Loan Charge

Debate between John McDonnell and David Davis

Thursday 18th January 2024 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

Like everyone else in the Chamber today, I have constituents who have been affected in a way that is incredibly distressing, so I understand completely the howls of outrage sounding across the House today. I want to deal with process, though.

Some hon. Members here took part in the debate in 2018. I would like people to read the speech made in that debate by my hon. Friend the Member for West Ham (Ms Brown). I was the shadow Chancellor then, and she was in my shadow Treasury team. Speaking from the Opposition Front Bench, she set out exactly case after case, as hon. Members have done today, but there was one additional case we drew on which has not been mentioned today—a case in which, because of cuts to local councils and elsewhere, staff had been laid off and then rehired on this basis by public bodies, which was particularly shocking.

Let me read the ministerial response that was given then, because I think we should learn from it. The then Economic Secretary said:

“Although…I have tremendous sympathy for those facing large tax bills, it is unfair to let people get away with not paying the tax they owe. There is support for people who have used the schemes and now find themselves in difficult situations, which require those affected to approach HMRC and bring the matter to a close.”—[Official Report, 20 November 2018; Vol. 649, c. 295WH.]

That was the ministerial response. I do not think we can tolerate a similar ministerial response today, because that led to immense human suffering, including, as some have said, some people losing their lives. Many of them did approach HMRC and they did try to negotiate deals, but there was no element of clemency and no understanding of the individual plight of those people. As a result, many of our constituents suffered badly.

I just want to move on and try to get some resolution. I hope that we and the Government can agree today on review. That review should be immediate and time-limited in months, not years. It should be truly independent, with its independence assured by the victims. It should propose a specific range of resolutions, which will have to include some element of compensation for what people have suffered. The review should look at where the compensation should come from. I think it should come not from from other taxpayers, but from a levy on those who promoted the schemes, and perhaps some elements of the finance and accountancy sector that were involved up to their necks, to be frank. That is my first point.

I also think that we need to review our own role in this, and in what has happened over time. I agree with the right hon. Member for Haltemprice and Howden (Sir David Davis) that not only should the Procedure Committee examine the House’s role, but the Public Accounts Committee should look into how we have arrived at current situation.

Let me give two examples of the background to all this. HMRC has come in for considerable criticism today, and I agree with much of it. What I say now is not in mitigation of HMRC’s role, but an attempt to gain some element of understanding of what has been going on there. HMRC is, rightly, under pressure from all of us, on both sides of the House, to tackle tax avoidance and evasion. Some of us have led campaigns over the last 20 years or so to try to get HMRC to work on that effectively, and I pay tribute to the Government for putting it under pressure to tackle the tax gap. They were the first Government to identify a tax gap of £38 billion, or whatever the amount is; I disagree with the figure, but at least we have a target to aim for. However, at the same time, over those 20 years, both parties have excelled in a Dutch auction to establish the extent to which HMRC’s staff levels can be cut.

I can understand a wish to reduce staffing, but there are better ways of doing it, and for a while the way in which it was done at HMRC was fairly brutal. That resulted in redundancy schemes whereby a whole wave, a generation, of expertise was lost, and it had an effect on the culture of HMRC. According to my understanding, HMRC looked for short cuts and a way of meeting the demand for it to tackle tax avoidance and evasion and the tax gap, and I think that this was one of the short cuts that it invented. In latter days, there would probably have been wiser heads in HMRC itself to suggest that this was not the route to go down because it would bring about more problems than solutions. However, a culture of secrecy and protectionism has developed in HMRC, and we need to understand that if we are to tackle this properly as an institutional failing.

Secondly, we need to look at the role that the House played. I have been going back to the year 2017, and trying to remember what was happening in the House at that time. Some Members will recall that there was not a normal process for the Finance Bill, because the right hon. Member for Maidenhead (Mrs May), who was then the Prime Minister, having assured us all that there would not be a general election—I think she assured us of that five times in the House—went for a walk in Wales, came back, and declared an election. So the finance measures were thrown into the wash-up procedure, which, as Members will know, means political parties sitting down to decide what measures are urgent and must be passed. It was agreed that the Finance Bill would go through in a single day, and as a result of that, this measure was introduced. I should like the Public Accounts Committee and others to look at how that process worked and how it did not work.

The right hon. Member for Haltemprice and Howden made an extremely valid point, which we made about every Finance Bill, or Budget Bill, that came forward. When the Government introduced the “no amendment to law” procedure, that tied the hands of the House when it came to what it could open up, what debates it could have and what amendments it could table. That was introduced by—

[Sir David Davis]

Hammond.

[John McDonnell]

Yes, by Lord Hammond. I think it was almost unprecedented. As I say, it tied the hands of the House, even when it came to further investigating issues relating to the Budget and Finance Bills.

I also think that we need to look at the process whereby Ministers and Opposition are able to question impact assessments and how they are developed, as well as the independence of those assessments. I still find it problematic that impact assessments are prepared largely by the Department and the ministerial team that are promoting the legislation involved, rather than its being done independently. Had there been an independent impact assessment in this case, and time for a proper debate and for amendment as well, the House would probably not have agreed to take this course. When I look back, I think that the implications should have been drawn to the attention of the whole House. The impression given was that this would be focused on a small number of “hard case” tax avoiders or evaders, and their scheme promoters.

[Sir David Davis]

I agree with nearly everything that the right hon. Gentleman is saying, but why can we not address it now? Why can we not go back and put it right?

[John McDonnell]

The point I am making is about enabling us to do that. I hope that some of the lessons being learned are learned not just by the whole House but by the Government as well, whichever party is in power. As soon as we introduce measures to fetter the role of individual Members of the House or the House as a whole, we open up the opportunity for mistakes to be made, because policies are not tested effectively in democratic debate in this Chamber.

I welcome the fact that reviews are to happen, but believe they should happen as a matter of urgency, if for no other reason than because I do not want to be here again in a few years’ time—we are now in 2024, and I do not want to be here again in 2026, 2027 or 2028—and find that we are in the same situation as we were in 2019. I do not want to find that more people have suffered and, worryingly, that more people may not be with us as a result of this because they have taken their own lives.

There is an element of urgency about rectifying this issue, and doing it with compassion and, in many instances, with clemency. That will enable us to focus properly on tackling tax avoidance and evasion, and also the institutional arrangements that exist to enable that to happen. We need to have a thorough debate in the House about our regulatory mechanisms, especially with regard to the accountancy and finance sector.

LIBOR Fixing: Conduct of Investigations

Debate between John McDonnell and David Davis

Tuesday 23rd May 2023 Commons Chamber

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

The story that I will tell this evening starts with understandable public anger at the failure of both business and state during the 2008 financial crisis and the massive institutional failures to bring real villains to justice. The regulators, the US Department of Justice and the Serious Fraud Office rushed to assuage that anger and deliver convictions but failed to do the work necessary to properly fulfil their task. Instead, they effectively delegated investigation to the banks, allowing them to offer up middle-ranking scapegoats so that they could avoid prosecuting the directors of disaster who actually ran the banks.

While the real villains got off scot-free, the scapegoats, including some whistleblowers, faced coercion and injustice. Their lives were destroyed by a totally inadequate regulatory and judicial system. In British courts, critical evidence was concealed. In America, the DOJ used tactics that amounted to judicial blackmail. The result was serial miscarriage of justice: 37 people were prosecuted, 19 convicted and nine jailed simply for doing their jobs. Their prosecutions were prompted not by complaints from victims but by a political and tabloid firestorm. How did this happen? Most of the critical data and facts that I will cite come from a seven-year evidence-gathering exercise by Andrew Verity, the BBC’s economics correspondent, who will be publishing a book on the subject shortly. I am grateful to Mr Verity for sight of his work and data.

In 2010 to 2012, the LIBOR scandal first came to light. It was reported that bankers at major financial institutions had colluded to manipulate the London interbank offered rate—LIBOR. Many leading banks were implicated, including Deutsche Bank, Barclays, Citigroup, JPMorgan Chase, and the Royal Bank of Scotland. LIBOR is an index designed to measure the interest rate at which major banks are lending money to each other, covering 10 currencies and over several different terms. It is calculated daily using estimates submitted by major banks of the rate at which they could borrow money at approximately 11 am. LIBOR was used worldwide as a reference for financial instruments including commercial loans, mortgages and student loans. At its peak, it underpinned $350 trillion of financial instruments. Now, its reputation is shot, and it will be replaced next month by the secured overnight financing rate, which is calculated instead by the Federal Reserve—notably, not in London.

After the credit crunch, there were persistent rumours of banks submitting estimates below available market rates—the nickname for it is “lowballing”—and there is no doubt that that was happening. In late October 2008, not long after Lehman Brothers collapsed, Chase New York had been pressured by the Fed to offer loans at a time when no banks wanted to. The actual rate it offered was 4.68%, but on that day its dollar LIBOR submission was 3.25%. That was an enormous difference of 143 basis points—a basis point is one hundredth of 1%—but 3.25% was typical of the LIBOR submissions that day. Now, 1.43 percentage points, or 143 basis points, may seem tiny, but for a bank loan of £100 million such a difference means nearly £1.5 million less in interest—a serious market distortion, undoubtedly harmful, particularly to small banks. Many knew it was happening, but few could, at least publicly, say why.

Then, in early 2010, Gary Gensler, head of the US Commodity Futures Trading Commission, was played a recording of a conversation between two London employees of Barclays bank, Peter Johnson and his boss Mark Dearlove. Johnson was responsible for Barclays’ dollar LIBOR submissions. The conversation Gensler was hearing followed several others in which Johnson, known as PJ, complained that other banks’ submissions were way below the conceivable market rate. PJ had been resisting senior level instructions to lower Barclays’ rate to stay “in the pack” of other banks. Indeed, his honest submissions—honest submissions—sometimes embarrassed Barclays by making others think they were paying unusually high rates.

The first voice on the tape was Dearlove’s rather cut-glass diction. He said:

“The bottom line is you’re going to absolutely hate this...but we’ve had some very serious pressure from the UK government and the Bank of England about pushing our LIBORs lower.”

Johnson protested:

“So I’ll push them below a realistic level of where I think I can get money?”

Dearlove came back:

“PJ, I’m on your side, 100 per cent…These guys don’t see it. They’re bent out of shape. They’re calling everyone from Diamond to Varley.”—

the senior directors—

“You and I agree it’s the wrong thing to do…These guys have just turned around and said, ‘Just do it’.”

What the whole recording revealed was two Barclays employees agreeing to rig LIBOR, albeit reluctantly and albeit instructed by the British state, through the top leadership of Barclays.

The LIBOR investigation began once Gensler at the CFTC heard that recording. He had a crime on his hands, as it were, but it was not bank directors and executives, or senior Bank of England and Whitehall officials who would be pursued. Prosecutors increasingly switched their focus away from the state-sponsored lowballing it discussed and towards something wholly different: requests from traders to LIBOR submitters for high or low settings that would protect their trading positions.

The regulators had outsourced their investigations to external lawyers hired by the banks themselves. Most of their evidence was collected by the bank investigators, particularly evidence passed from Barclays’ investigators to the CFTC, but those lawyers made fundamental errors. Most notably, for Barclays and UBS, they did not examine crucial documents, including the emails of senior executives—the real bosses. This was the first instance of a common theme: the scapegoating of low-ranking bankers by prosecutors, courts, directors and executives. Once the scandal became a news item, Barclays sacked low and middle-ranking employees like PJ who were involved. Their legal support was sharply cut off.

But not all faced the same treatment. Dearlove, for example, heavily supported by lawyers paid for by Barclays, pointed out that the instruction to lowball had come from the Bank of England and Whitehall. His case was immediately dropped like a dangerous hot potato, which it was. People at the top were attempting to shift the focus from lowballing to those skewing the rate to protect trading positions. But while submissions only changed by one or two basis points in response to trader requests, state-sponsored lowballing often meant understating LIBOR by 50, 100 or 150 basis points—comparatively enormous. That reflected a difference between the two practices that many failed to understand. Lowballing involved setting unambiguously and hugely inaccurate rates, but the so-called skewing only involved accommodating trader requests by selecting high or low rates from the tiny range of interest rates that banks were actually offering. Prosecutors mistakenly persuaded themselves there was only one accurate LIBOR rate each day, from which submitters should never deviate.

No such single rate existed. Banks could borrow at a small range of different rates, any of which could be described as accurate. With no rules about selecting from that range, submitters quite reasonably chose the accurate rates that helped their banks’ trading positions. This was not considered improper at the time, either by the submitters and the traders, or by the regulators and the central banks. It was normal trading practice that the LIBOR system was designed to accommodate.

However, the British courts later prosecuted low-ranking traders based on a sweeping ruling by the Court of Appeal that no commercial interest could ever be considered in LIBOR setting. The actions of those traders were then retrospectively declared illegal. Lives were destroyed because of the total misunderstanding of how LIBOR and business worked.

The ruling was thoroughly and unambiguously contradicted by a ruling in the US appeal courts last year. Indeed, the Serious Fraud Office initially struggled to find any plausible legal basis on which to prosecute. The submitters could not be prosecuted under laws such as the Fraud Act 2006—that required victims, false statements such as inaccurate LIBORs and potential gains for the perpetrators. None of those existed, at least not for the trader requests.

The SFO instead chose the vaguer common law offence of conspiracy to defraud. That required proving only two things: there was “dishonesty” and an agreement had taken place. However, the lowballing ordered by bank executives seemed to meet all the requirements under the Fraud Act, as well as conspiracy to defraud. It seemed a clear instance of commercial influence over LIBOR submissions, and far larger in scale. But the SFO preferred bending the law to prosecute low-ranking employees rather than pursuing top-level executives. It had access to all the material that Mr Verity has obtained, which points to the top, but it did not pursue it. For years, it failed even to interview the key executives.

Many traders initially admitted wrongdoing to prosecutors—admissions that later hurt them at trial. Tom Hayes initially admitted dishonesty to the SFO, but that is no real indictment on his cause. A shadow hung over the proceedings that motivated many who co-operated: the prospect of extradition to the United States. If they were extradited, acquittal was near impossible. More than 90% of prosecutions in the US end in a plea bargain. Most of the rest are found guilty. In the US, white collar criminals who pleaded not guilty were threatened with up to 30 years in jail without early release or any other arrangement, alongside violent criminals and drug lords and in unpleasant conditions. A plea bargain that guarantees a reduced sentence to a couple of years in an open prison is irresistible by comparison.

It was a form of judicial blackmail that forced defendants to admit to things that they had not done. British defendants such as Tom Hayes wanted to avoid that at all costs, and the only way was to be prosecuted in Britain instead, which necessitated telling the SFO one crucial lie: he pleaded guilty to acting dishonestly. Hayes changed his mind and decided to fight the charge, only after realising how much he would need to falsely implicate others, and when the sheer absurdity of the charges against him became clear. But Hayes’ judge, who described the case as open and shut before the trial began, ruled that no commercial interest could ever be legally considered by submitters.

The Court of Appeal upheld that absurd ruling, providing the legal underpinnings for later convictions. If applied consistently, Barclays directors, Bank of England officials and the British Bankers Association would all have been implicated. They had all effectively instructed lowballing or misreporting. But the ruling has never been applied to those at the top. Instead, Hayes got a 14-year sentence—more than an average manslaughter sentence—for something previously considered normal practice.

The SFO approached other traders for testimony to buttress its case, but everyone had engaged in the same behaviour that Hayes was accused of, because they said it was normal commercial practice. But the SFO saw no reason to stop. Instead, it found John Ewan from the BBA and Saul Haydon Rowe to act as expert witnesses. They testified that derivatives traders could never request changes to LIBOR submissions. Yet, as the SFO knew, Rowe was not an expert on LIBOR. In another trial, Ewan would contradict himself by saying it was permissible to submit LIBORs within the market range for commercial reasons. That is not to mention the fact the BBA itself had encouraged banks to adjust LIBORs in the past. An abundance of evidence that would have shown that what Hayes was doing was normal, and permitted by regulators and central banks, was either suppressed or not disclosed.

The theme repeated itself throughout the trials: important evidence was withheld, and the evidence offered came from non-experts or people who knew about or had condoned the behaviour. The same would happen in trials relating to Euribor—the Euro equivalent of LIBOR. The founders of Euribor had written rules for submissions when they launched the benchmark, and were willing to testify that commercial influence was welcome, expected and allowed for, but the judge refused to hear the evidence and ruled it was impermissible for submissions to be influenced by trading positions.

Not everyone faced that kind of trial. A recent judgment in America casts doubt on every conviction that relied on sweeping rulings about commercial influence. In January 2022 a US Appeal Court ruled, in US v. Connolly and Black, that trader requests—the basis for every single conviction—were not illegal. That shatters the foundations underpinning the ruling by the UK Court of Appeal.

The ruling was made by the Appeal Court for the Second Circuit, the circuit that includes New York and that would have judged an enormous volume of alleged financial crime. That court had a very high degree of financial expertise and we should place significant weight on its expertise. The ruling makes Britain a global anomaly—the only place where traders were locked up for something wrongly and retrospectively declared illegal. Indeed, the French, German and Japanese authorities never considered trader requests a crime, and even refused British requests to extradite traders.

These miscarriages of justice are scandalous, but perhaps just as serious was the attempt by the British and American establishments to hide their involvement in similar behaviour and their failure to apply the law equally and fairly. At its worst, it involved potential perjury in key trials. At other points, it involved possibly misleading a Committee of this House.

In 2012, the then deputy governor of the Bank of England told the Treasury Committee he had learned of lowballing only in “the last few weeks”, yet there appears to be damning evidence that that was untrue, including meetings, phone calls and sworn testimony to US authorities. It was also claimed there were no Bank of England instructions to change LIBOR submissions, but evidence uncovered by Mr Verity suggests that is also untrue.

The explanation offered to the Committee, that a misunderstanding caused traders to believe the Bank had instructed lowballing, is undermined by evidence that bankers had already received instructions prior to that “misunderstanding”. If it was a misunderstanding, no attempt seems to have been made to rectify it. Moreover, the recording of Mark Dearlove and Peter Johnson that I quoted earlier was not shown to the Treasury Committee, despite Barclays knowing about it at the time. It was exposed only in 2017 by the BBC’s “Panorama”. If it had been shown, it would have thrown doubt on any denials about Government pressure.

Several people who could have contradicted evidence before the Committee were never called to give evidence, such as Mark Dearlove and Peter Johnson, the two people on that tape recording; traders and submitters, who could have revealed information about any instructions; and the senior Whitehall officials behind much of the pressure, including Gordon Brown’s policy chief and the second permanent secretary to the Treasury.

The response to the scandal was itself scandalous. Every part of that public response—the convictions, parliamentary investigations and decisions not to investigate—were, at best, extremely questionable. I intend to write to the Metropolitan police asking them to review the evidence in order to examine whether any perjury has occurred. I have already written to the Chair of the Treasury Committee and the Speaker to consider whether the House was misled, and whether a new inquiry is needed.

[John McDonnell (Hayes and Harlington) (Lab)]

I thank the right hon. Gentleman for bringing this scandalous miscarriage of justice before the House. The House will have the opportunity to listen to Andy Verity when he comes to the Commons on 6 June, as well as some of those who were prosecuted. I suggest the right hon. Gentleman holds off from writing to the Metropolitan police until we confirm there will be a Select Committee inquiry. From the evidence available to us, it is clear that the House was misled, and I would not want a police inquiry to impede a House inquiry before we get the full evidence. We need an assurance from the Select Committee that it will seek Treasury officials, Treasury Ministers, Bank of England officials and all those regulatory bodies that were involved in this egregious miscarriage of justice, where people have suffered greatly as a result of what clearly appears to be not just the House being misled, but a conspiracy among them as well.

[Mr Davis]

This is not the first time that the right hon. Gentleman and I have worked together on a miscarriage of justice, and I will defer to his wisdom on this. Given that it has been a decade, I do not think that a three-month or six-month delay in writing to the Metropolitan police would necessarily be a bad thing. I am happy to wait until the conclusion of any Select Committee hearing and any report that might be produced. I will no doubt hear from the Select Committee Chairman in the coming weeks.

The former Lord Chancellor, Lord Mackay, who has seen this, has said that the whole affair presents a “serious challenge” to the “fairness of our system”, and that the question of law after the US judgment is more than worthy of consideration by the UK Supreme Court. Nine people were jailed for LIBOR rigging, and each one of those cases is a potential miscarriage of justice. Those people lost their careers, their reputations, their savings and their marriages. Their families’ lives were destroyed. Their cases demand a proper re-examination, preferably by the Supreme Court. The only other solution, as the right hon. Member for Hayes and Harlington (John McDonnell) said, is a fresh look at the entire affair. A fresh parliamentary inquiry, with the protection of parliamentary privilege, would help to ensure that the truth comes out and that British justice is finally applied equally to all.

Nationality and Borders Bill

Debate between John McDonnell and David Davis

Consideration of Lords amendments
Tuesday 22nd March 2022 Commons Chamber

[Mr Davis]

The one that I was citing was Nauru, not Papua New Guinea, which turned it down itself and refused to take any more. That is the actual fact of it. By the way, I talked to Tony Abbott about this issue last week and will recount a bit of that discussion in a moment. Since that centre was closed, there were 92,000 asylum applications, so it is not as though the story went away.

There is also a major practical problem: where is this facility going to be? Will it be in Ghana, which referred to the policy as “Operation Dead Meat”? Rwanda? We have heard more on Rwanda today, and I will leave it to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) to talk about Rwanda, as he knows more about it than I do. Albania? Moldova? Gibraltar? All these places have all been talked about—none has said yes. Even if we do find somewhere, we will have to pay it a spectacular bribe to get it to take in our dirty washing; that is what it is, in effect. The Government are simply proposing shifting responsibility for our problems to another country. That does not fit with the behaviour of the great country that I believe we are.

Given the time limit, I will finish on this point. I spoke last week to Tony Abbott, who was Prime Minister of Australia for some of the time we are discussing. We did not talk primarily about this policy, but I asked him what was most effective. I am afraid that he rather agreed with what the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) said—that the really effective policy was pushback.

Frankly, what we have to deal with, in the Home Office and with our French allies, is a series of practical problems, alongside the legalities of how we handle the channel, which is not yet resolved either. What we cannot do is put aside ethical standards in order to drive people away from our shores.

[John McDonnell (Hayes and Harlington) (Lab)]

When people look back on this debate, I think it will be in the same way that we look back on debates around the Poor Law. They tried to solve poverty in those times by being cruel to the poor; I think that is what we are trying to do here. We are not addressing the real issues we face.

I fully concur with everything the right hon. Member for Haltemprice and Howden (Mr Davis) said. I find it bizarre that we are even considering offshoring at this point in time; I think we all know that, practically, it is never going to come off—it is never going to happen—and this is a wasted debate.

I want to concentrate on employment rights. In my constituency, I have two detention centres, which house nearly 1,000 people. Most of them will be detained, but will then come into the community, and will eventually be allowed to remain. There are 1,700 asylum seekers in hotels in my constituency as well. They are not a burden—I welcome them. They may be a financial burden on local authorities and others—central Government need to support them—but, socially and emotionally, I welcome them completely.

The problem that these people have is that, most of the time, they are trapped in the system. Hon. Members just need to look at the figures from their own casework. Cases take at least six months or a year; I have dealt with cases that have been waiting for four or five years before there is a result. In the meantime, people are denied the right to earn a living. They are told to live off £5.40 a day, and that means they live in poverty.

Someone mentioned Syrian asylum seekers; those I have met are some of the most qualified people I have ever met. They have gone through universities and training; they have skills that they could use to give the country so much, and yet they are trapped in the system, living in poverty. And, tragically, what does living in poverty do, in some instances? People try different angles. Sometimes, unfortunately, they end up in criminality. This system, which refuses to allow people to exercise their skills and devote their talents to our community, forces them into poverty and, in some instances, criminality. All Lords amendment 7 said was, “Just allow these people to work—allow them to support themselves and their families, and to give something back to this country.”

European Union (Withdrawal) Act

Debate between John McDonnell and David Davis

Thursday 6th December 2018 Commons Chamber

[John McDonnell]

I recognise the valid intent of that intervention, and if the hon. Gentleman will stay the course with me a bit longer, I might be able to respond to it.

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

I, too, welcome the right hon. Gentleman’s approach and the tone and tenor of his opening remarks. I hope that during his speech—perhaps not immediately—he will lay out his criteria for acceptance of whatever the outcome should be, not in terms of his rather artificial six tests, but real criteria in the national interest.

--- Later in debate ---

[John McDonnell]

I believe that under a comprehensive customs union agreement, it is so much more unlikely that there would be any need for that fall-back position, and we would be able to offer permanency in an agreement rather than something that is a defective insurance policy.

Others may agree with the Chancellor on his initial assessment, and, in that case, I cannot see why this arrangement—

[Mr David Davis]

rose—

[John McDonnell]

Let me press on.

A variety of commentators have criticised the Prime Minister’s proposals, none more scathing than Mervyn King, the former Governor of the Bank of England. Leaving aside his description of the Government’s handling of this issue as

“incompetence of a high order”,

overall he says:

“It simply beggars belief that a government could be hell-bent on a deal that hands over £39 billion, while giving the EU both the right to impose laws on the U.K. indefinitely and a veto on ending this state of fiefdom.”

Many will share the view expressed by Nicole Sykes, the CBI’s head of EU negotiations, which were revealed in an email where she said that there is

“no need to give credit to negotiators I think, because it’s not a good deal.”

Let me move on to my third point, which is Labour’s alternative. I believe that the majority of hon. Members in this House agree that the Prime Minister’s deal is not a good deal. So over the next few days, and possibly—as was hinted at this morning—for even longer, Members will be searching for a way forward. I believe that Labour’s proposals for a new approach to our European relationship offer that way forward. Our European partners will have seen that the Prime Minister’s deal that they reluctantly endorsed has not proved to secure the support it requires in this House or in the country. I believe that they will see the need, now, for a constructive renegotiation if both their and our own economic interests are to be protected in the long term. Indeed, that is what has happened in the past.

Labour’s new deal will secure the economic interests both of ourselves and our European partners. It rests on three posts. Labour would prioritise a permanent and comprehensive customs union—yes, with a British say in future trade deals. We would deliver a strong, collaborative relationship with the single market—and yes, we would guarantee that the UK does not fall behind in rights for workers, consumers and the environment. Labour has always been clear: we respect the referendum result, but we have always said that we want a Brexit that puts jobs and the economy first—and that is exactly what Labour’s approach will do.

Shaker Aamer

Debate between John McDonnell and David Davis

Tuesday 17th March 2015 Commons Chamber

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

I am not necessarily sympathetic if there is any question of guilt on the part of the people picked up. However, what strikes me about this case is that the US was offering $5,000 ransoms or rewards, and it is too easy to forget that in Afghanistan at that time, $5,000 would have been equivalent to hundreds of thousands of pounds in this country. When it was a poor village that handed him over, I will not say that I do not blame them—I do—but it could be seen as understandable. What that does, however, is to call into extreme question any suggestion of Shaker Aamer’s guilt.

[John McDonnell]

It looks as though the ransom or reward turned the rounding up of individuals, particularly by the Northern Alliance and others, almost into a trade during that period, and it is easy to see how injustices have resulted.

According to Reprieve, which has been analysing what has been happening in Bagram and elsewhere, while detained in Bagram, Shaker was

“forced to stay awake for nine days straight and denied food. Doused in freezing water, he was made to stand in the Afghan winter on concrete for 16 hours. His feet were beaten and he was bound in torturous positions.”

After Bagram, in 2002, Shaker was among the first to be sent to Guantanamo Bay, where we know that he has endured harsh, brutal and inhuman treatment. That has been exposed by the United States authorities themselves. The CIA’s own torture memos of what happened in Guantanamo—which was authorised, unfortunately—describe

“Enhanced Interrogation Techniques endorsed by Dick Cheney for use in Guantanamo, including, yelling, slapping, stress positions, extremes of heat and cold, constant bright lights, permanent noise and constantly repeated music, food, sleep and sensory deprivation, long periods of total solitary confinement, removal of facial hair, removal of blanket, clothes, toothbrush…forced nudity, and forced feeding, sexual assault, water-boarding and suffocation in a narrow box, prolonged shackling of hands and feet, threats to family, exposure to dogs, insects etc., denial of exercise or daylight.”

We know from the prisoners who have been released so far that that is exactly what Shaker has experienced while being held in Guantanamo Bay. We also know from evidence provided by the United States guards themselves about the performance of those tortures.

Shaker has never been charged with any crime. He has been cleared for release twice but continues to be detained in Guantanamo, while many others have been released, including all the Britons and British residents. Over the past 12 months, 33 prisoners have been released in difficult circumstances. They have been released to host countries from Uruguay to Kazakhstan, which has obviously involved fairly complicated arrangements. It is hard to understand why the United States finds a transfer to the United Kingdom almost impossible; it is extraordinary that David Hicks, who had admitted to terrorist activity, was released to Australia in February, but the United States refuses to release Shaker, who has never been charged and has been cleared for release twice.

Why is Shaker still being detained? That is the question that we are all asking. Why can he not be allowed to come home to his family? We can only speculate. Is it because he knows too much about what happened in Guantanamo Bay and will ensure that the truth comes out if he is released? Is it because he was a spokesperson for the prisoners in Guantanamo when he was setting up the prisoners’ council? Is this part of some vindictive victimisation? Or is it because he can bear witness to the involvement of not just United States but, possibly, British intelligence in the illegal, criminal torture that went on in Bagram, Kandahar and Guantanamo?

The United Kingdom Government have made representations—I thank successive Foreign Secretaries, the Prime Minister and other Ministers for that—but unfortunately, those representations have been to no avail. Shaker’s Member of Parliament, the hon. Member for Battersea (Jane Ellison), who has worked assiduously on his behalf, cannot participate in such debates because of her ministerial position, but she can testify to the representations that the United Kingdom Government have made to the United States Government over the years.

In January, the Prime Minister visited Washington and raised Shaker’s case again with President Obama. The President gave an assurance that the case would be prioritised, but we now know from a recent statement by the United States Defence Secretary that no proposal for release—certainly, no proposal for Shaker’s release—has landed on his desk We also know that there have been discussions within the United States Administration, and possibly with United Kingdom officials previously, about deporting Shaker to Saudi Arabia, where his safety and human rights would certainly be at risk.

There are questions to which I would welcome the Minister’s response. Will he update the House on what further representations have been made by the UK Government to the US Government since January 2015 when the Prime Minister had the meeting with President Obama? What is the Government’s understanding of what continues to block Shaker’s release? It is very difficult to fathom why Shaker has still not been released when the closest ally of the US has made representations and a formal request and when the President of the US has said that the case will be prioritised. It is beyond credibility. Have any grounds or reasons been given for his continued detention? What assurances have the Government been given that Shaker will not be transferred to Saudi Arabia? If possible, will the Minister tell us the next steps that the UK Government plan to take to secure Shaker’s release? Will the UK Government press the US Administration, particularly the President, for a clear timetable for Shaker’s release?

In due course, we will need a full and thorough independent inquiry into Shaker’s evidence about British intelligence collusion. I would welcome the Minister’s views on that proposal. However, the most important thing for us now is to bring Shaker home. As I have said, many words have been spoken by Ministers, Prime Ministers, Foreign Secretaries and now even the President about the release of Shaker, but there has been no action. Now is the time for action, not words. That is why we have secured the debate.

Shaker’s release has now become urgent. As a result of more than a decade of detention and barbaric treatment, including extensive torture, his health has deteriorated significantly. A recent medical assessment by Dr Emily Keram states that Shaker suffers from serious ailments, including migraines, asthma, urinary retention, ear and skin problems and extreme post-traumatic stress disorder as a result of his imprisonment in Guantanamo.

I hope that today’s motion will be supported by everyone. It is very straightforward and states:

“That this House calls on the US Government to release Shaker Aamer from his imprisonment in Guantánamo Bay and to allow him to return to his family in the UK.”

The cross-party group of MPs and Lords supporting Shaker’s campaign for release numbers more than 40 and includes many senior Members of this House and ex-Ministers. It is a sizeable and active group, and we will send a delegation shortly to Washington to meet officials from the Administration over there to press for the release of Shaker. The UK Government can give us help and give this campaign significant support and momentum. I appeal to Members to pass the motion today; let us send a clear and unanimous message to the US President that we want Shaker released and returned to his family.

Shaker’s family members, in particular his sons, have joined us in Parliament today. I want us all to say to them now that we pledge that we will not rest until their father is free and back in the arms of his family.