Finance Bill

Gerald Howarth Excerpts

Tuesday 1st July 2014 Commons Chamber

[Shabana Mahmood]

I will turn at length to costings of the abuse of the quoted eurobonds exemption, but it is certainly true that many of the estimates of how much it might be costing the Exchequer have placed the figure at around £500 million.

Let me start with the context and explain the thinking behind our new clause. Public concern about tax avoidance is high, and this is a problem not only for the Government but for parties across the House. The setting of tax rates, decisions about tax reliefs, and the collection of tax are among the most important functions of government. If the system is not working as well as it could be, that needs to be addressed. Over the past couple of years, there have been a number of high-profile media stories focused on the tax arrangements of particular companies and individuals, as a result of which, it is fair to say, public trust in the tax system has been eroded.

The deficit, as we know, is high and will not now be cleared by 2015, as the Government promised when they came to office in 2010. It will not, in fact, be eliminated until well into the next Parliament.

[Sir Gerald Howarth (Aldershot) (Con)]

As the hon. Lady has mentioned the deficit, would she now like to apologise on behalf of the Labour party for the catastrophic destruction of the public finances in the last Parliament?

[Shabana Mahmood]

I think the hon. Gentleman and other Government Members should apologise for the fact that their Government have delivered a huge tax cut for millionaires while households are on average £974 a year worse off. That is a deplorable record and the Government should apologise for it.

We have already discussed at length today the fact that ordinary working people in our country are worse off as a result of this Government’s economic plan. As I have said, households are £974 a year worse off as a result of tax and benefit changes, and wages will be 5.6% lower in 2015 than they were in 2010. We also know that it is the richest 1% of the country who have benefited most from the recovery. With working people facing a cost of living crisis, it is vital that everyone pays their fair share and that we restore public trust. When ordinary people are struggling with their household budgets, which are stretched ever thinner, it is understandable that there will be increasing anger if they feel that others are successfully avoiding tax and the Government are failing to do enough about it.

The same goes for businesses, too. We know that small and medium-sized enterprises are struggling with business rates, for example, which have gone up since 2010. Many businesses are now paying more in rates than they do in rent. Businesses that do the right thing when it comes to tax are understandably frustrated and angry when they see others that do not play by the rules, and they are right to think that there should be a level playing field, so that those who do the right thing are not penalised because others get away with not paying their fair share. High-profile cases of tax avoidances have therefore undermined public trust in company taxation and hit businesses that play by the rules.

Our best measure of how well the system is working is the tax gap—which is effectively the amount of uncollected tax in the economy—which has risen under this Government by £1 billion to a total of £35 billion.

--- Later in debate ---

[Shabana Mahmood]

I am grateful to my hon. Friend, who is right that this is a long-standing problem for Governments of all colours and persuasions who have for too long been unable to deal with these very serious issues which result in people not being entitled to sick pay, holiday pay, maternity and paternity leave and other employee rights.

The third problem associated with disguised self-employment is that the unhealthy level of self-employment in the construction industry—40% compared with an average of 14% across all other industries—does not offer a sustainable skill supply for emerging growth opportunities or a change in the economic weather. Employers who want to invest in their staff and employ directly are losing out to companies that use payroll companies which, because they are paying less tax, can sometimes offer slightly higher pay to poach skilled staff.

In July 2009, we published proposals to tackle the problems of false self-employment in the construction industry, but it was not until last year’s Budget that the Government took an interest in the problem when they announced that they would consult on proposals to tackle tax avoidance by intermediaries based offshore who provided labour services to UK companies. We are still waiting for the Government’s response to their consultation on onshore intermediaries, which closed, I think, in March.

Last year, the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Leeds West (Rachel Reeves), reviewed the issue and, based on an investigation of the available evidence and widespread consultation with the industry, we have proposed that workers should automatically be deemed to be treated as employees for tax purposes if they meet criteria that most people would regard as obvious signs that they were employees rather than self-employed subcontractors. It is important to note that the measure would not only close a costly tax loophole but remove a perverse financial incentive for those workers whom most would regard as being in an employment relationship to be classified as self-employed. Such a shift would be good for the construction sector and its work force, too. We want the Government to take further action today to consider the issue and prepare the report envisaged in our new clause.

The third area in which we seek greater action is that of dormant companies. It has been estimated that 30% of all UK companies are not asked to submit tax returns. One explanation that has been given is that those companies are either dormant or are not liable to pay tax in the UK as they trade exclusively overseas. Once companies have declared themselves dormant, they are exempted from filing a corporation tax return for five years. For some companies, that window could be used as an opportunity to trade with tax impunity and yesterday we set out our proposals whereby we will require annual confirmation of dormancy and will further explore the possibility of banks’ automatically informing HMRC when there is activity in supposedly dormant accounts. That would deal with an issue of tax evasion, rather than tax avoidance, but it is important that the tax lost as a result of weaknesses in the rules of dormancy is firmly on the Government’s radar and it has not been to date.

As I have set out, tackling tax avoidance and closing the tax gap effectively remains a top priority for the public. This Government’s record is not good enough. Our new clause pushes for greater action on three important issues and practical measures that can help to close the tax gap. We hope that it will have the support of the House this evening.

[Sir Gerald Howarth]

I am pleased to take part in this debate—it is the first time I have participated in a Finance Bill debate for quite a long time. I rise to take issue with the hon. Member for Birmingham, Ladywood (Shabana Mahmood), who made a long and interesting speech, about her definition of tax abuse. Indeed, there was no definition of what is considered to be abusive tax arrangements. I think that we have all become lax in our use of language in a matter which is of huge concern to our fellow citizens, for the powers of the Inland Revenue—HMRC—to take money earned by our fellow citizens is an important power and one that should be used very carefully indeed. This House has a responsibility to ensure that these matters are properly debated.

I have to tell my hon. Friends that I am increasingly alarmed by the Government’s rhetoric on what they refer to as “aggressive tax avoidance”. I was brought up to understand that tax avoidance is not only legitimate but, indeed, the duty of the head of every household. It is not their duty to maximise their tax; it is their duty to minimise it. It is our money, which is taken from us by the Government.

[Kelvin Hopkins]

Will the hon. Gentleman give way?

[Sir Gerald Howarth]

Quite a lot of people want to speak, but the hon. Gentleman is a good man, so I will give way to him briefly.

[Kelvin Hopkins]

It is a simple point: the great majority of wage earners and salary earners can never escape, avoid or evade tax because they pay through PAYE. They have to pay every penny of their tax every week, every month, every year.

[Sir Gerald Howarth]

The hon. Gentleman is entirely right, but overwhelmingly it is the entrepreneurs of this country who drive our economy. Ensuring not only that our entrepreneurs are encouraged to invest in providing jobs for people but that this country is a good place in which people from overseas wish to invest their enterprise must be a major consideration.

As I say, I was brought up to understand that tax avoidance is entirely legitimate, and if a scheme is found to be outwith that which the Government intend, it is for Parliament to close any loopholes; tax evasion, on the other hand, is illegal. However, we have become consumed by the idea that because some high-profile companies do not pay tax in this country, tax avoidance as a whole is somehow immoral. I think that some of the companies that do not pay tax here ought to and I strongly support endeavours by the Government to ensure that they pay their fair share, but when, 10 days ago, I was approached by a constituent who told me about the accelerated payment scheme, I became very concerned indeed.

My constituent, a pharmacist, together with a local GP practice and a dentist, wishes to set up an enterprising, innovative scheme in Aldershot to provide a new, modern facility, but if he is told to pay the thick end of £100,000 when he understood the scheme to be perfectly lawful, where is that money to come from and what happens then to his investment in his proposed business? I think this measure will lead to great uncertainty. I pay tribute to my hon. Friend the Member for Cities of London and Westminster (Mark Field) for the clear way he has drawn attention to the potential repercussions of the Government’s proposal.

The Government are proposing to confer massive powers on state officials. Clause 213(3) provides that

“The payment required to be made under section 216 is an amount equal to the amount which a designated HMRC officer determines, to the best of that officer’s information and belief, as the understated tax.”

There we have it—huge power residing in the hands of unelected officials. We, as right hon. and hon. Members, all know from our constituency experience the number of cases where HMRC gets it wrong. We are invoked to try to recover the money that constituents in many cases have been unable, by direct contact with HMRC, to secure for themselves. Very often, it is only after our intervention that the matter is put right. A dangerous precedent is being set here for a rapacious future Government, perhaps a Labour Government. Perhaps that is what the hon. Lady was threatening; I am not sure that I would yet be in a position to accuse her of being rapacious, but perhaps she will let us know her intention.

We should be careful about giving these extensive powers to HMRC. Interestingly, my noble Friend, Lord Howard of Rising, asked Her Majesty’s Government

“how much money was repaid to taxpayers as a result of overcharging by HM Revenue and Customs in each of 2009-10, 2010-11, 2011-12 and 2012-13.”

The noble Lord Deighton responded:

“The information is not available as HM Revenue and Customs does not collect information on amounts underpaid or overpaid.”—[Official Report, House of Lords, 23 June 2014; Vol. 754, c. WA135.]

Therein lies a severe problem. If HMRC is incapable of giving us that information, what confidence can we have that it will exercise these powers carefully?

I quite understand the challenge faced by my hon. Friend the Exchequer Secretary, who is a very splendid Minister indeed, in trying to restore the public finances to order after they were destroyed by the former Prime Minister and Chancellor of the Exchequer. It is a massive challenge that we face. But we could make a start by looking at some of the money owed to Departments. I understand that the Ministry of Justice, for example, has quite a lot of money outstanding. In November 2011, the National Audit Office reported that the Ministry of Justice was owed £2 billion in outstanding fines and uncollected criminal assets. Last year, it wrote off £76 million in uncollected court fines, which was a 50% increase on 2010-11.

I also understand when my hon. Friend says that the Government want to address the issue of taxpayers dragging out contested cases in the courts. It is a fair point. But if the measure goes through, what incentive will there be on state officials, never knowingly understanding the importance of time, to expedite contested claims themselves? The president of the Chartered Institute of Taxation made a good observation. He said:

“We have sympathy with the Government’s need to accelerate dealing with some tens of thousands of outstanding mass marketed avoidance cases which are jamming up the courts…However, handing HMRC almost unprecedented executive powers to decide who falls within the mischief they intend to deal with, without the usual safeguards and appeal rights, is not something which should be done lightly”.

I strongly endorse that.

I remind my hon. Friends that when we came into office 35 years ago, and the noble Lord Howe, then Sir Geoffrey Howe, as Chancellor of the Exchequer, delivered his first Budget on 12 June 1979, he and his successor, my noble Friend Lord Lawson, set about reducing tax, because they believed that by reducing the burden of taxation, they would reduce the incentive for taxpayers to incur costs in seeking tax avoidance schemes. I urge the Government to look more carefully at how we might increase our drive to reduce taxation itself as a more efficient way, a more Conservative way, to reduce the incentive for taxpayers to seek avoidance schemes.

I will not support new clause 12 and do not think that the House should do so, but I do think that it needs to look much more carefully at the powers that the Bill proposes to confer on HMRC officials.

The Economy and Living Standards

Gerald Howarth Excerpts

Thursday 12th June 2014 Commons Chamber

[Sir Gerald Howarth (Aldershot) (Con)]

I am sure that the House is very grateful to the right hon. Member for Derby South (Margaret Beckett) for reminding us all of the magnitude of the fantastic challenge that the Government faced when they came to office in 2010. It is just a shame that neither she nor the shadow Chancellor seized the opportunity to apologise to the House and the nation for the catastrophic destruction of the public finances and the running up of a massive deficit.

[Margaret Beckett]

I have heard that argument in the House so many times. Indeed, the Chancellor used it today. However, there is a bit that I have missed: the bit where the right hon. Gentleman explained how the last Government also brought about the crashes in the United States and Japan, and in Spain and Italy and throughout the European Union. I am looking forward to hearing him give that explanation.

--- Later in debate ---

[Sir Gerald Howarth]

I am delighted to assist the right hon. Lady, who I know is very reasonable. The Chancellor of the Exchequer has just identified one of the causes of the problem that we faced, namely the Labour Government’s decision to remove responsibility for the supervision of the banks from the Bank of England. I know that that is the case, because I was an international banker myself. The Tory party warned the Labour Government that if they removed that responsibility from the Bank, there would be problems. [Interruption.]

[Mr Deputy Speaker]

Order. I want to hear Sir Gerald, but I cannot hear him when Members are shouting him down.

[Sir Gerald Howarth]

Thank you, Mr Deputy Speaker.

Let me be the first Government Member to congratulate my right hon. Friend the Chancellor on sticking to his guns, and on the long-term economic programme, which has unquestionably benefited the United Kingdom—not least my constituents in Aldershot, where unemployment has now fallen to 1.8%. We have done fantastically well, and, in my view, that was undoubtedly a factor in the Newark by-election success, on which I congratulate my right hon. and hon. Friends. There is no doubt that the sheer weight of Conservative effort helped, as, indeed, did the contribution made by Patrick Mercer, who was very popular in the constituency, and had done good work over 13 years.

However, as the shadow Chancellor pointed out, we should not be lulled into a false sense of security. One of the key reasons for UKIP’s success is that it has homed in on the public’s rising concern about immigration. That concern is not new; it has existed since the 1960s. What is new is that while there was an understandable reluctance to vote for the British National party, no such inihibitions apply to UKIP.

For 50 years, those of us who have expressed concern about the impact of mass immigration on our country have been reviled and denounced as racist. All argument was effectively closed down, as perfectly decent people expressing perfectly reasonable fears were intimidated into remaining publicly silent.

Things have now changed, however. People feel that at last they can break free from the shackles of political correctness in which they have been chained. It is no longer racist to want to preserve our British way of life, our religion and our culture; it is not racist to express pride in our nation’s history and, indeed, in our imperial past.

It is not just the Conservative party that has been affected by the public’s concerns, as the shadow Chancellor’s comments again made clear. Labour has seen white working-class support desert to UKIP. Furthermore, many of those who have arrived from abroad and have integrated in our society are also concerned about the continuing flows of migration.

The main parties have to recognise the effect that this unprecedented tidal wave of migration has had on the UK, including our economy. Of course migration has not been without its benefits, some of which are only too evident on the Benches around us here, and companies such as Tata have made, and continue to make, a very valuable contribution. However, this week’s Ofsted report on Birmingham schools has revealed the extent to which people newly arrived here not only reject our values and customs, but want to impose their own on the rest of us. I have a very clear message for them: this is a Christian country, a tolerant country, we speak English, we shake hands with ladies, and open facial recognition is a key part of our culture. If they find that offensive, they should please feel free to leave and move to a country that is more to their liking—for there are plenty of repressive regimes around the world that clearly are more to the liking of people like that. As the T-shirt worn by a young man whom I saw on the underground earlier this week said: “Speak in English; Think in English; Dream in English”. I thought that was rather good advice to a lot of people in our country.

What we all need to understand is that it is numbers that are the issue. As that excellent organisation MigrationWatch has pointed out, between 1951 and 1991 the population born overseas grew by less than 2 million, yet after the election of the Labour Government in 1997 the scale of immigration increased to a level without historical precedent. Between 1991 and 2011, the foreign-born population more than doubled, increasing by 4 million. Much of this was deliberately encouraged by the Blair Government, partly, as we were helpfully told by a Labour speechwriter, Mr Andrew Neather, to rub the noses of the right in diversity.

All this has had an impact on our country. The Prime Minister has been at the forefront of the campaign to denounce the growth of Islamic fundamentalism in the UK, but there are practical challenges, too. My right hon. Friend the Chancellor mentioned the housing issue. We need to build a new home every seven minutes just to accommodate new migrants to this country. England is already the most crowded country in Europe, yet unless tougher action is taken the population will grow by 7 million in the next 15 years, 5 million of which will be attributable to immigration, which is the equivalent of the towns and cities of Birmingham, Leeds, Glasgow and Manchester.

[Mr Bellingham]

Does my hon. Friend agree that this Government have made very significant progress in reducing migration to the UK from outside the EU? Indeed, there have been a number of big successes in that regard. However, does he also agree that the time has now come for the Governments of all countries in the EU to look again at the absolute free movement of people for jobs across the EU? The only way we can solve this problem and bring migration into some form of balance is by looking at migration from the EU as well.

[Sir Gerald Howarth]

My hon. Friend, with whom I have the privilege of sharing adjoining offices in Portcullis house, is entirely right. This Government have set about trying to tackle migration, not least by dealing with the legacy left by the previous Government, and we have tackled non-EU migration. My hon. Friend is right to alert the House to the extent to which our membership of the EU is inhibiting our ability to do something about that other aspect of migration, however, and I have a proposal, which I will make in winding up my contribution.

Labour’s failure to apologise for inflicting this policy on the nation, together with its failure to apologise for the destruction of the public finances, which I mentioned earlier, means it is wholly unfit to return to office. That brings me to the topic of the next Queen’s Speech. I hope with all my heart that that will be prepared by my right hon. Friend the Member for Witney (Mr Cameron) as leader of the Conservative party, elected with a clear working majority in this place. This country absolutely needs that. We cannot afford to go back to the policies of tax and spend, and running up yet more debt, as my right hon. Friend the Chancellor has reminded us again today. We have to keep reminding the British people that that is what Labour did in office and it has not yet recanted. We therefore must do our duty to the British people, which is to be returned with a clear working majority.

To get to that happy position, however, we need to convince the public that we will build on the existing measures we have put in place to contain inward migration, particularly from less affluent EU countries. We must act now. The Government should accept the unanimous recommendation of the European Scrutiny Committee to disapply the European Communities Act 1972 in relation to specific EU legislation, not least so that this Parliament can once again become sovereign and take swift action to recover control of our borders and reduce the level of burdensome regulation being imposed on us externally. If the European Court of Justice does not like that, then tough; the British people certainly will.

Interest Rate Swap Derivatives

Gerald Howarth Excerpts

Thursday 24th October 2013 Commons Chamber

[Sir Gerald Howarth (Aldershot) (Con)]

I join everyone else in congratulating my hon. Friend the Member for Aberconwy (Guto Bebb)—and also my hon. Friend the Member for Wyre Forest (Mark Garnier), whose banking career was much more distinguished than my own—on initiating this debate. I hope that the message will go out to the British people, and particularly to small businesses, that Parliament understands their grievances and is prepared to be robust in addressing them. We look to the Government to be equally robust in their response to the debate.

I want to raise the specific case of Pacer Marine, a boat business that provides chandlery services and sells day boats, rigid inflatable boats and the like. It is located just 10 minutes from junction 4 of the M3, so if any of my right hon. and hon. Friends would like to take advantage of that business, they should please do so. The principals of the business, Dennis Davis and his son Kevin, are constituents of the Secretary of State for Health, my right hon. Friend the Member for South West Surrey (Mr Hunt), but their business is located in my constituency. My right hon. Friend is as concerned about this matter as I am.

Pacer Marine moved in 2005. Mr Davis and his son had previously been renting premises, but they found a place to buy in Aldershot. They went to their bank for a normal commercial 25-year mortgage, but that was not available. Dennis Davis has described his discussions with NatWest:

“The bank were fairly aggressive from the start. Our 2 corporate managers came along to see us, then told us about the hedging/rate swap, and that they would only give us a ten year fixed mortgage with a further 5 years. We wanted a 20/25 year term. They charged us a greater rate than normal although we challenged them on it. The main reason for the hedge/swap was because, in their words, they said rates never go down. Well, as we all know now, they did. They then at another meeting introduced a third person who did the deed. Because of the position we were in we agreed to it, but we had always felt that we had been mugged.”

I have done an interest rate swap deal, so I know that they are extremely complex. One wonders what on earth the Royal Bank of Scotland was doing trying to present this sort of opportunity to a very small business.

The documentation provided by RBS is interesting. Part of the background it gave included this statement:

“Loan serviceability is tight…so there is a ‘condition of sanction’ that an interest rate management tool be put in place to protect you from variable base rate”.

Protecting interest rate liability is a perfectly sensible issue to discuss, but we should note that this was a condition of sanction. In a market update, the bank interestingly pointed to all the reasons why interest rates were unlikely to go down and more likely to go up, yet the memo acknowledged:

“There were mixed views from you on base: you saw the possibility of cuts of between half to 1%”.

The bank was recognising the concerns of the customer, but actually trying to make the case that the customer was likely to be wrong and that interest rates were more likely to go up so that the hedging proposal could be put to him.

The person involved was an employee of another part of RBS, so his interest was to make the most money for his unit by exploiting the uninitiated customer and flogging him business that he did not understand. I asked Mr Davis, “Why did you go into this? Did you consult a lawyer.” He responded by saying:

“We trusted the bank. Our business is boat chandlery, not financial wizardry. We thought we were getting the best advice from them. We never thought we would have to go to Peckham Market and deal with a bunch of Del Boys.”

That was how the people in the business felt about it.

Both my right hon. Friend the Member for South West Surrey and I raised this issue with Stephen Hester in June 2012. Needless to say, we got some sort of reply from something called “Group Executive Office”, whoever those people are, but the matter remains unresolved to this day, notwithstanding the fact that when I visited my constituent at the end of August or the beginning of September, they were due to have a meeting with RBS to go through the process which, as many right hon. and hon. Members have mentioned, moves at a snail’s pace. Two months on, we are no further forward. This is an absolute disgrace. We have to be clear that although the banking system and the banking business are important to the prosperity of the United Kingdom, the banks have a lot to answer for.

[Bob Stewart (Beckenham) (Con)]

I was really taken by what my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) said: perhaps the FCA should stop all repayments to banks until these problems are sorted out, certainly in specific cases. That might help the constituent of my hon. Friend the Member for Aldershot (Sir Gerald Howarth).

[Sir Gerald Howarth]

Several measures have been suggested during the debate and I hope that the Government will respond to them. I hope, too, that the FCA will respond more robustly than it has up to now.

My hon. Friend the Member for South West Devon (Mr Streeter) mentioned a meeting with Mr Chris Sullivan. Interestingly, he wrote to my right hon. Friend the Member for South West Surrey:

“As a Group, we are committed to the fair and timely treatment of our customers”—

what a fantastic and admirable sentiment!

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

Will my hon. Friend give way?

[Sir Gerald Howarth]

If my hon. Friend will forgive me, I will not, as other hon. Members wish to speak.

We have Mr Chris Sullivan, the chief executive of the corporate banking division—a very big wig in the Royal Bank of Scotland—saying that he is committed to the “fair and timely treatment” of the bank’s customers. I say, “Thank you very much,” to Mr Sullivan, because his letter was dated 3 August 2012 and yet my constituent has still seen no action. It is high time that the banks understood the gravity of the situation and the concern felt by the public. It is high time that they understood the risks they pose to businesses and the fact that they are damaging the United Kingdom by failing to address these concerns. They must do so forthwith, and the Government must give them every help so to do. I hope that eventually—indeed, soon—our constituents who have put their money on the line to try to generate wealth for our country and improve the economy will be given a better deal.

Trident Alternatives Review

Gerald Howarth Excerpts

Wednesday 17th July 2013 Commons Chamber

[Mr Jones]

I am not saying that; I am saying that we cannot dismiss the fact that these industries do not just employ people. I am proud of the high-technology industries in this country that support the nuclear programme. If the Liberal Democrats are not proud of that technology and the individuals involved in it, then that is their position, but I am certainly proud not only of their skills but of the wealth they create for many communities across the UK. I agree that that is not the only reason we should have the nuclear deterrent, but it is a very important one.

[Sir Gerald Howarth (Aldershot) (Con)]

I commend the hon. Gentleman for the strength of his argument. Let me point out—I am sure that he shares this view—that we came perilously close to losing this country’s submarine-building capability. That is a strategically important capability that we need to maintain, and it looks as though the Liberal Democrats are prepared to sacrifice it.

[Mr Jones]

I did not want to go down this road because obviously the Conservative Government have learned the lessons from the mistake that they made in the 1990s which created the current problems with Astute. We cannot turn these vital skills on and off like a tap when we need them. I have heard various people say, “Is this a justification for Trident?” No, it is not, but we have to take it into consideration when forming policy, and the Liberal Democrats’ position set out in the review document clearly does not do that.

--- Later in debate ---

[Sir Gerald Howarth (Aldershot) (Con)]

I pay tribute to my hon. Friend the Member for North Devon (Sir Nick Harvey), who was a very good and collegiate colleague in the Ministry of Defence. I am sorry that he was not able fully to carry out this work, because had he done so, I suspect the result would have been a lot better than this inadequate document that has been presented to the country today. It has taken two years to produce what has amounted to a mouse.

It is important that we remember the context. In 2009, the leader of the Liberal Democrat party, who is now the Deputy Prime Minister, said in this House that

“we should admit that we neither need nor can afford to replace Trident.”—[Official Report, 1 July 2009; Vol. 495, c. 297.]

That is where the Liberal Democrat party was a few years ago. It now appears to agree that we should continue with the deterrent, albeit on a part-time basis. However, this is not the end of the story. This is not the party’s defined position. The document does not represent the settled policy of the Liberal Democrats. That is to be settled by their whacky members at their party conference later this year. Therefore, whatever is said from the Dispatch Box, or by Liberal Democrat Members, is not the final word on this matter of huge importance. One thing that can be said of the document is that at least it has sparked this important debate, which has produced some extremely impressive speeches that I hope will gain wider currency across the country.

I wish to make three points. First, the deterrent has deterred. It has worked. We therefore do not need to invite people to make an act of faith.

[Mr Jenkin]

I listened carefully to the honest and courageous speech by the hon. Member for Brighton, Pavilion (Caroline Lucas), in which she said that the more countries that have nuclear weapons, the more likely it is that they will be used. Does my hon. Friend agree that the only time nuclear weapons have been used was when only one country had them, and that as more countries have acquired them the likelihood of their being used has decreased? No nuclear weapon has been used since more than two countries have had nuclear weapons. Does that not tell us something?

[Sir Gerald Howarth]

It does, but, if I may, I will come on to my hon. Friend’s point in a moment.

My second point is that, yes, the deterrent has worked and it worked during the cold war. The argument is that the cold war has ended and so we no longer need the deterrent. However, as my right hon. Friend the Member for North Somerset (Dr Fox) said, we cannot predict what threats we might face in the next 30 or 40 years. While there appears today to be no immediate nuclear threat to our country, we know that other countries either have, or intend to acquire, a nuclear capability, and that there are approximately 17,000 nuclear weapons in existence.

[Caroline Lucas]

rose—

--- Later in debate ---

[Sir Gerald Howarth]

If the hon. Lady will forgive me, I, too, have quite a lot to say. If she will permit me to continue to make my argument, this is an important point.

In 2010, the Ministry of Defence’s Development, Concepts and Doctrine Centre published an updated version of Global Strategic Trends to 2040. On nuclear weapons and the proliferation of nuclear capabilities, its report noted:

“The likelihood of nuclear weapons usage will increase.”

Notwithstanding what my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said, that is the view of the centre. It stated:

“Nuclear proliferation will be a significant factor affecting global security, especially as the transition to a multi-polar distribution of power brings change and uncertainty.”

Given those circumstances, my third point is that in the face of such analysis it would be a dereliction of duty to render our people vulnerable, and the Liberal Democrats are proposing to gamble with the security of Britain. I refer to paragraph 32 of their review. In respect of the alternatives cited, it states:

“The analysis has shown that there are alternatives to Trident that would enable the UK to be capable of inflicting significant damage such that most potential adversaries around the world would be deterred.”

It goes on to say:

“None of these alternative systems and postures offers the same degree of resilience as the current posture of Continuous at Sea Deterrence, nor could they guarantee a prompt response in all circumstances.”

When the Chief Secretary to the Treasury says that his proposal would deter most potential aggressors, he owes it to us to tell us who the aggressors are who would not be deterred. We need to know the answer to that.

The case tonight has been made overwhelmingly. I would like to add an ancillary benefit to the main thrust of the purpose of the deterrent. It was alluded to by my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) when he said that the possession of this deterrent conferred upon the United Kingdom an important degree of influence in the world. It gives us enormous respect with the United States of America, and although that alliance might not be important to the hon. Member for Brighton, Pavilion (Caroline Lucas), it is important to the rest of us. It is important, therefore, that we recognise these ancillary benefits, which confer important influence on the UK.

I agree with my hon. Friend the Member for New Forest East (Dr Lewis) that with all the cross-party agreement between the Opposition and ourselves, we should proceed as early as possible to ensure that the security of the United Kingdom is put beyond doubt and bring main-gate forward.