoid exacerbating the current NHS winter crisis?
Mr Lidington
The word from hospital trusts today so far has been that the work of hospitals has not been materially affected by the collapse of Carillion. The Department of Health has not been looking at this in isolation. In preparing contingency plans, it has been talking for some time to the NHS trusts that use Carillion as a contractor. The contingency plans address these issues with the aim of minimising disruption and making sure that services to patients continue both safely and to a high standard.
Craig Mackinlay (South Thanet) (Con)
I highlighted the point I want to raise in a Westminster Hall debate on small businesses in November 2016. I am concerned about the consequences for subcontractors and suppliers down the supply chain that are now likely to be left unpaid by Carillion. This is what we would call a domino effect. Is it not time to change the insolvency rules to introduce an assumed Romalpa clause or similar, so that in the instance of the failure of a primary contractor such as Carillion, payments or the snatching back of recognisable goods and services are directed to the relevant companies down the supply chain by the receiver or the insolvency practitioner, rather than the primary client making post-insolvency payments into a likely black hole?
Mr Lidington
In the case of Carillion, the Government have made provision for payments to subcontractors to continue where those subcontractors are involved in the delivery of key public services. As far as my hon. Friend’s broader points about insolvency law are concerned, he will have seen that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is in his place on the Bench beside me, and I am sure that he, given his responsibilities for the Insolvency Service, will have taken careful note of my hon. Friend’s request.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
This morning, I spoke to my local council, which is already acting fast to do all it can to ensure continuity of services and of staffing contracts. I am sure that the Minister will agree that the uncertainty ahead is hugely unsettling for employees and their families, but there is the further concern that valued employees with great expertise will start to look for new jobs, further compounding the risk to service delivery. Will he again reassure the employees affected by local authority contracts, such as those in Hounslow, that the Government will not leave them in the lurch and that the commitment to protect public services and supplies will extend to local authority contracts and, indeed, to services such as prisons, including Feltham young offenders institution in my constituency?
Mr Lidington
Feltham young offenders institution is certainly covered by the overall contingency planning that the Ministry of Justice has put in place. As regards other local authority contracts, the same applies as with NHS trusts in that the Government’s protection for payments of wages and salaries for suppliers and subcontractors extends to contracts where they are involved in the delivery of key public services. The Ministry of Housing, Communities and Local Government has been in touch with all the local authorities where we know Carillion contracts are in operation, and its Ministers and officials will be doing their very best to support those local authorities.
Several hon. Members rose—
Kevin Foster (Torbay) (Con)
I will bear that in mind, Mr Speaker. I thank my right hon. Friend for his reassurances, and it is right that this discussion should focus on workers and services, but I am concerned about pensioners. What reassurance can he give existing pensioners about their continuing to receive their payments, as planned?
Mr Lidington
The Insolvency Service or the official receiver will have to look at each of the 14 pension schemes forming part of the Carillion Group and assess their solvency and that of the companies with which they are associated. The backstop in all this is that the Pension Protection Fund will guarantee that pensions now in payment will continue to be paid at 100% of their value.
Paul Flynn (Newport West) (Lab)
Do not the strong condemnation by both the National Audit Office and the Public Accounts Committee of the Government’s decision to do a deal with EDF, a company that is €38 billion in debt, plus the Government’s failure to see the warning signs in this case mean that the Government are earning a well-deserved reputation for financial incompetence?
Mr Lidington
As I said earlier, roughly one third of the Carillion contracts currently in force were awarded by this Government, and another third were awarded by Governments supported by the hon. Gentleman.
Mark Garnier (Wyre Forest) (Con)
My right hon. Friend has made reference to the more recent contracts awarded to Carillion being done on the basis of a three-way partnership, and that seems a very pragmatic approach to Carillion’s recent problems, but with the collapse of Carillion, the financial burden will inevitably be passed on to the other partners. Will my right hon. Friend assure the House that when the Government did their due diligence on all the partners, they did it not just on the basis of one third of the risk, but of half of the risk and of 100% of the risk?
Mr Lidington
Yes, the Government did due diligence within the rules that I described earlier, and of course all the companies that signed up to those joint ventures knew that they were taking on that other potential risk, as well as the share to which they had definitely committed themselves.
Stephen Lloyd (Eastbourne) (LD)
How many profit warnings does a major company have to issue before this Government decide that they will probably not award it major and significant contracts—more than three, perhaps?
Mr Lidington
A large number of companies issue profit warnings from time to time. If all potential contracting parties with such a company were suddenly to pull out and say it should have no more business in any circumstances, that would be guaranteed to block any chance of the company solving its problems. The Government’s position is as I have described it: we operated at all times within the rules of public procurement as laid out in regulation and in law, but once Carillion had made the profit warnings, we took steps to ensure that greater degrees of protection were built into the small number of specific contracts that were awarded after July last year.
Mary Robinson (Cheadle) (Con)
In 2013, Stockport council entered into a £100 million, 10-year contract with Carillion for the provision of services. In addition, Carillion is the lead contractor on the £290 million A6 to Manchester airport relief road, which is currently under construction and goes through my constituency. What advice and reassurance is my right hon. Friend giving local authorities as they sit down today to contemplate the way forward?
Mr Lidington
The Department for Transport is now activating its contingency plans to move key work and projects to other suppliers where possible and to ensure that the impact is kept to the minimum. Clearly, the response will vary, depending on the specific contract terms, the level of Carillion’s involvement and whether it was contracted directly or through a joint venture, but I am sure that Transport Ministers will be happy to talk to my hon. Friend about her concerns in relation to the Stockport area.
Mr Kevan Jones (North Durham) (Lab)
Carillion is notorious in the subcontracting industry as a company that pays its bills very late—over 90 days in most cases. The Minister has talked about public sector contractors that will need to be paid, but what support will the Government give small business in the north-east and elsewhere that are in non-Government contracts and are still waiting to be paid?
Mr Lidington
Companies in non-Government contracts that are not involved in the provision of public services would become creditors of Carillion. The responsibility of the Government and the use of taxpayers’ money should be first and foremost for protecting the delivery of key public services and the employees who deliver those services.
Vicky Ford (Chelmsford) (Con)
I thank my right hon. Friend the Minister for wanting to minimise the impact on employees, pensioners, apprentices and subcontractors and for protecting vital services. Can he confirm that he will not fall into the Labour trap of dealing with corporate failure, as when the last Labour Government let bank investors pocket the profits for many years, but when the ship hit the rocks, the taxpayer had to pick up the bills while those same bond investors were let off scot-free?
Mr Lidington
My hon. Friend makes an important point. It is right that taxpayers’ money is used to protect public services, not to bail out either creditors or shareholders of a private sector company that has made serious financial mistakes.
Dr David Drew (Stroud) (Lab/Co-op)
Where Carillion has a public sector contract and is in dispute with householders, will the Government commit, if the settlement is in favour of the householders, to make payment to those householders?
Mr Lidington
I am sure that a constituency case lies behind that. I am very happy for myself or another Minister to talk to the hon. Gentleman about the precise circumstances.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
South Tees NHS trust has substantial investment with Carillion as a result of PFI arrangements agreed under the last Labour Government. Carillion’s supply chain is now horribly exposed, and Slater Refrigeration, which is a small firm based in my constituency that supplies cooling systems for one hospital’s blood banks, its MRI scanner, its CT scanner, its mortuary and its operating theatres, has been told that, while its costs will be covered going forward, the £43,500 that it is already owed by Carillion is not covered, and that presents a critical threat to the business. Can the Minister provide reassurance that these outstanding liabilities will be paid, either via the PFI shell companies or, in extremis, via the Government themselves?
Mr Lidington
I would hope that the company in my hon. Friend’s constituency will talk directly to the official receiver and the Insolvency Service, which is working with the official receiver. If there are still problems after that, I would invite him to talk to me or one of my team, and we will see what might be possible.
Louise Haigh (Sheffield, Heeley) (Lab)
Will the Secretary of State confirm that when he references key public services that includes projects at their early stage, such as the Sheffield tram-train project and the flood defences in the Don Valley, or are they at risk of cancellation? Will he also provide a bit more detail on the accountability for decisions made by the official receiver in transferring contracts?
Mr Lidington
The official receiver is clearly an independent authority—rightly so—but where we are talking about a contract to provide services to a Government Department or a Government agency, obviously that Department or agency has to decide whether the particular provider will deliver what is needed in terms of the quality and speed of public service. We are protecting the public service contracts on the basis of the value that they provide to the public, not where they might have got to in their development. Clearly, it is for the official receiver, in the first place, and for the relevant Departments to look at each project on its own merits and to assess how best to take it forward and through what type of provision.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that companies do not fail—directors and management teams fail? Does he also agree that capitalism without bankruptcy is like Christianity without hell: there is nothing to keep us on the straight and narrow? Carillion is finished, but demand for its services continues. The jobs will be recreated, and in future the management will have to be better.
Mr Lidington
I cannot match my hon. Friend’s theological knowledge, but the central point he made at the end is right: this work in providing public services will still need to be done. People will still need to be employed in the provision of support services, facilities management, repairs and maintenance, and so on. Although that will not be done by Carillion in future, it will be done by another provider, and the need to employ numbers of people will remain.
Alison Thewliss (Glasgow Central) (SNP)
In Scotland, Carillion is in partnership with TIGERS—Training Initiatives Generating Effective Results Scotland—to provide a shared apprenticeship scheme, and my constituent Connor Mallon, from Toryglen, was taken on as the 1,000th apprentice as part of that scheme last year. What reassurance can the Minister give those such as Connor who are in the middle of an 18-month programme? Can he also tell me a bit more about the CIBT taskforce, how that interfaces with the Scottish Government and what is being done there?
Mr Lidington
The hon. Lady’s point is an important one. I will brief myself, and I will write to her.
James Morris (Halesowen and Rowley Regis) (Con)
The new Midland Metropolitan Hospital, which was referred to by the right hon. Member for Warley (John Spellar), will provide vital services to people in Rowley Regis and is due to open in 2019. Carillion is the principal contractor. Will the Minister commit to make sure that he speaks to his counterparts in the Treasury and the Department of Health to ensure that there is continuity in this construction project, which is now two thirds complete and needs to be gripped?
Mr Lidington
Certainly, the Government’s wish and intention is that we can get on with construction work in the west midlands without material disruption. I will certainly pass the message very clearly to fellow Ministers in the two Departments my hon. Friend referred to.
Mike Kane (Wythenshawe and Sale East) (Lab)
Carillion is a partner in an international joint venture to deliver Manchester airport city enterprise zone in my constituency. Does the Minister agree that what has happened gives a terrible signal to international investors about the state of UK plc?
Mr Lidington
No. There are few countries in which companies do not fail. What is important in this case is that responsibility and financial liability for that failure are seen very clearly to rest with the shareholders and creditors, not with the public purse, and that Government energy is directed towards ensuring that those public services continue to be provided.
Jeremy Quin (Horsham) (Con)
Following on from the last question, once the official receiver’s investigation into the specifics of the directors of Carillion is concluded, how will my right hon. Friend ensure that any more general lessons regarding corporate governance are taken up, considered and applied where necessary elsewhere?
Mr Lidington
Ministers will want to consider these questions at a senior level. I am sure that we will also look with interest at whatever report the Public Administration and Constitutional Affairs Committee produces. It might be helpful in contributing to our thinking on this.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
In Newcastle, Carillion bought Eaga, a successful, local and partly employee-owned energy company, which was then forced to shed thousands of jobs due to the Government’s U-turn on renewable subsidies. Will the Minister agree that the people of Newcastle have been twice betrayed by his Government with regard to Carillion and commit absolutely to ensuring that jobs, pensions and our local economy do not suffer further? Let me be clear: a helpline will not cut it.
Mr Lidington
It is a lot more than a helpline; it is the continuation of payments, salaries, wages and payments to contractors and suppliers. I hope that that will be welcomed across the House.
Robert Courts (Witney) (Con)
I thank the Minister for his statement and commend Oxfordshire County Council for the swift work it has undertaken today, particularly to ensure that schoolchildren have been fed all over Oxfordshire. Will he please offer some reassurance to the 400 staff employed at Oxford’s John Radcliffe Hospital with regard to their jobs and to my constituents concerned about the continuity of services there?
Mr Lidington
Before coming to the House, I had a look at the latest briefing from the Department of Health and Social Care, and the John Radcliffe Hospital was reporting no disruption to services—we have had no notification of any problems. I am close enough in constituency terms to the John Radcliffe to know how important that modernisation project is. On schools, it is welcome that the message from Oxfordshire, Tameside and other local education authorities has been that business has been continuing as normal today.
Helen Goodman (Bishop Auckland) (Lab)
This case is very similar to that of Southern Cross. We can see that, although we can transfer jobs, the provision of services and money to the private sector, ultimate responsibility and financial risk stay with the public sector. How high is the contingent liability set in the minute that the Minister is laying before the House today?
Mr Lidington
I question the premise on which the hon. Lady put her question. It is true that ultimate responsibility for the provision of public services remains with the public sector, but as this case has demonstrated beyond any doubt, the financial risk really and truly is transferred to the private sector contractor.
Ross Thomson (Aberdeen South) (Con)
The Aberdeen western peripheral route is being constructed through my constituency. Will my right hon. Friend advise the House on what discussions he has had with the Scottish Government and the next steps that have been agreed to give reassurance to the workers turning up on site about their jobs, pay and pensions? Does he agree that the Scottish Government should outline their contingency plans as soon as possible, given reports that they have been slow in their payments to the project consortium?
Mr Lidington
This is one of the projects in Scotland that has been the subject of conversations between UK and Scottish Government officials. Because it is a Transport Scotland project, it is indeed a matter for the devolved Government in Scotland to take forward in seeking alternative providers, but the Government will continue to do whatever they can to support the Scottish Government in that endeavour.
Stephen Kinnock (Aberavon) (Lab)
This whole sorry tale is a textbook example of the privatisation of profit and the socialisation of risk. Companies such as Carillion have been taking taxpayers for a ride to the tune of billions of pounds of profit. Is not today the day when the case for a windfall tax on these sorts of companies became unanswerable?
Mr Lidington
I normally have time for the hon. Gentleman, but I am afraid that in this instance he wrote his script before listening to the statement. There have been no payments to Carillion except payments for services actually delivered by Carillion companies, in line with their contracts. What today has demonstrated is that the financial risk is transferred to the private sector contractor, and it is right that that should be the case while the Government concentrate on continuity of public services.
Alan Brown (Kilmarnock and Loudoun) (SNP)
As was highlighted by the hon. Member for Waveney (Peter Aldous), hundreds of subcontractors risk losing money as a result of cash retentions on the part of Carillion. The Government could have legislated previously to end that practice. As part of the review, will the Government establish how much cash Carillion is withholding, and for how long the payments were due to subcontractors? Will the Minister try to ensure that the money is released, and legislate to end unprotected cash retentions? As a co-sponsor of the private Member’s Bill presented by the hon. Member for Waveney, I should be happy if the Government adopted it.
Mr Lidington
I will not promise today to introduce legislation, but I assure the hon. Gentleman, as I assured my hon. Friend the Member for Waveney, that we will take a fresh look at those ideas.
Kate Green (Stretford and Urmston) (Lab)
Carillion’s performance in respect of the contract for facilities management in prisons has been extremely poor for a number of years. Can the right hon. Gentleman confirm that penalties for performance failure have been extracted during the life of the contract, and that there will be no further payments when the contract has not been delivered as it should have been?
Mr Lidington
I will ask Justice Ministers to respond to the hon. Lady in writing about the details of her question. I have seen enough prison inspection reports to know that in some prisons there were serious questions about the quality of Carillion’s provision. I am pleased to be able to reassure the hon. Lady that the Ministry of Justice has strong contingency plans not only to continue service, but to drive forward improvements. I know that my right hon. Friend the Secretary of State will be very committed to doing that.
Clive Efford (Eltham) (Lab)
Although a hedge fund seems to have been able to bet against Carillion and make millions of pounds, the Government’s due diligence gave it a clean bill of health. Can the Minister assure the House that at no stage did departmental officials advise Ministers against giving it further contracts following the profits warnings, and that Ministers did not act against any such advice?
Mr Lidington
As I have said more than once, different parts of the Government awarded the contracts in the light of the public procurement regulations and the principles of both United Kingdom and European law that underpin the public procurement process.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Across Wales, Carillion is involved in rail, road, energy and digital infrastructure projects. What discussions about exposure to Welsh projects took place between the UK and Welsh Governments before the events of the weekend, and what discussions have there been over the last few days?
Mr Lidington
Officials have been in contact with the Welsh Government. There is minimal exposure to jobs in Wales: there are about 40 Carillion workers there, but they do not work on any public sector contracts. Carillion has been subcontractor to two contracts in Wales for a design phase, and it was bidding as a subcontractor to a rail project, but as a subcontractor only. It is for the main contractor to find out who will take its place.
Andy Slaughter (Hammersmith) (Lab)
The Minister has talked about continuity, but in many cases the current service provided by Carillion is appalling. Two independent reports on Wormwood Scrubs prison last month—to which the Minister may have just alluded—describe indecent living conditions involving broken toilets, showers, and heating, electric and fire safety equipment. What confidence can we have that the performance of Carillion contracts will be not only maintained, but rectified where it is failing?
Mr Lidington
I think it important that, whether a service is provided by the public or the private sector, every effort is made—both in the designing of the contract or in-house arrangements and subsequently, through management of those arrangements—to deliver a service of the highest possible quality. The hon. Gentleman cannot unfairly point to examples in which the private sector has fallen down on the job, but it is equally possible to point to examples in which the public sector has done so. Many of us remember only too vividly the report on Mid Staffordshire hospital in recent years. It is not a question of private-public, one good and the other bad; it is a question of seeking to drive forward the highest standards, whatever the form of provision.
Toby Perkins (Chesterfield) (Lab)
It is not new news that Carillion had financial difficulties, and the Minister himself has referred to the Government having taken a particular interest in the performance of Carillion in the period since July 2017. Why did the Government leave the position of the Crown representative to Carillion vacant from August to November when there was such concern about the performance and financial health of Carillion?
Mr Lidington
A Crown representative was appointed a little while ago—before my time at the Cabinet Office started—and we intend to announce the name as soon as possible.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Sheffield houses Carillion’s customer experience centre, often known as the nerve centre of the UK operations, where 250 people are employed. What reassurances can the Minister give to the workforce about their short and long-term futures?
Mr Lidington
In the immediate future, people will still be needed to carry out that co-ordinating work, and the Government are funding such provision through the official receiver. In the longer term, it will depend upon exactly how the provision of public services takes place in respect of the various services currently looked after by the Sheffield centre.
Diana Johnson (Kingston upon Hull North) (Lab)
Bosses at Carillion took steps to protect their £4 million-worth of bonuses shortly before £600 million was wiped off the share values of the company, and with Persimmon recently awarding an obscene bonus to its chief executive, is it not time for this Government to take action on the culture of excessive bonuses at the public expense, and especially, in this case, on rewarding failure?
Mr Lidington
In respect of Carillion it is perfectly within the scope of both the official receiver and the Pensions Regulator to look at those actions taken by either current or previous directors and, if they are persuaded by evidence, to impose quite stringent penalties upon those people.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Every community represented in this place will be touched by the collapse of Carillion, including for me the Harplands Hospital in the constituency of my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell). My concern, however, relates to the wider impact on my county, which includes Army accommodation and over £1 billion nationally of Government funds that have been spent with Carillion both directly and through subsidiary companies. What assurances are you giving to them, and how are you communicating with service users from today to say that everything is going to be fine? One tweet from the Second Sea Lord is not enough.
Mr Speaker
That may well be so, but I am not offering any assurances to anybody, although the Minister might be able to do so, and we will be greatly obliged to him.
Mr Lidington
I am advised by the Ministry of Defence that the services provided by Carillion are provided through joint ventures, and therefore the other joint venture partners are required to come forward and shoulder the responsibilities that Carillion was exercising. The MOD is working with those partners to ensure the services continue to run effectively. If the hon. Lady has evidence of things going awry in her constituency or county in this respect, I encourage her to take that up with the Secretary of State for Defence and his team, because they are rightly determined to make sure that things go as smoothly as possible for our servicemen and women and their families.
Matt Western (Warwick and Leamington) (Lab)
In the statement the Minister says, “We have been monitoring Carillion closely since its first profit warning in July 2017”. For 18 months, however, from March 2016 until July 2017, Carillion was the most shorted stock on the UK stock exchange. In fact in July, after the 70% drop in share price, there was still a 21% shorting of the stock. Just how closely were the Government monitoring the situation—or did they for some reason have a blindspot?
Mr Lidington
There is no question of any blindspot. The Government, in common with any other party that was doing business with Carillion, clearly did not have access to the company’s books. The evidence of our concern is the very fact that the relevant Departments and agencies ensured that there was protection through the creation of joint ventures on key contracts when it became a matter of public record that Carillion had difficulties.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
The collapse of Carillion is the most appalling epitome of the worst kind of lemon socialism and corporate welfare, in which the socialisation of losses is underwritten by the state while private profits from state assets are siphoned off to shareholders. Given that these companies are responsible for huge swathes of critical national infrastructure and service provision, will the Minister give a guarantee that a new form of status will be granted to these companies whereby they will be forced to undergo much more onerous forms of regulation and supervision by the state, to ensure that any risk to the state’s functions can be prevented?
Mr Lidington
The action that the Government are taking today is, so far, ensuring that there is no risk to the state’s functions and that services are being provided as normal. As to the hon. Gentleman’s opening comments, this case demonstrates that this is, rightly, not a one-way ticket for contracting companies. They have had to suffer serious financial loss to both creditors and shareholders. The risk was transferred.
David Linden (Glasgow East) (SNP)
The West of Scotland Housing Association is headquartered in Barrowfield, which is part of my constituency. It is in the process of transitioning its maintenance contract from Carillion to Robertson FM, so there is no need for its tenants to worry, but what discussions has the Minister had with the Secretary of State for Housing, Communities and Local Government about the impact that this will have on other housing associations in these islands?
Mr Lidington
The Department for Housing, Communities and Local Government has been in touch with those housing associations that we think might have been affected by the collapse of Carillion. So far, we have not been alerted to any immediate difficulties, but this is something that the Secretary of State for Housing, Communities and Local Government will be keeping under close watch.