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House of Commons Hansard

Commons Chamber

06 September 2017
Volume 628

    House of Commons

    Wednesday 6 September 2017

    The House met at half-past Eleven o’clock


    [Mr Speaker in the Chair]

    Business Before Questions

    Queen’s Speech (Answer to Address)

    The Vice-Chamberlain of the Household reported to the House, That her Majesty, having been attended with its Address of 29th June, was pleased to receive the same very graciously and give the following Answer:

    I have received with great satisfaction the dutiful and loyal expression of your thanks for the speech with which I opened the present Session of Parliament.

    Oral Answers to Questions


    The Secretary of State was asked—

    Economic Opportunities: South Wales and the South-west

  • 1. What steps his Department is taking to foster economic opportunities between south Wales and the south-west. [900689]

  • I am keen to strengthen the relationship between south Wales and the south-west. After all, Bristol is the most productive city in England outside of London. Abolishing the Severn tolls will strengthen the links between communities and help to transform the joint economic prospects of south Wales and the south-west of England.

  • Will the Secretary of State be a strong voice in Cabinet not just for Wales, but for the regions of our country, especially for places such as—oh, I don’t know—Cornwall? Will he also make sure that the shared prosperity fund is distributed fairly and on the basis of genuine need?

  • I am grateful to my hon. Friend for his question because his area, like large parts of Wales, benefits from the current European Union structural funds. The shared prosperity fund offers great prospects of a much more streamlined approach to supporting some of the most needy parts of the United Kingdom. I am determined to ensure that the shared prosperity fund is a much more efficient delivery system with fair distribution around the UK—to serve my hon. Friend’s region, as well as Wales.

  • What would have strengthened Wales’s economic development links was the electrification of the railway between Cardiff and Swansea, which the previous Tory Prime Minister described as “vital”. By scrapping that, have not this Tory Government once again let down Wales?

  • I am sure that the hon. Gentleman recognises that advances in bimodal technology mean that electrifying the line between Cardiff and Swansea would not save passengers any journey time. In fact, there would be significant disruption and delay, adding costs to travellers and businesses alike without any time saving. The advances in bimodal trains mean that we can take the most modern fleet of trains further in west Wales than we would otherwise with solely an electrified railway.

  • The scrapping of the Severn tolls is a huge benefit to businesses across Wales. Does my right hon. Friend agree that it is also of vast benefit to businesses in places such as Wiltshire, where HGV operators have been paying £20 a time to get across the Severn? All of sudden, they will be able to do business in Wales much more profitably.

  • My hon. Friend has rightly recognised that scrapping the Severn tolls is a significant boost not only to the south Wales economy, but to the economy of the south-west of England. He welcomed it along with the South Wales chamber of commerce, Business West and many others. It seems that the only people who have not welcomed the scrapping of the Severn tolls are the Labour party and the Welsh Government.

  • Further to the Secretary of State’s first answer, will he give a categorical commitment that all areas in Wales that are in receipt of European structural funds will continue to be eligible in the near future?

  • The UK shared prosperity fund can do even more because we will not have the same restrictions that the European Commission put on European structural funds. It hardly makes sense that some of the most deprived parts of Wales are excluded from the European structural funds map as it stands because of European rules. The UK shared prosperity fund allows us to introduce a much more efficient and responsive scheme.

  • One project that could provide significant economic opportunities on both sides of the Bristol channel is the provision of a regular ferry service between Ilfracombe in my constituency and south Wales. It has been considered by a commercial company. What support could the Wales Office give to that idea?

  • I will happily meet my hon. Friend to discuss the prospects. Like me, he recognises the major economic opportunities of binding the regions together. Between the south-west of England and the south Wales economy, we have one of the largest digital clusters and one of the best cyber-security clusters. We can do more to encourage economic growth, including the sorts of subject I have mentioned and tourism, which would benefit from the Severn crossing we have talked about.

  • Transport Infrastructure

  • 2. What discussions he has had with Cabinet colleagues on transport infrastructure in Wales in the last 12 months. [900690]

  • I hold regular discussions with Cabinet colleagues and the Welsh Government on improving transport infrastructure in Wales. The UK Government are investing significant sums in infrastructure, delivering improved journey times for passengers on the latest trains. This will provide tangible benefits to people and businesses in south Wales and boost access to jobs and new opportunities.

  • Has the Secretary of State specifically discussed with his Cabinet colleagues funding for the redevelopment of Cardiff Central station in my constituency? Will there be redevelopment funding—yes or no?

  • I am grateful to the hon. Lady for the question. Yes, I have discussed with Cabinet colleagues the need for investment in new stations in Wales. There is the prospect for new stations, and there is the prospect for further investment. I have met Cardiff Council to talk about that. I have spoken about it to the Welsh Government. I am keen to explore the opportunities that exist there, and also the opportunity to attract private investment, so I have also spoken to the private developer around that site.

  • Returning to the subject of electrification, it is true that the bi-mode trains are good, but they are a second-best solution. However, looking to the future and further rail infrastructure investment in Wales, does my right hon. Friend agree that there are major questions to be asked about Network Rail’s ability to deliver projects on time and control its costs? What more can be done to create a more competitive and cost-effective environment for rail infrastructure investment in Wales?

  • My right hon. Friend makes an important point about the efficiency of Network Rail. Earlier this year, the Public Accounts Committee called on the Government to reassess the case for electrification on a section-by-section basis, partly as a result of the increased costs that have been delivered by Network Rail. However, to improve rail access to west Wales—to Pembrokeshire, Carmarthenshire and other places—we have the opportunity to explore opportunities for new stations, which could well deliver bimodal trains on a regular basis to parts of Wales that do not access fast trains at the moment.

  • I am extremely grateful to the Secretary of State—especially when he is briefer.

  • 12. Following a delegation I led in 2014 of four councils, two universities, many AMs and MPs, industry and Admiral, the then Prime Minister, David Cameron, pledged to extend electrification to Swansea, saying it would have a huge economic impact on developing employment in an area of neglected infrastructure, so will the Secretary of State stand up to the Prime Minister, as the previous Secretary of State did, and deliver the promises of the previous Prime Minister on electrification, which we so urgently need? [900700]

  • That was far too long. I will not call the hon. Gentleman again in a hurry if he is going to be so long-winded. He has got to do better than that.

  • I hope the hon. Gentleman will recognise that the new, most modern trains will be available and in service in Swansea within a few weeks’ time. Swansea will benefit from the latest, most modern trains and from 15 minutes of saved journey time when the project is complete. There would be no time saving—in fact, there would be significant disruption to Swansea—if we continued with the electric-only model he seems to be advocating.

  • Is it not the case that Swansea’s connectivity will be improved by the new Kingsway project, which is creating a digital district? Is it not a shame that Opposition Members do not recognise this important move? Perhaps they do not know what a digital district is.

  • My hon. Friend has great expertise in all things Welsh, but particularly in relation to digital projects and the Kingsway project he talked about. The Swansea Bay city deal is an exciting project that will complement the private activity that is taking place, and that will improve connectivity by digital means, as well as rail connectivity, with new trains in operation very soon.

  • Thank you, Mr Speaker. I love the new haircut and the tie. You look great.

    Before the summer recess, the Transport Secretary—the Secretary of State’s Cabinet colleague—sneaked out news that the UK Government would break their promise to electrify the main line from Cardiff to Swansea. People in Wales are now rightly asking whether the Government can even be trusted to deliver electrification as far as Cardiff. Will the Secretary of State promise that that electrification will go ahead and not join the ever-growing list of broken promises the Government have made to the people of Wales?

  • The hon. Lady will be well aware that work is under way on electrifying to Cardiff. The bimodal trains will affect service times and when the project is completed it will be of major benefit not only to Cardiff, but to Swansea. The major advantage of the bimodal trains means that we can take the latest rolling stock further in west Wales, whereas the electric-only project would have meant that any benefits stopped in Swansea.

  • Funding in Wales

  • 3. What discussions he has had with Cabinet colleagues on whether additional funding announced for Northern Ireland in the Government’s deal with the Democratic Unionist party will have consequences for funding in Wales. [900691]

  • The agreement with the Democratic Unionist party is about delivering for the whole of the United Kingdom so that we can get on with our plan to get the best Brexit deal for our country and create an economy that works for everyone. It is part of the Government’s commitment to support growth across all parts of the UK, including commitments to investment in city deals in Wales and the introduction of the Barnett floor to provide the Welsh Government with fair funding for the long term.

  • Given the cash deal with the DUP to prop up the Government, did the Secretary of State demand an increase for Wales under the Barnett formula, or was he simply sidelined?

  • I remind the hon. Gentleman that the Secretary of State and I have been successful in achieving city deals for Cardiff and Swansea, and we are working towards a north Wales growth deal as well. That additional funding from Westminster was not subject to any Barnett consequentials with regard to any other part of the United Kingdom.

  • Does my hon. Friend agree that last year’s fiscal framework agreement secures long-term, needs-based funding for the Welsh Government, and that that can act as an enabler for improved public services across Wales?

  • I thank my hon. Friend for her question. She is absolutely right: this Government have delivered a fiscal framework for Wales that was called for for 13 years, when the Labour party did absolutely nothing. That fiscal framework gives certainty of funding for Wales and the people of Wales, and it will be beneficial to the development of the Welsh economy.

  • The Secretary of State and the Minister have been having some problems with the Conservative party in Wales. Does the Minister agree with its leader, who said:

    “Any potential incentives considered for one nation in securing the majority must also be considered for Wales”?

    When are the Secretary of State and the Minister going to do their job and at least follow the line of their leader in Wales on securing additional funding for the people of Wales?

  • The leader of the Assembly group in Wales has the right of his own position, but the situation is very clear: this Government’s commitment to Wales is unprecedented. We delivered a fiscal framework when the Labour party did nothing. We have delivered city deals for Cardiff and Swansea, and we will deliver a growth deal for north Wales. This Government’s track record is one of additional investment to Wales, which needs to be matched by the Welsh Government.

  • As part of their arrangement with the DUP, the UK Government will contribute £150 million over two years to the improvement of broadband in Northern Ireland. As I am sure the Minister will be aware, of the bottom 10 UK constituencies for average download speeds, more than half are in Wales. What discussions has he had with Cabinet colleagues to ensure similar funding to improve broadband infrastructure in Wales?

  • I welcome the hon. Gentleman’s question and I welcome him to his place. The situation is very clear: constituencies such as Ceredigion and my own of Aberconwy have lagged behind in broadband connectivity in a Welsh context. He will be aware that broadband roll-out in Wales is the responsibility of the Welsh Government. It is interesting to note that Labour constituencies in Wales were prioritised over constituencies such as Ceredigion and my own of Aberconwy.

  • The May magic money tree, celebrated by the Tories during the general election, has been found planted and flourishing in Northern Ireland. Meanwhile, Wales withers under Tory austerity. Some Tories have taken a principled stand on the use of pork-barrel bungs to Northern Ireland. The Tory Secretary of State for Scotland said that there should be no “back-door funding”, and the Tory leader in Wales, Andrew R. T. Davies, said:

    “Any potential incentives considered for one nation…must also be considered for Wales.”

    When is the Secretary of State for Wales going to do his job and stand up for Wales?

  • I welcome the hon. Gentleman to his new position on the Front Bench, and I welcome him back to the House. I will repeat the comments that I have already made. For 13 years between 1997 and 2010, he was a Back Bencher when there was a Labour Government in this place. That Labour Government did not deliver any change to the Barnett formula, and they did not deliver a fiscal framework for Wales. This Government are delivering for Wales, and we will deliver a north Wales growth deal, which will be beneficial to his constituents.

  • Hendry Review: Tidal Lagoons

  • 4. What discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on the date of publication of the Government response to the Hendry review on tidal lagoons. [900692]

  • The Wales Office has had close discussions with ministerial colleagues following the publication of the Hendry review. The lagoon at Swansea is an exciting project, but it is essential that it delivers value for money for the energy consumer and for the taxpayer.

  • It is nine months since the Hendry review strongly endorsed the tidal lagoon at Swansea, where the rise and fall in the tide is the second highest in the world. It would unlock power for generations, not only on the Welsh side but on the other side of the Bristol channel. When are Ministers going to make a decision?

  • My hon. Friend is undoubtedly a champion for this new technology. However, it has to be stated on record that although the Hendry review was supportive of a tidal lagoon in Swansea, no real financial issues were dealt with in that report. It is necessary that we make the right decision not just in terms of the concept of a tidal lagoon in Swansea, but for the energy price that the consumer will pay and for the taxpayer. We will make the right decision in due course. [Interruption.]

  • Order. There are far too many noisy private conversations taking place in the Chamber. I want to hear the views of the hon. Member for Ynys Môn (Albert Owen) on the matter of tidal lagoons.

  • As has been indicated, the Hendry review was set up by the Conservative party, and the framework to finance these big projects was set up by the Conservatives. It is time, now, to stop talking and start delivering for Wales. I urge the Wales Office to stand up for Wales on this project and deliver for Wales.

  • The hon. Gentleman is undoubtedly a champion of energy projects across Wales and, indeed, in his own constituency of Anglesey. He will understand, as I do, that such decisions must be right in relation to the costs for the taxpayer and the energy consumer. We will ensure that the decision, when it is made, takes all issues into account, and that it is right for the energy consumer and the people of Wales.

  • Will the Minister make renewable energy in Wales a priority so that it can play its full part in delivering our important goals on energy security and tackling climate change?

  • The development of energy policy in Wales is about energy security. It is about securing our energy supply for the future, which is why I and my colleague in the Wales Office are always involved with projects such as the new Wylfa power station in Anglesey. We are looking at small modular reactors for parts of Wales, and we are, indeed, still looking at the tidal lagoon in Swansea.

  • Wales has a once-in-a-generation opportunity to become the world leader in tidal lagoons. The Swansea Bay tidal lagoon alone will generate 2,000 jobs and contribute £300 million to the Welsh economy during its construction. Welsh Labour MPs, the Welsh Labour Government and many public faces and campaigners have declared that they “Love the Lagoon”, so why are the Government refusing to publish their response to the Hendry review and, in so doing, putting the project at risk?

  • At the risk of repeating myself, the hon. Lady highlights the fact that there is support for the concept in Wales—indeed, there is. But she also needs to be honest about the fact that the Labour Government in Wales, Labour MPs from Wales and Labour Assembly Members from Wales have highlighted the danger of high energy prices for the steel industry, for example. We need to make a decision that is right for industry in Wales and for the Swansea Bay tidal lagoon, but we need to do that on a calculated basis, looking at the facts. That is what we will do.

  • Renewable Energy Projects

  • 5. What progress the Government have made on delivering renewable energy projects in Wales. [900693]

  • The Government are committed to supporting renewable energy to deliver more secure, cleaner energy. For example, in March we gave consent for the Glyn Rhonwy pumped storage project, which will support other renewable technologies by capturing and storing excess energy from solar or wind. It will support 250 full- time jobs at peak construction, and it is a great example of the essential role that Wales plays in energy supply.

  • Following on from questions from the hon. Member for Tiverton and Honiton (Neil Parish) and my hon. Friends the Members for Ynys Môn (Albert Owen) and for Neath (Christina Rees), the issue of the tidal lagoon does need a response from the Government. It is eight months since the review. Will the Minister say now when the Government will publish their response? There is a very real risk that the investors that are needed to fund the project will walk away unless a decision is made very soon by the Government.

  • In the previous Parliament, the hon. Lady was an Opposition Front-Bench Treasury spokesman, so she will be aware that we need to analyse the benefits and costs of a tidal lagoon. The decision will be made and announced in due course by the relevant Ministers.

  • There is great support for the tidal lagoon in my constituency, where GE Energy would manufacture the turbines. Is the Minister concerned that our lead in this sector might be lost if we do not make a swift decision?

  • Having read the Hendry review, I am aware of the technology’s possible benefits to industry across the UK. That is why we are giving such serious consideration to the report produced by Charles Hendry.

  • Community hydro schemes throughout Wales have faced business rates increases of up to 900%. In Scotland there is 100% relief and in England there is a cap, but Labour Ministers in Wales are sitting on their hands. I am told that the basic problem is made here in London because of the regulations. Will the Minister meet me and representatives of the sector to seek a full and quick solution?

  • The hon. Gentleman’s constituency, like mine, has a number of hydro projects, and I would be more than delighted to meet him to discuss where the problems lie. My understanding is that the problems lie in Cardiff, with the Labour Government, but I am more than happy to meet the hon. Gentleman to make sure that we deal with this.

  • Exiting the EU: Welsh Economy

  • 6. What discussions he has had with the Secretary of State for Exiting the European Union on the potential effect of the European Union (Withdrawal) Bill on the economy in Wales. [900694]

  • I have regular discussions with my right hon. Friend the Secretary of State for Exiting the European Union on how all aspects of our exit from the EU will affect Wales. The European Union (Withdrawal) Bill will maximise certainty to individuals and businesses across Wales and the rest of the UK.

  • Fifteen months after the referendum result, progress on Brexit is still too slow. About two thirds of Welsh exports go to the European Union and thousands of Welsh jobs depend on this trade, so what is the Secretary of State doing to ensure that our Welsh economy is not wrecked by a cliff-edge Brexit that would damage these vital ties?

  • The hon. Gentleman will be well aware that the European Union (Withdrawal) Bill will be debated tomorrow. I hope that he will support that Bill because of the certainty and security it provides by closing loopholes and ensuring that we have appropriate frameworks in place. Those in themselves present the issue of a cliff edge that he mentioned.

  • Since the referendum result, we have seen record inward investment in Wales, record levels of employment and a proposal to scrap the Severn bridge tolls. Does that not show that under the Conservative Government the future for Wales is very good indeed?

  • I am grateful to my hon. Friend for his question. He is a passionate campaigner for not only the UK and Wales, but the benefits of leaving the European Union. We want a stronger, fairer, more united and outward-looking Union, and Members on both sides of this House have a role to play in that.

  • One hundred years ago, y Gadair Ddu—the Black Chair—was posthumously awarded at the Birkenhead Eisteddfod for Hedd Wyn’s awdl “Yr Arwr”. I would like to congratulate the poet’s nephew Gerald Williams and Parc Cenedlaethol Eryri on safeguarding for Wales the family farm, Yr Ysgwrn, which will be opened officially today.

    This month also celebrates the referendum 20 years ago that brought devolution to Wales. The European Union (Withdrawal) Bill is a bare-faced Westminster bid to take back control against the will of the people of Wales. Will the Minister tell the House what his Government will do when Wales denies consent to the Bill later this year? Would it not be political folly to press ahead in such circumstances?

  • Order. I am most grateful to the hon. Lady. If colleagues could show some sensitivity to time, that would be appreciated.

  • I would certainly underline many of the points that the hon. Lady made in relation to Hedd Wyn, whose former home is being opened today.

    The hon. Lady will recognise that withdrawal is about creating the smoothest form of exit that we can possibly deliver. My right hon. Friend the First Secretary of State and I met the First Minister earlier this week, and we are keen to deepen our engagement even further. We want the Welsh Government to respond so that we can come up with the sort of frameworks that will work for every part of the United Kingdom.

  • The Secretary of State has said in the past that there will be more powers for Wales, but is not his banal rhetoric undermined by the Government’s record of broken promises? The tidal lagoon—no decision; S4C funding—slashed; rail electrification—cancelled. Will he list the powers that Wales can look forward to and say when we will hear what they are?

  • I am disappointed by the tone of the hon. Lady’s question. She is well aware of our strong record on devolution. Earlier this year, we passed the Wales Act 2017. Last December, we agreed a new fiscal framework, which gives Wales a very fair settlement, and we are trying to work as closely as possible with the Welsh Government to deliver an exit from the European Union that works for every part of the UK. Wales is obviously my interest in that.

  • I am sure that the Secretary of State knows that the Welsh economy could be damaged by careless talk about Brexit. The public narrative from the Welsh Government is often alarmist and could even scupper future foreign investment. What can my right hon. Friend do to reassure potential foreign investors that Wales is open for business and remains a first-class destination for foreign investment?

  • My right hon. Friend is absolutely right. It is a shame that many Opposition Members and remoaners fail to recognise the opportunity that leaving the European Union creates. When my right hon. Friend the Prime Minister was in Japan just last week, she announced a deal in relation to Aston Martin—yet another significant trade arrangement with Japan on the back of those with Nissan and Toyota—and the Vale of Glamorgan and the midlands will benefit further from it.

  • Employment Trends

  • 7. What recent assessment he has made of employment trends in Wales. [900695]

  • In the past year, the employment rate in Wales has reached a record high. Wales benefits particularly from thriving tourism, which, with the help of UK Government initiatives, such as the coastal communities fund, grew by a massive 36% last year. Ten per cent. of Welsh workers are now directly employed in tourism—up from 7% in 2014.

  • Does the Minister agree that, post-Brexit, it is essential to maintain the current level of rural agricultural support to Wales? What will he do to try to ensure that that happens?

  • The Wales Office is committed to maintaining the employment growth stats that we have experienced in Wales in the past seven years. The investment that the Secretary of State mentioned from Aston Martin is a fine example of our ability to attract investment into Wales that will create high-quality jobs.

  • Employment trends within Wales are important, too. What on earth, as a north Wales MP, is the Minister doing supporting the transfer of Her Majesty’s Revenue and Customs jobs from Wrexham to Cardiff city centre?

  • There will be more HMRC jobs in Wales as a result of the reorganisation than is currently the case. I assure the hon. Gentleman that the situation in Wales is one of employment growth—99,000 more jobs than in 2010, and 119,000 more jobs in the private sector. The employment story in Wales is a success of which the hon. Gentleman should be proud.

  • Today’s important report from the Institute for Public Policy Research provides a damning indictment of direct Westminster rule over the Welsh economy. Does the Minister agree that the only solution is greater economic powers for Wales?

  • The hon. Gentleman is like a stuck record on this issue. Rather than citing reports from high-flown companies, he should highlight the real, on-the-ground success story: unemployment in Wales is falling and fewer people are dependent on welfare. We are creating jobs and a successful economy in Wales. The hon. Gentleman should celebrate that.

  • Prime Minister

    The Prime Minister was asked—


  • Q1. If she will list her official engagements for Wednesday 6 September. [900624]

  • As we return from the summer recess, I am sure that the thoughts of Members across the House are with the friends and families of the victims of the tragic Barcelona terror attack last month, including seven-year-old Julian Cadman.

    I want to reassure the House that the United Kingdom has ensured that assistance, in the form of military and humanitarian resources, is already in place for those countries, including the overseas territories, that are preparing for Hurricane Irma.

    This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

  • Of course everyone agrees with my right hon. Friend about the thoughts that she has shared, particularly in relation to all those who perished in the terror attack in Barcelona—especially Julian Cadman.

    As part of the process of leaving the European Union, it is imperative that we transfer existing EU laws, regulations, directives and the rest into substantive British law. There are many concerns—very serious concerns—among Conservative Members about the means, not the ends, of the European Union (Withdrawal) Bill. Will my right hon. Friend assure me that she will look in particular at amendments that seek to change the Bill so that it does not become an unprecedented and unnecessary Government power grab?

  • I am grateful to my right hon. Friend for raising this issue. I know that she, like me, wants to see an orderly exit from the European Union, and that she will support the Bill, which will enable us not just to leave the EU but to do so in an orderly manner, with a functioning statute book. As we do that, of course, we will require certain powers to make corrections to the statute book after the Bill has become law, because the negotiations are ongoing. We will do that via secondary legislation, which will receive parliamentary scrutiny—the approach has been endorsed by the House of Lords Constitution Committee. Let me reassure my right hon. Friend that as the Bill undergoes its scrutiny in this House and the debate continues, we will of course listen very carefully to that debate. I shall be happy to meet her to discuss the issue further.

  • I agree with what the Prime Minister said about Barcelona. The attack was abominable and appalling. I believe that we should think of the victims, but also thank the people of Barcelona for their wonderful community response to what was a threat to all of them.

    I hope that the whole House will join me in thinking also of the victims of the terrible floods in Bangladesh, Nepal, India, Sierra Leone and Texas. Obviously, our thoughts are with those who are facing Hurricane Irma in the Caribbean as we speak.

    Every Member on both sides of the House should be concerned about the fact that inflation is once again running ahead of people’s pay. This week, workers at McDonald’s restaurants took strike action for the first time in this country. The boss of McDonald’s, Steve Easterbrook, is reported to have earned £11.8 million last year, while some of his staff are paid as little as £4.75 per hour. Does the Prime Minister back the McDonald’s workers’ case for an end to zero-hours contracts and for decent pay?

  • Obviously, what is taking place at McDonald’s is a matter for McDonald’s to deal with, but the questions—[Interruption.] Let us focus on the issues that the hon. Gentleman raises, such as zero-hours contracts. In fact, the number of people on zero-hours contracts is very small—[Interruption]—as a proportion of the workforce, and there are people who genuinely say that it is of benefit to them to be on those contracts. However, for the 13 years the Labour party was in government, it did nothing about zero-hours contracts. It is this Conservative Government who have put the workers first and banned exclusive zero-hours contracts.

  • My question was about McDonald’s, whose chief executive is paid 1,300 times as much as his staff—and approximately 800,000 people in Britain are on zero-hours contracts.

    When she became leader of her party, the Prime Minister pledged:

    “I want to make shareholder votes on corporate pay not just advisory but binding.”

    She put that in her manifesto but, like so much else in her manifesto, it has now been dumped—or archived, or however we want to describe it. Was the tough talk on corporate greed just for the election campaign or is it going to be put into law?

  • I suggest to the right hon. Gentleman that he looks again at the action that, in government, Conservatives have taken on this issue: it is the Conservative Government who have recently published our proposals on corporate governance; it is Conservatives who gave shareholders the power to veto pay policies; it is Conservatives who forced companies to disclose board directors’ pay; and it is Conservatives who introduced tough transparency measures for the banks. That has been done not by a Labour Government; it is the Conservative party that has been putting workers first.

  • I note that the Prime Minister uses the word “advisory”, because page 18 of the dumped manifesto says:

    “the next Conservative Government will legislate to make executive pay packages subject to strict annual votes by shareholders”.

    She has gone back on her word.

    To help people who are struggling to make ends meet, many politicians have become convinced that we need to cap energy prices. Even the Prime Minister was briefly converted to this policy. Last week, the profit margins of the big six energy companies hit their highest ever level. I wonder if I could now prevail on the Prime Minister to stick to her own manifesto pledges on this matter as well.

  • First, on the question of what we are doing on corporate governance, I actually did not use the word “advisory” in my answer, so may I suggest to the right hon. Gentleman that in future he listens to my answer and does not just read out the statement before him?

    The right hon. Gentleman raises an important issue about energy prices, because we are concerned about how that particular market is operating. We do expect the companies to treat customers fairly. That is why we have been looking at the action that can be taken, and it is why the Business Secretary has been doing exactly that: he wrote to Ofgem in June asking it to advise on what action it could take to safeguard customers. We are particularly concerned about the poorest customers who are kept on those tariffs that do not give them value for money. So I agree—and it is the Government who are doing something about it.

  • If only that were the case, because Ofgem’s plans will benefit only 2.6 million customers, but 17 million customers are short-changed by the big six energy companies. The Prime Minister could and should take action on this.

    But the Prime Minister is not the only one going back on her word—[Interruption.] When Conservative Members have calmed down a little, I would just like to say this: at last year’s Sports Direct annual meeting, Mike Ashley personally pledged to ban the use of zero-hours contracts in his company. A year on, it is still exploiting insecure workers with zero-hours contracts. Will the Prime Minister join me in now demanding that Mr Ashley honours his words and ends zero-hours contracts in all his companies?

  • As I have said, it is this Government who have actually taken action in relation to zero-hours contracts, unlike the Labour party.

    The right hon. Gentleman talks about manifestos and people going back on their word. I might remind him that the Labour party manifesto included a commitment to support Trident, our independent nuclear deterrent. Shortly after the election, in private, he told people he did not agree with that. For years the right hon. Gentleman sat on the Labour Benches and did not support Labour policy; now he is Labour leader and he still does not support Labour policy.

  • I listened very carefully to what the Prime Minister said on this occasion and I am struggling to see the connection between what she just said and Mike Ashley, Sports Direct and McDonald’s. Perhaps she will now answer the question: will she condemn what Sports Direct and McDonald’s are doing to their staff? It is quite straightforward—yes or no?

    Today, thousands of nursing and other healthcare staff are outside Parliament. They are demanding that this Government scrap the 1% pay cap. Poor pay means that experienced staff are leaving and fewer people are training to become nurses. There is already a shortage of 40,000 nurses across the UK. Will the Prime Minister please see sense, end the public sector pay cap and ensure that our NHS staff are properly paid?

  • We absolutely value the work of all those who work in the public sector—nurses, teachers and others—who are doing a good job for us, day in and day out, often in difficult and harrowing circumstances. It might be helpful if I remind the House of where we are on the issue of the pay review bodies and public sector pay. There are two pay review body reports for 2017-18 still to be published and for the Government to respond to—for police and prison officers—and that will happen shortly. Then later in the autumn, as happens every year, we will publish the framework for 2018-19. We will continue to balance the need to protect jobs and public sector workers with the need to ensure that we are also protecting and being fair to those who are paying for it, including public sector workers.

    We have seen the right hon. Gentleman, in this House and outside it, consistently standing up and asking for more money to be spent on this, that and the other. He can do that in opposition—[Interruption.] He asks consistently for more money to be spent, and he can do that in opposition because he knows that he does not have to pay for it. The problem with Labour is that it does that in government as well. As a result of the decisions that the Labour party took in government, we now have to pay more in debt interest than on NHS pay. That is the result of Labour.

  • The Prime Minister had no problems finding £1 billion to please the Democratic Unionist party—no problems whatsoever. NHS staff are 14% worse off than they were seven years ago. Is she really happy that NHS staff use food banks? Warm words do not pay food bills; pay rises will help to do that. She must end the public sector pay cap. The reality for working people is lower wages and less job security, with in-work poverty now at record levels. So will the Prime Minister clarify something she evaded during the election campaign? For those struggling to get by, whether employed, self-employed, permanent or temporary, can the Prime Minister categorically state today that they will not see rises in the basic rate of income tax, national insurance contributions or value added tax?

  • I can tell the right hon. Gentleman about the help we have been giving to those who are just about managing. We have taken 4 million people out of paying income tax altogether, and we have given a tax cut to more than 30 million people. We see record numbers of people in employment in this country. We have given the lowest earners the highest pay rise for 20 years by introducing the national living wage, but you only get that with a strong economy. We believe in sound money; he believes in higher debt. We believe in making our economy strong so that we can invest in our public services. Labour’s approach is reckless; ours is balanced. Our approach delivers a strong economy. That is more money for the public services and more jobs for people and families, but you only get a strong economy and a better future with the Conservatives.

  • Q2. As the Prime Minister has said, this Government have an outstanding record on job creation, with 3 million more people in work than there were seven years ago. It is perfectly true that wage rises have not been as high as we would have hoped, but I am proud that we gave that big boost to people at the low end with the rise in the national living wage. What the right hon. Member for Islington North (Jeremy Corbyn) does not understand is that we can only have sustainable rises in pay with increases in productivity. My question to the Prime Minister is: will she instruct all her Ministers to bring forward proposals for productivity rises in time for the Chancellor to announce them in the Budget? [900625]

  • My right hon. Friend has absolutely put his finger on it: productivity is crucial to the strength of our economy and to improving it going forward. That is why we are introducing our modern industrial strategy, which will boost productivity, and why we are introducing really good-quality technical education for the first time in this country, to ensure that young people have the skills they need to take the higher-paid jobs created as a result of our industrial strategy.

  • Does the Prime Minister agree that immigration is essential to the strength of the UK economy, as well as to enhancing our diversity and cultural fabric?

  • As I have said on many occasions, overall immigration has been good for the UK, but people want to see it controlled—that, I think, is what people want to see as a result of our leaving the EU. We can already exercise controls in relation to those who come to this country from outside the EU, and the Government continue to believe that it is important to have net migration at sustainable levels—we believe that to be in the tens of thousands—particularly given the impact it has on people at the lower end of the income scale in depressing their wages.

  • Last October, the Prime Minister was forced into a humiliating U-turn on proposals to force companies to disclose how many foreign workers they employed. During the summer, 100 EU nationals resident in the UK received deportation notices in error, which caused alarm to them and many others. We need to cherish those who are here, not chase them away. She must stop dancing to the tune of her right-wing Back Benchers and apologise for the disgraceful treatment her Government have shown migrants in the UK. In the first instance, will she pledge that international students will no longer be included in the net migration figures?

  • In relation to the error made by the Home Office, every single one of those individuals was telephoned with an apology. [Interruption.] It should not have happened in the first place, but the Government did telephone with apologies. As I explained in my first answer to the right hon. Gentleman, however, there is a reason for wanting to control migration. It is because of the impact that net migration can have on people, on access to services and on infrastructure, but crucially also because it often hits those at the lower end of the income scale hardest. I suggest he think about that impact, rather than just standing up here and saying what he has. It is important that we bring in controls, but we want to continue to welcome the brightest and the best here to the UK, and we will continue to do so.

  • Q3. I know that my right hon. Friend will be as alarmed and angered as many people are at the decision of the Northern Ireland judicial authorities to reopen the so-called legacy cases involving past and present members of the armed forces. These cases have been investigated meticulously and represent just 10% of deaths in the troubles. A line really needs to be drawn. Does she agree that it is wrong to single out any group for this kind of investigation and that the hundreds of thousands of people who served in Northern Ireland should feel appreciated for the difficult job they did and not be hounded into old age by such investigations? [900626]

  • We are unstinting in our admiration for the role that our armed forces played in ensuring that Northern Ireland’s future would only ever be decided by democracy and consent. The overwhelming majority served with great distinction, and we do indeed owe them a great debt of gratitude. As part of our work to implement the Stormont House agreement, we will ensure that new legacy bodies are under legal obligations to be fair, balanced and proportionate, which will make sure that our veterans are not unfairly treated or disproportionately investigated and reflect the fact that 90% of deaths in the troubles were caused by terrorists, not the armed forces. Of course, as my right hon. Friend will appreciate, however, the investigations by the Police Service of Northern Ireland are a matter for it, as it is independent of government.

  • Q9. The Prime Minister will be aware of the death of my constituent, Kim Briggs, who was knocked over last year by a cyclist on an illegal fixed-wheel bike with no front brake. Does she agree that the law on dangerous driving should be extended to included offences by cyclists and that the 1861 offence of wanton and furious driving, on which the prosecution had to rely in this case, is hopelessly outdated and wholly inadequate? [900632]

  • First, I extend our sympathies to the family and friends of the hon. Lady’s constituent who died in those tragic circumstances. The hon. Lady has raised an important issue. We should welcome the fact that the prosecution team were able to find legislation under which they were able to take a prosecution, but she makes a general point about ensuring that our legislation keeps up to date with developments, and I am sure that the Secretary of State for Transport will look at the issue.

  • Q4. Living near a natural green space is good for physical and mental health, but people in the most deprived areas of the country are the least likely to do so. My right hon. Friend has committed to reducing inequality and improving mental health, so I ask her to read the new report published by the Conservative Environment Network and masterminded by my hon. Friend the Member for Taunton Deane (Rebecca Pow) and to take on board its recommendation to consider the environment across Government policy. [900627]

  • I thank my hon. Friend for that. She has campaigned on and has a particular interest in the whole question of mental health. I welcome the fact that she has raised the health benefits of green space, which are becoming ever more recognised, and I know that the Conservative Environment Network highlights that in its report. The Department for Environment, Food and Rural Affairs will be producing a 25-year environment plan. It will consider the evidence within that report and will focus on what can be done to ensure that the benefits provided by access to green space are available to all segments of society.

  • Q13. This summer, a third of all parents across the country went without a meal to ensure that they could feed their children during the school holidays. In Stoke-on-Trent, amazing volunteers came together to provide over 10,000 meals for local kids. I am proud of my constituents, but I am disgusted by this Government, who have turned a blind eye and done nothing. How many kids have to go hungry and how many parents have to go without food before this Prime Minister will do her job and act? [900636]

  • I recognise the issue that the hon. Lady raises about children who are normally able to access free school meals during term time and the impact that that has during the holidays, which is a matter that the right hon. Member for Birkenhead (Frank Field) has been taking up together with colleagues in the all-party parliamentary group on hunger. From the Government’s point of view, our focus remains on tackling the root causes of poverty, not just the symptoms. That is what is important. Nearly three quarters of children from workless families moved out of poverty when their parents entered full-time work, and we see record levels of employment under this Government. That is why ensuring that we get a strong economy and those jobs is so important. I am sure that Ministers in the Department for Work and Pensions and the Department for Education will be looking at the proposals that the right hon. Member for Birkenhead has brought forward.

  • Q5. The reductions in unemployment, poverty and income inequality are some of our proudest achievements in recent years. What more are the Government planning to do to further the one nation principle and to ensure a still fairer society? [900628]

  • My hon. Friend is absolutely right. Under this Government, we have seen income inequality fall to its lowest level since 1986, the number of people in absolute poverty is at a record low, and we have the lowest unemployment rates since 1975. He is right, however, that there is more to do, which is why yesterday we announced £40 million for youth organisations to boost the skills and life chances of young people living in disadvantaged areas. That will have a transformational effect on the lives of some of our most disadvantaged young people and will help to achieve the fairer society to which my hon. Friend rightly refers.

  • Q15. A few weeks ago, the utterly shaming lack of mental health provision in this country was condemned by our most senior family court judge as he sought a bed for a desperately ill teenage girl. The 17-year-old had been restrained no fewer than 117 times in a place not fit to care for her. Does the Prime Minister agree with me in echoing the words of Sir James Munby that the continued failure to tackle our nation’s mental health crisis means the state will have blood on its hands? [900638]

  • I am sure everybody in this House was concerned to read of the circumstances of that individual and the treatment she received. I accept that we need to do more in relation to our mental health services. That is precisely why the Government are putting more money into mental health; it is why we have introduced a number of programmes particularly focusing on the mental health of young people; and it is why we have reduced by 80% the number of people being detained in police cells because of their mental ill health. As I have said, we have increased the funding, but of course we need to do more. That is why we are pushing forward on further change. We are pledged to reform outdated mental health laws, and we have created targets to improve standards of care. I agree that mental health is important, and this Government are focusing on it and putting more resource into it.

  • Q6. Given the importance of the fishing industry across the whole United Kingdom, particularly in my constituency of Banff and Buchan, what discussions have the Government had with representatives of the fishing industry in the north-east of Scotland as part of the ongoing EU withdrawal negotiations? [900629]

  • I recognise the importance of the fishing industry to a number of parts of the United Kingdom, including, of course, my hon. Friend’s constituency. He is right to raise this point. The Government are engaging with a range of fishing stakeholders, including a meeting with the Scottish Fishermen’s Federation in July. We do value our fishing communities, and supporting them will be an important part of the action we take as we exit the European Union. We are working closely with the fishing industry. I myself met fishermen on a number of occasions across the summer and spoke to them about the industry. We are working with fishermen and others who have a stake in the industry to make sure that we get this right when we leave the European Union.

  • The Prime Minister will be aware of my party’s initiative last week to have devolution up and running in Northern Ireland immediately, in parallel with the talks process—an initiative that was welcomed by the Irish Government, Opposition parties and a wide section of public opinion in Northern Ireland. If, however, despite all our best efforts and the agreement of all the other parties, Sinn Féin stands alone and continues to block the restoration of government in Northern Ireland, will she confirm to the House what a Government spokesperson said yesterday evening about the future governance arrangements for Northern Ireland, particularly the very welcome statement that there will be no question of joint authority or a role for Dublin?

  • The right hon. Gentleman is right about the importance of the talks to restore a devolved Administration in Northern Ireland. I am happy to confirm that we will not be looking at a joint authority. He will be aware that the Belfast agreement includes certain responsibilities in relation to the Government of the Republic of Ireland in north-south co-ordination, but the focus for us all should be on trying to ensure that we can resolve the current differences and see that devolved Administration reasserted in Northern Ireland. That is what would be best for the people of Northern Ireland.

  • Q7. By refusing even to discuss free trade, does the Prime Minister agree that the European Commission is damaging the employment and economic interests of its own member states? For example, by endangering jobs in the German car industry, for which the UK is the largest export market. Will she call on other European Heads of Government to prevail on the European Commission to end this act of wanton economic self-harm and to start free trade talks, which are so clearly in the interests of everybody? [900630]

  • As my hon. Friend will know, my right hon. Friend the Secretary of State for Exiting the European Union was recently back in Brussels for a further round of negotiations. Those negotiations have been productive and constructive, but of course we want to see the discussions moving on to the future relationship. What the Government have done over the summer, and will be continuing to do, is to publish a set of position papers that set out options and ideas for how that deep and special partnership can be taken forward. My hon. Friend is absolutely right that this is not just a question of what suits the United Kingdom; it is actually in the interests of the European Union to have that good, deep and special partnership.

  • What action is the Prime Minister taking to ensure that my constituents, many of whom are paying in excess of £5000 to travel to London every year, get a better service, not the one that the new plans under her Government will introduce? Under those plans the people of Bedford will lose the inter-city rail services.

  • If the hon. Gentleman looks at the record of this Government, he will see that we recognise the importance of rail services—

  • He says that we don’t, but I suggest he just look at the funding we are putting into improving rail services across this country. That is a sign of our recognition of the importance of those services.

  • Q8. One person sleeping rough is one too many. Our party’s manifesto set out to end rough sleeping by the end of this Parliament. Given the important role that charities play in this task, will the Prime Minister join me in paying tribute to the excellent charity Crisis, which is marking its 50th anniversary? [900631]

  • First, may I pay tribute to my hon. Friend, because I know this is an issue he cares about deeply and he co-chairs the all-party group on ending homelessness? He rightly says that we did have a commitment on reducing rough sleeping, with the aim to halve it by 2022 and eliminate it altogether by 2027, and £550 million has already been allocated until 2020 to tackle homelessness and rough sleeping. I am also happy to join him in paying tribute to Crisis, as it marks its 50th anniversary. Over those 50 years, it has been doing a very important job, and I will be hosting a reception for Crisis to mark its 50th anniversary in Downing Street later today.

  • The University of Bradford, in my constituency, makes a compelling case for a medical school teaching all types of health professionals. Will the Prime Minister confirm that those universities where the need is greatest will be given the opportunity to set up medical schools?

  • First, we are of course pleased that we are going to be increasing the number of training places, which means that the Department of Health is looking at the whole question of what places are available and where, and what new medical schools should be set up. So I am sure that the Secretary of State for Health will be interested in hearing the hon. Lady’s pitch for Bradford to have a medical school.

  • Q10. In the 1960s and 1970s, thousands of women were prescribed Primodos as a pregnancy test, which resulted in profound effects for the babies that followed. Alongside elderly parents, my constituent Charlotte Fensome cares for her brother Steven, who was profoundly affected. Does the Prime Minister agree that those families now deserve justice and that there should be a chance to launch a public inquiry into this terrible scandal? [900633]

  • My hon. Friend has raised an important issue, and she is absolutely right to do so. We should recognise the impact that this had on those women who took this hormone pregnancy test during pregnancy from the late 1950s into the 1970s—I believe 1978 was the last time. An expert working group has been set up to look into this issue and it is due to publish its findings in the autumn, but I would be very happy to meet my hon. Friend to discuss this issue with her.

  • Parents in my constituency are disappointed. [Laughter.]

  • Order. That is a really unseemly response. The hon. Lady is a new Member; she is highly articulate; and she will be heard.

  • Parents in my constituency are disappointed. Over the summer they sought to take advantage of the 30 hours of free childcare, but due to underfunding they found that it was not available and not free. Will the Prime Minister apologise to parents across the country for false advertising on what otherwise would have been a welcome policy?

  • What I can tell the hon. Lady is that we are investing £1 billion of extra funding every year in early years entitlements, and that includes £300 million per year to increase the national average funding rate. This investment is based on work that was done—a plan that was done—by the DFE, which was described by the National Audit Office as “thorough” and “wide-ranging”. There are important ways that childcare providers can get more from their funding—the DFE is offering to support them to do that—but independent research has shown that our hourly funding rate is significantly higher than the average cost for providing a place to a three or four-year-old. I would hope that she welcomed the fact that this issue of childcare is one that this Government have taken on board and are delivering on.

  • Q11. For the second year running, I am planning the Wiltshire festival of engineering, this time with my hon. Friend the Member for South West Wiltshire (Dr Murrison). We hope to inspire 3,000 children to help to challenge stereotypes of engineering careers and to combat the local skills gap. In addition, we want to highlight that Wiltshire is a hub of engineering, design and technology. Would the Prime Minister consider attending this wonderful event? [900634]

  • I congratulate my hon. Friend on her initiative. She raises a very important point: I think it is important that we see more young people moving into engineering and pursuing careers in engineering and science more generally. The steps she is taking with our hon. Friend the Member for South West Wiltshire (Dr Murrison) are an important part of that. We do need to address those stereotypes. I am particularly keen to address the stereotype about women in engineering, because we should see more women going into engineering. If my diary allows, I would be very happy to attend her festival.

  • Clinicians do not believe it will be safe. Commissioners and providers do not believe it will be feasible. Is it not now time for Ministers to reverse the decision they took in 2011 to close the accident and emergency department at King George hospital?

  • We have been very clear that we want decisions to be taken at a local level with clinical advice, and that is exactly what the Department of Health is doing.

  • Q12. As Home Secretary, the Prime Minister was one of the first to appreciate the alarming extent of child sexual exploitation. She responded to calls from many of us to set up the historic abuse inquiry. Does she agree that those who expose and work to root out the criminal perpetrators for the horrific crimes they commit—especially in the face of so-called cultural sensitivities and people hiding behind the cloak of political correctness—should be encouraged and promoted, not castigated and gagged? [900635]

  • My hon. Friend has raised a sensitive and important issue. As he said, it is one that I took a particular interest in when I was Home Secretary. Anyone who abuses a child must be stopped, regardless of their race, age or gender. Child sexual exploitation is not exclusive to any single culture, community, race or religion. It happens in all areas of the country and can take many different forms, but I am clear and the Government are clear that political or cultural sensitivities must not get in the way of preventing and uncovering child abuse. The freedom to speak out must apply to those in positions of responsibility, including Ministers and shadow Ministers on both sides of the House. If we turn a blind eye to this abuse, as has happened too much in the past, more crimes will be committed and more children will be suffering in silence.

  • Glenfield’s children’s heart surgery unit has some of the best outcomes in the country, including mortality rates lower than the national average. Professor Ara Darzi says that proposals to change children’s heart surgery are astonishing, embarrassing and plucked out of thin air. Will the Prime Minister ensure that the final decision is made on the basis of sound clinical evidence and when this House is sitting?

  • The hon. Lady is aware that there are many ways in which MPs can question Ministers about plans. As I said in answer to one of her hon. Friends, decisions about the future structure of the NHS, its services and their provision will be taken, and are being taken, on the basis of clinical need and clinical evidence.

  • Q14. Britain is among the world’s leading digital economies, and as we leave the European Union technology will be crucial for a successful Brexit and for dealing with issues from the Northern Irish border to customs controls. Does the Prime Minister agree that Brexit can kick-start a further wave of digital investment and that working with the industry through a Brexit technology taskforce could help her do that? [900637]

  • My hon. Friend is absolutely right about the position that the United Kingdom holds in science and innovation. We are already a leading destination: we have some of the world’s top universities, three of which are in the world’s top 10, and we have more Nobel prize winners than any country outside the United States. We have a proud history of cutting-edge research in science, innovation and technology and, as he says, Brexit gives us an opportunity to give a further kick-start to our position in relation to the digital economy and technology. We want to attract investment from all over the world and to work with industry to ensure that that can be done.

  • In her party conference speech last year, the Prime Minister said that

    “existing workers’ legal rights will continue to be guaranteed in law—and they will be guaranteed as long as I am Prime Minister.”

    Will she tell the House how long that will be?

  • I am happy to stand by commitments on improving workers’ rights. That is something we have been doing as a Conservative Government and will continue to do, and it is something that I will continue to do as Prime Minister.

  • Tomorrow is World Duchenne Awareness Day, which highlights this devastating muscle-wasting condition that affects young men such as my constituent Archie Hill. If, as anticipated, the current development of a more reliable newborn screening test goes ahead, psychological support must be readily available to any affected family. Will the Prime Minister assure families, and Muscular Dystrophy UK, that NHS England will develop the provision of such vital psychological support?

  • My right hon. Friend has raised an important aspect of this terrible condition. I recognise the importance of ensuring that people can access appropriate psychological support when a young family member is diagnosed with this serious health problem. On the new screening test, I understand that Muscular Dystrophy UK is working with one of NHS England’s advisory groups to understand how best to meet the needs of parents and carers following a child’s diagnosis. I am grateful to my right hon. Friend for having raised this important issue.

  • On a point of order, Mr Speaker.

  • Order. It is always a delight to hear the hon. Lady, but I will have to keep her on ice because ordinarily we take points of order after statements or urgent questions. I shall build up, as the House will, a well of expectation and anticipation to hear what the hon. Lady has to say to us in due course. Meanwhile, she may wish to interest herself in the next item of business.

  • Free Childcare Entitlement

  • (Urgent Question): To ask the Secretary of State for Education if she will make a statement on the implementation of free childcare entitlements.

  • Thank you very much, Mr Speaker, for allowing this urgent question, which gives me the opportunity to highlight the Conservative Government’s determination to support as many families as possible with access to high-quality, affordable childcare and early-years education. We are investing a record amount: our support will total £6 billion per year by 2020. My Department is committed to ensuring that all three and four-year-olds have access to free childcare. All parents, regardless of their income and employment status, are entitled to 15 hours of free childcare for their three and four-year-olds; take-up of that universal entitlement is 95%. In addition, take-up of 15 hours of free childcare for disadvantaged two-year-olds is rising, and it is fantastic that more than 70% of eligible two-year-olds are benefiting from this.

    On 1 September 2017, the Government reached a major milestone in delivering our key manifesto pledge to double the free childcare entitlements for working parents of three and four-year-olds from 15 to 30 hours. Today I have tabled a written ministerial statement updating the House on delivery of the 30-hours offer. By 31 August, more than our targeted 200,000 30-hours codes had been issued to eligible parents wishing to take up a place this autumn; indeed, I can update the House on the figure: 216,384 codes issued. These families join the 15,000 families who are already benefitting from 30 hours of free childcare in our 12 early delivery pilot areas. The independent evaluations of these areas were encouraging, showing that more than three quarters of parents reported greater flexibility in their working life as a result of 30 hours, and more than eight out of 10 childcare providers offering the 15 hours entitlement went on to offer 30 hours.

    During the autumn, I will closely monitor delivery of all free childcare entitlements to ensure continued improvements to all our offers for parents and providers. I will continue to work closely with Her Majesty’s Treasury Ministers to ensure that parents can access the HMRC-run childcare service smoothly. The majority of parents have successfully applied using the childcare service, but some parents experienced difficulties accessing the service through the system by the 31 August application deadline. Those parents who are eligible and applied before the deadline will have a code to allow them to access our 30 hours of free childcare. They will not lose out.

    I am pleased to report that this is yet another key manifesto pledge delivered for working families.

  • Last Friday, the flagship policy of 30 free hours of childcare for working parents was introduced. It was a policy shrouded in secrecy, misinformation and mayhem, and now is the time for answers.

    From the beginning, the application process was not fit for purpose. Parents were unable to get their code, settings were run ragged trying to help parents, and this afternoon parents who have been waiting weeks are still in limbo. The Minister has told us that 216,384 parents have their codes. Will he tell us what proportion that is of all parents eligible for 30 hours? How many parents received compensation? How many parents does he expect to pay out to in total? How many of those children have secured a funded place and how many have not? This is basic information that we should already know.

    Experts, providers and parents are up in arms about this lack of funding. The Pre-school Learning Alliance found a 20% funding shortfall and three-quarters of providers said that childcare funding did not cover their costs. Shockingly, 38% of providers do not think that they will be sustainable in a year’s time. To stay viable, settings will charge for extras such as trips out, nappies and lunches in order to pay their staff and keep the lights on. Can the Minister guarantee that he will not allow a two-tier system to emerge whereby parents who cannot afford to pay the extras do not have access to the policy and those who can do?

    Despite the Minister claiming otherwise, Busy Bees and the Co-operative Childcare group have now publicly said the funding rates are insufficient, so what is his strategy to keep experienced and talented practitioners in the sector? The Minister used the pilot evaluations to defend funding rates, but the truth is that 30 hours had a negative financial impact on providers, so has he spoken to stressed-out providers facing closure or parents at their wits’ end?

    Finally, this childcare has been advertised as free but it is clear that it will be subsidised by parents or providers. This risks pricing out the poorest and top providers leaving the sector. Will he now listen and commit to re-evaluating the policy’s funding?

  • I am afraid that the hon. Lady’s rhetoric does not reflect the experience on the ground. I can update her: we predicted that about 75% of eligible parents would apply to the scheme, as there are some parents who for very good reasons, such as family childcare, would not apply. That figure would have been 200,000, so we have exceeded that prediction. I can confirm that only six days into September 152,829 parents have secured a place—71% of those parents. That is a great success story.

    We responded to the sector’s concerns about funding; indeed, Frontier Economics carried out some detailed work for us and reported to the Department that the mean hourly delivery cost of childcare was £3.72 an hour. The amount of money that we are providing has increased from £4.56 to £4.94. My experience talking to nurseries up and down the country, including some in London, is that they can deliver for that price. Indeed, the pilot areas have delivered and some 15,000 children have benefited from 30 hours of free childcare, and the lessons learned from those pilot areas are being applied.

  • I welcome the additional money that the Government are putting into childcare, but may I ask my hon. Friend what help and resource is being given to help childcare providers, particularly the smaller ones that are not part of the bigger chains, that are finding cost pressures difficult with the new policy?

  • We certainly understand that the sector will deliver this for us, which is why we carried out so much detailed work. Indeed, a survey published on 31 August demonstrated that eight in 10 of those providers will provide 30 hours. If we look at the pilot areas that have been delivering for a year now, including places such as York and Northumberland, we can see that 100% of their providers are delivering and 100% of the parents who wanted a place found one, despite some reservations being put on the record by some of those providers at the very beginning. The pilots have demonstrated that we can deliver and we are delivering.

  • We of course welcome any changes that increase free early years and childcare entitlements, but it seems as though the Tories’ policies will do more harm than good. In yesterday’s programme for government, the Scottish National party Scottish Government confirmed that the childcare entitlement will double for all three and four-year-olds and eligible two-year-olds to 1,140 hours from August 2020. The Tories have decided to cherry-pick who receives free entitlement to childcare. The Scottish Government will also take action to enable all childcare workers delivering fully funded early years learning childcare to be provided with the Scottish living wage from August 2020, recognising that there are few more important jobs than working with the youngest children, while this Government are restricting which parents are entitled to the 30 free hours, freezing out those on low or unpredictable hours, and have said nothing about those who work in that sector. Should not the Government heed the warnings of the Social Market Foundation and the New Economics Foundation that this version of free childcare is regressive? Will they look towards Scotland’s vision of childcare based on quality, flexibility, accessibility and affordability instead of creating a two-tier system?

  • I will take no lessons from the Scottish Government, no matter what the hon. Gentleman wishes to read out to us. We have committed £6 billion in this area. We talk about childcare, but this is good quality early years education and 93% of the settings are providing good or outstanding childcare. That is great news for education and great news for those parents who, in many cases, find their working lives transformed by access to 30 hours of childcare.

  • This is clearly the right policy and has been demanded by working parents and others up and down the country. The shadow Minister talked about the policy being shrouded in secrecy; I do not know where she was in the general election of 2015, but I think that this is an issue that all parties discussed in many different debates.

    Let me ask the Minister about the implementation of the policy by Her Majesty’s Revenue and Customs and the operation of its website. He knows that I, as the incoming Chairman of the Treasury Committee, wrote to the head of HMRC over the summer, who replied on 17 August saying that a total of £45,000 or thereabouts had so far been paid in compensation. Can the Minister update the House and will he confirm that, as he said, those parents who had codes by 31 August will be able to access the childcare this autumn?

  • I thank my right hon. Friend for her question. This is indeed a manifesto pledge that is being delivered. It is no secret that there were some technical problems with the IT system and, indeed, my right hon. Friend the Financial Secretary is in his place listening to what we say. About 1% of cases that applied online were stuck—that is, for a technical reason those cases were not processed. Another group of cases could not have been processed online, and we refer to those as amber cases. Let me give an example: a person who applies for childcare on the basis of a job offer rather than a track record of earning in that job. If we were not to have a manual system as back-up, we would have a Catch-22 situation in which the person could not apply for childcare because they did not have a job but could not get the job because they did not have childcare. In such situations, there is a manual system.

    When the Secretary of State wrote to my right hon. Friend, I think 2,200 cases were stuck. The figure I now have is 1,500, but they are many new cases, some of which have only been on the system for about a week. I am sure that the Financial Secretary to the Treasury will write to my right hon. Friend with regards to compensation. A small number of people were affected by the system. The system was operational 93% of the time during which people could apply.

  • Has the Minister read the report that I published last week with the Social Market Foundation? It shows that, of the extra money that the Government are pumping into early years over the course of this Parliament, 75% is being spent on the top 50% of earners and less than 3% will go towards the most disadvantaged. This comes at a time when the Government’s own evaluation of the two-year-old offer shows that good-quality early education is life-changing for the families who receive it. Is he happy with this distribution of expenditure? What more is he doing to ensure that low-income and disadvantaged families are accessing this high- quality education?

  • I did read the hon. Lady’s report and some of the press coverage. She is absolutely right that the attainment gap needs to be closed between those from a disadvantaged background and those from other families. We are making progress in closing that gap, which is being closed at a faster rate in London than elsewhere. The 30 hours of childcare is for working families. However, many families cannot get into work because they cannot get childcare, so we will be pulling families out of poverty who currently cannot work because of the extortionate cost of childcare compared to their income. Of course, we still have the offering of 15 hours for the most disadvantaged two-year-olds and the early years pupil premium, which is specifically aimed at helping families most at need—the most disadvantaged families—because we need to close the attainment gap.

  • When it comes to childcare, parents want affordability and certainty. Many parents listening today will be very reassured by the Minister’s statement, so I thank him for that. Will he take this opportunity to confirm what proportion of childcare providers will offer the new entitlement? I believe it is estimated to be about 80% of providers. Can he confirm that that is still the case?

  • My right hon. Friend is absolutely right. Not all providers were offering the 15 hours. Of those that do offer 15 hours, about 80% are going to offer the 30 hours. We understand that we might need to increase capacity in some areas, which is why we have made £100 million of capital funding available to provide another 18,000 places for 30-hours placements.

  • I absolutely welcome the policy. After all, it was a Liberal Democrat policy that we started implementing while in coalition so I would like to see it succeed. However, I invite the Minister to come to Oxford West and Abingdon because I am afraid that the suggestion that the policy is absolutely fine and working on the ground is simply not correct. In my constituency, the places are not available and they are being heavily subsidised by early and late pick-up fees, and extra money for nappies and lunches. Those costs simply were not there before. Please will you look again at the funding in different parts of the country? The total figure does not matter. It needs to be available where parents are. Have you looked at this and what are you going to do about it?

  • I have not done so and I have no plans to do anything about it, but I have a feeling that the Minister might; we will see. Let’s hear the fella.

  • When we selected the areas for the early roll-out pilots, we were careful to select places that were representative of different parts of the country. For example, York would have many parallels with Oxford. Indeed, 100% of providers delivered that childcare in York and 100% of families looking for childcare got it. I would be more than happy to visit Oxford and see the successful policy being delivered for parents who need it so much.

  • I welcome the Government’s extra investment in childcare. The availability and accessibility of good childcare can make a huge difference to working families. Does the Minister think that the introduction of 30 hours of free childcare will have a positive and direct impact on the finances of working families?

  • My hon. Friend is absolutely right. Evidence from the pilot areas demonstrates that almost a quarter of women and 10% of men are able to take more hours at work. Indeed, the policy has been transformational in some people’s lives. I heard a story the other day of a family who, during the working week, only really met in the car park of the factory where they work shifts. As the husband arrived with the child strapped into the back of the car, the mother got back in the car and drove home, so they were not able to enjoy time together. The delivery of 30 hours’ free childcare will mean that they will be able to enjoy a better family life. The policy will address the situation of people passing in the hallway as one person comes in from work and another goes out.

  • Is it not clear from the contributions of my hon. Friends and from the experience of Busy Bees, a nursery chain that provides a service in Bromborough in my constituency, that these low rates for childcare mean that the market is now fundamentally broken? What will the Minister do if we find, after years of this Tory Government, that they have reintroduced the scourge of low pay into childcare?

  • If the hon. Lady had been listening to the Prime Minister in Prime Minister’s questions, she will have heard that we look carefully at the cost of delivering childcare. As I said, that is £3.72 an hour—much less than the funding we are providing. Busy Bees has 267 nurseries across the country, and is delivering 30 hours. Despite the reservations we have heard, the Co-operative Childcare is delivering 30 hours at its 45 nurseries, including 17 in London, which is one of the most expensive places to do that. Bright Horizons is participating in the scheme with its 296 nurseries. The big chains are participating. I go up and down the country talking to small independent and charitable nurseries and other providers including childminders, and they are also delivering with the funding we are putting in.

  • I congratulate my hon. Friend on delivering on this election promise, but will he keep the funding arrangements under review, particularly those in high-cost areas? Even in these early days, some constituents have complained to me that there is a lack of availability at a local level. That is driven by the money. Will he keep that under review to ensure that the provision is universally available across the country?

  • My hon. Friend is absolutely right. We are creating a lot more places and that creates demand within the system. I visited a nursery just outside Selby in East Yorkshire that was gearing up to provide more places and hire more staff to provide the availability. We are putting £100 million of funding into the system to provide 18,000 additional places. Many nurseries are investing through their own resources to deliver this policy.

  • Children in deprived areas of my constituency start school up to 20 months behind where they should be developmentally. High-quality childcare with properly trained professionals can transform their lives. I urge the Minister to take the Opposition’s concerns more seriously. During the general election campaign, I met several providers who will not be able to deliver the policy. Will he look again and ensure that all children get the very best start in life?

  • I agree with the hon. Lady that it is vital to close the attainment gap between disadvantaged children and other children in our schooling system. Indeed, we have 12 opportunity areas across the country where we are looking at ways of specifically addressing that. One way is better provision for early years, but another is working with parents to improve the home learning environment, which is often so lacking in some families, particularly when they have housing problems to address.

  • Many parents in Torbay will welcome the availability of up to 30 hours of free childcare to support them going into employment, but, as with all policies, the proof of the pudding is in the eating. Regarding the early delivery areas, what evaluation has been done of the number of parents who have taken on extra hours at work thanks to the availability of increased childcare?

  • The raw stats indicate that about a quarter of women and 10% of men took additional hours, but I have also heard from people who could not get into employment at all because of the cost of childcare. A lady I spoke to in York said that the fact that she could now work and take up the 30 hours of childcare greatly transformed her family’s finances and life. The system is very flexible. Families can spread the childcare over more weeks or use different providers, including those in the voluntary sector, maintained nurseries or childminders.

  • The Government cannot hide on this issue. During the Childcare Bill Committee, I and others here and outside Westminster told the then Minister that his plans were full of holes, and so it has been proved. What will the new Minister do to fill the gaps in provision, particularly in deprived areas, where the holes are the deepest and the need is the greatest?

  • I am not going to argue with the hon. Gentleman that we need specifically to target some of our more deprived areas. This policy is designed to help working families, but I am all too well aware that many children in the most deprived families, with the most needs, are not in working families. That is why we have the offering for two-year-olds and the additional help that is going in. We are working very carefully to ensure that we do not leave that group of children out, particularly in the opportunity areas.

  • My elder daughter, Daisy, started nursery this week. From speaking to local parents, I know that this policy will, as the Minister says, help hard-working families take up new employment and additional hours, so it is welcome. I am also encouraged that parents will be able to add to the funding the Government are making available through existing schemes, such as childcare vouchers. However, in support of my hon. Friend the Member for Harrow East (Bob Blackman), will the Minister, as he reviews policy in an ongoing way, consider whether flexibility could be introduced for rural or high-cost areas, to make sure those additional schemes can be used to help parents who wish to do so to top up the funding provided by the Government? Instead of always complaining that there is not enough, let us help parents to look after themselves.

  • I do not want to disappoint my hon. Friend, but we are not in the business of encouraging top-ups. Nurseries are perfectly free to charge for additional hours or for lunch, nappies or other items, but that cannot be a prerequisite to accessing the 30 hours. The Government have a number of other packages, including tax-free childcare and other wonderful policies that the Treasury is making available, to help people afford the cost of childcare. However, this particular policy is great news for parents and great news for children, who are accessing quality childcare and education.

  • I have a constituent who is struggling to pay for childcare because of the way universal credit works. She is a working single mother and is expected to pay for her childcare up front—it is over £800 in her case—and then to claim it back, which does not make much sense to me. The cost is more than she earns from her job, and she may need to give up working. How does this system help people such as my constituent get back into work?

  • This system helps people precisely like that, because it is not a system where people pay and reclaim—the money is reimbursed to the nursery by the local authority. Indeed, staff at one of the nurseries I spoke to in York said that one of the best aspects of the scheme is that they would not have to chase parents for money or, on occasion, withdraw childcare because the parent had not paid their bill. This scheme makes the administration easier for nurseries, which are already collecting the 15 hours’ funding from local authorities. That will exactly solve the hon. Lady’s constituent’s problem.

  • I strongly support the Government’s policy, not least because one of my daughters starts nursery tomorrow. In Nottinghamshire, we have an issue with capacity, and particularly convenient capacity, in rural areas. Parents who commute long distances and who live in villages want childcare close at hand—childminders as well as nurseries. Will the Minister highlight the Government’s childcare business grants of £500 or £1,000, which are available to people who want to set up small businesses as childminders or small nurseries, and will he perhaps consider increasing the grants to a level that enables providers to do more?

  • We have talked a lot about nurseries, but I must make it clear that there is flexibility in this scheme. Indeed, we have 5,500 dormant childminders, who could see this as an opportunity to get back into that business, although I suspect that a number of them may be working in other jobs, and particularly in nurseries, as jobs are created in them. However, this is a flexible system, and I hope the voluntary sector will also step up to the mark and increase capacity in its nurseries—indeed, we could see a number of new nurseries opening because of this policy.

  • I welcome the principle of 30 hours of free childcare, but it cannot come at the expense of quality early years education, and that is exactly what is happening. Many children in my constituency from deprived communities currently have access to quality nursery schools employing qualified nursery school teachers, and those schools are doing tremendous work to enhance the life chances of those children. Those schools assure me that they will not be able to fund the continued employment of those qualified teachers. It is important that we make a distinction between childcare and early years education. I note that Save the Children also raised concerns about this issue yesterday, maintaining that 40% of those who took part in the pilot areas actually reported a loss in profits and, therefore, a threat to their sustainability.

  • I absolutely recognise the importance of the maintained sector. Indeed, many of the small number of maintained nursery schools tend to be in some of the more deprived areas, where needs are much greater. I would just reiterate the fact that 93% of nursery providers are either good or outstanding, according to Ofsted. That is a great sign of the quality that is being delivered on the ground. More hours will mean better quality education, with children starting school more prepared for it. Indeed, a report in the press today showed that children arrive at school without the necessary language skills and simple skills such as picking up a knife and fork. They will learn that at nursery, and that is great news.

  • Figures produced over the summer show that female employment rates are at a record high, at over 70%. Does the Minister agree that it is important to encourage and support women back into work and that this policy and legislation do that?

  • I absolutely agree with my hon. and learned Friend, while recognising that some mothers and, indeed, fathers may see caring for their child at home as their priority—sadly, many do not have a choice in that because of the finances of the household. However, this policy is delivering the opportunity for more women to get into the workplace, and I have already heard from women who have taken on more hours or started a job when they could not previously afford to go to work at all.

  • Last year, in a Westminster Hall debate, the then childcare Minister told me I was scoring cheap political points and should be ashamed of myself when I raised the issue of funding policies and of how nurseries were at threat of closure because of this policy. Recently, a Pre-school Learning Alliance survey said that one in three nurseries fears being driven out of business because of this policy. What action is the Minister taking to ensure our nurseries do not close because of this flagship policy from the Government?

  • I am surprised the hon. Lady has been accused of making cheap political points. I have known her for some time, and she has never made such points to me. I can assure her that we have looked carefully at the costs of delivery. There will be nurseries that, because of their business plan, are not going to deliver 30 hours, but there are nurseries that were not delivering 15 hours —indeed, there is one in my village, which is connected to a fee-paying prep school, that will not participate. However, there will be choice for parents who might want to go for a different type of nursery education—maybe with longer hours, or with different types of trips and other services—that other families might not wish to choose.

  • I commend my hon. Friend for the way he is responding to this urgent question. For the thousands of working parents who are taking advantage of the 30 hours of free childcare, how much is it worth to them on average, per year, per child?

  • It is worth £5,000. That makes a big difference to a family budget.

  • All children are entitled to expect the best possible start in life, and parents are entitled to expect help with childcare so that they can go out to work. However, with thousands of parents in Birmingham still in limbo, free childcare that is often not free, providers threatened with going out of business, and the closure of 26 children’s centres in the city, does the Minister understand the grievance expressed by the group of parents I met last week in my constituency, who said the Government are long on rhetoric but are simply letting Birmingham’s children down?

  • The hon. Gentleman talks about letting children down in Birmingham, but maybe he should look at some of the children’s services there and see how they could be improved. However, this policy has been tested up and down the country, in rural and urban areas, and it is great news for parents and children.

  • Having listened to the urgent question—I congratulate the hon. Member for Batley and Spen (Tracy Brabin) on getting it granted, and the Minister on doing a written statement—I think there is agreement on both sides of the House that this is an excellent policy, and the issue is just the implementation. If there is one Minister in the whole House who will make sure something is done properly, it is the Minister at the Dispatch Box today. Will he give the House an undertaking that he will come back later in the year to update the House on this policy?

  • I certainly will. It must be borne in mind that there are three entry times; it is not like reception year, whereby all children start in September. We are already encouraging parents whose children will have turned three by 1 January—and, indeed, those who will turn three after Easter—to apply early to get on the system. Two more tranches of children will come into the system as it builds.

  • The Minister will be well aware that Northern Ireland has not had a functioning Assembly since January. I want to be reassured that childcare entitlement in Northern Ireland is not falling behind because of the uncertainty over the Assembly, or the lack of it. We have no idea when it will come back. Will the Minister enlighten the House and, in particular, parents in Northern Ireland? Who exactly does he liaise with in Northern Ireland to make sure that childcare entitlement is progressing within the United Kingdom, of which Northern Ireland is a part?

  • I have to confess that I have not liaised with anyone in Northern Ireland on this issue, but I will certainly have a conversation with the Secretary of State, who is well equipped to report on all issues regarding Ulster.

  • May I welcome a policy that will assist another 400,000 families and increase the amount of money we are spending to £6 billion? Will the Minister review the position in East Sussex? As a county with a low average wage, we are not receiving as much as Brighton and Hove, which is right on our borders. As a result, there is a concern that staff in the industry will migrate to Brighton. Perhaps in a year’s time, could the Minister assess whether those patterns are emerging and, if they are, commit to look at the issue afresh?

  • I will certainly keep these matters under review. Indeed, I have a meeting with Suffolk MPs either this week or next week, because their funding is different from that in Norfolk, which is always a matter of contention.

  • I respect the Minister, who is making a valiant effort to defend an outstanding policy with holes in it, the biggest of which is funding. One group who have not been mentioned in this debate is childminders, including those in my constituency, who are highly qualified, are often women, have a level 3 national vocational qualification and have been Ofsted assessed. I have been categorically told by a number of my constituents that the county council funding provided from money given by central Government is inadequate. Many of them say that unless that is remedied they will have to pull out of the business. Can the Minister at least assure me that he will review the whole funding arrangement in the coming first quarter?

  • I will certainly continually keep this under review. Councils are encouraged—indeed, they have committed—to pass on 90%. They have some administrative costs, as I am sure the hon. Gentleman is aware, but we will close that gap as the system matures.

  • I, too, warmly welcome this policy and the fulfilment of our manifesto pledge and commitment. Dorset was one of the pilot areas to introduce 30 hours’ free childcare, and many parents have welcomed the additional flexibility. May I invite the Minister to re-emphasise that message? The policy provides flexibility and gives both parents the opportunity to get back into work or increase their hours of work.

  • Dorset was indeed one of our 12 early delivery areas, starting in April 2017. I am hearing great news from Dorset and I am sure that my hon. Friend will keep me posted.

  • Is the Minister not concerned that more than 60,000 children whose parents applied for a funded place do not have one? How is he going to deliver the policy for those parents, who may have been relying on that funded childcare place in order to take up an offer of employment or to extend their hours at work? This is particularly important in rural areas such as mine. The largest chains of nurseries are better able to spread the costs, but three nurseries in High Peak have had to close their doors over the summer. They are all small, independent nurseries that cannot see a way forward on the funding levels that have been set.

  • That was not the experience in the pilot areas, including areas very similar to that of the hon. Lady. Indeed, we have seen areas where 100% of the providers were delivering and 100% of the parents got places. We are only six days into the school term. I heard that, on Tuesday alone, 8,000 parents got their codes validated with a nursery. Parents will still be looking around and deciding in which nursery to get a place. Indeed, many nurseries will now be considering taking on additional staff to provide more places in those nurseries, given the increased demand.

  • How many working parents have been excluded from the entitlement because they cannot guarantee that they will work more than 16 hours a week on the national minimum wage? Does he not recognise that the reality of many working parents in my constituency is that their employers will not guarantee them those hours, so nor can they? That makes it even harder for them to earn and work.

  • I thank the hon. Lady for her question. Before I answer it, may I correct what I said earlier? Ninety-three per cent. of the funding has to be passed on by the local authority in 2017-18, rising to 95% from 2018-19, which is even better news than I gave earlier.

    The experience is that someone has to be earning the equivalent of 16 hours a week of the national minimum wage. Many mothers and, indeed, fathers are looking to take additional hours, given that childcare will be available. That is the experience up and down the country.

  • Will the Minister acknowledge that the commitment given by his predecessor at a meeting I held with independent small nursery owners in Isleworth last November has not been upheld? They warned her that the funding for the scheme would be insufficient and they would have to close, reduce the range of services to children, charge high amounts for lunch or cut the proportion of highly qualified staff in their settings. She said, “Don’t worry,” and implied that she would sort the funding, but does the Minister agree that their predictions have proven to be true?

  • We did hear what the sector said, which is why we have increased the funding. Indeed, there will be an additional £300 million a year by 2020 as a direct response to those concerns about the funding levels. We have done a lot of work working out what it costs to deliver, and we are confident that the funding is adequate.

  • In July 2016 I asked about progress, as a member of the Public Accounts Committee, given the Committee’s concerns. I asked in particular about work to ensure that local authorities were managing childcare markets effectively and whether there would be intervention if necessary. The then Minister told me that I had asked an important question and then announced the amount of capital. I was grateful for his kind words. It would be a cheap political point to say, “I told you so,” so I am not going to do that. I will simply ask the question again: what work is the Department doing to ensure that local authorities are managing childcare markets effectively, and will the Minister intervene if necessary?

  • We are working very closely with local authorities, particularly on the administration. Indeed, we have given very clear messaging to local authorities: if there are parents who have not yet got their codes because of technical or other reasons, they have to show latitude. Of course, it is not the job of the local authority to manage the market; it is the job of the parents to choose the best provision for their child and for the market to respond to that. That is what we are seeing up and down the country, with increased places being provided in existing nurseries, and new nurseries, I hope, being opened, particularly given the grant funding we have made available for another 180,000 places.

  • Does the Minister agree that some Members seem to be glossing over the fact that this pilot has proved that the policy will empower and enable parents either to go back to work or to extend their working hours, which will transform thousands of lives in this country?

  • There are colleagues in the House from places such as York, Northumberland, Newham, Wigan, Staffordshire, Swindon, Portsmouth, Hertfordshire, Dorset, Leicestershire, North Yorkshire and Tower Hamlets, which have been in the pilot for a year. I have not heard a peep from anyone saying that the scheme is not working, so obviously the pilot has been successful.

  • I must confess that I was something of a secret fan of the Minister, because in a previous incarnation he was very helpful to me with an issue my constituents had. No one is arguing against the idea of 30 hours, but if the picture is as rosy as he paints, how come there are allegations of nurseries forced into bankruptcy and a policy on its knees less than a week in? If people such as those in today’s edition of The Times—a friendly Murdoch paper—are saying that it does not add up, surely it is time to reassess the finances and ramp them up so that the policy is properly funded.

  • We will certainly keep all these matters under review, but the experience from the pilot areas and early deliverers has been that they are delivering on the levels of funding we have put in, and we have responded to concerns by putting in additional funding, with another £300 million by 2020, to make sure that it is more than adequately funded.

  • What does the Minister have to say to the parents of children with special educational needs who cannot access childcare for their children?

  • I am absolutely determined to do what we can to help the parents of children with special educational needs. I have had a number of meetings already, despite my short time in the Department, about ensuring that the money that we are spending is spent effectively and ensuring that parents get the support that they need.

  • I will, exceptionally, take the hon. Lady’s point of order now, if she so wishes, because otherwise I will not hear it and I might feel sorely deprived.

  • Points of Order

  • On a point of order, Mr Speaker. I would hate to deprive you of this request; this is a really serious issue. As you will know, we have not had an Assembly functioning in Northern Ireland, and we have no Government Ministers. I am deeply disappointed, to put it very mildly, by the fact that the Secretary of State for Northern Ireland has not sought an early opportunity to come and update the House on his efforts to get the Assembly up and running. May I ask you, Mr Speaker, whether through your good offices you could prevail upon the Secretary of State for Northern Ireland to do the House the courtesy of coming here later today, or tomorrow, to make a statement and let the people of Northern Ireland know when this intolerable situation is going to come to an end and what the Government’s plans are for Northern Ireland, an integral part of the United Kingdom?

  • I thank the hon. Lady for her point of order. The truth is twofold. First, I have received no indication of an imminent ministerial statement on that matter. Secondly, I have to admit, and I doubt the House will be surprised, that I do not know what discussions or other work might currently be under way. If such discussions or work are taking place, it may well be thought, and perhaps judiciously, that that work should be brought to fruition first, or at least be given a chance to be brought to fruition, before the Secretary of State comes to the House to make a statement. I do not know.

    What I do know is that, ordinarily, the Secretary of State for Northern Ireland—the hon. Lady will know that I have dealings with a very large number of Ministers right across the vista of government—is among the most punctilious of Ministers in approaching me with a view, first, to offering me a private briefing, and then to consulting as to whether or when he should make a statement. The Secretary of State will hear very soon, because it will waft its way to him, the gravamen of what the hon. Lady has just said to the House. I hope that if the Secretary of State has got any important information to vouchsafe, he will choose to do so to the House at the earliest possible opportunity. That could well be this week, and it could well be, at a stretch, today, although I do not think the hon. Lady should expect that. I hope that it will be soon.

  • On a point of order, Mr Speaker. I had planned to raise this point a bit later with, I had hoped, the Chairs-elect of other Select Committees, but as you are going to be vacating the Chair, I think I should raise it now. Can you throw any light on the apparent delays in setting up the Committee of Selection, which are being used as some form of excuse for even further postponement in getting the new Select Committees up and running? Is it not the case that the Chairman-elect of one of the more senior Committees has put forward a plan whereby the Select Committees could be up and running without necessarily awaiting the formation of the Committee of Selection? Is there anything that you can do to help us? I know that several Committees have meetings—hearings—scheduled for next week that will have to be aborted if we cannot get this simple problem resolved this week.

  • I am grateful to the right hon. Gentleman for his point of order, and I certainly hope that the unfortunate and unnecessary eventuality to which he referred does not come to pass.

    I would say a number of things to the right hon. Gentleman. First, I had been aware, some weeks ago, that there was a plan in the offing on the part of at least one Select Committee Chair to facilitate a simple—streamlined, if you will—process whereby the Committees could be constituted. I have not had any recent intelligence on the progress of that initiative, but I was aware of it.

    Secondly, I can say without fear of contradiction to the right hon. Gentleman that although it might be normal for the Committee of Selection first to be constituted, it is not a prerequisite of the establishment of the Committees, and nobody should insult the right hon. Gentleman, his colleagues or the House by suggesting, pretending or implying that it is a prerequisite. It is not. It is perfectly possible for a resolution to be put to this House to facilitate the immediate composition of the Committees. Whether the Committee of Selection is formed or not is, or can be, a separate matter.

    Thirdly, and finally, I say to the right hon. Gentleman and to other Members that I spoke to the Leader of the House shortly after the House rose for the summer recess, and I impressed upon the right hon. Lady the very widely held view—not merely among Select Committee Chairs, but among Back Benchers more widely—that the Committees should be constituted as quickly as possible on our return in September so that they could conduct their first meetings without having to wait until October. I am pleased to tell the House that the Leader of the House immediately assured me that she shared my impatience on this matter and was keen that the Committees should be constituted. She went on to say that she favoured an inclusive approach and wanted to take the House with her, and I absolutely believe her.

    Let me say with all the force at my command that it is absolutely imperative, under any Government, that the Government are subject to scrutiny; and rigorous scrutiny is undertaken not least, and often best, by the Select Committees. Delaying at their composition is not clever. It is not my job to do the Whips’ work for them, but all that they will do if they delay is to build up ill will, and that would be profoundly misconceived. My simple message, in a non-partisan spirit on behalf of Back Benchers in all parts of the House, is: for goodness’ sake, stop faffing around and get on with it.

  • I thought my ruling on the matter was fairly conclusive, but I will take a point of order from the right hon. Gentleman.

  • Further to that point of order, Mr Speaker. In that spirit, is it not possible for the Leader of the House to bring forward a motion setting up the Committees—subjecting herself to your will and to the will of the House—so that we have them established within the next 24 hours?

  • It could be done. It absolutely could be done, and I really hope it will be. Let us take our responsibilities seriously in this place. If we want to recover the respect of the House, we have to show some self-respect.

    I must say that I am very glad that parliamentarians on both sides are speaking up about this matter. The Executive have very important powers and responsibilities, and we respect that, but Parliament has very important responsibilities to scrutinise them, and it should not be frustrated in its legitimate mission. I think I have made the position very clear, and I hope that the powers that be will now do the decent thing. Otherwise, the matter will just keep on being raised. That would be very embarrassing for the Government, and I do not want that to happen.

  • National Shipbuilding Strategy

  • With permission, Mr Speaker, I wish to make a statement. This Government are committed to a strong Royal Navy and a strong economy that benefits every part of the UK. Today I am publishing the national shipbuilding strategy, the means by which we plan to bring these two strategic goals together. Copies are being placed in the Library and on the Government website. This strategy will transform the procurement of naval ships, enable the fleet to grow by the 2030s, energise the United Kingdom’s maritime industry, and increase skills, exports and prosperity across our country.

    In the 2015 strategic defence and security review we committed to developing a national shipbuilding strategy, because we acknowledged that previous procurement of surface ships had been problematic. Sir John Parker, a well respected expert in this sector, was appointed to produce an independent report to inform the strategy, and that report was published in full last November. Sir John analysed where previous approaches had fallen short, and identified a “renaissance” in United Kingdom shipbuilding. He made 34 recommendations in total. I am pleased to report today that we have accepted all of Sir John’s recommendations for the Government, and have either implemented them already or have a plan of action to do so. I would like to place on record once again my thanks to Sir John for supporting us.

    The strategy focuses on surface ships and makes clear this Government’s commitment to an ambitious programme of investment in a growing Navy. In the post-Brexit world, the need for us to project our influence and to keep reaching out to friends and allies alike will be more important than ever. That is why we now propose to invest billions in the Royal Navy over the coming decade. Our future fleet will include our two mighty flagships, the Queen Elizabeth aircraft carriers; the next generation Dreadnought submarines; the Type 45 destroyers; and a phalanx of new frigates—not just Type 26 global combat ships, but a flexible and adaptable general purpose light frigate, the Type 31e—as well, of course, as the Astute class submarines and five new offshore patrol vessels.

    I am pleased to announce in the House today that the Government plan to procure the new Type 31e frigates. We will order a first batch of five such vessels, with the first to be in service by 2023. The Type 31e will enable us to refocus offshore patrol vessels and other craft on their core patrol and protection roles, while the Type 31e ships will maintain and project the presence we require to deliver security in an uncertain world. In turn, that will allow the high-end capabilities of the Type 26 frigates and the Type 45 destroyers to focus on maritime task group operations—particularly carrier strike—as well as the protection of the nuclear deterrent. As its name implies, the Type 31e will be designed from the start as an exportable vessel, meeting global needs for a flexible and adaptable light frigate. We will test the concept of distributed block build during the procurement competition.

    This procurement will be the first demonstration of our new strategy in practice. The new frigate will be procured competitively, providing an opportunity for any shipyard across the UK to bid for this programme of work. The strategy confirms, in the clearest statement of this policy for a decade, that all warships will have a UK-owned design and will be built and integrated inside the United Kingdom. Warship build will be by competition between United Kingdom shipyards. We will of course encourage United Kingdom yards to work with global partners, where they meet our national security requirements, to ensure that the vessel is fully competitive on the export market. We will also encourage UK yards to participate in the ongoing fleet solid support ship acquisition programme.

    These several programmes will secure hundreds of highly skilled and well paid jobs on the Clyde and throughout the UK, bringing opportunities for high-wage and high-skill employment, growth and prosperity. Our research indicates that maritime industries in the UK employ about 111,000 people in nearly 7,000 companies, contributing £13 billion to our economy, of which the shipbuilding and repair element alone contributes about £2 billion.

    This is a strategy for industry as much as for the Government. Delivering these new ships means that we will need a strong shipbuilding sector as part of a wider marine engineering sector. That includes the shipyards, their suppliers, those who manufacture and support the equipment for these ships, and the skilled workers who support those companies. Industry and the trade unions were involved as we developed the strategy, and I thank them for their contribution.

    This programme of investment represents further opportunities for the sector to compete for and win work for the Royal Navy and for overseas customers, in turn enabling further investment, greater productivity and growth. The strategy makes it clear how the Government now intend to work with the marine engineering sector to support and enable that growth. In turn, we expect the industry to raise productivity and innovation, and to improve its competitiveness in domestic and overseas markets. That, in turn, should better insulate shipyards from the peaks and troughs of Royal Navy business, and bring more sustained growth and prosperity in the regions where those businesses are based.

    The strategy makes it clear how the Ministry of Defence will grip and drive pace into ship procurement. We have already implemented a new governance structure that will ensure early and senior oversight of ship procurement programmes. Additional and expert external support will be provided to Navy Command and the Type 31e project team to ensure that they can execute their responsibilities at speed. There will also be a new structure to oversee the delivery of Type 31e and Type 26, building on the lessons learned from the carrier programme. We will reap the benefits of these changes as we build and support a modern Royal Navy that will grow in size by the 2030s. We are committed to meeting the undertakings set out in this strategy, but delivering its ambitious vision will require a joint effort between the Government and the industry. I commend this statement to the House.

  • I thank the Secretary of State for his statement, and for advance sight of it.

    I welcome the fact that this strategy has finally been published—we all want a secure future for this country’s world-class shipbuilding industry, and this represents a step in the right direction—but may I ask the Secretary of State why on earth it has taken so long? He announced this strategy more than two years ago, and Sir John Parker’s report to inform it was out last November. We were told we would finally see the strategy in the spring, and back in May the defence procurement Minister, the hon. Member for West Worcestershire (Harriett Baldwin), said that it was ready, so why have the shipbuilding industry and its workers been kept waiting for so long?

    The strategy repeats the Government’s stated aim of bringing the Type 31e frigates into service from 2023. As that is just six years away, will the Secretary of State set out more detail of the timetable? When will the contract be put out to tender, and when does he hope to announce the successful bidder? What discussion has he had with the industry about whether the £250 million cap for the Type 31e is achievable? We know that the defence budget is already under considerable strain, so what contingency is in place in case costs overrun?

    The Government’s commitment to a shipbuilding strategy must be complemented by a comprehensive industrial strategy. We need more than warm words, so may I ask the Secretary of State how he intends to maximise opportunities for the UK supply chain? Will he, when determining best value, commit to giving weight to the positive impact on local economies and employment opportunities in awarding contracts?

    The news that only 50% of the steel in the Type 26s is UK sourced is disappointing. How do the Government intend to improve on that for future contracts?

    The strategy rightly focuses on the export opportunities for UK shipbuilding, and orders from overseas will be important in ensuring steady work for shipyards across the UK. Given the fierce global competition, what strategies will the Secretary of State implement to secure orders from foreign buyers?

    We must ensure that uncertainty surrounding Brexit does not dissuade companies from operating here, or our allies from wanting to buy British. What active steps are the Secretary of State and his ministerial colleagues taking to facilitate the best possible operating conditions so that British and European defence companies are not deterred from investing here?

    As well as investing in our naval fleet, we must invest in the men and women who serve in our Royal Navy. We know that there is a crisis in recruitment and retention across the three forces, with the Navy currently under strength and the Government on course to miss their target on personnel numbers. Will the Secretary of State set out specific steps to ensure that that sorry situation does not continue?

  • I am grateful to the hon. Lady—I think that that was a welcome for the strategy, even though she had some detailed questions. Let me try to answer the, I think, seven of them.

    First, Sir John Parker did report at the end of last November and we initially hoped to publish the strategy in early summer. The hon. Lady asked why it had been delayed. I think I recall a general election around that time—she may recall it, too. There was therefore necessarily a delay. We have now introduced the strategy—I wish it had been a few months earlier.

    Secondly, the hon. Lady asked when we intend to start placing the orders. We will run the competition at pace next year. We hope to place the order by the end of next year and start the building programme in 2019.

    The hon. Lady asked about contingency. The problem with naval procurement under successive Governments for many years has been cost overruns. The frigates will be procured in a completely different way. We are setting a price per ship and challenging the yards to come up with the right bids to match that price. It is a reasonable price and it is now up to industry to meet it.

    I hope that the eventual winner—or winners—of the tender programme will be encouraged to show us how it proposes to involve its local supply chains, and certainly the British steel content it can provide. Not all specialist steels for shipbuilding are made in this country, but we certainly encourage the use of British steel. We now have the means to do that through the procurement policy, which enables us specifically to consider that factor when weighing up the different tenders.

    The hon. Lady asked about exports. It is a sad fact that we have not exported a new warship from this country under any Government since the 1970s. The new frigate is specifically designed to be exportable—a ship that other navies want to use. We already have an intensive export campaign for the Type 26 frigate. I have been championing its case in Australia, which is about to purchase an anti-submarine frigate, and also in Canada. I assure her that the Type 31e will be designed for export and we will put the full weight of Government behind that campaign.

    The hon. Lady asked what we are doing to secure British defence companies’ continued participation in the European market after Brexit. We will shortly publish how we see the future of foreign policy and of defence and security policy in the new partnership that we want with the European Union. That will include our view of future participation in European defence programmes and funding.

    Finally, the hon. Lady asked about manning in the Royal Navy. It is currently over 97% manned. We are spending a great deal of money on recruitment marketing and improving retention in the Royal Navy. We have spent some £40 million a year on recruitment marketing for the Royal Navy. She will have noticed that unemployment in this country is the lowest for 40 years. The Royal Navy, like many other large organisations, has to compete with other sectors of the economy, but I assure her that we will ensure that it does so. She will recall from the strategic defence review of two years ago that we are increasing the number of personnel in the Royal Navy by 400 sailors to man the additional ships.

  • Where warships are concerned, quantity is a form of quality because even the most powerful warship can be in only one place at any one time. I therefore warmly welcome the strategy, particularly its acknowledgement, in the section on strategic context, that:

    “There is a need for greater volume in the destroyer and frigate force if we are to deliver the required operational flexibility.”

    The Secretary of State mentioned the 1970s. He will know that in the 1970s we had as many as 70 frigates and destroyers. In the mid-1990s, we had 35 frigates and destroyers, and successive Governments incrementally reduced that to 32, 31, 25 and our current total of 19, which the Select Committee on Defence described as “woefully inadequate”.

    My right hon. Friend is entirely on the right lines in saying that we need to grow the fleet. Will he do everything in his power to ensure that what happened to the Type 45 destroyers, and to some extent to the Type 26 frigates—as the build went on, they became increasingly complex and expensive so that we ended up with fewer ships at the end of the process—does not happen to the Type 31e?

  • The light, general-purpose frigate is specifically designed to avoid that fault, which, as my right hon. Friend said, has plagued previous programmes.

    My right hon. Friend took us back to the 1970s. Perhaps only he and I now remember them and what happened then. I note his comments about the number of ships. I gently say that today’s ships are of course much more powerful than those that were involved in, for example, the liberation of the Falklands, and that although they can be in only one place at once, they can fight conflicts at different ranges at the same time.

    It is my ambition to grow the fleet. We are expanding the Royal Navy. If industry can rise to the challenge and deliver the frigates to time and in the price cap that we specify, it will enable us to expand the Royal Navy beyond the numbers set out in 2015.

  • I thank the Secretary of State for the statement and for advanced sight of it. I welcome—finally—the publication of the national shipbuilding strategy. I had started to think that we would never get there.

    However, the Secretary of State did not get off to the best start this morning. What is it with his interviews with Scottish journalists? He came out with a howler on “Good Morning Scotland”, claiming that there was already a frigate factory on the Clyde. That is quite something, because only three weeks ago my hon. Friend the Member for Glasgow North West (Carol Monaghan) and I met workers on the Clyde, who were asking for that very thing. Has not the Secretary of State reneged on his promise and should not he put that right at the Dispatch Box today?

    Since 2005, we have had the defence industry strategy, the 15-year terms of business agreement with BAE, and a consolidated shipbuilding plan for the Clyde that led to many job losses. Workers there are asking whether the Ministry of Defence will see any of its promises through.

    The Govan and Scotstoun yards were promised 12 Type 45 destroyers; we got six. They were promised 13 Type 26 frigates; so far, we have three. As for the world-class frigate factory which the Secretary of State seems to think exists, I can tell him right now that there are journalists in Scotstoun trying to find it. How can the workers in those yards believe the Secretary of State’s promise that there will be work for them until 2035?

    More broadly, as was mentioned by the hon. Member for Llanelli (Nia Griffith), behind the historically low level of the escort fleet lies a low-manning crisis. Will the Secretary of State say more about what he is going to do to resolve that issue?

  • First, let me make it very clear that it ill behoves members of the Scottish National party to pose as friends of the Clyde when they would decommission our nuclear submarines, which would halt work on the Clyde on the frigates that would protect those submarines.

    Secondly, the hon. Gentleman is wrong about the frigate factory. There is a frigate factory on the Clyde, namely the Govan and Scotstoun yards, to which I gave 20 years of work back in July when I cut steel on HMS Glasgow, the first of the heavy anti-submarine warfare frigates. I gave 20 years’ worth of work to the Clyde, and, as a result of today’s announcement, it will be able to bid for the lighter frigate as well. He will clearly never be satisfied. There are 20 years of work and the contract for the first three frigates is worth £3.7 billion, but he is still not satisfied.

    As for manning, I have already explained to the House that the Royal Navy, like the other two services, is just over 96%, or 97%, manned. We are spending a lot of money on recruiting to fill the remaining gaps, and to ensure that we can continue to offer a rewarding, highly valued career in the Navy.

  • I welcome the statement. Will the Secretary of State confirm that the same model could be applied to other areas of defence procurement to ensure more British content and more export capability? Will he also confirm that when we are out of the European Union we may be able to spread the model beyond defence, because we shall be able to make up our own procurement rules across the board?

  • We will indeed be able to set our own procurement rules, free of some of the constraints that have resulted from our membership of the European Union. It is true that we need to improve the way we have procured our naval vessels in the past, and to start sending new-build ships out across the world again. Many other navies in the world are looking for lighter frigates, offshore patrol vessels and new vessels of all kinds as the global picture darkens and they need to do more to protect their maritime interests. There is a huge opportunity, and we shall see now whether the English yards, alongside the yards on the Clyde, are ready to rise to the challenge.

  • May I question the Secretary of State on recommendation 9 in Sir John Parker’s report, for the freezing of the design specification? Does it mean that a repeat of, say, the change in the design specification of the Astute class submarines in build to introduce special forces capability would be bindingly ruled out in future? Would it also rule out a repeat of the fiasco over cats and traps that took place when the coalition Government changed their mind not once but twice, and added to the cost of the carriers?

  • I think that my right hon. Friend the Member for New Forest East (Dr Lewis), the Chairman of the Select Committee, was on better ground when he drew attention to the problems we had in the past when the design was constantly tinkered with, and indeed added to, and the ships that were planned became heavier and heavier and more expensive and late. There have been significant delays in the Astute class programme. I do not ascribe blame to those who work on the programme, but under previous Governments of both complexions there has always been a tendency for the military to add the very latest equipment, and we need to get away from that. We need to produce a frigate that has a basic design, but is sufficiently adaptable for foreign navies to be able to add to it and adapt it for their own particular purposes.

  • As the son of a sailor, Reginald Francois, I welcome the Secretary of State’s statement, and particularly welcome the announcement about the Type 31e.

    May I follow up the point made by my right hon. Friend the Chairman of the Select Committee about frigate numbers, and make a humble suggestion? Given that the Type 23 frigates will be gradually paid off over the next few years, has the Secretary of State given any consideration to the possibility of—rather than selling those vessels abroad, or even scrapping them—placing some of them in a state of extended readiness so that they could provide a rapidly mobilised war reserve?

  • I congratulate my right hon. Friend on his election to the Select Committee; I look forward to discussing these matters when I am next summoned to appear before the Committee. I also thank him for the work that he has done, since leaving the Department, on the reserves, and the need for us to improve the offer that we make to them. We are studying that report.

    I will certainly consider my right hon. Friend’s specific proposal: we have no immediate plans to sell off the Type 23s, and we have a bit of time in hand to consider whether there is sufficient merit in it.

  • I welcome the Secretary of State’s announcements, which made it clear that the monopoly control that certain yards have exercised over the whole of his order book is now broken. Does he accept that Cammell Laird, with its workforce of expertise and loyalty led by an inspiring leader, John Syvret, is in pole position to win these orders, but that it will have to win them? May I invite him to visit the yard when his diary allows, so that he can give its entire workforce the good news that he has given to us today?

  • I am grateful to the right hon. Gentleman. It is true that the monopoly that the Clyde has enjoyed for so long in warship building is ending, but, equally, the Clyde yards—we are talking not just about BAE Systems; there is the Ferguson yard as well—are perfectly free to compete for this work, in addition to the work on the heavy frigates that they are already building.

    I, too, am aware of the renaissance of the Cammell Laird yard, which I visited during my time as industry Minister. I would have to be careful about visiting it again, because I am not sure that I can start to accept that it is necessarily in pole position, but I think that the renaissance of such yards in England provides opportunities not just for Birkenhead, but for A&P on the Tyne, Appledore in Devon, and Harland and Wolff in Belfast. There is now a huge opportunity for those yards to step forward and see whether they really can build the frigates on time and within budget.

  • Does my right hon. Friend agree that the Government’s support for Clyde shipbuilding puts the Clyde in an excellent position to benefit from export opportunities, and that Opposition Members should celebrate this commercial opportunity for Scotland?

  • Absolutely. As I have said, the Clyde already has 20 years’ worth of guaranteed work on the eight heavier anti-submarine frigates. When I was on the Clyde in July to cut steel on the first, HMS Glasgow, there was a unanimous welcome from the workforce for the commitment that the Government are following through in awarding that contract. Today, however, we are doing more than that, in both frigate factories. [Interruption.] Govan and Scotstoun will produce eight frigates over the next 20 years. But there is even better news for Scotland today: those yards—and, indeed, Babcock at Rosyth—will be able to bid for the lighter frigate as well. Scotland’s cup runneth over.

  • In thanking the right hon. Gentleman for the honourable mention of Harland and Wolff in Belfast, retaining, as it does, the UK’s largest and second largest dry dock, I do not wish to draw him on pole positions, but in welcoming today’s advancement and the greater focus on regionalisation and competitiveness, may I ask whether the Secretary of State envisages a single tendering process to be met by joint venture, or will individual components be separately tendered for, and then collated together for the Type 31?

  • I certainly hope that Harland and Wolff will participate in this competition and rise to the challenge. We retain an open mind as to what the final winning solution is likely to be. We have learned a lot from the block build construction of the aircraft carriers, but equally it might well be the case that one particular yard comes up with the best proposal, or that that comes from a consortium of one or two yards, working with international yards as well on some elements of the ships. So we have a completely open mind as to how this is going to be done. This is a challenge for all the shipyards in Britain and Northern Ireland.

  • May I add my voice to those who welcome this announcement of our commitment to a growing Royal Navy, to high-skilled jobs right across the UK, and to more apprenticeships so that our young people are brought into this industry? Will the Secretary of State tell us how we will ensure that this strategy comes in both on time and to cost? How will we hold suppliers to account so that we optimise the number of ships in the water?

  • The revival of naval shipbuilding, particularly in the English yards, will produce huge opportunities for apprentices to embark on highly valued skilled engineering careers. Indeed, in Scotland—I turn again to the opportunity here for Scotland—when I was at the Govan frigate factory on the Clyde, cutting steel on HMS Glasgow, I was able to point out to the workforce that the apprentices who will be working on the eighth of these eight frigates are yet to be born. That is the nature of our long-term commitment to the Clyde and, I hope, of our long-term commitment to our other, English yards.

    My hon. Friend makes an important point about the delivery of this programme. Too many programmes in the past have ended up over budget and over time, leaving critical gaps. By setting a fixed price for these ships and putting in place a delivery organisation that will ensure that there will be penalties, we are determined this time that we will drive the procurement and delivery of these ships at pace.

  • As chair of the all-party group on shipbuilding, I welcome these orders for the UK shipbuilding industry, but may I ask the Secretary of State about two fundamental points? First, on military capability, will the Type 31 add to our defence capability? Will it be able to fulfil our full NATO maritime standing commitments? So far little has been said about its anti-submarine or war-fighting capabilities. Secondly, the last successful set of exports was in the early 1960s, with the Rothesay class of frigates. Is it realistic to underpin a strategy entirely on exports, particularly when the French and Italians have similar types of ships not only on the drawing board, but in the marketplace?

  • First, in respect of the performance of standing tasks within NATO, I made it clear that they will principally be undertaken by the Type 26 anti-submarine frigates and Type 45 destroyers, releasing the Type 31s for other duties around the world where we need to project our presence and where we can work more closely with allies outside the NATO context.

    On exports, I hope that the hon. Gentleman will not be as pessimistic as he appears to be about our prospects. There is growing international demand for lighter ships and ships that are adaptable for all kinds of constabulary work around the different coastal regions. I have every confidence that we can produce a ship that will outperform what can be produced by the Italian or French yards but, in the end, it is for British industry to rise to this challenge and produce a ship that is cost-effective and can compete in the world market.

  • When I recently wrote to my right hon. Friend, I included a prospectus of Corby steel products, which I obviously commend to him. Will he give an undertaking today that, whenever possible, we will use British steel in the building of these ships?

  • As I have said, we will take a very close interest in the percentage of steel used in each of the bids—we will be watching that extremely closely. I remind the House that some specialist steels that are not produced in this country are needed for the hulls of our warships, but we will be looking to those who submit their bids to demonstrate just how much British steel they will use, as well as how they will fully engage their local supply chains, and, indeed, take the opportunity to refresh local skills in their area.

  • The Secretary of State is right that the Navy needs to modernise—I welcome the strategy and the jobs, although I share the concerns expressed about the workers on the Clyde—but may I press him on the skilled personnel who will be needed to operate these vessels? In his answer to the hon. Member for Llanelli (Nia Griffith), he said that the low unemployment rate was one of the particular challenges, but armed forces data show particularly high rates of outflow for Royal Navy engineers and that only 33% of armed forces personnel feel valued by their service. What is he doing about the experience of people working in the armed forces to make sure they do not want to leave?

  • To add to the answer I gave earlier, yes, the Royal Navy, like the Air Force and to some extent the Army, is increasingly competing with the rest of the economy for engineers, IT specialists and technicians of all kinds. These are exactly the jobs that are in such demand elsewhere across the economy. We have a growing economy now and, as I have said, very low unemployment, so this is not easy. This is not a unique feature of the Royal Navy or the Air Force; the same complaints can be made right across the engineering sector, as well as in the aerospace and automotive industries.

    What are we doing about that? We must make sure that our offer to our people is as attractive as possible. We have legislation going through the other place to make employment in the armed services more flexible and to provide more opportunities, for example for women who want to return to the service, to move between the reserves and regulars more easily. That is a flexible employment measure and I hope it will have the support of the hon. Lady’s party when the Bill is considered by this House in due course. We need to continue to work away at the offer to make sure that we provide careers that are attractive, highly valued and, indeed, highly rewarded.

  • I greatly welcome today’s announcement. I recently wrote to the Secretary of State asking him to consider naming one of the Type 26 frigates HMS Colchester. I got a very pleasant and polite response from the Under-Secretary, saying no, but I am nothing if not persistent, so I will ask again. We have waited patiently since 1746 for another HMS Colchester, and I ask the Secretary of State to please consider naming one of the new Type 31e class vessels HMS Colchester.

  • I will certainly bear that in mind, although if my hon. Friend has waited since 1746, perhaps he can wait a little longer. By the way, I am still waiting for any expression of gratitude—I know that does not come easily to those on the Scottish nationalist Benches—for choosing the name HMS Glasgow for the very first of these anti-submarine frigates, paying tribute to the previous holders of that name and also the role that Glasgow played in the last two world wars. I will, of course, bear my hon. Friend’s suggestion in mind.

  • I welcome today’s statement, not least because it gives an opportunity to A&P Tyne in my constituency, which did fantastic work on the aircraft carrier. I am sure that A&P will be considered for further work, but will the Secretary of State assure me that that will be the case? Also, why does he not insist that British steel and components are used whenever possible, in order to create jobs and fly the flag for Britain? Is he looking at the loopholes and caveats, and is he going to put in any incentives to maximise the amount of British labour and apprenticeships involved in this excellent opportunity?

  • I am grateful for the hon. Gentleman’s welcome. A&P has already made a contribution to the construction of the carrier and it is contributing to the construction of the Astute class submarines. I very much hope that it will be involved in the competition. This is an opportunity for the Tyne, which was previously shut out when the monopoly was granted in favour of BAE Systems in Scotland, so this is good news for Tyneside and the other English yards. So far as steel is concerned, we want to see greater use of British steel when possible, but we must also be alive to the need to achieve best value for the taxpayer.

  • I warmly welcome the Secretary of State’s statement, with its ambition to increase the Royal Navy’s platform numbers and our export possibilities. The hon. Member for North Durham (Mr Jones) mentioned the Rothesay class, which of course evolved into the excellent Leander class that was operated by eight navies worldwide because it was so adaptable and provided an excellent platform for all their needs. Will the Secretary of State assure me that the procurement process will ensure that the design that eventually emerges from the competition will have equal appeal so that our ambition to increase the Royal Navy’s surface platform numbers and wider export potential can be realised? That would help jobs, businesses and apprenticeships in the UK.

  • My hon. Friend puts his finger on it. This design has to be adaptable and flexible. As international supply chains are now lengthening, I hope that the yards that enter this competition will consult not only with other yards across Europe, but with other navies that are looking to procure this type of frigate, so that they ensure that they design a platform that is sufficiently adaptable and flexible for different navies’ respective requirements.

  • The Secretary of State will be well aware that this year is the centenary of the formation of the Women’s Royal Naval Service—the Wrens. At the start of his statement, he said that “this Government are committed to a strong Royal Navy”. What is he planning to do to mark the centenary of the vital service of the Wrens, many of whom joined the service in later years and are still alive today? Many of them are quite offended that there has not been a brooch, a certificate or anything else to mark their service. It would be fitting, in this centenary year, if the Secretary of State were able to correct that omission, which I am sure was accidental.

  • I certainly hope that it was accidental. I, too, would like to put on record my tribute to the women who have served in that branch of the Royal Navy for more than 100 years. Now, of course, our women are able to enter more and more roles in the Royal Navy. I will certainly check whether that centenary is being appropriately marked, and if we can pick up on any of the hon. Lady’s specific suggestions.

  • Havant has a strong engineering naval base, with three local supply chain partners involved in the Queen Elizabeth carrier project, which is securing local jobs. Does my right hon. Friend agree that, in designing a frigate for export, the potential for job creation among small and medium-sized enterprises is particularly significant?

  • Yes, and we want to make it easier for more SMEs to participate in the supply chains of the major yards. Portsmouth and the surrounding area are now enjoying the challenge of completing the final fitting out of the two carriers and making sure that they are properly maintained and serviced, but there may well be further opportunities in the Havant area. I remember that the sector report that was produced for that area as part of the Solent local enterprise partnership specifically drew attention to the maritime strengths of the region, and I hope that it, too, can get involved.

  • As the hunt goes on for the mystical frigate factory, which the Secretary of State cancelled in June 2015, may I ask him what shipyard reconstruction investment he is going to make on the Clyde? Also, does he accept the criticisms in the Parker report that some decisions were based on historical wrong assumptions about the ability to build different types of ships consecutively, as has happened on the Clyde? Will he confirm that the Type 31 frigate is a complex naval warship and that it should therefore be built at the centre of excellence on the Clyde, as he and the then Prime Minister promised in November 2015? Finally, why are the fleet support ships being procured internationally when the UK shipyards could be building them?

  • The hon. Gentleman is doing his best to turn sunshine into a grievance. Govan will build eight enormous frigates over 20 years. That is a frigate factory by any definition, and I hope that he is clear about the sheer weight of work that Govan and Scotstoun are now going to enjoy. So far as investment in the yard itself is concerned, yes, part of the £3.7 billion that I announced when I came to cut steel in Glasgow at the end of July is indeed investment to enable BAE Systems to build the final five of the eight-ship batch. That money includes the price of the first three ships as well as investment to ensure that the next ones are built as well.

    On the question of the support ships, it is only warships that have to be built inside the United Kingdom, for security reasons, but there is absolutely nothing to prevent yards in England or Scotland from bidding for the fleet solid support ships as well. Indeed, there is every reason to encourage them to do so.

  • I welcome the approach that has been announced today. We are a maritime nation and we should be ambitious. This demonstrates that we are being ambitious with not only our security, but the economy, and I am delighted that there might be some spin-offs for the south-west. With 40 Commando in my constituency, may I highlight the need for the general purpose frigates to be designed with maximum utility in mind, so that they will be able to accommodate and project Royal Marines as and when necessary?

  • I am delighted that my hon. Friend shares my ambition for the Royal Navy. I want it to be bigger and stronger, and to have the ships that it needs so that it can protect our trade routes, promote our prosperity and contribute to security on each of the seven seas. That is our ambition as a Government, and I am going to do everything I can to drive that forward with the new ships and submarines that we are now setting out to build.

    I note my hon. Friend’s point about the Royal Marines. The frigate will have to be adaptable and flexible, and amphibious fighting capability is something that foreign navies might be looking for. I will certainly ensure that that is further considered.

  • The Defence Secretary did not say much in his statement about the strategic context in which these decisions are being taken. Given that the Government have decided not to conduct a strategic defence review in this new Parliament, will he say more about the long-term planning assumptions that underpin the publication of this strategy?

  • In the light of the deteriorating international situation and the intensification of the threats identified in the 2015 review, we have undertaken to look again at the specific capabilities available not just to the MOD but to the Home Office and the other Departments, to ensure that as the threats intensify we have the right capabilities in the right places to meet them. I hope to report further to the House on how that review develops later in the year.

  • I commend the Secretary of State for his Department’s being the leader across Government in the employment of apprentices, especially at Catterick garrison in my constituency. Will he reassure the House that the use of apprentices will be a key factor in the procurement process to ensure that this exciting new national shipbuilding strategy can support the aspirations of young people across the UK?

  • I can certainly give my hon. Friend that undertaking. We will be looking carefully at the commitment to apprenticeships from the yards that tender for this ship. He is right to remind the House that the armed forces are the single biggest employer of apprentices in the entire country. We play a huge role in developing apprenticeships as a fully valued alternative to more academic studies and as a pathway to a rewarding career.

  • I welcome the statement by the Secretary of State and, yes, even the naming of HMS Glasgow, but for the record in Hansard, I must point out that Glasgow is not the Clyde. As the son of a former shipyard worker at John Brown’s, the greatest shipyard ever to grace these islands, I will take no history lesson on the utter disinvestment in the Clyde since 1945 by every successive British Government. Given that the cost of the Type 31 has been capped at £250 million per frigate, before we take into account the depreciation of the pound, which the National Audit Office says poses a severe risk to the equipment plan, will the Secretary of State reassure the armed forces, especially the Royal Navy, that we will see a credible timetable for raising the Royal Navy from the position in which it now finds itself—with more admirals than frigates?

  • Twenty years of guaranteed work—

  • Forty five years of disinvestment.

  • Twenty years of guaranteed work for the Clyde is a peculiar definition of disinvestment.

  • On the contrary, the Government are investing in the Clyde—

  • A scandalous lack of historical knowledge.

  • We invested £3.7 billion in July, and there are five more frigates to follow. This is a massive investment in the skills present on the Clyde. The Government are investing in the Clyde.

  • Order. The hon. Gentleman had his say when he was on his feet. He must not continue to try to have a say while sitting down.

  • I think the hon. Gentleman is probably faintly embarrassed by the scale of our commitment to the Clyde and of the investment there.

    The hon. Gentleman asked me a serious question about the affordability of the equipment programme more generally. Yes, part of the equipment programme will have to be funded through the efficiency savings that we in defence have to realise and put back into the equipment programme. That means being more efficient, modernising our processes—for example, getting rid of barracks and land we no longer need—and continuing to work more effectively. All of that gain will go back into the equipment programme and help to fund the frigate that his constituents are building.

  • I welcome the Secretary of State’s announcement, particularly the commercial latitude of his Department in procuring a vessel that can compete in export markets. The issue of procurement has been raised many times by Members. Will he confirm that the high UK content of the vessels means that the cost will not be affected by the depreciation of the pound post-Brexit and that there will be benefits across the UK, including for manufacturers of propulsion systems, such as GE Energy in my constituency, which, incidentally, is as far from the sea as one can possibly get?

  • It might be far from the sea, but it is a very important firm and a key maker of the propulsion systems we will need. Of course, by definition, the higher the British content of these frigates, the less the price will be affected by the depreciation of sterling, but I will not speculate as to where the level will eventually settle.

  • I would like to entice the Secretary of State to the calm of the Scottish highlands. He referred to modular construction as having achieved value for money in the Queen Elizabeth-class carriers. The Nigg yard in my constituency, where I used to work, has great expertise in this field. Will he instruct his officials to consider the Nigg yard as and when these vital new contracts are drawn up?

  • I am happy to agree to that. I hope that the Nigg yard will be included, and I will ensure that our officials include it in the discussions we will now begin on the technical details with the various yards and other companies involved. I well recall my own visit to Nigg when I was the oil and gas Minister, and I am well aware of the efforts it is making to diversify from the oil and gas sector. We will make sure that it is fully able to participate and receives all the information necessary for it to do so.

  • I warmly welcome today’s statement, as will my constituents who work at British Steel in Skinningrove. I am the deputy chairman of the all-party group on steel and metal related industries. With that in mind, I was hoping that officials from the Department might come to meet the APPG to discuss how we can deliver what has been rightly referred to as the pressing need to maximise the British steel content in the new vessel?

  • I congratulate my hon. Friend on achieving the position of deputy chairman of the all-party group, and I am happy to agree to get an official or colleague to attend and make sure his group is fully aware of exactly how we will maximise the use of British steel in this procurement.

  • As the MP for Devonport, where half the nation’s frigates are currently based, I welcome this much delayed strategy. I am concerned, though, that the £250 million price cap for a Type 31e is an accountant’s answer to a general purpose frigate, not an answer to the military question. I doubt we will get a capable frigate for that much money with a full complement of offensive weaponry. Will the Secretary of State confirm, therefore, that the new Type 31e will be equipped with more than just one main gun?

  • I cannot confirm the exact details of the armaments and weapons systems on the frigate. We think that £250 million per ship is the right kind of cap to aim for, and we will now go into intensive discussions with the industry, but yes this is a challenge to our yards—particularly to the English yards, as well as to BAE Systems and Ferguson’s on the Clyde and Babcock on the Forth—to meet for the first time a cap per ship. That is extremely important. We have seen far too many programmes where the cost has escalated year after year, to the detriment of the other parts of defence.

  • I commend my right hon. Friend for his statement and invite him to describe to the House the minimum armament of the vessel, the minimum capability requirement and the minimum size of ship’s complement.

  • We will be officially launching the competition tomorrow and will be working on the technical details of the frigates, so I cannot confirm to my hon. Friend today the exact specifications that we will set out for the weapons system, but he and the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) are right that they will be a key part of holding the bidders to the overall price cap.

  • As the MP for Scotstoun, I am beginning to see a familiar pattern here. Workers in Scotstoun and Govan were promised 12 Type 45 destroyers; they got six. They were promised 13 Type 26 frigates; we have got three so far. The Secretary of State speaks of this frigate factory on the Clyde. To be clear, a frigate factory is an indoor assembly hall; it is not putting ships together in the rain. So we see another broken promise there. Will he now keep a promise to the workers in Glasgow and give them a cast-iron guarantee that the current workforce levels will be maintained until 2035?

  • I am not responsible for the overall number of Type 45 destroyers, and I am sure that the hon. Lady will recognise that that decision was taken by a previous Government. As for the number of Type 26 frigates, we have guaranteed the eight Type 26 anti-submarine frigates to the Clyde, and we are giving the Clyde the opportunity to tender for more. It is important, however, that other yards right across our United Kingdom are able to tender as well, and I hope she will recognise that. As for employment numbers on the Clyde, the actual number employed in either Govan or Scotstoun is a matter for BAE Systems.

  • I join others in welcoming today’s statement, which is good news for our country, for industry and for jobs, but let us not forget that it is also good news for the Royal Navy and those who serve in it. Does my right hon. Friend agree that the construction of the new aircraft carriers demonstrates the skills and industries that exist right across the United Kingdom to build ships for our Royal Navy and, potentially, other navies around the world?

  • I hope my hon. Friend is as proud of the two new carriers as I am. It is a permanent statement to the world of what we can make of our country’s manufacturing talent that the ships were put together across six different yards, including the Clyde, which shows what we can do in a huge and important national endeavour. They will sail the oceans of this world as a reminder not simply of Britain’s military power, but of what we can do with our industry and technology.

  • I think I am one of the few Members who has actually built a ship, so I speak with some degree of understanding of the process. When I was with BAE Systems, we looked at multiple-site block builds, which we obviously used for the Type 45 destroyers, but a key component of the terms of business agreement that we had with the Ministry of Defence was to achieve upper-quartile status in world shipbuilding. Not only did the team and I carry out a worldwide benchmarking exercise to deliver a world-class shipbuilding capability on the Clyde, but we also developed the design of a shipyard that would deliver that world-class capability. That included an integrated fabrication or module hall, a paint cell and a 330 metre-long dock hall in a covered dock assembly facility, which have been quietly dispensed with. It is clear that even the plan B, which involved a module hall at Govan, has also been dispensed with. Is it still the Government’s intention to achieve upper-quartile status in world shipbuilding on the Clyde through facilities investment? Will the design of the Type 31 involve a consistent, integrated assembly site? Given the demolition of the Scotstoun site, is there the capacity on the Clyde to deliver that?

  • I cannot answer the hon. Gentleman’s question about the upper-quartile position, but I can restate that we are open-minded about the winning solution for the procurement of this particular frigate. There are important, useful lessons from the block build involved in the construction of the two carriers, and I am sure that all those involved in the competition will want to pick up on those particular lessons and, indeed, on how the final assembly can be properly integrated, but we will not say now that there must be one solution rather than another; it is up to British industry to rise to this particular challenge.

  • Representing a part of south Devon that looks forward to seeing the ships ultimately refitted and based there, I welcome today’s statement, but will the Secretary of State reassure me that we have learned from past military procurement mistakes and the impact that they had on the size of the fleet, particularly during the Type 45 programme, when a £6 billion budget for 12 ships became a £6 billion budget for six?

  • My hon. Friend is right. As I have said several times now, procurement programmes have overrun in time and in budget too often. We have to get a proper grip on that with a much more commercial approach to the delivery of such projects. We have now put that in place for the delivery of the Dreadnought and Astute-class submarines through the new Submarine Delivery Authority. We have also put it in place with BAE Systems for the delivery of the Type 26 ships, where we have a pain-share/gain-share arrangement by which the company must bear the cost if it runs behind schedule or over budget. We will do the same for the Type 31 ships, for which we will have a commercial delivery set-up to ensure that the taxpayers’ interests are properly protected.

  • The Times reports today that the new Type 31e frigate will cost about a third of the Type 26 frigate, so will the Secretary of State provide a little more detail than he has to date about the difference in capability between the two frigates?

  • The Type 31e frigate will be about half the size of the Type 26, but we hope that it can be produced for around a third of the cost. If we can produce these ships for that particular price, that is the prize that will enable us in the end to expand the size of the Royal Navy. The challenge that we are laying down to British industry is whether, for the first time, it can meet a particular price per ship. The difference is essentially in the weight and in the duties that the ship will carry out.

  • The Secretary of State has triggered two search parties in Scotland today. The first relates to the mythical frigate factory referred to earlier and the second is this cup that runneth over. I am sure that people are out on the streets of Glasgow looking for them today. However, I am glad that he has at long last actually found the shipbuilding strategy and that it is a step in the right direction. As for the Type 31 frigates and the fleet support ships, what steps is he taking to ensure that the build programme is accelerated to guarantee a constant drumbeat of orders for UK shipyards? With the ageing Type 23s and the need for the UK to focus all its efforts on exports, time and tide waits for no man; we need to make progress as quickly as possible.

  • I think that that is the nearest we are going to get to a welcome from Scotland today, so let us bank that and thank the hon. Gentleman for it. He is right about one thing: the Type 23s are beginning to age and we must ensure that the Type 31e and the Type 26 are ready to replace them to keep up the overall numbers of frigates and destroyers. That is why we aim to insert real pace into the programme through the new procurement process by accelerating the design phase, running the tender next year, placing the orders towards the end of next year and starting, as he says, the regular of drumbeat of orders to replace the Type 23 frigates. He will know that they were not all built at the same time and that the older ones will soon need to be taken out of service. Our aim is to have the first Type 31e in service by 2023.

  • Last, but certainly not least, I call Alan Brown.

  • They used to tell me that when I was the last pick at football as well.

    In the 2015 strategic defence and security review, an extra £16 billion was found for the successor nuclear submarine project’s budget, which clearly led to a cut in orders for the Clyde and to the disappearance of the frigate factory. If the costs for the successor submarine programme continue to spiral, what effect will that have on the national shipbuilding strategy and on today’s promises?

  • We have set aside some £31 billion for the construction of the four new Dreadnought submarines, but we have also put aside £10 billion as a contingency to meet any further requirement. With the greatest respect, I think the hon. Gentleman has this the wrong way around. If we had not set aside the money for the successor programme and if this Parliament had not voted to renew the Trident submarine programme, we would not need the frigates that we are already building on the Clyde.

  • Point of Order

  • On a point of order, Mr Deputy Speaker. Following the announcement of eight jobcentre closures across Merseyside, my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Liverpool, West Derby (Stephen Twigg) and I wrote to the Minister for Employment on 18 August asking him to consider colocation proposals drawn up by the Mayor of Liverpool and the city council to save some key services in our constituencies and, most importantly, to pause the closure plans and open a window of negotiation. Norris Green jobcentre in my constituency is due to close on 15 September, yet we have not had a reply from the Minister.

    Mr Deputy Speaker, can you help me win a response from the Department for Work and Pensions on this important matter?

  • In fairness, that is not a point of order for the Chair, but I want to agree that it is unsatisfactory for Back Benchers not to get a reply. Whatever party we are from, we represent constituents who expect a reply. I hope the Government Front Bench will take that on board. I suggest that the hon. Gentleman has put it on the record, and people will reflect on it. I would like to believe that a letter will be winging its way as we speak.

    Bill Presented

    Terms of Withdrawal from EU (Referendum) Bill

    Presentation and First Reading (Standing Order No. 57)

    Geraint Davies, supported by Mr David Lammy, Caroline Lucas, Thelma Walker, Daniel Zeichner and Tom Brake, presented a Bill to require the holding of a referendum to endorse the United Kingdom and Gibraltar exit package proposed by HM Government for withdrawal from the EU, or to decide to remain a member, following the completion of formal exit negotiations; and for connected purposes.

    Bill read the First time; to be read a Second time on Friday 3 November 2017, and to be printed (Bill 103).

  • Ways and Means

    Taxable Benefits

  • Before I call the Financial Secretary to the Treasury to move the first Ways and Means motion, I make it clear to the House that motions 1 to 48 will be debated together.

  • I beg to move,


    (a) provision (including provision having retrospective effect) may be made amending Part 3 of the Income Tax (Earnings and Pensions) Act 2003, and

    (b) (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year amending Chapter 6 of that Part (taxable benefits: cars etc).

    The motions on the Order Paper provide the basis for the second Finance Bill of 2017. They will define the scope of the Bill and allow the Government to introduce it for further debate and consideration in the normal way. The motions ultimately represent a number of measures that will refine our tax system to make it fairer and more sustainable.

    As the House will be aware, Finance Bill resolutions are typically the formal subject of the Budget debate and are considered at that point. That was the case earlier this year, when the Government introduced the first Finance Bill of 2017 after the spring Budget. The general election, however, meant that time to consider that Bill was curtailed. We proceeded on the basis of consensus, taking a number of important provisions, including the soft drinks industry levy, through to Royal Assent before Parliament was dissolved, but a large volume of legislation on other announcements at the spring Budget and earlier fiscal events was withdrawn. At that point, my predecessor clarified to the House that there was no change of policy and that the Government intended to legislate for the withdrawn measures at the first opportunity. The written statement I provided on 13 July again confirmed that intention.

    These motions now pick up where we left off and legislate for the provisions that were introduced and withdrawn due to time constraints. The areas of tax legislation that they provide for will not be a surprise to right hon. and hon. Members, who passed resolutions corresponding to these tax changes after the spring Budget and debated them on Second Reading of the earlier Act.

    In fact, Members who are aficionados of tax legislation—I note that a few usual suspects are here today—will find a lot of the Bill to be even older news. Before they were introduced after the spring Budget, many of the clauses had been published in draft and the policy design had been consulted on with tax professionals, businesses and the public. Such an open and consultative approach is an important part of the tax policy making process; it helps to ensure that legislation achieves its intended effect and means that those who will be affected know in advance what to expect.

  • I am grateful to the Minister for allowing me to make an early intervention. So that the House can understand the voting patterns later tonight, will he clarify whether the motions before us are covered by the deal done between the Democratic Unionist party and the Conservative party? That answer will be very informative to the House and, indeed, to our constituents.

  • I assure the hon. Lady that the process at the conclusion of this debate will be exactly the same as the one we go through on any consideration of Ways and Means measures in respect of such fiscal matters.

    An open and consultative approach is important to our tax policy making process, and our commitment to a single major fiscal event each year is a further valuable step to improving the process for making fiscal policy. Just as with most other major economies, people will no longer face a host of tax changes twice a year.

    The transition to the new Budget timetable will, of course, mean that a further Finance Bill will be introduced following this autumn’s Budget. In line with our past practice, the Government will next week publish drafts of some clauses that we plan to introduce in the next Finance Bill. The transition means there are fewer clauses than in recent years, but pre-legislative scrutiny will again help consideration of the Bill.

    On that subject, Members may notice that there has been a slight change to the motions on today’s Order Paper. The Government have withdrawn a motion covering changes to the definition of a taxable disposal within landfill tax. That motion and the corresponding clause will no longer be taken forward in the current Bill.

  • The hon. Gentleman has brilliantly pre-empted my next comments. If only he were a little more patient, all would be revealed. Her Majesty’s Revenue and Customs has been consulting on related changes to the taxation of illegal waste disposals over the summer, and we will set out our proposals in this area on 13 September when draft clauses for the winter Bill are published.

  • Is the Minister saying that those proposals will actually come forward? I will address this in my speech, but I have been in discussion with HMRC’s policy department, which has given certain commitments to making some serious changes in order to collect more landfill tax and stop avoidance.

  • The hon. Gentleman is right about the importance of those measures, and they will go forward. The policy has not changed; it will just come forward at a different time with other measures in this area.

  • Does the Minister have the staff to do the job on addressing tax avoidance?

  • Our record on addressing tax avoidance speaks for itself. HMRC has raised £160 billion from clamping down on avoidance, evasion and non-compliance since 2010, which is a vast improvement. Given that our current deficit is running at about a third of the 2010 level, this Government have brought in a huge amount of money. In terms of having the resources, we have invested £1.8 billion in HMRC since 2010 to focus exactly on tax avoidance.

  • As the Minister knows, HMRC’s landfill tax figures show a £150 million tax gap. Will the future proposals be published for further reaction and consultation? What I hear from the industry is that some of the proposals it wants are being ignored by HMRC.

  • All the measures relating to the motions we are debating will be out there and will be clear. They will be brought forward along with other measures later in this Session.

    Moving back to the Bill at hand, the motions on the Order Paper give little mystery as to the provisions that we will be introducing. I look forward to debating them in more detail as the Bill progresses, and I will say more about the overall aims of the Bill on Second Reading. For the moment, I will provide a brief outline of some of the main measures.

    The Bill that the motions provide the basis for will make significant changes to the corporation tax regime for large companies. Building on work that this Government have championed internationally and the recommendations of the OECD, the Bill will limit the extent to which big multinational corporations can reduce the tax they pay in the UK through excessive deductions for interest expense. That measure will address a significant area of corporate tax avoidance, and is forecast to raise £5.3 billion over the next five years by ensuring those corporations pay a fair contribution.

    The Bill will also change the treatment of losses within corporation tax; it restricts the extent to which past losses can be set against taxable profits, ensuring that companies with profits over £5 million in a year must pay some corporation tax. At the same time, the Bill will provide for allowances recognising donations to grassroots sport and to museum and gallery exhibitions, and for new £1,000 allowances so that those earning small amounts from trading or property will not have to pay tax on this income. The changes to tackle avoidance of corporation tax by multinationals are part of a number of changes that take further steps in tackling tax avoidance and tax evasion.

  • Does my right hon. Friend agree that Labour’s plans to raise corporate and personal taxation will damage real incomes and investment in the UK?

  • My hon. Friend is relatively new to this House but she makes an important and insightful point, which is that, as we know, we should be under no illusions that under Labour’s plans corporation tax will rise. We have seen it fall from 28% to 19%, and it will continue down to 17%—

  • On a point of order, Madam Deputy Speaker. I thought this debate was about the Government’s proposals. The Minister, following a set-up question from a Back Bencher, is now talking about what proposals Labour might have. Is that in order? Should we not be sticking to the—

  • Order. I thank the hon. Gentleman for his point of order. It is right that we must keep a careful eye on these matters, which of course I am doing. I am sure the Minister is, in the remarks he is making, using as an illustration other policies that may not be his policies. Of course, if he is replying to points raised in the debate, I will always encourage that, because it is important that every Member in this House has a say in the debate. [Interruption.]

  • The hon. Gentleman must not add more from a sedentary position to his point of order, so I will not take up that point, which in any case I cannot answer. The Minister has barely begun, and I am sure that in his wide-ranging speech he will cover everything he ought to cover and everything the House requires him to cover.

  • Thank you, Madam Deputy Speaker. I could not have put that better myself. [Interruption.] And I will get on with it, too. I am not surprised that Labour Members are slightly shy about our discussing their tax plans, because they are not good for our country. Having a plan to raise corporation tax to 26%, with an increase for small companies as well, and to change the tax threshold to bring many, many more people into the higher rate of tax is not a way of incentivising jobs, wealth and economic growth, as the hon. Gentleman well knows.

    Our changes to tackle avoidance of corporation tax by multinationals are part of a number of changes that take further steps in tackling tax avoidance and tax evasion. Others covered by these resolutions will introduce a penalty for those who enable tax avoidance, a penalty for transactions connected with VAT fraud and measures to tackle disguised remuneration tax-avoidance schemes.

    The Government’s aim to make the tax system fairer is further supported by the Bill’s provisions on the taxation of those with non-domiciled status. A number of changes will be made, and these are forecast to raise £1.6 billion over the next five years. Most importantly, permanent non-dom status for people resident in the UK will be ended, so that they pay tax in the same way as everybody else. That major reform makes the tax system—

  • I wish to make a point about tax avoidance and fraud. When it comes to landfill tax, will that extend to companies or public organisations which know that the price they are paying for the collection of their waste cannot possibly include the disposal rates of landfill tax? Or will it cover those accountants and others who are involved in a landfill tax company and know what is actually going on? Will that be covered by the definition of fraud and avoidance?

  • I will ask the relevant Minister in the relevant Department to get back to the hon. Gentleman on that very specific point.

    I was discussing a major reform that makes the tax system fairer and supports the public finances, increasing, but not jeopardising, the contribution that non-doms make to tax revenues. Other clauses will legislate for the changes—

  • Will the Minister explain how long the Government have been working on this major concession and when he anticipates that there will actually be some change that means non-doms experience the same arrangements as ordinary taxpayers in this country?

  • The answer to the hon. Gentleman’s question is that that is precisely what this Bill will be achieving. We will be putting an end to permanent non-dom status, so that those who are “deemed domicile” are treated on the same basis for taxation purposes as other residents in our country. Let me gently remind him that his party was in government for 13 years and very little happened then on the issues to which he now professes objection. So we should not be taking too many lessons from Labour on the issue of non-doms.

  • Does my right hon. Friend recall, as I do, that for the best part of a decade the Labour party kept saying every year that it would do something about non-doms and then did nothing whatsoever because it was so into the prawn cocktail circuit and pandering to big business, and that Labour only ever took any action when it was humiliated by our previous Chancellor, George Osborne, when he was in opposition? Does my right hon. Friend also agree that this Government have been leading the way consistently on making sure that a fair share of tax is paid by non-doms and others?

  • My hon. Friend is entirely right about that. We currently raise £7 billion a year from non-domiciled individuals, which is £1 billion more than was the case a decade ago. The provisions in this Bill will ensure that we raise a further £1.6 billion over the next five years, so this Government are serious about this issue and are acting on it.

    Other clauses will legislate for the changes we have announced to the dividend allowance, reducing the differential between taxation of different individuals, and to the money purchase annual allowance for those who have accessed their pensions under the flexibilities that this Government have provided.

    Finally, these resolutions provide for the Finance Bill to legislate for the Making Tax Digital programme.

  • I was provoked to my feet by the word “finally”. I am very concerned that a number of the resolutions before us include the words

    “including provision having retrospective effect”.

    I have waited patiently for the Minister, guided by Madam Deputy Speaker in his extensive contribution on this crucial piece of legislation—we are discussing the Budget and the Finance Bill, for goodness’ sake—to tell us why on earth so many provisions are having retrospective effect.

  • The answer to the hon. Lady’s question is that many of these things relate to the fact that this Bill has been, in effect, interrupted; we now have a second Finance Bill because we had a general election some time ago, as a consequence of which not all of the measures that were going through Parliament at that time were proceeded with. The second point I would make to her is that the fact that some measures are retrospective does not mean that they have not been fully consulted on or that draft legislation has not been out there to inform the public and stakeholders.

  • I raise this point because where there is late payment of tax, for whatever reason, be it carelessness or inattention to a particular detail, penalties and fines will be imposed. When we are considering things having retrospective effect, we may well find that such provisions will not comply with our commitments under the European convention on human rights about the retrospective creation of fines and penalties. The Government will not want to hear that, but I just bring it to the Minister’s attention when we talk about the retrospective effect of any provisions in a Bill such as this, which involves fines and penalties.

  • I thank the hon. Lady for her further thoughtful point, but I just return to my comments, which are that those who will be affected by the retrospective measures in this Bill will have had an opportunity to be fully apprised of them prior to their coming into force under an Act of Parliament.

    In conclusion, the resolutions provide for the Finance Bill to legislate for Making Tax Digital. The Government are committed to creating a tax system fit for the digital age. Businesses increasingly interact with customers, manage their purchasing, organise their payroll and undertake a host of other functions online. It is the future for keeping their accounts and reporting their tax affairs. Moving to a digital system will help us to address the £9 billion annual cost of taxpayer errors. It is right that we act.

  • As one of the Conservative Members who was gently trying to persuade the Government to take a more staged approach to Making Tax Digital, may I take this opportunity to thank the Minister for his announcement in July of the changes to the scheme? Those changes have been greeted in particular by the small business community with some relief and gratitude, and I speak as a small business owner myself. The prolonged nature of introducing the full-throated Making Tax Digital programme means that business has time to adapt. Will he confirm that that means the Government have plenty of time to tweak the system for some of the perhaps unforeseen burdens that may still arise?

  • I thank my hon. Friend for his kind remarks. By way of mutual appreciation, I thank him for his input around the discussions I held immediately prior to taking the decisions to which he alludes. He is right that we now have the time to ensure that the measures are sufficiently piloted, are robust and are not overly onerous on the businesses and individuals to whom they will apply, and that they work to make businesses more efficient and effective in themselves while reducing the tax gap further and raising much needed revenues.

    I have heard the representations from businesses and from members of the House about the speed of the transition to Making Tax Digital. To ensure that businesses are ready, I announced a new timetable for the programme before the summer recess. In the first instance, from April 2019 participation will be required only for businesses that have to register for VAT and they will be required to provide only updates on their VAT liabilities, which they already report quarterly. We will extend mandatory participation further only once the programme has been shown to work well, and at the very earliest in April 2020. As my hon. Friend the Member for North West Hampshire (Kit Malthouse) suggested, I know that will be welcomed by Members from all parts of the House who have raised such concerns with me.

    As I have outlined, the purpose of the resolutions we have tabled is to enable the introduction of a Finance Bill that will legislate for a number of tax changes announced before the general election. The changes the Bill will make are important. They will make a major contribution to the public finances, tackle tax avoidance and evasion and address areas of unfairness in the tax system. We will doubtless debate the principles of the changes fully on Second Reading and consider them in detail in Committee. Today is an opportunity to begin that process and take forward again the tax legislation curtailed at the end of the last Parliament. I commend the resolutions to the House.

  • I noted the Minister’s comment that there is no change in policy. From that statement it is clear that the Government have learned absolutely nothing from the result of the general election, which is a terrible shame. The Opposition welcome the Government finally laying before the House the Ways and Means resolutions, which will comprise the so-called “summer” Finance Bill, but the clue is supposed to be in the name. I find it rather odd, as I am sure many of my parliamentary colleagues do, that we stand here in early September debating a summer Finance Bill that was expected to be introduced and passed before the summer recess. Alas, it was not.

    I recall the Minister’s predecessor standing at the Dispatch Box only four and a half months ago assuring the House that if the Government were returned, they would immediately bring forward measures dropped from the previous Finance Bill due to lack of parliamentary time. However, they have an excuse for the procrastination: it is called chaos. We have a chaotic Government, chaotically stumbling from crisis to crisis, not knowing one part of their anatomy from another. After the election, we returned to a zombie Parliament where little in the way of business was put forward to be debated in the House. Mr Speaker referred today to the whole question of the scrutiny that we are supposed to be doing, but the Government are not putting anything forward for us to scrutinise.

    Not only is the Prime Minister one of the walking dead, but she wants Parliament to join her. On a number of occasions, my colleagues and I wrote to the Treasury to ascertain the date for the Finance Bill. In addition, the issue was raised twice in business questions and the Chancellor was asked about it in Treasury questions, all to no avail and no answer. It was the fifth amendment approach to answering questions. It was only in the waning hours, as Members packed up before the House rose for summer recess, that the Government were forced to publish the date for the Bill’s return.

    I know the Treasury lost two Ministers in the election—to rework Oscar Wilde’s observation, losing one Minister is a misfortune, but to lose both looks like carelessness—but surely the country cannot simply hang around because the Government are in meltdown. The Government are making an art form out of uncertainty. We have uncertainty about Brexit, uncertainty about the country’s finances, as the resolutions indicate, and now uncertainty about the Prime Minister’s job prospects. The only certainty we have is the inability of this vacuous, hapless Government to govern with any scintilla of competence or compassion.

    The Government had five weeks after the general election to introduce measures dropped from the previous Finance Bill and bring certainty to taxpayers and businesses. Many of those businesses have already undertaken the administrative and financial burden of ensuring that they meet the stipulations of the measures included in the Ways and Means resolutions being debated today. The Minister could have brought forward the resolutions and published the Bill before the House rose for summer recess. That would have allowed Members and the businesses and taxpayers affected time to read through the proposals and examine them thoroughly. Instead, the Government have cynically restricted the debate by scheduling the Second Reading of the European Union (Withdrawal) Bill for tomorrow.

    Next week, the Minister intends to push ahead with the Second Reading of the Finance Bill only four days after its publication, with the explanatory notes being published on the day of Second Reading. Once again, the Chancellor and the Treasury are deliberately shying away from the parliamentary scrutiny that we should be having on these resolutions. This is a time of great political and economic uncertainty, and the measures included in the resolutions do little to address the problems at hand. The global economy is on the move, while Britain under the Tories is being left behind. The resolutions are defined more by what is not in them than what is. There is nothing about investment, nothing about productivity and nothing about public services—much ado about nothing.

  • Will the shadow Minister give the House his view on the points made by his Back-Bench colleague the hon. Member for North Durham (Mr Jones) on the landfill tax question?

  • I would not proffer advice to my hon. Friend the Member for North Durham, because he is an expert on that issue, but I will listen clearly to what he says. Unlike the Government, I listen to my colleagues on the Back Benches.

    We need only look across the channel to see that every European economy outgrew Britain in the GDP figures for the first quarter. Our productivity rate remains one of the worst in the G7 and is lower than it was 10 years ago. Real wages continue to fall behind inflation. More than ever, we need bold and radical solutions to stimulate growth, raise productivity and encourage investment in our economy. None of the resolutions before us will do that. Even the Archbishop of Canterbury has made that point. Rather than focusing on balancing the budget or tackling our growing debt to GDP ratio, we have a Chancellor who spent the summer in the witness protection programme, rearing his head only to brief against his boss when the coast was clear and the Prime Minister was abroad.

    The measures before the House represent the Government’s failure to take the opportunity to begin seriously to tackle the challenges that our economy and country face. For example, it is clear that the Tories have no answers on how to raise productivity and no answers on how to tackle the growing inequality in pay. We are now experiencing the longest period of wage stagnation for 150 years, with nurses having to demonstrate in Parliament Square to make their point. The Tories have no answers when it comes to creating an economy that works for the many and not just for a privileged few.

  • The hon. Gentleman’s former noble friend Lord Sugar, who knows a little about productivity and running a business, poured a huge amount of cold water on the prospectus that the Labour party put before the