Skip to main content

Commons Chamber

Volume 465: debated on Monday 22 October 2007

House of Commons

Monday 22 October 2007

The House met at half-past Two o’clock

Prayers

[Mr. Speaker in the Chair]

Message from the Queen

Electoral Commissioners

I have to inform the House that the address of 18 July, praying that Her Majesty will appoint as electoral commissioners: (1) Maxwell Marshall Caller CBE for the period ending on 31 December 2011; (2) Henrietta Campbell CB for the period ending on 31 December 2011; (3) Ian Maxwell Kelsall OBE with effect from 19 January 2008 for the period ending 31 December 2012; and (4) John McCormick with effect from 19 January 2008 for the period ending on 31 December 2012, was presented to Her Majesty who was graciously pleased to comply with the request.

Oral Answers to Questions

Defence

The Secretary of State was asked—

Private Security Companies (Iraq)

There is no British licensing regime for private military and security companies, so the answer is none. However, for completeness, let me add that the Ministry of Defence does not have any contracts with such companies in Iraq, and we have no plans for any.

Will the Secretary of State update the House on plans for a system of industry regulation, especially as the Government first proposed it five years ago? What discussions has he had with the Americans on taking a common approach, following the Blackwater incident? In such a volatile environment, is he not concerned that the unprofessional and reckless activities of security companies could prove disastrous and endanger the lives of more civilians, and of members of our forces?

First, no private military and security company operating under British Government contract—there are three such companies operating under contract for other Departments—has ever been implicated in the death or injury of any innocent Iraqi civilians as a result of the discharge of weapons; I should make that clear at the outset. As for the follow-up to the 2002 Green Paper, when the Lord Chancellor was Secretary of State for Foreign and Commonwealth Affairs he commissioned a review of policy options for private military and security companies. As I think hon. Members know, the review was completed in 2005, and it raised a number of complex issues that officials are considering in detail. I hope that we can work our way through those complexities shortly. Of course, when a conclusion is reached, Parliament will be informed of the detail. Hon. Members can be reassured that I discuss all aspects of our policy, and United States policy, on Iraq with my counterpart, the Secretary of Defence.

May I tell the Secretary of State that we did not know that there was a report within Government in 2005? The Select Committee on Foreign Affairs has been asking for and expecting a response to the representations that it made some eight years ago, following the Sandline inquiry and the problems arising from the fact that London is one of the world recruitment capitals for security firms. There is a problem with the interface and relationship between those firms and United Kingdom armed forces, and it needs to be addressed with greater expedition.

I think that my hon. Friend’s question betrays the complexity of the issues involved. The problem is defining the activities that should be regulated, and how any regulation of overseas activities might be enforced. That is not an easy matter to resolve. Indeed, the Blackwater incident and its aftermath shows that the United States of America is struggling to do so, given that the regulation of such companies in Iraq currently depends on a coalition provisional authority memorandum. There are a number of complexities with the issue. I am anxious that they be resolved, and that we can come to the House in good time to explain how we will proceed on that area of policy.

The Secretary of State sounds reluctant to grasp the nettle on the issue so ably raised by the hon. Member for Thurrock (Andrew Mackinlay). Surely there are two problems: that the companies are doing things that the British armed forces would traditionally have done themselves, were it not for overstretch, and that the attraction of some of the companies is such that they pull people out of our armed services to go and work for them at much higher wages. That in itself contributes to overstretch.

The hon. Gentleman only adds to the complexity of the issues with that qualification. It is not true to suggest that those companies, which are not all, by any stretch of the imagination, within the Government’s control, do work that the British Army would otherwise do were it not for overstretch. In fact, in Iraq, the Departments that contract those companies do so to provide security for civilian operators. It is by no means correct that the Army would provide that security in any event or that other military forces would do so. There is no lack of willingness on my part or energy to work our way through the difficulties, but they are significant, and we want to try to get them right before we announce the detailed policy to the House.

Operational Deployments

2. For what period of time operational deployments are expected to require annual expenditure from the reserve. (159394)

The additional costs of operational deployments will be funded from the Treasury reserve for as long as the operational deployments continue.

Given that 7,700 troops are on deployment in Afghanistan—it is rumoured in NATO that Britain will contribute more troops—and given that our ambassador in Afghanistan has spoken of a commitment that might last three decades, it is simply not reasonable to expect the armed forces to have to budget year on year, on the basis of an indefinite commitment. That money should be structured into the defence budget, and the armed forces should not have to come back to the Treasury, year in, year out for a commitment that is going to last decades.

If the money for operations was built into the budget, that is exactly what the armed forces would have to do: they would have to budget within that structure. At present, the armed forces are funded to provide the capability required—operations are funded from the reserve—so that they are not put into that position. May I take the opportunity to scotch the rumour on which the hon. Gentleman drew? Unfortunately, the NATO spokesman, Colonel Appathurai—I hope that I have pronounced his name properly—made an error yesterday. I will not read the detail of the document I have received, but I am happy to place it in the Library. Today, however, he gave a clear explanation in a press conference, in which he admitted that he had inadvertently misled the media yesterday, and that there were no such plans to increase the UK contingent.

The Secretary of State must be the only person in the House who does not understand that the armed forces are overstretched and under-resourced for the commitments that they have undertaken. When is he going to face up to the fact? If the military has to cancel 10 per cent. of its training every year, the resources are clearly not available for it to do the job and be trained for the job that it is meant to do?

Statistics show that the number of training events is increasing every year. For the year 2004-05, the total of planned training events was 379; for 2005-06, it was 533; and for 2006-07, it was 699. I accept that some of those events were cancelled, but the percentage of cancellations has decreased. I accept, too—I have said so at the Dispatch Box—that we are asking the military to do a significant amount, which has an effect. I have also explained time and again what we plan to do to reduce that pressure.

Have not the Government failed in their attempts since 2004 to produce a defence-specific inflation index? They keep trumpeting the fact that they have given the armed forces 1.5 per cent. more than the general level of inflation, but the Royal United Services Institute calculates that defence equipment projects run at 5 to 10 per cent. above the general level of inflation. Does that not mean that the Government’s claim that they are spending more on defence in real terms is simply a load of hogwash?

It is not a load of hogwash. I have given the figures, and the Opposition spokesmen must accept, however reluctantly, that there have been real- terms increases. The Opposition face a problem, as there is a £6 billion hole in their spending plans. In our policy debate last Tuesday, I invited the hon. Member for Woodspring (Dr. Fox) to say from the Dispatch Box whether he would match or improve our spending plans. Given that he said he was prepared for an election a couple of weeks ago, the Opposition face a challenge—will they spend more than us and, if so, on what will they spend less?

Afghanistan

The security situation in Afghanistan is stable, if fragile in places. The Afghan national army and the international forces are helping to extend the authority of the Government of Afghanistan, although there remains a threat from suicide attacks and local ambushes.

Do the Government still believe that the Taliban do not constitute a strategic threat? If so, will the right hon. Gentleman explain why 2.7 million rounds of ammunition were used between June 2006 and September 2007?

There is no correlation between those two issues. Yes, I believe that the Taliban do not pose a strategic threat to the Government of Afghanistan. They are able to carry out some forms of attack, in particular asymmetric attacks, as they are called—suicide bombings and others—that are difficult to defend against. They know that, and those attacks generate a degree of threat that we are trying to deal with, albeit with some difficulty. Otherwise, every time the Taliban have faced up to the forces of the international security assistance force—ISAF—they have been overmatched and defeated. That has happened for a number of reasons, not the least of which is that we have been prepared to use a significant amount of ammunition against them.

Does my right hon. Friend agree that we are facing a huge threat and that day in, day out UK forces have to face the threat in Afghanistan that should be shared among our NATO partners, to ensure that they take more of the weight? Does he agree that it is time for them to stand up and be counted?

I agree that NATO needs to live up to its collective commitment. My ministerial colleagues and I regularly raise the subject when we speak to our partners. It will continue to be raised to ensure that increasingly they live up to those commitments, and there has been some movement on the part of some of our allies.

NATO’s own statement of requirements says that we need thousands more troops on the borders of Afghanistan and Pakistan. Does the Secretary of State accept that we cannot be as effective as we would like to be without those extra troops? Does he agree that there is a risk that, over the next few months, we might find ourselves losing the ground that we have already taken and have to fight to get it back again later on?

The right hon. Gentleman properly raises an issue that the commander of ISAF raised in a recent interview. It is a concern that if we are unable to hold on to the ground that we have managed to secure, we will have to do exactly as the right hon. Gentleman says. However, like most hon. Members, he knows that our ability to secure and hold that ground is mostly a function of our ability to train and mentor Afghan security forces, both the army and the police, to do that. Unless we can make the Afghan security forces capable of holding on to that ground, we will find ourselves repeatedly in that situation, although I do not think we will do so because we are making progress in mentoring and training.

Security issues in respect of the Afghan-Pakistan border feature significantly in our dialogue in NATO and with Pakistan. I recognise that additional forces are needed for that part of the country, but the security will have to be effective on both sides of the border, as the right hon. Gentleman well knows.

At a meeting of the NATO Parliamentary Assembly earlier this month, MPs from the Netherlands and Canada reported that their Parliaments would reconsider their countries’ commitments to ISAF, and particularly to deploying to more dangerous regions of Afghanistan because of fears about unequal burden-sharing. The Secretary of State has already said that he shares that concern. What discussions has the North Atlantic Council had about burden-sharing, and how does he think policies could be changed so that it is more even?

It is a question not of changing policy but of NATO allies living up to the collective commitments to which they have signed up. I am well aware that the Netherlands and Canada must go through parliamentary processes that their Governments promised their Parliaments in order to consider extending their commitments beyond certain dates—I cannot remember the specific dates, but they are in 2008 or 2009. I am confident that they will get the support from other allies that will allow them to get through that political process. While I am at the Dispatch Box, I want to pay tribute to both those countries, which have made a significant contribution in difficult circumstances to securing the southern part of Afghanistan. That issue is constantly discussed both in the NAC and when Ministers meet, as NATO Ministers will at an informal session later this week.

Security in Afghanistan will clearly improve if reconstruction work is progressed. It is believed that the MOD report on Operation Herrick was very critical of construction work. Both the Defence Committee and the Foreign Affairs Committee have requested copies of that report to allow them to scrutinise in detail what is going on in Afghanistan. Will the Secretary of State make the report available to those Committees?

I will consider the request from the hon. Gentleman, and I would consider such a request from the Committee, if I were to receive one.

Does my right hon. Friend agree that security in Afghanistan is a result of not only the number of troops, but their operational capability? Will he outline improvements for troops in terms of vehicles and other equipment to improve their operational capability?

Recently, significant improvements have been made in the protected vehicles that are available to our troops. We have not quite got the numbers of vehicles into the operational theatre that we plan to, but we are making significant progress. Last week, I went to see Brigadier Lorimer and representatives from 12th Mechanised Brigade, which has just returned from Afghanistan, and they spoke very highly of those vehicles and of the Mastiff vehicle in particular. Hon. Members will be aware that the Prime Minister’s recent announcement about the procurement of Mastiff vehicles means that we expect to deliver more than 400 of them over the next two years. The majority of them will go to Afghanistan, but some will be used for pre-deployment training.

The MOD is to be congratulated on the deployment of the Warrior armoured fighting vehicle to Helmand province, which is proving to be a great success. Will the Secretary of State ensure as a matter of urgency that more of those vehicles are deployed throughout the theatre in support of the infantry?

I am grateful to the hon. Lady for recognising that improvement in force protection and the effectiveness of our troops. I discussed that very issue with Brigadier Lorimer on Friday, because it was on his recommendation that we first considered deploying Warriors. No request has been made for additional Warriors from commanders or the military, but if a request is made—Brigadier Lorimer agrees with the hon. Lady and suspects that a request will be made—I will consider it in the same way as I considered the first request.

My right hon. Friend has mentioned the work that is being done to train Afghanistan’s own security forces. Are there enough trainers in the country at the present time, and, if not, what can be done to supply more?

There are not enough trainers in the country. For example, there are about 1,800 police trainers in Kosovo, which is about the size of Wales. The EU commitment to Afghanistan for police training on the civil side amounts to some 160 trainers, of whom 60 have been deployed. At a recent informal meeting of EU Ministers, I described that as a flea on the back of an elephant. If we are to match up to the challenge that we have generated for ourselves in the international community, we need to do much better on police trainers.

Will the Secretary of State give careful thought to the thesis that the longer foreign troops unavailingly remain in southern Afghanistan, the greater the likelihood that Pakistan will turn into a fundamentalist, Islamic, hostile state, with the result that it will be a more immediately potent nuclear threat than even Iran?

To my surprise, the hon. Gentleman asks me to look forwards and not back, and I am grateful for his invitation to do so. The longer our troops in Afghanistan stay in their present configuration, doing what they need to do, the more testing it will become for them to sustain the support of the local people. I accept and understand that. All the military commanders and everybody who knows about insurgencies understand that the support of the local community is very important.

There are serious concerns about developments in Pakistan. Only last week, there was evidence of the reach of insurgents and extremists in the country, and of their ability to overcome significant security. With respect to the hon. Gentleman, I do not agree that our presence in southern Afghanistan is generating the dangers that emanate from Pakistan. The environment is complex, and we would all do well to make our best contribution to try to stabilise Pakistan.

It is woefully disappointing that some of our allies are not pulling their full weight in Afghanistan. Moreover, there is the question of the unfair funding mechanism, through NATO, under which not only does Britain carry a disproportionate military burden, but our taxpayers carry a disproportionate financial burden. In the expectation that that unacceptable situation will continue, if the Government have not begun planning, or developed plans, for more British troops to be sent to Afghanistan, how do they think that the NATO gap will be filled—and by whom and in what time scale?

The hon. Gentleman and I largely agree on the issue of NATO living up to its commitments. As far as the NATO alliance is concerned, my priority is to get it to accept that it should live up to its commitments. I continually discuss with the Secretary-General, the Secretary of Defence and other allies present in the south how we can get other countries to increase their presence. As the hon. Gentleman knows, we have had some success. Solving the issue through changing the funding mechanism would bring other challenges, which the hon. Gentleman will understand; if we move from the position of the costs lying where they fall, we might find ourselves having to encourage countries to increase their investment in their own capability as well. All such decisions have a cost.

Our intention to get the necessary force levels in Afghanistan involves a combination of sustaining our level of commitment to the country and encouraging our allies to increase theirs; principally, however, it involves training Afghan forces to be able to take over responsibility in their own country. We are doing that at quite a pace.

Hon. Members on both sides of the House will know of the widespread speculation that substantial numbers of Iranian-made explosively formed projectiles, or EFPs—the most lethal form of roadside bomb—have been supplied to the Taliban in Afghanistan. It is unbelievable that the Iranian Government would not know about those consignments. What is being done locally and internationally to stop such murderous attacks emanating from Iran on our armed forces?

I will not share all the relevant information with the House, but if the hon. Gentleman wants further briefing on the issue I shall be happy to give it to him on the appropriate basis. He knows exactly what we are doing to try to stop that dreadful, deadly traffic. He knows the degree of success that we have had; on some occasions, we have made that success public for obvious reasons.

The hon. Gentleman is right about that equipment; indeed, there is also training of insurgents deployed into Afghanistan by the Iranians. I agree with him: I do not for a moment accept that all that is not known. If it is not known, I still think that the Iranian Government have to take responsibility because they have created a complexity of circumstances in which there is deniability.

We must apply pressure on all levels, including diplomatic pressure—particularly in the region, where significant pressure on Iran is most effective. The Afghan Government themselves are giving that message to Iran. The irony is that although Iran does those things, it also does many positive things in Afghanistan. Like its relationship with Iraq, its relationship with Afghanistan is complex. The House can rest assured that the issue is uppermost in my mind and those of my ministerial colleagues.

Military Covenant

We are fully committed to meeting our responsibilities for serving personnel, veterans and their families. Over time, we have made improvements to service pay, accommodation, health and welfare provision, force protection and personal equipment. However, we recognise that more can be done.

The Royal British Legion says:

“we believe that certain aspects of the Military Covenant are not being delivered and that the Nation must now bring about change to ensure that our Service people and their families get the support they deserve.”

One of the things that it pinpoints is the armed forces compensation scheme, which it says will make

“receiving compensation for death, injury or illness caused by Service significantly more difficult.”

Does the Minister agree?

I do not agree. My hon. Friend the Under-Secretary has had several meetings with the legion and has asked it to provide instances of where claiming compensation has been made difficult so that we can consider them. The burden of proof is at an acceptable level, and there is no evidence that there are difficulties. The level of compensation has been increased and improved by the introduction of the up-front payment to supplement the pension, which was not available at all until a year or so ago.

Why has the burden of proof for compensation been shifted from the Secretary of State to the wounded soldier?

The burden of proof is on the balance of probabilities. That is the same level of proof that is required under other schemes run by the Government, and it is not onerous, in my opinion. As I said, my hon. Friend the Under-Secretary has asked the legion to identify cases where people had difficulty in claiming compensation, and if they can show that they had difficulty we will address the matter. We are not going to walk away from this. We do not believe that the burden of proof presents a problem, but if evidence shows that it does, we will look at that evidence.

I think that the Minister is in denial. There are 775 outstanding cases of injury compensation and 63,000 outstanding claims under the war pensions scheme. Does he honestly believe that those figures paint a picture of a Government who are committed to the military covenant?

Thousands of claims have to be processed each year. Some of them are relatively simple and straightforward and can be dealt with in a short period; others relate to people with enormously complex injuries, and that inevitably lead to delays in making an assessment. We have to do the maximum that we can to deal with these claims as quickly as we can, but they must be dealt with properly and thoroughly; I would have thought that that is what the hon. Lady wanted.

One of the areas where there is significant scope for improvement in honouring the covenant is mental health services. What steps is my right hon. Friend taking to ensure that that happens?

We have increased the funding that we offer to Combat Stress, which is an organisation that helps us in this respect. We have introduced assessments for all people who go into and out of theatre to try to ensure that we improve the assessment of the mental health of those who are faced with these circumstances. We are also introducing, through pilots in the first instance, across-the-board mental health facilities to cover all the regions of the United Kingdom to ensure that we pick up mental health issues as and when they arise and that we know exactly what problems face our ex-military personnel in the years to come.

I congratulate the Royal British Legion on its campaign, because there is always more that can be done to support our veterans. I thank the Minister for the increased funding for Combat Stress, and especially for Hollybush house in my constituency. Will he join me in congratulating Hollybush house on the opening of its new wing last week? Along with the extra funding, that will greatly increase its capacity to support veterans who have mental health problems as a result of serving their country.

I thank my hon. Friend for the support she gives to Combat Stress, which I know is based in her constituency. I welcome her comments on the Legion’s campaign. We, too, welcome it; we have no problem with the Legion using its power and influence to raise such issues throughout the country. It is sad, however, if people want to use its campaign for party political purposes. We ought to be working together to raise such issues, which are perfectly legitimate, in the country as a whole.

One of the most-cited elements of the covenant is the way in which the country deals with those wounded in action. Despite the unfair criticism of Selly Oak hospital by Opposition Front Benchers in last week’s defence debate, I am sure that the Minister will agree with the Chief of the Defence Staff, who said in March 2007:

“There is nowhere better in the country, nowhere more expert at polytrauma medicine than the hospital in Selly Oak, that’s why our people are there.”

That is exactly right. That is the opinion of the Chief of the General Staff and, overwhelmingly, of people who visit the facilities at Selly Oak. The comments made during the debate the other day were unfortunate, and they have not yet been withdrawn. Off the back of an individual case, the details of which were inaccurate, a slur was effectively cast on the people who work there.

Does the Minister regard looking after the bereaved families of fallen servicemen and women as part of the military covenant? If he does, can he explain why it is still the case that no payment is made to bereaved families to enable them to be legally represented at inquests?

I accept that that is part of the military covenant. We must ensure that we give all appropriate support to the bereaved relatives of our service personnel, and we do. However, coroner’s court appearances are not of such a nature that people should expect to be represented legally. The system is an inquisitorial one designed to get to the facts. It is not a system in which people automatically clash with the views of the Ministry of Defence at the hearings.

My right hon. Friend recognises that the covenant is between the armed forces and the people of our countries. The Government are a part of that contract. Does he believe it is enhanced by politicians in this House and outside using the military as a political football by misquoting military leaders to score cheap party political points?

No, I do not. If people begin to use this debate in that way, they will detract from what we ought to be doing. All Members of this House, irrespective of party, should join this debate and help to facilitate what is needed: the maximum connection between our armed forces personnel, who are doing a tremendous job on behalf of this country, and the nation as a whole, many of whom do not understand and appreciate the full extent of the sacrifice and the service that is being given.

A disproportionately large number of our homeless on the streets of London and other cities in the United Kingdom are former servicemen and women. I commend the work of the Sir Oswald Stoll Foundation and Veterans Aid—two marvellous charities that are helping with that. Is the Minister aware of the growing campaign for a national veterans centre in London to act as a one-stop shop, whether simply for veterans to make links with their old regiments or for the homeless to go and try to find somewhere to stay for the night? Is he prepared to meet representatives of the charities to push forward the campaign?

Lots of charities are working on the matter and doing a fantastic job, and we should do everything we can to encourage them in their work. My hon. Friend the Under-Secretary meets them regularly. I am more than happy not only to meet the people concerned but to consider any ideas. We are prepared to consider any suggestions for assisting our former service personnel.

Does the Minister agree that one of the obligations that we owe our servicemen is confidence that when they serve on the front line, their families are being adequately housed and looked after at home? Does he recall that in 2001 the defence housing executive was aiming to get all family accommodation up to standard 1 by November 2005? That date has been and gone, and we now have a 10-year programme, which, according to the Secretary of State, would necessitate £50 million a year being spent on family accommodation. Does the Minister realise that in the 12 months to April this year, only £16 million was spent? At the rate that things are happening, rather than being talked about, it could take 50 years to bring service family accommodation up to scratch. Given that the Government have sold £2.2 billion of assets since 1999, would not it be an idea for a guaranteed proportion of those capital asset sales to be ring-fenced in future for reinvesting in the Ministry’s estate of houses?

The hon. Gentleman is right that a big job continues to be necessary on the estate for service family accommodation and single living accommodation. However, he should not undervalue the amount of work being done, the amount of money being spent and the size of the continuing building programme. In the past year alone, £700 million was spent. As my right hon. Friend the Secretary of State said, there is a plan for £5 billion to be spent in the next 10 years. However, we will not put right decades of neglect overnight. The hon. Member for Colchester (Bob Russell) points at Conservative Members, and during their reign practically no investment was made in service living accommodation. The matter is being addressed, but it will not be sorted out overnight.

My right hon. Friend knows, because he visited Portsmouth naval base a couple of weeks ago, that we have made an excellent investment in single living accommodation in Portsmouth. Will he confirm that this Government did not sell off MOD housing stock at a knock-down price, or leave the MOD to pick up the maintenance costs?

Part of the problem is that we are living with the Annington Homes contract to this date. That adds complexity to dealing with family living accommodation. We are getting on with the rebuilding programme for single living accommodation and making improvements in service family accommodation, but the Annington contract has been a big part of the problem.

In Iraq 7.4 Americans are wounded for each fatality, whereas the official UK figure is 1.6. What explanation of that gross disparity can the Minister offer other than the obvious one, which is a failure by the Ministry fully to reflect the casualty burden that our armed forces sustain?

Since I have been in this post, I have heard repeated allegations that somehow injured service personnel are not adequately reflected in the figures. I have heard all sorts of scurrilous things, such as that we are deliberately trying to hide the extent of our injured service personnel. I have seen no evidence of that. I continue to be prepared to examine anything that anyone has said. If anyone can provide evidence that we are under-reporting—[Interruption.] I heard the hon. Member for Westbury (Dr. Murrison) make scurrilous claims last time he was at the Dispatch Box, and I do not know whether he wants to do that again—

I will try to do that, Mr. Speaker, at your direction.

I say to the hon. Gentleman in all seriousness that if he or anyone else has evidence that there is a problem with the reporting mechanism, let us have it. We will look at that evidence and see whether we can put the problem right. Looking at what is needed for the purpose of treating our injured service personnel must be the priority. I see no evidence for the many claims that are made—indeed, continuing right up to this morning—and which have been quite adequately dealt with by my hon. Friend the Under-Secretary.

Afghanistan

The UK armed forces in Helmand continue to defeat the Taliban tactically, while supporting Foreign and Commonwealth Office and Department for International Development programmes to improve governance and provide reconstruction. UK armed forces continue to provide mentoring and assist in the development of the Afghan security forces, as part of our long-term goal to ensure that the Afghans can take responsibility for their own security.

Of course there have been successes in Helmand, but there have been dreadful failures, too. The main one is the totally unexpected scale of the deaths of our valiant soldiers—18 died during the parliamentary recess—as well as the deaths of Afghan civilians. Those are uncounted, and are mostly women and children killed by American bombs. The result of that is that we are losing the crucial battle for hearts and minds, to the extent that many of the Afghans who welcomed us in 2001 and were glad to see the Taliban out of their country are now preparing to welcome the Taliban back, because they do not want to live in a country that is at war without end.

I assume that there was a question in there at some point, Mr. Speaker, so I will treat it as if it had a question mark at the end of it. My hon. Friend is consistent in his opposition to our deployment in Helmand province. We have debated the issue on numerous occasions. We will have to agree to disagree about it, although I think that we can agree that he ought to report accurately the success of our troops in Helmand province.

As I have told the House already this afternoon, I spent a good part of Friday with a fair representation of 12th Mechanised Brigade, which has achieved a considerable amount over the period to which my hon. Friend referred. Those soldiers, their commanders and their commanding officer, Brigadier Lorimer, are in no doubt that they left a large part of Helmand province in a much better state, in terms of security and reconstruction, than they found it six months ago. I will not have people in the House categorising that as failure. It is not failure; it is significant success.

Given the number of deaths in Helmand province that result in the repatriation of bodies to Wiltshire—cases that it falls to the Wiltshire and Swindon coroner to pursue—may I say how grateful Wiltshire is that the budget has been addressed, and that a greater effort is being made by the Ministry of Justice? However, will the Secretary of State say whether the forthcoming coroners Bill will contain any proposals to address the extraordinary anomaly whereby servicemen who, unfortunately, die overseas must have an inquest in England but not in Scotland? Should there not be special provision for military deaths to be treated either with a special military coroner—perhaps at the Bulford centre—or in another way that gives more consideration to the families of the bereaved than we are able to give at present?

I thank the hon. Gentleman for his contribution and his sustained interest in this issue. I also thank him for his recognition of the importance of the additional resources that both the MOD and the Ministry of Justice are providing to support the coroner in Wiltshire. I am confident that those resources, as well as the increased resources in Oxford, will help him to address the increased burden of work that he currently faces as a result of the repatriation of bodies.

The hon. Gentleman addresses an issue that we have known about for some time, a resolution to which we have been discussing with the Scottish Executive. The fact of the matter is that there is no jurisdiction in Scotland for the investigation of deaths abroad. I noted recently that in answer to questions about fatal accident inquiries—the Scottish equivalent of coroner’s inquests—the minority Government Justice Minister in Scotland said that he had no intention of changing the law in relation to them. I hope that he did not really mean that, and that his answer was perhaps just a line that an official had given him, which he had not thought about. We certainly continue to discuss the issue, because we are anxious that families based in Scotland will have the opportunity, in such terribly unfortunate circumstances, to have inquiries conducted near to their homes, as can happen in England and Wales.

Will the Minister outline any potential difficulties that the increase in internal problems in Pakistan might cause for troop deployment to Helmand province, given Britain’s commitment to driving out the Taliban?

As I said earlier, I do not accept that there is necessarily a correlation between our deployment in Afghanistan and the troubles that are internal to Pakistan. I have no doubt that some of the same actors in the insurgency are involved on both sides of the border, and since I first took responsibility for our deployment in Afghanistan as Secretary of State for Defence, I have been in no doubt that there is cross-border traffic from Iran that causes some of the difficulties related to the insurgency. We need to see stable government, progressing towards a democratic Government, and Pakistan is capable of addressing the issue of extremism in that country. However, we should not underestimate the scale and nature of that challenge, and some of the things that we have seen on our television screens over the past week have shown just how difficult it is going to be.

Has the Secretary of State had a chance to review the comments made last week by the German Defence Minister, Mr. Franz Josef Jung, in which he criticised the British policy of holding talks with supporters of the Taliban in Musa Qala? When the Secretary of State meets Mr. Jung at the NATO conference, will he point out that if Germany had its troops on the front line in Helmand rather than in the relatively peaceful north, he would appreciate, just as British military commanders do, that this strategy of engagement is essential if we are to have any long-term hope of resolving the conflict?

I have very productive discussions with the German Defence Minister, who is committed to the support of NATO operations in Afghanistan. I suspect that the hon. Gentleman is a supporter of the electoral method that generated the coalition that is governing Germany, and I must point out that the Defence Minister’s need to operate within that coalition often makes it quite difficult to achieve all that he wants to achieve on the basis of his own politics. Also, with all due respect to the hon. Gentleman, and while I hear what he is saying, the approach that he suggests might not be as successful as he thinks. He is a great loss to the diplomatic corps if he thinks that it would benefit our troops in Afghanistan to approach the German Government in that fashion. Finally, Musa Qala has not turned out to be a success because it was unsustainable by the Afghan Government, but in my view, that kind of local agreement, which allows the Government to take care of their own areas, has to be the basis for moving forward. I am sure that there will be circumstances in the future in which we will make progress and then see it fall away; we will need to learn to cope with that.

Merchant Navy

The main defence role of the merchant fleet is to support and supplement the naval fleet and to participate in reinforcement and resupply operations. To this end, certain British ships, including roll-on/roll-off vessels, product tankers and passenger vessels, are designated as strategic ships.

Is the Minister aware that in the past 30 years the number of British-registered merchant ships over 500 tonnes has been reduced from 1,600 to 300, and the number of British-registered merchant seamen has been reduced from 90,000 to 16,000? Given the importance of the merchant navy to defence, does he share my concern about that? Is he having discussions with any other arm of government on reversing those bad results?

I do not know exactly what my hon. Friend is saying. My figures are certainly different from his, so perhaps we should talk further about this matter afterwards. In my recollection, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) made some changes in the legal arrangements, which I know he is proud of. It is widely acknowledged within the merchant fleet that that did a lot to increase the amount of tonnage under British flags. My figures show an increase of 148 per cent. in flagged British ships since the year 2000. I also have a different set of figures for merchant seafarers, according to which there are 27,000, rather than the number suggested by my hon. Friend. Perhaps he and I should get together to ensure that we are talking about the same thing, by cross-referencing our information.

Reserve Forces

9. How many reservists there were in the armed forces in 1997; and how many there were on the most recent date for which figures are available. (159402)

As of 1 April 1997, there were a total of 322,100 regular and volunteer reservists; and as of 1 April 2007, there were approximately 206,200. Those numbers are made up of volunteer reservists, such as the Royal Naval Reserve and the Territorial Army, and regular reservists—ex-regular personnel who retain a reserve liability.

The residents of Bermondsey and Walworth are, like me, proud of the Royal Marines and the Army reservists who are based in our communities. Colleagues around the country will feel the same. Is it policy or accident that the number of reservists has gone down by a quarter during the period of the Labour Government, and the number in the Territorial Army by more than a third? We heard the other day that, because of defence cuts, the Royal Monmouthshire Royal Engineers have been told that they cannot recruit any more reservists, so can the Minister confirm that no other regiment or unit is being held back from recruitment? Many people want to contribute to the country in this way, which has the potential hugely to enhance our capacity at home and abroad.

The hon. Gentleman’s question throws up a couple of points. Back in the late 1990s, the strategic defence review did call for a decrease in the number of reservists, because the nature of defence and defence jobs was changing quite substantially. The 1997 figures were distorted by the fact that in the preceding years there had been big cuts in the regular Army, which led to a residual reserve capacity in 1997 that has obviously changed with time. I wholly agree with the hon. Gentleman that we need to encourage more people to get involved with the reserves. There is currently under-recruitment there, which we need to continue to redress. We all need to work within our communities to ensure that we do the maximum we can to reap the benefit from the huge willingness of so many people to participate in the various branches of the reserves.

Earlier this year, the Chief of the General Staff, Sir Richard Dannatt, in an internal Ministry of Defence note, expressed the following concern:

“Our reserves to meet the unexpected (as well as for current operations) are now almost non-existent…We now have almost no capability to react to the unexpected”.

Is that not a shocking indictment of this Government’s stewardship of our armed forces?

It is not the view of the chiefs of the defence staff that we are asking more than is possible of our armed forces. We, as Ministers, share the concern that our armed forces are extremely busy and that there is not a great residue of capacity left aside. We all know that we have two current operations going on. Perhaps the hon. Gentleman is saying that all our armed forces are working extremely hard. No one is trying to hide that at all, but we are dealing with the situation, and our armed forces are dealing with it in an exemplary fashion.

Intergovernmental Conference (Lisbon)

With permission, Mr Speaker, I want to make a statement about the outcome of the informal European Council in Lisbon. The new agreed text of the amending treaty to support the enlargement of the European Union has been placed in the Libraries of both Houses.

Alongside the treaty, it was agreed at Lisbon that the priority for the European Union must now be the global challenges that we face in relation to employment, prosperity, competitiveness, climate change and security. Today—in a document, “Global Europe”, published this afternoon and available to the House now—the Government set out how we will advance those new priorities in the future.

The mandate for the IGC made it clear that “the constitutional concept”—[Interruption].

Order. The Prime Minister is making a statement, and it is not helpful for hon. Members to intervene.

The mandate made clear that

“the constitutional concept, which consisted in repealing all existing Treaties and replacing them with a single text called ‘Constitution’, is abandoned”.

My intention throughout the summer and autumn of negotiations has also been to ensure that the detailed safeguards for the British national interest are written into the text of the treaty. I invite the House to examine in detail both the treaty and the protections that we have secured by our insistence on special treatment for the UK in a range of areas where our national interests demand it.

First, I will ensure that Parliament has the fullest opportunity to examine the protocol on the charter of fundamental rights. The protocol, which is legally binding and enshrined in the treaty itself, provides an essential safeguard for the UK. It states that

“the Charter does not extend the ability of the Court of Justice, or any court or tribunal of the United Kingdom, to find that the laws, regulations or administrative provisions, practices or action of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that the Charter reaffirms”.

The legally binding protocol ensures that nothing in the charter of fundamental rights challenges or undermines the rights already set out in UK law. The treaty also ensures that nothing in the charter extends the ability of any court, European or national, to strike down UK law. The point is reaffirmed in the protocol:

“in particular, and for the avoidance of doubt, nothing in Title IV of the charter creates justiciable rights applicable to the United Kingdom except in so far as the United Kingdom has provided for such rights in its national law.”

Secondly, we have secured in detail vital safeguards to our criminal law system and police and judicial processes, while making it possible to co-operate across borders when we choose to do so and when it is right in matters vital to our security. The safeguards are also enshrined in legally binding protocols to the treaty. They prescribe in detail our sovereign right to opt in on individual measures when we consider it in the British interest to do so, but also to remain outside if that is in our interests. In the past, for example, we have opted in on measures dealing with combating illegal immigration and the exchange of information when such measures are unquestionably in Britain's interests. The new treaty gives us freedom to protect the fundamentals of our common law system if we believe that it could be jeopardised, while at the same time allowing us to participate in areas where co-operation is in the national interest. The agreement set out in the details of the text is that it will be in our exclusive power to decide, on a measure-by-measure basis.

As a result of our recent negotiations, the opt-in now covers all types of measures, including completely new measures and amendments to existing measures. When measures come forward under the Schengen agreement, we also have the right to opt out. We can choose to participate in any and every measure, but we cannot be forced to do so. If we choose not to, there is a fair, objective and robust system for consequential changes, but no financial or other penalties. We have secured a comprehensive, legally binding opt-in on all justice and home affairs measures, which will enable the UK to choose whether or not to participate in any justice or home affairs measure in the future.

I turn to the common foreign and security policy. I welcome further scrutiny by this House of the agreements that we have secured because, again, I believe it is now absolutely clear that the basis of foreign and security policy will remain intergovernmental—a matter for Governments to decide. The intergovernmental basis is unchanged, and subject to distinct rules and procedures that protect that position. The declaration that we secured expressly states that nothing in the treaty affects the existing powers of member states to formulate and conduct their foreign policy, including maintaining their own national diplomatic services and membership of the United Nations Security Council. There is no sole right of initiative for the Commission, and there is no role for the European Parliament in decision taking. Voting by unanimity is the rule for all policy decisions. Apart from two specific and limited provisions in foreign policy—appeals against EU sanctions and, as now, any overlap, for example, with international development assistance—there is no jurisdiction for the European Court of Justice.

The declaration agreed on Friday made it clear that the European Parliament would have no new role in the appointment to the new post of high representative, which will be made by the European Council. And there will be no change to the way EU foreign policy is decided—it will continue to be governed by unanimity. There is, in addition, a clear declaration that nothing in the treaty, including the Office of the High Representative and the External Action Service will

“affect in any way the existing legal basis, responsibilities, and powers of each Member State in relation to the formulation and conduct of its foreign policy, its national diplomatic service, relations with third countries, and participation in international organisations, including a Member State’s membership of the Security Council of the UN.”

On social security, we have secured an effective veto power on any proposals for important change. We can insist on taking any proposal to the European Council and, because it will be decided by unanimity, we have a veto where we—Britain—determine that a proposal would impact on important aspects of our social security system, including its scope, cost or financial structure. In justice and home affairs, the amending treaty gives us the right not to participate; in social security, it gives us the right to insist on unanimity.

Many qualified majority voting measures, for example, rules for the euro or special state aids for Germany, do not affect the United Kingdom. The remaining areas of QMV agreed in June are decisions on emergency humanitarian aid to third countries—manifestly in Britain’s interest—and energy market liberalisation, again in our interest. Others are technical or procedural and simply relate to the efficient functioning of the Union, for example, the internal rules for appointing the Committee of the Regions, judges and the Economic and Social Committee.

While there is a two-and-a-half-year presidency of the Council, the President of the Council has been appointed as the servant of the leaders of the national Governments—and the purpose is to strengthen the Council of national Governments in relation to other EU institutions.

The new treaty also expressly provides that national security is the sole responsibility of member states. The declaration to the treaty makes it clear that while the European Union, like the UN and the International Monetary Fund, can sign international agreements, this does not, and cannot, authorise the Union in any way to legislate or act beyond the powers conferred on it by member states in the treaties.

As a result of our negotiation, we are agreed that the new text will make it clear that national Parliaments have the right, but are not obliged, to contribute to the work of the Union. Under the amending treaty, national Parliaments have a new right to force the EU to reconsider proposals if a third of Parliaments feel that the issue is better dealt with at member state level. And symbols of statehood that were the characteristic of the rejected constitutional treaty—European flags, anthems or mottos—have been abandoned in the treaty.

As I have already made clear, the Government will only agree the amending treaty in December if, in the final text, all the UK protections that I have outlined are included in the detail we have negotiated. Parliament will have the opportunity to debate this amending treaty in detail and decide whether to ratify it. The Government will recommend that there is sufficient time for debate on the Floor of the House so that the Bill is examined in the fullest of detail and all points of view can be heard—[Interruption.]

Order. Mr. Penning, I must ask you to behave—[Interruption.] Order. Let me deal with it. It is not the first time that the Opposition have called on Ministers to come and make statements to the House. The Prime Minister is doing that. If hon. Members do not co-operate with me, I have powers to deal with the matter. I ask the House to listen to what the Prime Minister has to say. Do not shout out questions. If there are questions, I will recognise Members and let them put their questions to the Prime Minister. That is the way that we will do it.

In addition, we propose to build further safeguards into the legislation. To ensure that no Government can agree without Parliament’s approval to any change in European rules that could, in any way, alter the constitutional balance of power between Britain and the European Union, we will make a provision in the Bill that any proposal to activate the mechanisms in the treaty that provide for further moves to QMV, but which require unanimity of member states, will have to be subject to a prior vote by this House.

The amending treaty will not be fully implemented until 2014. Indeed, one section does not have full effect until 2017. I can confirm that, not just for this Parliament but also for the next, it is the position of the Government to oppose any further institutional change in the relationship between the EU and its member states. In our view, there is also a growing consensus across Europe that there should be no more institutional change for many years.

The December European Council will also consider a declaration proposed by Britain that Europe moves to a new agenda. The new priorities are a focus on jobs, competitiveness, prosperity, climate change and security, so that Europe can play a far stronger part in the competitive economy of the world and be a leader and success story in the new global order. So because it is right that Europe now focuses not on more institutional change, but on the reforms that are needed to meet the challenges of the global era, we are publishing today our agenda for the new priorities that we as a European Union must adopt—a renewed focus on completing the single market, in which the priority is the liberalisation of the energy and telecommunications sectors; a commitment to free trade and openness, with the priority of ensuring a successful outcome to the world trade talks and promoting better EU-US trade links; tackling climate change and energy security; combating terrorism and organised crime; reducing global poverty; and reforming the European Union budget.

It is by putting in place those changes that we can create a truly outward-looking, globally focused European Union that helps deliver prosperity, opportunity and security for all, with an agenda that is good for Britain and good for Europe, and that allows us to continue to benefit from our membership of the European Union and, by working together, to have a greater influence in the world.

The protections we have negotiated defend the British national interest. We are putting in place new procedures to lock in our protection of these interests. We will oppose any further proposals for institutional change in the European Union this Parliament and the next. We will lead the debate in Europe to move to a new agenda of new priorities that focus on the economic and social needs of our citizens. I commend this statement to the House.

The Prime Minister says that he wants Europe to focus on competitiveness and climate change and is opposed to further institutional change. I have to say that people will ask why he did not say that boldly at the start of the intergovernmental conference, rather than lamely at the end of it.

There is one fundamental question arising from today’s statement. When a party makes a promise in a manifesto, can it be trusted to keep it? The Prime Minister has described the Labour manifesto as an issue of trust. That manifesto promised a referendum on the EU constitution. If this Prime Minister goes back on that promise, how can he expect his promises to be believed in future? In his statement, he did not even mention that R word once. As his hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart), who helped to write the constitution, said:

“If Labour can’t trust the people, why should the people trust Labour?”

First of all, let us look at the content of the treaty. Will the Prime Minister confirm that the treaty gets rid of the veto in 60 areas, including in energy, transport and self-employment law? The Prime Minister has given up on the veto but he says that is okay because he has got rid of the motto. Well, I have a motto for him: “Let the people decide”.

Will the Prime Minister confirm that this treaty means an EU President and Foreign Minister and an EU diplomatic service in all but name? Will he confirm that it includes a new ratchet clause that allows even more vetoes to be scrapped without the need for a new intergovernmental conference? The Prime Minister says that there will be no more institutional change for 10 years but he has just agreed a treaty that allows institutional changes to take place every year.

The Prime Minister deploys two main arguments against holding a referendum: first, he says, the treaty is not the same as the constitution and, secondly, he says that Britain is a special case because of our opt-outs and our red lines. Let me take the two arguments in turn: first, the claim that the new treaty is substantially different from the constitution. The Irish Prime Minister says that it is 90 per cent. the same. The Spanish Foreign Minister says that it is 98 per cent. the same. The German Chancellor says:

“The substance of the constitution is preserved…That is a fact.”

Why does the Prime Minister think all of them are wrong and he is right?

What is more, is not it the case that even his colleagues do not believe him? His new trade Minister, Lord Jones of Birmingham, days before his appointment said:

“This is a con to call it a treaty—it’s not. It’s exactly the same—it’s a constitution.”

The Prime Minister’s colleagues on the Labour-dominated European Scrutiny Committee say that the EU treaty is “substantially equivalent” to the constitution, even for Britain. They say that pretending otherwise, as the Prime Minister keeps doing, is “likely to be misleading”.

Next, the Prime Minister says that even if it is a constitution for other countries it is not for Britain because of our opt-outs and our red lines. Will he confirm that the red lines do not include the EU President, the single legal personality, the vetoes or the ratchet clause? That is why his hon. Friend who helped to draft the constitution described the red lines as “red herrings”.

Even the areas covered by the red lines are falling apart; take the red line on tax. The Government told the BBC that it was a bit of a con and “purely presentational” because tax was never going to be part of the treaty anyway. Is not it the case that the red line on foreign policy is only in a declaration? It is not legally binding and legal advice to the European Scrutiny Committee says that it may turn out to be “meaningless”.

With the red line on the charter of fundamental rights, the former Prime Minister promised us an opt-out. Will the Prime Minister confirm that the Minister for Europe had to write to the Scrutiny Committee to explain that it was not an opt-out after all, but just a clarification? That actually matters. The Prison Officers Association has already announced that it will take the Government to court so that it can have the right to strike that is set out in the charter of fundamental rights.

The red line on criminal justice has also been torn apart by the European Scrutiny Committee. The Chairman of the Committee said:

“We believe that the red lines will not be sustainable…we believe these will be challenged…and eventually the UK will be in a position where it will have all of the treaty…we think”—

the red lines—

“will basically leak like a sieve.”

So much for the red lines, but even if they were totally robust and watertight it would not affect the case for a referendum, because they are the same red lines as the Prime Minister’s predecessor set out for the constitution. Then, as now, the Government claimed that the charter would not affect UK law. Then, as now, the Government claimed that we were protected from measures on foreign policy, tax and criminal law and then, as now, they claimed that there was no great constitutional change at stake. So why promise a referendum then, but not now? Is not the answer perfectly clear?

The last Prime Minister, standing at the Dispatch Box, said,

“let the battle be joined”;—[Official Report, 20 April 2004; Vol. 420, c. 157.]

whereas this Prime Minister says, let battle be avoided wherever possible, especially if people are to have their say. That is why he is not having a referendum. He does not think he would win it. Why does he continue to treat people like fools by pretending otherwise? Why does he continue to put forward arguments that do not even convince his own colleagues?

This is the Prime Minister who stood outside Downing street four months ago promising to restore trust in politics, but now he is betraying people’s trust. He promised to listen, but he refuses to give people the chance to speak. He promised to honour his manifesto, but he is breaking one of the most important manifesto commitments of all. He says that this issue will be settled by Parliament, so perhaps he could start his response by answering a simple question: when Parliament votes on whether to hold a referendum, will he allow his side a free vote? He has absolutely no democratic mandate to sign this treaty without a referendum. If he breaks his trust with the British people, they will rightly say, “How can we ever trust him on anything else again?”

I will answer every point in detail, but I notice that the right hon. Gentleman mentions nothing about the long-term agenda for Europe—not one thing. Is it not remarkable that, after six years of debate about institutions, not one Government in the rest of Europe—not one of the 27—support his opposition to the amending treaty? Is it not remarkable that only one Government—Ireland—who are constitutionally obliged to do so, think that the issues justify a referendum now? Is it not also remarkable that, in his own shadow Cabinet, those members who were there in 1992 all voted against a referendum on a more far-reaching treaty in Maastricht?

As for the individual questions that the right hon. Gentleman put to me, the first was on the passerelles—as for those that he raised, I have to tell him that they were legislated for in the Single European Act by Lady Thatcher. The implementation of passerelles requires unanimity, and sometimes I think that he does not listen to me, because I said directly that, in the House of Commons, Members of Parliament would have a vote on whether to implement any of the passerelles.

I think that the right hon. Gentleman will accept that foreign policy remains an intergovernmental matter and the decisions remain to be made by unanimity. Those are the two building blocks of the common foreign and security policy: the decisions are intergovernmental and taken by unanimity. That means that Britain has the right to decide. The right hon. Gentleman raised that issue in terms of justice and home affairs, but the fact is that we have an opt-in on all the important issues that have to be decided—an opt-in that has been negotiated by us, including in relation to Schengen measures, where we can opt out if we choose to do so. The fact of the matter is that, on this issue too, Britain will decide.

On social security, because we have a veto on any further new decision, it is Britain that will decide. As for the charter of rights, I think that the right hon. Gentleman should read the protocol, which means that there are no rights in British law as a result of that charter. It is exactly for that reason that the CBI has issued a statement saying that it supports our interpretation of it.

I am afraid to say that, because the Leader of the Opposition is not prepared to look at the long-term agenda for Europe, people will rightly draw the one conclusion that is drawn from the behaviour of Conservative Members: not only are they against the amending treaty, but they wish to renegotiate the membership of the European Union; they wish to withdraw from employment and social legislation; and not only that, they have a decision to make on whether, when the treaty is ratified, they will support a referendum even after the ratification, which means that they have to renegotiate with all the other 26 members on our membership of the European Union. For a country where 62 per cent. of our trade lies with Europe, I have to say that the years of economic uncertainty and instability that would result from such renegotiation would, in my view, be unacceptable to British business and unacceptable to the British people.

The House should also know, in conclusion, what friends the Conservative party has in Europe. The Conservatives said that they would form the Movement for European Reform. They said that other countries would join, and they announced at a press conference that the Czech party had joined and then that the Bulgarian party had joined. Then, only a few days ago, the European People’s party announced that the Bulgarians had already withdrawn from the Movement for European Reform. Then, the right hon. Gentleman has got his last remaining friends, whom he calls his closest allies in Europe—the Czech Civic Democrats—but his only allies in Europe support the amending treaty. [Interruption.]

The right hon. Gentleman’s only remaining friends in Europe, the Czech Civic Democrats, support the amending treaty and are against a referendum, and the Czech Prime Minister has said,

“We cannot afford any further failure on the path to this common goal”

in Europe. The right hon. Gentleman has no friends in Europe, and he has no support from any Government; he will have to change his policy. We will defend the national interest.

I welcome the statement. We believe that the treaty is necessary. It is in the British national interest that the European Union should work efficiently and effectively, but there remains the issue of legitimacy. We believe that there should be a referendum. The public should decide whether Britain should remain a committed member of the European Union. A great deal has changed since the Harold Wilson referendum in 1975. There has been a pooling of sovereignty through Mrs. Thatcher’s Single European Act, John Major’s Maastricht treaty, Tony Blair’s Amsterdam and Nice treaties, and now this treaty. The time has come for consultation with the British public on the cumulative effect of those treaties, because there is anxiety about national sovereignty, and that has to be addressed through public debate.

We cannot continue with the approach perfected by the Conservative party, which, when in office, supported European integration without referendums, but which, when in opposition, supports the worst features of anti-European populism.

May I take the Prime Minister back to his early political career in Scotland? He will remember that a movement was launched by great figures such as the late John Smith and Donald Dewar, and by lesser figures such as the Prime Minister and me, to persuade the then sceptical Labour movement of the merits of the European Union. We won that argument, and we ask him to return to it, because very few people under the age of 50, including the Foreign Secretary, have been able to engage in the debate. If the Prime Minister does return to that argument, it will help him to escape from the image that he created of someone who is afraid of the ballot box. He may also persuade the leader of the Conservative party to say whether he is in favour of Britain being in or out of the European Union, or both at the same time.

I now turn to the specifics of the treaty. The red lines were of course understandable, but on the vision, as the Prime Minister describes it, what is he doing to promote a more decentralised and devolved Europe, rather than the European superstate that is the figment of Europhobes’ imagination? Why did he not do more to promote the concept of subsidiarity, which is so weak in the treaty? Does he not realise that it is highly corrosive to public confidence when the European Commission promotes issues such as rules on working time, which should be a matter of national competence, instead of using its energy to deal with cross-border issues such as global warming and the aviation industry’s contribution to it?

We support the Prime Minister’s vision of an open, outward-looking Europe, but why has he not rebuked his friend and former colleague, Peter Mandelson, who, instead of getting down to his job of delivering liberalised world trade negotiations, is launching protectionist attacks on China? What is the Prime Minister doing to address the urgent deteriorating political situation in Turkey, partly created by rebuffs from the European Union? Will he at last give us a timeline for fundamental reforms of the wasteful, economically illiterate common agricultural policy?

My final question to the Prime Minister is this: will he come out of his bunker and join the Liberal Democrats in supporting a referendum on British membership of the European Union, and join us in making the European case, and campaigning for a yes vote?

I welcome what the hon. Gentleman said about the long-term agenda for the European Union, and I hope he will read the document that we have published today, in which we set out the case for an open Europe that looks out to the world, as well as the case for a world trade agreement. We support the hon. Gentleman in urging all parties to make that agreement soon. We support EU outreach to Turkey, and we hope that the negotiations with Turkey will start soon. In the document, we also support wide-scale reform of the EU budget, including reform of the common agricultural policy. The hon. Gentleman will remember that there was an agreement that those reform discussions should start next year, and they will do so.

I agree, too, that it is time to have a debate about the future of Europe in the context of Britain being positive about its membership of the EU. It is unfortunate that the debate has not concentrated on the things that European countries can do together, including environmental action, in which we can work with our partners to deal with climate change as well as action to open up the single market. Sometimes, we forget that 62 per cent. of our exports go to the European Union; 40 per cent. of all financial services activity in Europe comes through London; and 80 per cent. of the burgeoning carbon market for the whole of Europe is based in the City of London. We are in a privileged position because, through the United Kingdom’s financial services in particular, we can benefit from the extension of the single market and make it the means by which we can create jobs for the future.

I am pleased that the two candidates for the leadership of the Liberal party—at least the two candidates who have announced that they are standing for the leadership—have said that they do not regard this as a constitutional treaty. They regard it as an amending treaty that does not require a referendum, so they share the view of every single Government in Europe, apart from that of Ireland, where there is a constitutional obligation to hold a referendum. I hope that we can proceed on the basis that there will be a full debate in the Chamber in the House of Commons on all the details of the legislation; that every Member of Parliament who has views can contribute to that debate; and that we can look in detail at the provisions that have been agreed as part of the amending treaty. I think that people will come to the conclusion that we have defended the British national interest, and built in the necessary protections for the future.

I welcome the agreement by 27 sovereign countries. The Prime Minister referred to the appointment of a high representative for foreign and security policy. Will he confirm that that individual will not be the Foreign Minister, that the representatives of the European external action service will not form a foreign ministry, and that we will not have European Union embassies but EU missions throughout the world?

I am grateful to my hon. Friend, who is the distinguished Chairman of the Foreign Affairs Committee. I stress that foreign policy will remain intergovernmental. We have always said that decisions will be made unanimously and that the treaty does not, as people have claimed, remove our seat at the United Nations Security Council. We have always said that the organisation and function of any external action service must be agreed unanimously, too. I can therefore reassure my hon. Friend on each point that he made.

Will the Prime Minister explain how the home affairs and justice opt-ins that he negotiated will work at the end of five years?

There are three separate ways in which the justice and home affairs opt-ins work. First, we have the right to opt in to any new measures. Secondly, we have the right, if we so choose, to opt out of existing measures that we have accepted if they are amended. The third option, to which I think the hon. Lady was referring, applies to Schengen measures. After a period of five years, they will stop being intergovernmental measures and become part of the treaty. At that stage, we will have the right to opt out, if we choose to do so.

Will my right hon. Friend confirm that the year before last, he and I were both elected on a manifesto pledge to campaign wholeheartedly for a yes vote on the new constitutional treaty, that that pledge was scuppered, as was the treaty itself, by the no votes in France and Holland, and that that being so, those who write well remunerated articles reminding the Labour party of manifesto pledges have either not read the manifesto or prefer money to truth?

The constitutional concept, as was stated in the declaration, has been abandoned. If anybody has any doubt about the special treatment that has been accorded to Britain as a result of our negotiations, Valéry Giscard d’Estaing, who is hardly a supporter of what we have been trying to advocate, said only a day ago, on 20 October:

“As to the balance sheet of the changes, it mainly favours Great Britain, which will enjoy a special status: It is ‘placed in an exceptional situation’ with respect to monetary union; it does not apply the Schengen agreement; it is not bound by the constraints of the Charter of Fundamental Rights…. and it retains its discretion to interpret certain judicial matters.”

That is how we have defended the British national interest, and that is why the amended treaty is quite different from the original constitutional treaty. We have secured the protections for the British national interest.

Does the Prime Minister recognise that the history of the European Union is hugely shaped by the Courts, and that they have always, through judicial activism, changed elements in the treaty in the direction of ever closer union? As they were the ones to find in favour of European law having primacy—not this House or any other Parliament—does he not realise that the Courts will progressively find in the direction of a single legal personality, and that his opt-outs will no longer exist?

I do not accept what the right hon. Gentleman says. The protocols that we have negotiated are part of the treaty and they are legally binding, no matter what he wishes to believe. If he is in any doubt about what has happened, the President of the European Parliament only a few days ago, writing in The Daily Telegraph—as a Christian Democrat, he should support the Conservative party but does not do so on this matter—stated:

“The special deal . . . in this area even goes as far as allowing withdrawal from previous agreements where the UK had opted-in.”

He went on to say that

“we have reverted to a classic treaty between 27 sovereign states under international law similar to all previous EU treaties”.

If the Conservative party did not support a referendum on Maastricht, why should it support a referendum on the constitutional treaty?

May I remind the Prime Minister, in response to the question from the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), that the destiny of Europe was set when we signed the Single European Act in 1986 under a Thatcher Government? The House should welcome my right hon. Friend’s statement that 62 per cent. of our exports now go to Europe, whereas it was 57 per cent. 10 years ago. The House should welcome his emphasis on jobs, competitiveness, prosperity, climate change, security, the single market, free trade and openness. I assure him that these will be the subjects of debate when we come to discuss the reform treaty.

I am grateful to my hon. Friend, who will very much be part of the debate on the Floor of the House when we discuss all the provisions. I welcome the chance to debate the treaty and to show that the protocols and the opt-ins that we have succeeded in achieving defend the British national interest. My hon. Friend is right. At some point, even the Conservative party will have to come to terms with the fact that we benefit from our membership of the European Union. It is not just 62 per cent. of our trade and 40 per cent. of all financial services activity of the EU in London—50 per cent. of investment banking is in London—[Interruption.] The Conservatives do not seem to be concerned that millions of jobs are dependent on our membership of the European Union. It is estimated that our trade with the European Union makes possible 3 million jobs, and if the Conservatives want to create a period of economic instability, I know where business and the British people will be. They will want economic stability.

Does the Prime Minister recall the statement that he made in this House in July on constitutional reform, in which he promised to devolve more power directly to the people? He asserted:

“The right of all the British people to have their voice heard is fundamental to our democracy”.—[Official Report, 3 July 2007; Vol. 462, c. 818.]

Does he realise the damage that he is doing to people’s faith in democracy, when he breaks his own manifesto promise to hold a referendum on the treaty, which in substance and legal effect is almost identical to the previous one, and when he ignores and contradicts the words that he uttered on direct democracy only three months ago in this House?

If we were voting on a decision to join the euro, there would be a referendum; and if we were discussing the old constitutional treaty, there would be a referendum. We have secured the defence of the national interest in such a way that no fundamental change is taking place in the relationship between the European Union and Britain, which is shown in the protocols as well as in the opt-ins that we have achieved. The right hon. Gentleman should think again before his next intervention, because he was one of the Conservative Whips when the Conservatives opposed a referendum on the Maastricht treaty.

First, I commend the Prime Minister for correctly quoting the European Scrutiny Committee report when he uses it. We said:

“We consider that, for those countries which have not requested derogations or opt outs from the full range of agreements in the Treaty…the new Treaty produces an effect which is substantially equivalent to the Constitutional Treaty.”

Of course, we do have derogations and opt-outs.

Secondly, turning to the Schengen building agreements and framework decisions, there are 70 to 80 areas in which we have agreed that there is no role for the European Court of Justice, but if we opt in to these and to clauses 62 to 69 of the reform treaty, those areas will be controlled by the European Court of Justice and the Commission. Will the Prime Minister assure us that whatever Bill he introduces in this House will include detailed procedures so that this House knows its role in deciding whether the Government should be advised to opt in or not to opt in to those things, or whether to accept the opt-out in certain areas, as we go along through the five years and debate whether there will be transposition of all those 70 to 80 areas?

I assure the Chairman of the European Scrutiny Committee that there will be a full opportunity to debate those issues on the Floor of the House. In particular, he will find that we have an opt-in on all those matters, and it will be for us, the British people, to decide whether we opt in on those issues.

As far as my hon. Friend’s more general point is concerned, I am pleased that the Committee takes the view that the treaty as it affects Britain is quite different from the treaty as it affects other countries. Britain will decide on justice and home affairs, because we have the opt-in; Britain has the protocol on the charter of rights; Britain has an intergovernmental decision on foreign policy; national security has been exempted from the treaty; and we have a veto on social security. In all the areas where there were question marks beforehand, we have defended the British national interest. As my hon. Friend has rightly said, the treaty is different in its consequences for Britain and for other countries.

Does the Prime Minister recognise that there is always an ongoing responsibility on this or any other British Government who are playing their role properly in Europe to do more to explain and inform people about developments within the European Union and Britain’s role within those developments? Will he acknowledge—we have all experienced this, whatever our views on the European issue—that when it comes to “Question Time”, “Any Questions?” or Radio Five Live phone-ins, the most common complaint is that people do not feel they get sufficient unbiased information on which to make a judgment about Europe? That will not change to any great extent given the arcane and at times impenetrable debates that will take place in this House on the minutiae of the draft treaty. Does he have any specific initiatives in mind, running concurrently with the passage of this treaty, to get more information out to the British public—particularly, perhaps, through the education system?

I note that the right hon. Gentleman has become the president of the European Movement. It is, of course, part of the work of the European Movement to stimulate debate in the country about the future of the European Union. There will be time to debate all the detailed parts of the amending treaty in the House of Commons, which will also provide an opportunity to inform the public about the consequences and implications of the amending treaty. I believe that the public will come to the view that we have taken the right decisions to protect the national interest.

If the Scottish First Minister grants Scottish voters a say on the treaty, will the Prime Minister protect English voters and grant them a similar privilege?

The Prime Minister has not answered the question whether there will be a free vote for his side on a referendum. We now know that the Liberals will opt out. Will he say whether, given the question marks described by some of his colleagues and the doubts about the language, which he himself referred to in December, he will let the British people—rather than just him and his Government—decide whether the treaty should be signed?

I have already made it absolutely clear that if we secure all the detailed amendments that we have sought and that are in the text at the moment, we are prepared to sign the treaty and recommend to the House that the treaty be ratified. As far as the hon. Gentleman’s position is concerned, I see that he has signed the early-day motion calling for a referendum even after ratification.

The Conservative party will have to make a decision, because if it wants a referendum after ratification, it is effectively asking the European Union to reopen the conditions of membership of the European Union. I believe that the Conservative party will find it very difficult to get support—even from the Czech Civic Democrats—for that position. It will find that 26 out of 27 members of the European Union do not want to go along with its proposals for changes. The Conservative party will have to make a very difficult decision. I believe it will have to decide what is in the interests of the British people.

Does the Prime Minister agree with the trade unions and me that we must not under any circumstances put jobs in this country at risk? Some 62 per cent. of our exports go to the European Union. If we put exports at risk, we are putting jobs in this country at risk.

There is not a constituency in this country that does not depend on trade with the European Union. That trade has grown substantially since we joined the European Union in the 1970s and it will continue to grow over the next few years. What would put it at risk is a prolonged period of instability with people not knowing whether we proposed to continue with our membership of the European Union or we were trying to renegotiate that membership. I believe that there is no support in the country for putting that—and thus jobs and the prosperity of the British people—at risk.

There is considerable concern that protocol 7 is not sufficient to prevent the European Court of Justice from using the charter of fundamental rights in future to create new, individual legal rights in the United Kingdom. Presumably, the Government have taken legal advice on that. I should be grateful if the Prime Minister told me whether that legal advice is absolutely 100 per cent. unequivocal and whether he will publish it.

The charter records but does not create new rights and the protocol has the full force of law. That is both the legal advice that we have had and, I suspect, the legal advice that anybody else who has looked at the issue has had. I believe that the Confederation of British Industry has also looked at it very closely, and it has come to the view that we have defended the British national interest.

As someone who, on many occasions, has not been over-enthusiastic about various aspects of the European Union, I ask my right hon. Friend whether he agrees that, bearing in mind what he has said about the opt-outs, many of the objections today really amount to little more than xenophobia. Some of the talk very recently about Munich, betrayal and so on is utter rubbish from start to finish.

I agree with my hon. Friend. The problem is that some Conservative Members do not just want to stop the amending treaty but want to renegotiate the whole membership of the European Union. That is why they start with employment and social legislation; they then say that even if the treaty is ratified they will still want a referendum. That will open up the question whether we are serious about our membership of the European Union. I hope that at some point the Conservative party will come to its senses and realise that we are in Europe and that we are in Europe to stay.

The Prime Minister has conspicuously avoided responding to the request from the Leader of the Opposition to reconcile his remarks on the protocol with the letter from the Minister for Europe to the European Scrutiny Committee on 31 July. On that occasion, the Minister said that the protocol

“is not an ‘opt-out’ from the Charter. Rather, the Protocol clarifies the effect the Charter will have in the UK.”

If all other member states of the European Union are going to be bound by the charter of fundamental rights and if the Government themselves believe that we do not have an opt-out, will the Prime Minister use this opportunity to clarify to the House what, in the words of the Minister for Europe,

“effect the Charter will have in the UK”?

I can clarify to the right hon. and learned Gentleman that the protocol is legally binding in the UK. I would have thought that he, as a lawyer, could see that it is part of the treaty and is therefore legally binding. That is the position of the Government. I would have thought more of his comments if he had voted for a referendum in 1992, which he did not do.

The Prime Minister referred to the enforced liberalisation of the energy market in Europe. That is very important because we have been trying to persuade the French to do this for a long time so that British companies may own French energy companies just as French energy companies own British ones. Is this not even more important as we face up to Russia and try to ensure our energy security into the future?

Will the Prime Minister welcome article 84 of the treaty, which is about intellectual property rights? We have been campaigning to try to ensure that, as the Gowers review said was necessary for the British economy, we have strong intellectual property rights across the whole of Europe, which will now come in thanks only to this treaty.

My hon. Friend is absolutely right. Both in intellectual property and in energy, we benefit from the action taken within the European Union. As far as energy liberalisation is concerned, I detected that one or two Conservative Members supported me when I said that qualified majority voting on energy liberalisation is in British interests. Let me read the letter from the chairman of Centrica and the chairman of National Grid to the Financial Times:

“The draft Reform Treaty can…help to promote energy liberalisation by moving this to majority voting…this will be a way of circumventing cases of protectionism.”

That is in the interests of the British economy and of British energy companies trying to sell in Europe, and in the interests of growth in the European economy as a whole.

Does the Prime Minister accept that by refusing to hold a referendum he is putting not only himself on trial but Parliament itself? Does he not appreciate that 27 million people have been denied the opportunity of a referendum since 1975? Given the circumstances of deceit and the manner in which this treaty has been negotiated, as the European Scrutiny Committee has indicated, it is absolutely essential that we have a referendum. No wonder only 59 per cent. of people bother to vote at all. Does he not understand the responsibility upon him?

We have had many debates over the years, and I think that the hon. Gentleman will concede this: that if there had been a decision to recommend joining the euro, I was the first to argue that there should be a referendum—[Interruption.]

Order. The hon. Member for Stone (Mr. Cash) has asked a question and now he will not hear the answer. He must be quiet and hear the answer. I know that it is very difficult for him, but he should try to hear it.

If we were making a decision on the old constitutional treaty, we would have had a referendum. The hon. Gentleman cited the European Scrutiny Committee. He must therefore accept that its Chairman has said, as I believe, that the treaty as negotiated for Britain has the protocols—the opt-outs and opt-ins, in certain respects—that make it a quite different treaty for Britain than it is for other countries in Europe. The hon. Gentleman should also accept that his real reason for having a referendum is, as he has said on a number of occasions, “We must withdraw from the European Union.” That is his true position.

Will the Prime Minister indicate what positive measures the treaty could deliver in addressing regional disparities in the United Kingdom?

The regional work of the European Union, including that of the European Economic and Social Committee, does a tremendous amount to try to deal with the question of inequalities. For example, over the last Parliament we succeeded in persuading the European Union that there should be regional venture capital funds and that we should be able to have regional investment that did not come up against state aid legislation so that the regions of our country could receive benefits from membership of the European Union. Of course, regional policy will move towards eastern Europe over future years, but benefits will still come to all the regions of the United Kingdom from membership of the European Union. We must not forget that 3 million jobs depend on the trade relationships that we have with Europe, and we should do nothing to put those at risk.

May I put a direct question to the Prime Minister? Does he fervently believe in honesty, trust and honour? I want a direct answer to that. Would he indicate why, if this treaty-constitution and Europe are so good for this country, he is not prepared to put it to the people of this country in a referendum and ask them what they think rather than telling them what he thinks?

I believe that trust is built in this country by defending and advancing the British national interest, which is what I shall continue to do. We had better be clear about the agenda of the hon. Gentleman, for whom I have a great deal of respect. He is a member of Better Off Out and it is pretty clear what he wants to achieve.

When members of the European Scrutiny Committee, including me, looked at these issues, we raised legitimate concerns about the firmness of some of the red lines. Does my right hon. Friend agree that the appropriate place for those to be debated and discussed is in this Chamber, by Members of Parliament elected to scrutinise such treaties? Will he confirm that there will be sufficient time for every Member of this House to participate in those discussions?

My hon. Friend is a member of the Scrutiny Committee and I welcome the chance for us to debate in detail, on the Floor of the House of Commons, the protections that we have secured for the British national interest. It is interesting that most of the questions from the Conservatives today are not about the detail of the amending treaty at all. I welcome the debate that we will have in future months on this matter, and we will show, as we show the Committee with the questions it has asked of us, that we have secured the proper protections for Britain.

The Prime Minister knows that the common fisheries policy has been a disaster in Scotland. It has also been a serious impediment to Norway or Iceland ever joining the EU. Having chosen to disregard that red line issue for the Scottish Government, will the Prime Minister tell the House what advantages he foresees by enshrining the common fisheries policy as an exclusive treaty competence?

The Prime Minister referred to the Maastricht treaty a number of times. Is not the difference between the Maastricht treaty and the Lisbon treaty that the Government at the time of the former did not promise a referendum, whereas this Government—my Government—did?

I say to my hon. Friend, for whom I have considerable respect, that if this were the old constitutional treaty, we would be having a referendum. The fact that we have secured major protections for the British national interest, while the constitutional concept has been abandoned, leads us to the conclusion that the best way of debating the matter is in detail on the Floor of this House, so that we can show people that we have protected the national interest.

If the Prime Minister rejects the judgment of some leading European statesmen that this treaty represents 90 to 98 per cent. of the original constitution, what figure would he put on it?

I have just quoted Valery Giscard d’Estaing, who said that:

“As to the balance sheet of the changes, it mainly favours Great Britain” .

I could quote the President of the Commission, who said that there are “important differences” as far as this affects Britain. I could go on to quote the President of the European Parliament, who says exactly the same—that

“The special needs of the United Kingdom have been … taken into account.”

The way in which the treaty affects Britain is different from the way it affects the other 26 countries. Again, I would think more of what the hon. Gentleman was saying if he had not voted against a referendum in 1992.

Does my right hon. Friend agree that one of the most compelling global issues that we face is climate change and the role of emissions trading? Europe is vital in dealing with that issue. Does he agree that a debate on the treaty would be a diversion from the real work that we should be doing with Europe and that, by calling into question this Government’s commitment to Europe, it would undermine our ability to shape that debate?

I hope that my hon. Friend will have the chance to read “Global Europe”, the document that has just been published by the Government, which seeks to set the agenda for future years. There is general agreement that the environment, and how Europe deals with climate change, is an important issue on which we will make very little progress without co-operation across Europe. I hope that Opposition Members realise that if we are to make progress on climate change, we need to work with our European partners. We are very happy to follow the agenda that we have set down, and I hope that my hon. Friend will join us in pressing our European colleagues to move faster on the matter.

As the Prime Minister has repeatedly said that the House will have full opportunity to debate the treaty, will he give a firm, unequivocal and binding commitment that that business will not be timetabled?

Does my right hon. Friend believe, like me, that the siren voices calling for a referendum are abdicating their responsibility as parliamentarians by trying to bypass the House’s decision-making powers?

There will be ample opportunity for the amending treaty to be debated in full in the Chamber of the House of Commons so that people can judge for themselves whether we have secured the proper protections. Although eight or nine countries proposed referendums for the old constitutional treaty, only one country in the European Union—Ireland, which is constitutionally obliged to hold referendums on many matters, including the treaty—will hold a referendum. All the other countries that previously proposed referendums will not have them.

Does the Prime Minister accept that the enlargement of the European Union was the biggest peaceful realignment of Europe since the decline of the western Roman empire? As it represented a major British triumph, will he conduct the debate in terms of the achievement of British objectives, and resist the temptation that so much of the press offer to regard our membership of the European Union as a continuation of world war two by other means?

I am grateful for what the right hon. Gentleman has said. Every part of the House supported the enlargement of the European Union. The reason for the new treaty is that we have to take into account the fact that there are 27 members of the European Union and the arrangements that were suitable for six, 12 or 15 are no longer appropriate when representatives of 27 countries are sitting round a table. Many of the changes in the treaty are directly to deal with that fact. I hope that we can say to countries in eastern Europe that we welcome their participation in the European Union and that we will do everything we can to integrate them into its workings. The treaty is very much part of that. On the protections for Britain, we can assure the British people that we have defended the British national interest in the way they expect us to do.

Does the Prime Minister understand that many pro-Europeans who do not believe that a referendum is appropriate for the treaty nevertheless believe that a time is coming when we will have to hold a referendum to reaffirm our membership of the European Union, and that that will help focus men’s minds, including those in the Conservative party and the press? It would be make-your-mind-up time and we would be able to go out to argue with them in favour of membership of the European Union. That would distinguish between those of us who see it as a force for good, reconciliation, commerce and politics and the flat earth society, which seems to dominate the Conservative party.

When the debate is held in the House of Commons on the amending treaty, people will come to the view that our membership of the European Union is in the national interest. They will see the number of jobs that comes from our membership, the contacts in business from which we benefit and the scope for our making progress on the environment, and they will realise that, when the common foreign and security policy works, with Europe working together in unanimity, that can often make a huge difference in the conduct of foreign affairs. As we have that debate, I hope that people will see that our membership of the European Union benefits Britain.

Points of Order

On a point of order, Mr. Speaker. I have given notice of this point of order to the right hon. Member for Bristol, South (Dawn Primarolo). The Independent today quotes an official setting out details of the evidence that the right hon. Lady will give in response to questions to be put to her by the Select Committee on Science and Technology on Wednesday this week. Surely Ministers’ evidence to Select Committees should not be set out in advance of their receiving the questions from the Committees. How can the Science and Technology Committee function if Ministers treat us, Parliament and the public with such discourtesy? Will you look into the matter and, if necessary, ask the Minister to come before the House to explain her position?

Let me answer the previous point of order. I gather that the Department’s written evidence to the Committee, which has been published, has already indicated the Minister’s view on the issue. The hon. Gentleman will, in any event, have a chance to question the Minister on Wednesday in the Committee.

On a point of order, Mr. Speaker. During altercations with the Prime Minister just now, I understand that it was not appropriate for me to ask the question that I would now like to put to you as a point of order. However, the Prime Minister made certain assertions about what I have said in the House. I should like to put it on record that I request chapter and verse from him. I think, Mr. Speaker, that you will find that his assertions were not accurate.

The hon. Gentleman is awfully good at pursuing the argument through points of order. I will not rise to the bait.

Serious Crime Bill [Lords] [Ways and Means]

I beg to move,

That, for the purposes of any Act resulting from the Serious Crime Bill [Lords], it is expedient to authorise the recovery of costs in relation to authorised monitors.

The resolution is necessary because if the House chooses to accept the amendments tabled in the name of the Home Secretary, the Bill will include provision for recovering the costs of authorised monitors from those organisations that have been involved in serious crime. The resolution is a financial provision that is minimal in terms of the amounts of money involved as a whole. We anticipate roughly 30 orders to be made each year. The vast majority of such orders will be against individuals, with only a small number anticipated each year for use against organisations. Of that small number, we do not think that the inclusion of an authorised monitor will be appropriate in many cases. The overall number of such orders will therefore be minimal, but they could be useful where used.

Monitors take forward the Government’s commitment to approaching the regulation of business in an intelligent, risk-based fashion. It is not useful or an encouragement to economic growth to engage in blanket regulation of the business sector, where that is avoidable. However, where organisations are involved in serious crime—for example, where they are being used as tools for money laundering or fraud—we must act to intervene in a targeted and specific manner. That is why the Bill provides that serious crime prevention orders can be used against organisations. That will give law enforcement a flexible means of preventing continued involvement in serious crime by the organisation.

Any regulation comes with a cost to it, which is precisely why we want to avoid spreading the burden of that regulation too widely. Monitors will be able to provide a useful service, in ensuring that the other terms of an order are being complied with. For example, an expert in corporate governance will be able to—

Order. I am reluctant to interrupt the Minister, but we are actually on the ways and means resolution. Is that what the Minister is speaking to?

It is, Mr. Deputy Speaker. I am trying to outline why the costs that are implicit in the Bill are relevant and appropriate.

Any regulation comes with a cost to it, which is precisely why we want to avoid spreading the burden of that regulation too widely. Monitors will be able to provide a useful service to ensure that the other terms of an order are being complied with. For example, an expert in corporate governance will be able to make an assessment of whether a requirement to put in place appropriate systems in a company to ensure that it is not used for serious criminal purposes has been complied with. That is expertise that law enforcement might well not have.

As well as such terms of an order being used rarely, as I have said, the costs to the organisation will be reasonable and proportionate. We have also included certain safeguards, to ensure that the costs are proportionate to any organisations that might be made subject to a serious crime prevention order. Such a term of an order will require only those organisations that have been proved to be involved in serious crime to pay an additional reasonable and proportionate cost, in order that we can ensure that they are not engaged in serious crime. That is surely preferable and more proportionate in achieving the desired end, in that it steers a course between letting the criminal behaviour continue and seeking to end the activities of that organisation altogether. As a result, I am confident that the imposition of costs is appropriate.

This proposal, relating to the establishment of new monitors under serious crime prevention orders contemplated in the Bill, is a late addition. I note what the Minister has said about the necessity for the monitors, but that is a matter for our debate on the substantive elements of the Bill and on the way in which the Government have tabled the amendments to it. It is surprising that the Government are tabling such amendments at this late stage, especially as the Bill has already been scrutinised in the other place. It raises concerns about the extent to which the provisions have been examined, but we will debate that in greater detail outside the Ways and Means resolution. We shall not oppose the resolution, but that should not be taken as our acceptance of, or acquiescence in, the general arguments on the creation of monitors arising from serious crime prevention orders.

Question agreed to.

Orders of the Day

Serious Crime Bill [Lords]

As amended in the Committee, considered.

[Relevant documents: Twelfth Report from the Joint Committee on Human Rights of Session 2006-07, Legislative Scrutiny: Fifth Progress Report, HC 490.]

New Clause 1

Compliance with orders: authorised monitors

‘(1) A serious crime prevention order against a body corporate, partnership or unincorporated association may authorise a law enforcement agency to enter into arrangements with—

(a) a specified person; or

(b) any person who falls within a specified description of persons;

to perform specified monitoring services or monitoring services of a specified description.

(2) A person with whom the agency has entered into arrangements in accordance with such an authorisation is known for the purposes of this section as an authorised monitor.

(3) A serious crime prevention order which provides for an authorised monitor may, for the purpose of enabling the performance of monitoring services, impose requirements of the type mentioned in section 5(5) as if the references in paragraph (a)(iv) and (b)(iv) of that provision to a law enforcement officer included references to an authorised monitor.

(4) A serious crime prevention order which provides for an authorised monitor may require any body corporate, partnership or unincorporated association which is the subject of the order to pay to the law enforcement agency concerned some or all of the costs incurred by the agency under the arrangements with the authorised monitor.

(5) Any such order—

(a) must specify the period, or periods, within which payments are to be made;

(b) may require the making of payments on account;

(c) may include other terms about the calculation or payment of costs.

(6) The tests for making or varying a serious crime prevention order in sections 1(1)(b), (2)(b) and (3), 17(1) and (2), 19(2), (4) and (5), 20(2) and (4) and 21(2) and (4) do not operate in relation to an order so far as the order contains terms of the kind envisaged by subsections (4) and (5) above (or by subsection (1) above for the purposes of those subsections).

(7) But a court must not include in a serious crime prevention order (whether initially or on a variation) terms of the kind envisaged by subsection (4) or (5) unless it considers that it is appropriate to do so having regard to all the circumstances including, in particular—

(a) the means of the body corporate, partnership or unincorporated association concerned;

(b) the expected size of the costs; and

(c) the effect of the terms on the ability of any body corporate, partnership or unincorporated association which is carrying on business to continue to do so.

(8) A law enforcement agency must inform the subject of a serious crime prevention order which provides for an authorised monitor of the name of, and an address for, any person with whom the agency has entered into arrangements in accordance with the authorisation in the order.

(9) Nothing in this section affects the ability of law enforcement agencies to enter into arrangements otherwise than in accordance with an authorisation under this section.

(10) In this section—

“law enforcement agency” means—

(a) a police authority or the Northern Ireland Policing Board;

(b) the Serious Organised Crime Agency;

(c) the Commissioners for Her Majesty’s Revenue and Customs; or

(d) the Director of the Serious Fraud Office;

“monitoring services” means—

(a) analysing some or all information received in accordance with a serious crime prevention order;

(b) reporting to a law enforcement officer as to whether, on the basis of the information and any other information analysed for this purpose, the subject of the order appears to be complying with the order or any part of it; and

(c) any related services; and

“specified”, in relation to a serious crime prevention order, means specified in the order.’.—[Mr. Coaker.]

Brought up, and read the First time.

With this it will be convenient to discuss the following:

Government new clause 2—Costs in relation to authorised monitors.

Government amendment No. 15.

In his report, “Regulatory Justice: Making Sanctions Effective”, Professor McCrory advocated that

“regulatory sanctions were consistent with, and appropriate for, a risk based approach to regulation, as set out in recommendation eight of the Hampton Review. The Hampton Review recommended that the penalty regime should be based on the risk of re-offending and the impact of the offence…with tougher penalties for rogue businesses that persistently break the rules.”

There is a significant read-across between the approach that he advocates and the innovative and targeted approach to involvement in serious crime that we are proposing in the amendments. We have already discussed the fact that businesses are increasingly used by serious criminals as the means by which they, for example, launder money or attempt to disguise activities such as people-trafficking or drug-trafficking. Businesses can be in more than one place at a time, they can have complicated legal structures and they can carry out exceedingly complex business and large amounts of transactions on a daily basis. All those things make them very difficult to interdict for their involvement or use in serious criminal enterprises.

The Serious Organised Crime Agency, the Serious Fraud Office, Her Majesty’s Revenue and Customs and the rest of the law enforcement community are constantly developing and using innovative approaches to dealing with this problem. They are having significant successes and should be commended. However, the inexhaustible potential for using businesses in different ways to further serious criminal ends means that that work is not always enough.

The amendments will mean that, for example, where a business has been proved to be involved in serious crime, an order can require it to provide its accounts or other information to an authorised monitor, to ensure that it complies with a requirement not to conduct its business in a particular way. That will be effective where the information is particularly complex and where someone such as a forensic accountant will be able to make a far better assessment than a law enforcement agency of the way in which the business is conducting itself. If the court authorises a law enforcement agency to employ a monitor, it can go on to provide, as a term of the order, that the organisation that is the subject of the order must pay the costs that the law enforcement agency incurs in employing the authorised monitor. That effectively increases the regulatory burden on a business because it has been proved to be involved in serious crime. The provisions target regulation in a risk-based manner, and mean that burdensome regulatory approaches do not have to be taken to deal with the few bad apples in any business area. Regulation does impose a cost on business, but we can all agree that this is better than the results of no regulation at all.

The Minister has talked about the application of the orders and the way in which they would need to be monitored, and I understand his point about the complexity of corporate structures and how businesses might be used. Will he explain, however, whether the orders will require the recipient to have knowledge that they have committed or been involved in a serious crime? There could be a risk that someone unknowingly involved in such a crime could be the subject of an order and have to pay the cost of the monitoring.

We went through that debate at great length in Committee. The applicant authority would have had to go to court over any organisation that was the subject of a serious crime prevention order. Only in circumstances where someone had either encouraged or facilitated a crime would they be made the subject of a serious crime prevention order. The hon. Gentleman’s point would have been considered by the court before deciding whether to apply the order. There is the potential, in appropriate circumstances, for there to be a burden on the business concerned, but that is to be preferred to the potential cost of having to regulate an entire sector.

The provisions include a safeguard whereby the courts will impose a requirement to pay costs only where it considers it appropriate to do so. In reaching that decision, it will have regard to the means of the body corporate, partnership or unincorporated association concerned; to the expected size of the costs; and to the effect of the terms on the ability of any body corporate, partnership or unincorporated association that is carrying on business to continue to do so. That provides a strong steer to the courts to ensure that the orders are used only where the overall effect on the business is not such as to cause damage to it as an ongoing concern.

The Minister talks about the assessment of the costs of the order and of the monitoring. How is it likely to be presented to the court and what scope would there be for any re-assessment of such costs, which, at the outset, may not be readily calculable when the court is considering the matter?

As the hon. Gentleman will know, the practical arrangements for deciding how costs are to be arrived at will be done through order. It is one important aspect of the order making power, so as it goes through, we need to consider the practical consequences, how costs will be apportioned and what amounts are appropriate. The important point in respect of the primary legislation, however, is the existence of safeguards for any business, organisation or partnership—and they are set out in the provisions. As I have explained, we want to ensure that businesses made subject to a serious crime prevention order by the courts abide by the terms of that order. By the use of a forensic accountant or other suitable professional, we want to ensure that businesses comply, but we do not want to do so in a disproportionate way—hence the safeguards that I have outlined. I rather think that the hon. Gentleman knew the answer to his question before he asked it: costs will be subject to the order making process.

The new clause strikes an appropriate balance between the need to ensure that businesses are not used by serious criminals and the need to ensure that the business sector as a whole is not damaged by measures designed to combat the few. I thus commend the new clause to the House.

The first thing to note about new clause 1 and the accompanying new clause 2 is that they are obviously very late in consideration. Given what the Minister has said about their importance and necessity, it is surprising that we are considering these proposals on Report—after the entirety of the Bill has already been examined.

I acknowledge what the Minister has said about the complexity of what is involved. I accept that in serious and organised crime, criminals will go to great lengths to ensure that their true purpose is disguised and that different corporate structures may be used to try to hide criminal activity. On the face of it, whatever the merits of serious crime prevention orders—we will come on to debate them later—if they are to apply and be effective, there is clearly a need for monitoring to ensure that their terms are adhered to. Without proper monitoring the orders will be ineffective, because it will not be known whether they have been breached and whether the appropriate sanctions should apply. I realise that the position is complex and that on the face of it there is a need for experts to be involved, but the new clause leaves a good deal of room for improvement.

I want to raise a few points on which I have sought elucidation from the Minister. The key point is that, while a person or corporate body subject to a serious crime prevention order would need to appear before a court, that person or body would not necessarily have committed a serious offence, but would only have had to be involved in a serious crime. We shall discuss that more fully during our wider debate on the orders themselves.

It might be said that involvement in a serious crime indicated a direct link and was therefore extremely important, but the wording of the Bill suggests that the link may be somewhat more indirect. Clause 2(1)(b) and (c) make it clear that such involvement could include a person’s facilitating the commission of a serious offence, or conducting himself

“in a way that was likely to facilitate the commission”

of a serious offence. There is no requirement for intention in those circumstances. Indeed, clause 4(2) imposes what is almost a reverse burden of proof on the person who is potentially subject to an order, who must show that his actions were “reasonable in the circumstances”.

The Minister said that only about 30 orders a year would be issued, and that has been stated consistently and clearly throughout the review of the draft legislation. What is not clear is whether this measure is really about the Mr. Bigs or whether it is likely to be used far more widely than the Minister intends, purely because of the way in which it is drafted. That is worrying in this context and a number of others. Notwithstanding possible assurances that the measure is supposed to be limited and to attack only the very central figures, it could be interpreted as allowing peripheral figures who, despite having no direct intention and no direct knowledge that they have facilitated or been engaged in facilitating serious crime, may find themselves subject to a serious crime prevention order—and, subsequently, to another order requiring them to pay for the monitoring of their compliance with it.

That potential injustice leaves me extremely uncomfortable with the ambit of the new clause, despite the Minister’s statement that it is intended to focus only on a very small group of corporates, and to ensure that forensic accountants and experts are brought in to aid the monitoring, enforcement and interpretation of the orders. That second aspect—cost—strikes me as extremely important. I have already described the legislation as wide ranging and potentially draconian. New clause 1(4) states

“A serious crime prevention order which provides for an authorised monitor may require any body corporate, partnership or unincorporated association which is the subject of the order to pay to the law enforcement agency concerned some or all of the costs incurred by the agency under the arrangements with the authorised monitor.”

It goes on to state that payments on account may also be required, which effectively means that payment must be made in advance of the monitoring.

As we have heard from the Minister, it is unclear how those costs will be assessed; in essence, they will be drawn in through secondary legislation. It is also unclear how the court will determine those costs and, therefore, the impact on the business concerned. He has tried to point out the protections in new clause 1(7), which is intended to give the courts a particular role in assessing the relevant circumstances, examining

“(a) the means of the body corporate…

(b) the expected size of the costs”.

The provision also deals with the effect that the order and the monitoring would have on that body corporate.

We do not know what those costs will be, how they will be assessed and how they will be measured. The court will be put in a difficult position in assessing the impact of the order on the body—the company or business—because it will have to undertake a detailed examination and review of the finances, the business and the way in which the company operates to assess whether the order would have a particular effect and whether it would risk the bankruptcy, liquidation or winding up of the company. That will be a hard decision for the court to make, particularly given that it will have to make an assessment of costs that may subsequently change.

I am sure that the Minister will say that the Government will set out in the order what the compliance should be, what the terms of the order are and therefore why there is a need for monitoring, but difficulties are involved. Given my professional background, I know that sometimes the costs that one is given in advance may not end up being the costs that arise. The monitor—this expert—will have to make a judgment about what is involved and what its own professional costs are likely to be in seeking the order in the first place.

The court will be in a difficult position. How will it go about assessing the costs and the impact when it may have limited information on that body corporate? It will clearly not have a full understanding of how that company conducts its business, the pressures on it and the market conditions. This provision could have a significant adverse impact on businesses if a wrong judgment is made, with the best of intentions, based on information that is not complete at the time that a monitoring condition is applied. We could risk creating injustice, particularly if an order was granted against a company whose involvement was peripheral, not intended, not direct and almost without knowledge, even though the court may have been able to show that it should have taken some other action and that is why it is brought within the scope of the serious crime prevention order in the first place.

New clause 1(6) deals with the tests for making serious crime prevention orders. The Minister will be familiar with our debates on Second Reading and in Committee about harm reduction versus punishment. He has said on many occasions, as I am sure he will say this afternoon and this evening, that the Bill is only about harm reduction—it is about preventing serious crime—and that it is not about punishment. One can form one’s own judgment about whether that is the reality in the Bill, but subsection (6) raises interesting questions that deserve greater scrutiny.

Does the hon. Gentleman see a distinction, as I do, between using these powers to restrict the freedoms of people whose prison sentence has been spent but who have been convicted of an offence, and using them in a preventive capacity in respect of people who may never have been convicted of any offence?

Well, there is an issue in the way in which civil orders can be used for crime prevention. The hon. Gentleman is right to highlight the fact that the orders can be used in two separate ways. One is almost as a post-bail or a post-conviction prevention order, in which the intention is almost to get someone back behind bars as soon as possible by virtue of a breach. That is a criticism that has been levelled at some of the other civil orders that the Government have introduced. The other is use of the order before any criminal conviction has been obtained, and that raises issues of appropriateness, especially when the criminal law could be applied and some sort of criminal sanction invoked. That is a point that we will debate in greater detail when we reach serious crime prevention orders later.

New clause 1(6) states:

“The tests for making or varying a serious crime prevention order”—

it then lists various sections—

“do not operate in relation to an order so far as the order contains terms of the kind envisaged by subsections (4) and (5) above.”

In other words, monitoring should occur. The particular parts of the Bill that are being carved out by that provision are those to do with preventive measures. For example, I draw the Minister’s attention to clause 1(1)(b), which provides that the court may make an order if

“it has reasonable grounds to believe that the order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime in England and Wales.”

In other words, that limb—the necessity for the court to be satisfied that the order would prevent crime—would be carved out by new clause 1(6). That is a bit odd, if the intention is to prevent, rather than to punish. That is an important point for how the orders are used and, in terms of the European convention on human rights, to ensure that the Bill is not construed as providing for punishment. It is essential that the orders should be preventive, not punishment, but new clause 1(6) would take out all the relevant provisions on orders that will have a monitor granted to them. That is perverse and bizarre and, when the Minister winds up, I trust that he will give some explanation of it.

The way in which the provision is drafted suggests that it may also apply to the whole of the serious crime prevention order, rather than just to the monitoring aspects. That would make the orders very wide and draconian in their application in the particular aspects. The late inclusion of this wide-ranging new clause raises many questions, and it has not had proper scrutiny and debate.

The hon. Gentleman made a reasonable point about the application of new clause 1(6), but then made the wild assertion that it would apply to serious crime prevention orders as a whole. If he reads further, he will see that it is limited to the new clause, and does not apply to the whole Bill.

I am grateful to the Minister if that is what is intended, but new clause 1(6) states that it does not operate

“in relation to an order”.

While it may continue

“so far as the order contains terms of the kind envisaged by subsections (4) and (5) above”,

it does imply that it could apply to orders more generally. However, I welcome the Minister’s intervention to make it clear that the provision is intended to deal only with the monitoring aspects, not the aspects of wider concern. Even so, in terms of monitoring, surely the orders should be intended to prevent crime. Otherwise, why are they there? He has said that the provision is not intended more generally, but it is still questionable whether the removal of the sections in question will cause problems with compliance with the European convention on human rights. Perhaps he can reflect on that point in further detail when he winds up.

The Minister said that the costs will be dealt with in secondary legislation, so we do not yet know how they will be assessed. How will appeals against the costs work? New clause 2 states that costs could be subject to appeal, and that

“Such provision may, in particular, include provision about appeals.”

Can the Minister shed any more light on the Government’s intentions relating to appeals against costs? The costs could be significant and the regulations could have a damaging impact on businesses.

The proposals note that the steps an enforcement agency can take to recover costs will also be covered by secondary legislation, but again the Minister has not talked in great detail about the Government’s intentions in that regard. Will the relevant enforcement agencies have the right to bankrupt and wind up a company that is unable to pay for monitoring costs—however damaging their impact might be?

The Government have decided to introduce these provisions hurriedly at a late stage, and there is a lack of detail in terms of costs, how the courts will assess companies, whether appeals against the costs will be allowed and how they will operate, what the time scales will be and what the rights of challenge will be. Once the costs are in place, what rights will enforcement agencies have and how will they operate in practice? What discretion will the agencies have in recovering the costs?

I accept that if costs are levied it is right, on the face of it, that the company should pick them up, but there is a duty on law enforcement to deal with its monitoring. The proposals could place a significant burden on companies and the House is not yet clear about the context for the provisions or their scale and nature. Based on the information we have been given, I remain concerned about the risk of injustice due to the lack of clarity and certainty in new clauses 1 and 2.

I am grateful for the opportunity to speak briefly on new clause 1.

I echo the concerns that have just been expressed about the introduction of such wide-ranging and important provisions at this stage of our deliberations. We had opportunities for exhaustive discussion of the Bill in Committee, when we went through it in great detail, so it is alarming that new provisions are being introduced in this way.

Three aspects of the new clause give me cause for concern, and I shall be interested in the Minister’s response. The first is that the provision is extremely wide-ranging. It shines a light on a larger concern about the Bill as a whole, which is that there are conflicting stories about the number of people who will be caught up by the provisions.

In Committee and in his speech today, the Minister was keen to stress that the provisions will apply to only a small number of people. Those assurances are not in writing in the Bill, but the background mood music is that we need not be overly concerned that the provisions will be routinely applied, as they will catch only a small number of particularly burdensome criminals. None the less, representations to me from agencies and others who are broadly supportive of the measure make much more extravagant claims about its impact on my constituents. If 30 or 40 people a year are caught up by the provisions, it is unlikely that any of them will be my constituents. Of course, there will be a knock-on effect in terms of the impact that is caused, but it would be interesting to know how many people are likely to be caught by these provisions. Although there is a point of principle, a matter of degree also applies, and so far, that is not at all clear.

The second point that gives cause for concern is that the specific people are not defined in the Bill. Therefore, it is difficult to understand how, when such services are contracted out to various outside agencies, checks and balances will be in place to ensure that the powers are wielded responsibly and in a way that would satisfy an elected representative, such as myself.

The third issue that gives me cause for concern—I would be interested to hear the Minister’s response—was raised by the hon. Member for Hornchurch (James Brokenshire) and relates to the obligation on the subject of the order to pay the costs. That could be a very serious sanction against someone who has not necessarily committed a criminal offence. I would be interested to know whether the Minister felt that there could be a cap on those costs. I ask him for more detail on how he thinks that will work in practice.

I am grateful to the hon. Member for Hornchurch (James Brokenshire) for recognising the complexity of the Bill and for, quite frankly, the decent way in which he admitted that fact. Some of these provisions are very technical, complex and difficult. That is why some of these amendments are being debated on the Floor of the House. I make no apology, however, for introducing something that will significantly improve the Bill. It would be somewhat ridiculous if, because I might be embarrassed about the fact that the hon. Gentleman would complain about such late additions to the Bill, I did not introduce amendments that improve it and make a significant difference to it. All I can say to the hon. Gentleman is that I apologise for the late introduction of new clause 1 and to the House for the lateness of some of the amendments, but I do not apologise for the fact that provisions, such as new clause 1, will make a significant difference and are significant improvements to the Bill, and it is therefore important that we debate them today.

The Minister says that he believes that new clause 1 will make a significant difference. He has also said that, in essence, about 30 such orders will be granted a year. How many orders does he think will be granted subject to the monitoring requirements set out in these new clauses?

I do not know the answer to that, but the serious crime prevention order as laid out in the Bill should be available to the courts. That will be a matter for the courts, and it will be for the applicant authorities to go to the courts where they think it appropriate and where they think that a serious crime prevention order will seriously impact on crime. With respect to new clause 1, the inclusion of authorised monitors is important because it will make the serious crime prevention orders more effective, as they apply to businesses and organisations. Let me suggest to the hon. Gentleman and to the hon. Member for Taunton (Mr. Browne) that I would have thought that all of us are united in wanting to ensure that serious crime prevention orders imposed on businesses and organisations are enforced and made to work, so that we can all see that they have credibility, and the use of authorised monitors will ensure that the terms are agreed to and, importantly, complied with.

The hon. Member for Hornchurch talked about complexity. I said in my introductory remarks that businesses might want to use the complexity of the arrangements to hide accounts, transactions or what they are doing. That means that law enforcers will at times need the experience, ability, knowledge and skills of forensic accountants, who can scrutinise the accounts in a way that many law enforcers cannot. That means that the serious crime prevention order will prevent the serious crime that we are talking about. When such an order is made, we will be able to ensure that the terms are agreed with.

He talked about the arrangements relating to costs. Of course, the courts will consider the costs when making an order. If the costs change, it is open to the subject to apply to the court for variations to the costs set out in the order.

The hon. Gentleman raised a point about bodies knowing whether they are subject to an order. An organisation will either have to be represented at proceedings, or be sent a notice by recorded delivery or hand delivery, before the order takes effect, so they will have knowledge of the order and its terms. As he will remember, if an organisation’s actions are reasonable, those actions cannot form the basis of a finding that it has acted in a way that has facilitated, or is likely to facilitate, serious crime. The burden is on the organisation to prove reasonableness, because the organisation is best placed to know the background to its actions. If an applicant authority wants to make a body the subject of a serious crime prevention order, that body can use a defence of reasonableness in court. We went through that many times in Committee, as he knows. If the organisation can demonstrate that its actions were reasonable to the satisfaction of the courts, it will not be made the subject of a serious crime prevention order.

As the hon. Gentleman will know, it is for the court to assess the evidence before it, as is the case for courts in all sorts of situations, and it is for the court to decide whether an organisation has acted reasonably under the group of new clauses that we are discussing. That is the protection against the injustice that the hon. Gentleman talked about.

The Minister highlighted the point about the assessment of the court, but that is really a question of the information presented to the court. It may not be presented with a full picture. He chided me for criticising him for the late notice of the new clauses, and our late consideration of them. What discussions has he had with the Law Society, or similar third parties that are acutely involved in considering the provisions, given that the provisions are complex, and will sit on top of an already complex situation? The complexity of the new provisions causes me concern because of the potential injustices that may arise as a result of it.

I apologise if I chided the hon. Gentleman too harshly; I did not mean to. He will know that we are taking forward the amendments as a result of the Hampton review and the Macrory report. They pointed out the need for appropriate and proportionate regulation, and that is what we have ensured. The hon. Gentleman talked about new clause 1(6), which switches off the test in clause 1(1)(b), and asked what the justification was for that measure. It is difficult to show that authorised monitors would directly prevent serious crime, but it is important to ensure that the parts of the order that would directly prevent serious crime are complied with. That is why we included the authorised monitors in the provisions.

The hon. Gentleman asked whether the Bill complies with the European convention on human rights. He will have seen my statement on the subject but, again, I refer him to the protections in the new clause, which ensures that a court cannot appoint an authorised monitor to supervise a serious crime prevention order without taking into account certain circumstances, particularly those in proposed new subsection (7)(c), which refers to

“the effect of the terms on the ability of any body corporate, partnership or unincorporated association which is carrying on business to continue to do so.”

In other words, if a serious crime prevention order is served on an organisation, and if an authorised monitor is used to ensure compliance with the order, the court must ensure through proposed new subsections 7(a), (b) and (c), that the measure is proportionate and takes into account the ability of the organisation or partnership to comply with it. With those comments, I urge the House to support the new clause.

Question put, That the clause be read a second time:—

The House proceeded to a Division.

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

Clause read a Second time, and added to the Bill.

New Clause 2

Costs in relation to authorised monitors

‘(1) The Secretary of State may by order make provision about the practice and procedure for determining the amount of—

(a) any costs payable by virtue of section (Compliance with orders: authorised monitors)(4) and (5); and

(b) any interest payable in respect of those costs.

(2) Such provision may, in particular, include provision about appeals.

(3) Where any amounts required to be paid by virtue of section (Compliance with orders: authorised monitors)(4) and (5) have not been paid within a required period, the law enforcement agency concerned must take reasonable steps to recover them and any interest payable in respect of them.

(4) The Secretary of State must by order provide for what are reasonable steps for the purposes of subsection (3).

(5) Any amounts which have not been recovered despite the taking of the reasonable steps are recoverable as if due to the law enforcement agency concerned by virtue of a civil order or judgment.

(6) Where any amounts required to be paid by virtue of section (Compliance with orders: authorised monitors)(4) and (5) are, in the case of an order of the Crown Court, not paid within a required period, the unpaid balance from time to time carries interest at the rate for the time being specified in section 17 of the Judgments Act 1838 (c. 110) (interest on civil judgment debts).

(7) For the purposes of section 25, a failure to comply with a requirement imposed by virtue of section (Compliance with orders: authorised monitors)(4) and (5) to make payments occurs when the amounts become recoverable as mentioned in subsection (5) above (and not before).

(8) In this section “law enforcement agency” has the same meaning as in section (Compliance with orders: authorised monitors).’.—[Mr. Coaker.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 3

Civil recovery management receivers

‘(1) After section 245D of the Proceeds of Crime Act 2002 (c. 29) (property freezing orders) insert—

“245E Receivers in connection with property freezing orders

(1) Subsection (2) applies if—

(a) the High Court makes a property freezing order on an application by an enforcement authority, and

(b) the authority applies to the court to proceed under subsection (2) (whether as part of the application for the property freezing order or at any time afterwards).

(2) The High Court may by order appoint a receiver in respect of any property to which the property freezing order applies.

(3) An application for an order under this section may be made without notice if the circumstances are such that notice of the application would prejudice any right of the enforcement authority to obtain a recovery order in respect of any property.

(4) In its application for an order under this section, the enforcement authority must nominate a suitably qualified person for appointment as a receiver.

(5) Such a person may be a member of staff of the enforcement authority.

(6) The enforcement authority may apply a sum received by it under section 280(2) in making payment of the remuneration and expenses of a receiver appointed under this section.

(7) Subsection (6) does not apply in relation to the remuneration of the receiver if he is a member of the staff of the enforcement authority (but it does apply in relation to such remuneration if the receiver is a person providing services under arrangements made by the enforcement authority).

245F Powers of receivers appointed under section 245E

(1) If the High Court appoints a receiver under section 245E on an application by an enforcement authority, the court may act under this section on the application of the authority.

(2) The court may by order authorise or require the receiver—

(a) to exercise any of the powers mentioned in paragraph 5 of Schedule 6 (management powers) in relation to any property in respect of which the receiver is appointed,

(b) to take any other steps the court thinks appropriate in connection with the management of any such property (including securing the detention, custody or preservation of the property in order to manage it).

(3) The court may by order require any person in respect of whose property the receiver is appointed—

(a) to bring the property to a place (in England and Wales or, as the case may be, Northern Ireland) specified by the receiver or to place it in the custody of the receiver (if, in either case, he is able to do so),

(b) to do anything he is reasonably required to do by the receiver for the preservation of the property.

(4) The court may by order require any person in respect of whose property the receiver is appointed to bring any documents relating to the property which are in his possession or control to a place (in England and Wales or, as the case may be, Northern Ireland) specified by the receiver or to place them in the custody of the receiver.

(5) In subsection (4) “document” means anything in which information of any description is recorded.

(6) Any prohibition on dealing with property imposed by a property freezing order does not prevent a person from complying with any requirements imposed by virtue of this section.

(7) If—

(a) the receiver deals with any property which is not property in respect of which he is appointed under section 245E, and

(b) at the time he deals with the property he believes on reasonable grounds that he is entitled to do so by virtue of his appointment,

the receiver is not liable to any person in respect of any loss or damage resulting from his dealing with the property except so far as the loss or damage is caused by his negligence.

245G Supervision of section 245E receiver and variations

(1) Any of the following persons may at any time apply to the High Court for directions as to the exercise of the functions of a receiver appointed under section 245E—

(a) the receiver,

(b) any party to the proceedings for the appointment of the receiver or the property freezing order concerned,

(c) any person affected by any action taken by the receiver,

(d) any person who may be affected by any action proposed to be taken by the receiver.

(2) Before giving any directions under subsection (1), the court must give an opportunity to be heard to—

(a) the receiver,

(b) the parties to the proceedings for the appointment of the receiver and for the property freezing order concerned,

(c) any person who may be interested in the application under subsection (1).

(3) The court may at any time vary or set aside the appointment of a receiver under section 245E, any order under section 245F or any directions under this section.

(4) Before exercising any power under subsection (3), the court must give an opportunity to be heard to—

(a) the receiver,

(b) the parties to the proceedings for the appointment of the receiver, for the order under section 245F or, as the case may be, for the directions under this section;

(c) the parties to the proceedings for the property freezing order concerned,

(d) any person who may be affected by the court’s decision.”

(2) In sections 273(4)(b) and 277(7)(b) of that Act (recovery orders and consent orders: recovery of costs of pension scheme trustees or managers) after “enforcement authority,” insert “receiver appointed under section 245E,”.

(3) In paragraph 1 of Schedule 10 to that Act (disapplication of special income tax and capital gains tax rules for receivers), after paragraph (c), insert—

“(ca) a receiver appointed under section 245E;”.’.—[Mr. Coaker.]

Brought up, and read the First time.

With this it will be convenient to discuss the following: Government amendments Nos. 14, 18, 19, 23 to 41 and 48 to 53.

I shall begin with new clause 3. Under the civil recovery provisions of the Proceeds of Crime Act 2002—POCA—it is not possible at an interim stage for there to be a receiver whose only function is to manage property while it is frozen. That is a problem because there are civil recovery cases in which a property freezing order, which only freezes property, is not enough, as the property cannot be managed.

On the other hand, obtaining an interim receiving order, which freezes assets and requires the appointment of an independent receiver, would be too much and is unnecessary in some cases. That is because the independent receiver, known as an interim receiver, has management, investigation and reporting functions. Due to the investigative function, it is only right that the interim receiver should be independent from either party to the civil recovery proceedings, so that accusations of any bias in the case can be avoided.

There is an identified operational need to create a new type of receiver whose only role is to manage property. Such a receiver would not have any investigatory or reporting functions; he or she could be a member of the staff of an enforcement authority, such as the Serious Organised Crime Agency. In the Government's view, the creation of a civil recovery management receiver will improve the efficiency and effectiveness of the civil recovery regime in the 2002 Act. It will result in significant savings as the primary expense in civil recovery cases is meeting the remuneration and expenses of an interim receiver. In particular, in-house management receivers would be much more cost-effective. The Assets Recovery Agency has a number of cases where the sums spent on the interim receivership already exceed the value of the assets it is pursuing. Such experience has inevitable consequences in terms of whether an enforcement authority would adopt a difficult case, which is likely to be protracted and therefore expensive, or opt for a lower value and less complex case. We want to minimise such a resource consideration in the decision-making exercise of an enforcement authority on whether it should adopt a case for civil recovery.

Other minor amendments are consequential on new clause 3. The other amendments in this group, which are also designed to support amendments that the Bill already makes to the Proceeds of Crime Act 2002, relate to the disclosure of information and the delegation of the functions of the directors of the main prosecution agencies.

Amendments Nos. 27 to 32, 35, 37 to 40, 49, 50 and 52 relate to the disclosure of information between the various agencies involved in the civil recovery of the proceeds of crime.

Very little in the Bill relates directly to Scotland, but some of the amendments do. Although this is a slightly inelegant way of doing it, with gateway provisions for disclosure over two Acts, can the Minister confirm that the amendments change how SOCA’s POCA-related activities work to allow disclosure to the Lord Advocate and Scottish Ministers? In particular, have changes been made to ensure proper disclosure of criminal confiscation, civil recovery and taxation information? Finally, are the regulations concerning disclosure of information by the Lord Advocate and Scottish Ministers unchanged?

That was an excellent question by the hon. Gentleman, but I shall have to give it some thought before I answer him. In all seriousness, I think that I had better take some advice before I tell him something that is inaccurate and misleading.

With the exception of its training and accreditation functions, the Assets Recovery Agency is to be merged into the Serious Organised Crime Agency under clause 72. The Assets Recovery Agency is currently the one body in England, Wales and Northern Ireland that undertakes civil recovery investigations and proceedings to recover the proceeds of crime. This civil recovery role will now transfer effectively to SOCA, the Crown Prosecution Service, the Revenue and Customs Prosecution Office, the Serious Fraud Office and the Public Prosecution Service for Northern Ireland. In order to support these and other functions carried out under the 2002 Act by the director of the Assets Recovery Agency, there is provision in part 10 of the Act for the disclosure of information to and by the director. The main group of amendments makes similar provision to part 10 to allow for the new bodies to be able to receive and disclose information to assist them in these, and other, functions. Amendments are either made to the parent legislation of the prosecution bodies where they already have what are known as information gateway provisions, or they create a new set of provisions for those organisations that do not have such legislative gateways. The flow of information is vital to ensure the success of the civil recovery regime in taking away the proceeds of crime. The usual safeguards and established practices and procedures are followed in the provisions to prevent any actual misuse of information or accusation of misuse.

Amendments Nos. 25, 26 and 36 provide for a more effective and broad ability for the directors of the main prosecution agencies to be able to delegate their functions. The Bill confers the functions of civil recovery investigations and proceedings on to the directors. The operational reality will be that the respective directors will either delegate to their staff or contract out these functions. The amendments ensure a suitable level of flexibility in that process.

Amendments Nos. 14, 24, 33, 34, 41, 48, 51 and 53 are minor consequential amendments reflecting the abolition of the Assets Recovery Agency. For example, the reference to that agency is to be omitted from schedule 1 to the Corporate Manslaughter and Corporate Homicide Act 2007.

In my constituency, there is a premises on West parade, on the front of Rhyl promenade, which was the property of a drug baron who was sent away for many years for importing £55 million of cocaine. That property has remained empty for six or seven years, and it has not been confiscated. Will the measures that the Minister is outlining today help to speed up that process, and will he prioritise that specific property?

There are two ways in which we hope to take the matter forward. It is important to recognise that the courts should be encouraged, where someone has been criminally prosecuted for an offence, to place an confiscation order on them when that person is found guilty. We also hope that the civil recovery powers available can be used in exactly the sort of circumstances that my hon. Friend has laid out. Throughout the Bill, we want to ensure that those who profit from crime lose the profits they have made, whether they are the so-called Mr. Bigs or the people to whom my hon. Friend has referred, who cause havoc and mayhem in many of our communities. With that I commend the new clause to the House, with the added reassurance to the hon. Member for Dundee, East (Stewart Hosie) that I will return in due course to the points he made.

The new clause effectively provides additional provisions relating to freezing orders, which come under section 245A and the subsequent sections contained within the Proceeds of Crime Act 2002. Those additional orders were introduced under the Serious Organised Crime and Police Act 2005, and apply only in certain circumstances where proceedings are under way to recover the proceeds of unlawful conduct. The freezing orders need to describe the property concerned and prohibit any person to whom that order applies from dealing with the property. As we said when the freezing order was introduced, it plays an important part in ensuring that we bear down on organised criminals who may be intent on misusing proceeds of crime, and in ensuring that such proceeds are recovered. We have stated on record that the orders are a good thing, so the gap that the Minister has highlighted is relevant.

In the Minister’s letter to me, and the hon. Member for Taunton (Mr. Browne), he states:

“The amendments I have tabled to the Proceeds of Crime provisions in Part 3 of the Bill will create a Civil Recovery Management Receiver. Creating these receivers will fill a legislative gap as it is not currently possible to have a receiver whose only function in civil recovery proceedings is to manage property while it is frozen. Civil Recovery Management Receivers will provide this function.”

There is clearly a gap, and it is interesting that it has taken a little while for it to become apparent and for us to be made aware of it through the consideration of the provisions in the new clause.

The proposal seems sensible because one of the concerns that arises in relation to frozen assets—the Minister alluded to this point—is that, when ensuring full proceeds are received, it may be necessary to manage assets while they are frozen to ensure that they do not diminish in value, and that the funds obtainable are as full as they should be. I recognise the intent behind the provision and the gap to which the Minister refers in his letter. It needs filling to ensure that we get the full proceeds required, and that there is no diminution in the value of the assets subject to the freezing order.

We understand the context of the new clause and the point that the Minister makes. We hope that it will act to ensure that the proceeds of crime are realised in a more effective way, that the value of those assets is maximised through the procedures and process undertaken, and that the issue is dealt with appropriately.

The Government have also tabled many other amendments, which are largely technical. I want to concentrate on amendment No. 27, which deals with section 435 of the Proceeds of Crime Act 2002. The section originally ensured that the director of the Assets Recovery Agency could use the information that he obtained in the exercise of one set of functions in connection with any of his other functions. In other words, under the 2002 Act, the director could use information gained for one purpose in another context.

When the Bill was in Committee, the Government tried to delete section 435 from the 2002 Act. The measure before us reflects that. However, amendment No. 27 would reintroduce section 435, but in a modified fashion. The amendment would expand the scope and application of the Bill. Proposed new section 435 would apply especially to the Director of Public Prosecutions, the Director of Public Prosecutions for Northern Ireland and the Director of the Serious Fraud Office.

The relevant point about the proposed new section is that it provides that the relevant Director—of Public Prosecutions, of Public Prosecutions for Northern Ireland or of the Serious Fraud Office—can use information obtained under part 5 or part 8 of the 2002 Act,

“in connection with his exercise of any of his other functions (whether under, or in relation to, either Part, another Part of this Act or otherwise).”

I am concerned about the extent and scope of “or otherwise”. Perhaps, when the Under-Secretary replies to the debate, he can confirm whether it is intended to have a much broader application than the original section 435—in other words, whether “or otherwise” covers all the relevant duties of the directors in all their contexts.

Clearly, amendment No. 27 is another late amendment. A change of approach was felt to be required to section 435 of the 2002 Act, given that it was meant to be deleted, not used, at the outset. It would be interesting if the Under-Secretary shed some light on the reason for the change of approach. Why is the sharing of information felt to be required now when it was not believed to be necessary previously?

I appreciate that the amendment’s application to several different bodies reflects the way in which the Assets Recovery Agency has been divided—its authorisations do not go to only one body but several different ones. From an enforcement perspective, the relevant directors to which subsection (4) of proposed new section 435 applies reflect the intended expansion of the enforcement agencies and bodies. However, there remains a question about whether the amendment proposes an appropriate or reasonable use or expansion of the previous power, which would have been limited to those under the 2002 Act.

The proposed new section is much more wide ranging—there appears to be no limit on the use to which information gained under the 2002 Act can be put. That may be appropriate for ensuring that illegal acts or information relevant to other prosecutions and proceedings are discovered through the powers granted by the 2002 Act. However, it is a change to the previous position and it would therefore be helpful to inform the House of the intention of the proposed new section. Is it intended to be all encompassing? Are any protections intended? Will