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Commons Chamber

Volume 520: debated on Wednesday 15 December 2010

House of Commons

Wednesday 15 December 2010

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Business Before questions

Coronation of the Virgin


That an Humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of the Report from Right Honourable Sir David Hirst, Chairman of the Spoliation Advisory Panel, dated 15 December 2010, in respect of an oil sketch by Sir Peter Paul Rubens, The Coronation of the Virgin, now in the possession of the Samuel Courtauld Trust.—(Angela Watkinson.)

Oral Answers to Questions

Northern Ireland

The Secretary of State was asked—

Dealing with the Past

My hon. Friend the Minister of State and I have met with political parties, community organisations, academics and victims groups from across the community to discuss dealing with the past. We will continue to listen to the views of people in Northern Ireland to find a way forward on this sensitive and contentious issue.

The Secretary of State made a commitment, which he repeated several times, that there would be no more costly, open-ended inquiries. Any decision by him to hold a further, restricted inquiry—for example, into the Pat Finucane incident—would be opposed on the one hand by nationalists and republicans, but regarded by others as a prerequisite for long-standing grievances, against the Irish Republic’s Government, for example, to be inquired into. Is it not more sensible and consistent for the Secretary of State to say, “We’ve reached the end of the inquiry road”?

I am grateful to the hon. Gentleman for his question. He is quite right: our stated policy is that we do not want to see any more costly and open-ended inquiries. However, my right hon. Friend the Prime Minister said during the debate on the Saville statement that we would look at individual cases. Our position on the Finucane case—a contentious case, as the hon. Gentleman knows—was laid out clearly in my written ministerial statement on 11 November.

At the risk of broadening the question from the previous exchange, let me say to the Secretary of State that coming to terms with history is the responsibility of us all. Those who are British, those who are Irish and those who are both welcome the progress that has been made over the past few years and recognise that many have contributed to it.

My hon. Friend is absolutely right. We want to bring as broad a range of people as possible into the process of negotiation, so that when we arrive at a means of going forward, as many people as possible have bought into it.

The Secretary of State will know that the Attorney-General for Northern Ireland is in the process of reopening a large number of historical inquests, which will place significant additional financial burdens on the Courts Service and the police service. Given the Government’s responsibilities in relation to the past, how does the Secretary of State intend to approach the sharing of those costs?

The right hon. Gentleman played a key role in seeing those powers devolved. He will know that the administration of inquests is a devolved matter that is entirely in the hands of the Attorney-General for Northern Ireland. It would not be for us to interfere in the mechanics and financing of his Department, which are entirely down to the local Executive.

Given the commitments by the British and Irish Governments at Weston Park, and the commitment by those Governments to an inquiry into the death of Pat Finucane, does the Secretary of State recognise that it would be unwise for the British Government to act unilaterally?

The right hon. Gentleman knows perfectly well that this is not an easy case, as he had three years to resolve the matter, as the real Secretary of State. He effectively ended up with a Mexican stand-off, where the family wanted one thing and he wanted them to have an inquiry, as I understand it, under the Inquiries Act 2005. He knows that this is not an easy matter to resolve, and that is why I had a helpful meeting with Mrs Finucane and her son. I laid out the process that we intend to follow in my written ministerial statement of 11 November.

The right hon. Gentleman will know that I have also met with Geraldine Finucane. I pay tribute to the way in which she has conducted herself, as I know he has too. However, notwithstanding his remarks about future inquiries, now that he is the real Secretary of State—as he described it—is he beginning to understand the damage that could be done to community support for the devolved institutions and to the British Government if he were to renege on existing undertakings, made by a previous Government and supported by his party in opposition, to independently investigate the past?

I cannot fail to point out that the right hon. Gentleman did not meet Mrs Finucane when he was the Secretary of State. I wrote to her in June, and I had a meeting in November, which was the time that the family chose, and we had a very sensible discussion. He knows that this is not an easy issue to resolve, and I laid out very clearly in the written ministerial statement that a number of issues have to be considered. We are quite open-minded about this, and we are determined to try to find a resolution that is satisfactory to all sides.

Terrorist Threat (Policing)

2. What recent assessment he has made of the likely effect of proposed changes to public expenditure in Northern Ireland on policing the threat to security from dissident groups. (29911)

3. what discussions he has had with the Northern Ireland Executive on the likely effect of proposed changes to public expenditure in Northern Ireland on policing the threat to security from dissident groups. (29912)

I meet the Justice Minister regularly to discuss the policing of the terrorist threat and related expenditure. I welcome the publication this morning of the Northern Ireland Executive’s draft budget, with its significant allocation to the Department of Justice. I can assure the hon. Gentleman that this Government will ensure that adequate resources are available to meet the threat.

Does the Secretary of State understand the very real public concern, not just in Northern Ireland but elsewhere in the United Kingdom, about any cuts in front-line policing in Northern Ireland and the impact that they would have on security and public safety?

I am fully aware of the concern that the small number of terrorists presents. That is why the Government have made a fair settlement on the Executive, and I am very pleased today that they have agreed a draft budget with a substantial allocation to the Police Service of Northern Ireland. We have made it absolutely clear that, should the security position deteriorate, we will be open to further discussions with the Executive, as was agreed by the previous Government.

The Minister will be aware that the issue of fleet renewal is causing considerable concern. Will he support any request for additional funds from the PSNI to meet the case for fleet renewal?

I think that I alluded to that a second ago. We are quite clear that, should the security position deteriorate, and should a good case be made by the Justice Minister and the Chief Constable—one of whom I talked to this morning; I spoke to the other yesterday—we will be prepared to consider going to the contingency reserve for extra funds in order to bear down on the terrorist threat.

Can the Secretary of State confirm that, if the situation were, regrettably, to get worse in Northern Ireland, either immediately or over the course of the next few years, those extra resources would come from the UK Government, rather than from the money already allocated to Northern Ireland?

We are absolutely clear about that. It was part of the settlement made by the previous Government that, should there be a deterioration in the security position in Northern Ireland, the Government of the United Kingdom would be prepared to accept a bid, on security grounds, for resources from the contingency reserve. I repeat that emphatically today. I said that to the Justice Minister when I spoke to him this morning.

In view of the recent revelations on the WikiLeaks website—which were confirmed by the former Irish Prime Minister, Bertie Ahern—that Martin McGuinness and Gerry Adams had prior knowledge of the Northern bank robbery in 2003, can the Secretary of State confirm that co-operation will take place between the Garda and the PSNI, that a full investigation will take place, that no stone will be left unturned, and that the Historical Enquiries Team will be allowed to pursue this matter in the way that it is pursuing other cases in Northern Ireland?

I thank the right hon. Gentleman for his question. I think that the answer was well put by the party leader at the British-Irish Council in the Isle of Man earlier this week. We are quite clear that those who have a past can explain for themselves. For the present, however, we are content for those who adhere to the Mitchell principles and pursue their legitimate political aims by peaceful democratic means to play a part in the process. The other issues that the right hon. Gentleman raised are matters of law and order; they are matters not for elected Members but for the police and the prosecuting authorities.

I am grateful for that answer, as far as it goes. Of course, no one in the Chamber today was at the BIC meeting in the Isle of Man, so I would be grateful if the Secretary of State could elaborate on that point. Will he also make it clear that any resources that the Historical Enquiries Team needs to pursue these particular allegations will be forthcoming, and that the community in Northern Ireland can be assured of an equality of pursuit of allegations in Northern Ireland against dissident republicans and mainstream republicans if they were involved in terrorist activities, such as have been alleged not just by WikiLeaks but by the former Irish Prime Minister?

We are strong supporters of the work of the Historical Enquiries Team, who are looking at every one of the 3,268 deaths over the course of the troubles, and we are satisfied that they are absolutely colour-blind in approaching every one of these dreadful incidents. They have also been accredited with neutrality by European institutions, and we are happy that they should pursue their work, which is in the hands of the devolved Administration and financed locally. The Prime Minister and I have been on the record on many occasions, supporting the neutral work of the HET, because we know it does bring significant satisfaction to the families who have so far received reports.

The Secretary of State will be aware that it has been announced that individuals from my constituency will stand trial next year for the murder of the soldiers in Antrim. Does the Secretary of State agree with me that the full rigour of the law needs to be applied and that the sentencing needs to fit the crime?

I think that is a sub judice issue. We support the rule of law and it should be pursued by the legitimate people in authority in the legal sphere and the judicial sphere. It is not for us as elected politicians to interfere.

I am grateful to the real Secretary of State for the comments he made earlier, but members of the PSNI tell me that two of their principal anxieties are the dissident threat and, obviously, financial uncertainty. On 10 November, the Secretary of State said that should the situation become worse, the PSNI would

“have the right to approach the Government”—[Official Report, 10 November 2010; Vol. 518, c. 276.]

—something which I think we all have. Today, he has gone a little bit further. Will he today stand four-square with the PSNI and say that, should the situation become more grave—which we hope it will not—he will support the PSNI in an application to the contingency reserve?

I welcome the hon. Gentleman to his new role. I will say emphatically, for the third time during this Question Time—and I said it to the Chief Constable yesterday and to the Justice Minister this morning—that should the security position in Northern Ireland deteriorate, we will adhere to the arrangements, which we have conceded were fixed by the previous Government, that given a deteriorating security position, the Justice Minister and the Chief Constable can come to the UK Government with a security case for funds from the contingency reserve.

Royal Visit

4. What discussions he has had with the Irish Government on arrangements for the proposed visit by Her Majesty the Queen to the Irish Republic. (29913)

Responsibility for any visit by Her Majesty the Queen lies with my right hon. Friend the Foreign Secretary, in consultation with Buckingham Palace. I know that the Taoiseach, Brian Cowen, and the President, Mary McAleese, have expressed their support for a visit by Her Majesty and I very much hope that such a visit will be possible.

In light of the debate that will take place in this House this afternoon and the valuable assistance that we are providing to the Republic of Ireland in its time of need, is it not past time that we had a visit by the sovereign to the Republic of Ireland? After all, the President of the Republic of Ireland has visited the United Kingdom on many occasions and I think it is time now for a degree of maturity and for this issue to be addressed.

I completely agree with the right hon. Gentleman. There has been no formal invitation yet, but he is absolutely right to draw attention to the matter. The UK and Ireland have an entwined relationship: 870,000 Irish-born people live here in the UK and over 90,000 UK citizens live in Ireland, and I hope they will join us in hoping that this visit can go ahead.

Does my hon. Friend have any concerns about security issues in respect of the Queen’s proposed visit to the Irish Republic?

I do not think it would be very responsible of me to comment on that, save to say that we work extremely closely with the Garda, they work extremely closely with the PSNI and I have complete faith that they would be able to see that a visit of that sort went off without any trouble whatsoever.


5. What recent discussions he has had with the Northern Ireland Executive on future provision of prisons in Northern Ireland. (29914)

The provision of prisons is now entirely a matter for the devolved Administration. My right hon. Friend the Secretary of State’s statement to the House of 4 November outlined the discussions he has had with Justice Minister David Ford on the recommendations in the Billy Wright inquiry report.

Will the Government’s spending decisions have any impact on potential new capital projects such as Magilligan prison and the new police training college?

The hon. Gentleman raises a good point. As we have said before in the House, we are committed to standing by the terms of the policing and justice financial settlement, which will enable the Executive to come to their own view about new capital expenditure, including on Magilligan prison, and we are closer to that with the announcement of the draft budget today, in respect of which we are very grateful to all the parties.

In the last couple of days the Prison Service has received some adverse publicity from certain sections of the Northern Ireland media. The Prison Officers Association has stated that it accepts that some degree of change is needed. What discussions has the Minister had with the POA to bring the service forward and to get a balance, which is clearly what we need?

I have, of course, followed those comments and seen the various interviews with the Justice Minister, David Ford. These are devolved matters: prisons are the responsibility of the Department of Justice. We follow these matters closely, but they are best left to those properly in charge of them.

National Asset Management Authority

6. What assessment his Department has made of assets held by the Republic of Ireland’s National Asset Management Agency in Northern Ireland; and if he will make a statement. (29915)

We are not in a position to make a detailed assessment of these assets. The Northern Ireland Executive are in touch with the authorities in Dublin and NAMA’s Northern Ireland Advisory Committee, and my right hon. Friend the Secretary of State raised Northern Ireland interests in relation to NAMA with the Taoiseach on Monday.

Given the difficulty NAMA is having in managing these assets and the Republic’s already over-indebted situation, would it not make sense for us to take some of those assets off its hands, as consideration for financial support we may give?

My hon. Friend will have an opportunity to make those and other points in the debate on the Loans to Ireland Bill—no doubt he will wish to take part in that. I think he should be proud of what we are doing, however. We are now part of the solution rather than the problem, and we believe it is right that we, as a country that has so much trade with the Republic of Ireland, should come to its support at this time, with no conditions.

The Minister has indicated that the Northern Ireland Office is not in a position to make an assessment. Does he believe that the Treasury is in a position to make an assessment, and has it done so?

That is a good question. My hon. Friend the Financial Secretary to the Treasury has said that discussions continue with the Government in Dublin about NAMA and the way forward, so they are clearly in regular discussions. Again, no doubt my hon. Friend will inform the House about that in the debate this afternoon, and discuss it with those who wish to take part in that debate.

Air Transport Strategy

7. What discussions he has had with the Secretary of State for Transport and the Northern Ireland Executive on the development of an air transport strategy for Northern Ireland. (29916)

The Government fully recognise the importance to Northern Ireland of a suitable framework for air travel, particularly for the economy and export trade. My right hon. Friend the Secretary of State and I will continue to engage with colleagues in Government and the Northern Ireland Executive as the new aviation policy framework is developed in the new year.

I thank the Minister for his answer, and endorse the point he makes about an air transport strategy and framework being essential to our economic recovery, particularly in respect of tourism. [Interruption.] Can he assure me, however, that he will do all in his power to work with those responsible—both the Secretary of State for Transport and the Department for Regional Development in Northern Ireland—to ensure that we get a functioning strategy that provides air links to Europe, Canada and the United States? [Interruption.]

Order. I wish to hear the Minister’s reply, and I am sure the House wants to hear it as well.

I am most grateful to you, Mr Speaker.

The hon. Gentleman is right, and I know he represents his constituents well in these matters. A balance has to be struck between extending the amount of flights that are available and the environmental consequences of doing that. I should declare that I have had meetings with Flybe, which operates out of Belfast City, and is based in my constituency. It does an excellent job, and I know it is always looking for new routes. The hon. Gentleman is absolutely right: in order to grow tourism and exports, which we have to do to rebalance Northern Ireland’s economy, we have to make sure that we have transport links that are as good as any other part of the United Kingdom.

Residual Terrorist Groups

8. What recent discussions he has had on the threat to security in Northern Ireland from residual terrorist groups. (29917)

I meet regularly with my security advisers and David Ford to discuss the terrorist threat in Northern Ireland. The threat level in Northern Ireland stands at severe, meaning an attack is highly likely. So far this year there have been 206 arrests, both in Northern Ireland and the Republic, for acts of terrorism and serious criminal incidents related to terrorism.

I thank my right hon. Friend for his reply. How is he working with the Republic of Ireland to facilitate the cross-border strategy for dealing with dissident violence?

I am very grateful for that question. Co-operation with the Republic of Ireland on this issue is at an unprecedented level. I pay tribute to the outgoing commissioner, Fachtna Murphy, who has done a tremendous job, and I am delighted that Martin Callinan has been appointed as his successor. [Interruption.] A symbol of that was the cross-border strategy announced this week, showing the unprecedented collaboration between the PSNI and the Garda. [Interruption.]

Order. There are far too many noisy private conversations taking place in the Chamber. I call the Rev. William McCrea.

Thank you, Mr Speaker. In the discussions held concerning the serious threat from republican dissidents, has the issue of police manpower been raised? Has due consideration been given to the representation made by the Police Federation concerning police numbers, especially the police reserve, and in light of the relevant extra financial resources that would be necessary?

I am delighted to see the hon. Gentleman back in his place following his illness, as always asking pertinent questions. He will know that police levels in Northern Ireland are the highest in the United Kingdom at 4.2 per 1,000. The numbers of police are for the Chief Constable to decide—it is an operational matter—but as I have said on several occasions already in this Session, we will stand by Northern Ireland and if the Chief Constable and the Justice Minister make a good security case, we will consider access to the contingency fund.

Republic of Ireland (Financial Developments)

9. What recent assessment he has made of the effects on the Northern Ireland economy of recent financial developments in the Republic of Ireland. (29918)

We are concerned about the risk that the current economic difficulties in the Republic of Ireland might have on Northern Ireland. We will continue to work closely with the Northern Ireland Executive on these issues. The Financial Secretary and the Secretary of State met the First Minister and Deputy First Minister on 24 November to discuss these matters.

What steps can my hon. Friend the Minister take to do his best to protect the Northern Ireland economy from the worst effects of the financial crisis in the south?

As I said before, we should be proud of being part of the solution, rather than the problem, and it is right to stress the interdependence of the two economies. Ireland accounts for 5% of the UK’s total exports. We export more to Ireland than to Brazil, Russia, India and China together, and it is incredibly important—40% of Northern Ireland’s exports go there as well. So a healthy economy in Dublin is important to a healthy economy in Belfast.

Security Threats (Policing Provision)

10. What recent discussions he has had with the Northern Ireland Executive on the provision of resources to the Police Service of Northern Ireland to address security threats from dissident activity. (29919)

PSNI resources are primarily a matter for the devolved Administration. I am delighted that the Executive have agreed a draft budget. This Government will work to support the PSNI where exceptional security pressures exist.

Can the Secretary of State tell the House whether he has given the Chief Constable of the PSNI a specific assurance that he will continue to have access to additional funds from the reserve, so that vital community-based policing does not suffer from a lack of resource?

I am very grateful to the hon. Gentleman for his question. Of course, in Northern Ireland, community policing is an absolutely vital part of moving the process forward. The Chief Constable has been allocated significant resources in the draft budget today, and it is up to him how to apportion those significant sums of money.

Enterprise Zone

My hon. Friend the Exchequer Secretary is writing to the Northern Ireland Executive this week with a draft consultation paper on rebalancing the Northern Ireland economy. He and I will be meeting Executive Ministers in the new year to discuss the paper before publishing it for consultation.

Does my right hon. Friend agree that Northern Ireland’s high dependence on the public sector is simply untenable, and that it is more important than ever that private sector innovation be promoted in the Province, in order to rebalance the Northern Ireland economy?

My hon. Friend is absolutely right on this, and I am very pleased to see his continued interest in Northern Ireland matters. We have been saying for three years now that an economy that depends for 77.6% of its GDP on state spending is wholly unsustainable. It will need rebalancing. That will take time. To do nothing is irresponsible; to move too fast is irresponsible, and I estimate that it will take, probably, 25 years. This week, we will be sending a paper to the Executive for discussion, looking at ways of turning the whole of Northern Ireland into an enterprise zone.

Prime Minister

The Prime Minister was asked—


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

Time and time again, the Prime Minister has said that he wants to protect the poorest and most vulnerable while reducing the budget deficit, so can he explain to me and to residents of my Lewisham East constituency why he is heaping huge cuts on local councils, which tend to spend half their overall budget on child protection, care for the elderly and services for the disabled?

Let me tell the hon. Lady what we are doing in Lewisham to protect the most vulnerable. The per pupil funding in our schools in Lewisham will be maintained at £6,951 per pupil—that is the 10th highest in the country, recognising the level of deprivation. On top of that, for the first time in our history we will be adding a pupil premium of £430 per child. That is an excellent policy.

Q2. The BBC reports that the German Finance Minister wants to set an interest rate to punish Ireland. Will the Prime Minister confirm that this country wants to help Ireland? (30542)

My right hon. Friend the Chancellor of the Exchequer will be setting out the details of the loan on Second Reading of the Bill today, but I think that it is worth standing back and asking ourselves, “Why is it that we are able to make a loan to Ireland? Why is it that people are asking us to do that?” It is because Britain’s economy is out of the danger zone and recovering. If we had listened to the Labour party, we would still be in a hole.

May I start by paying tribute to our troops serving in Afghanistan? We owe them a huge debt of gratitude for everything that they are doing for us, and our thoughts will be with them and with their families, who will be apart from them at this time of year.

Does the Prime Minister recognise the concern that there will be about the rise in unemployment of 35,000 that we saw this morning? Does he understand that for all those families around the country, his confidence and indeed his restatement today that Britain “is out of the danger zone” will seem very hollow?

First, let me join the right hon. Gentleman in paying tribute to our forces in Afghanistan, whom I visited last week, and to all their families, who will be missing them at Christmas time. To be fair, under the Government of whom he was a part and under this Government we are making big improvements on their contact home—on fax time, telephone time and all the contact that they need—and that is absolutely right.

On the unemployment figures, of course everyone should be concerned—and I am concerned—by a rise in unemployment. When anyone loses a job it is a tragedy for that person, and we must do everything we can to help people into work. With the Work programme we will be launching the biggest back-to-work programme in this country for 70 years. To be accurate, although part of the figures are disappointing, they are mixed because we see that the claimant count has come down in the unemployment figures and we are also seeing an increase in the number of vacancies in our economy—every day there are another 10,000 vacancies. So, yes, we have to get the private sector going and increase the number of jobs available. Over the past six months, we have seen 300,000 new private sector jobs. We need more of them, and keeping our economy out of the danger zone is the way to get them.

The Prime Minister slightly sounds as though he paints himself as an innocent bystander in relation to the unemployment figures. He should not be pressing ahead with a rise in VAT on 4 January and £20 billion of public spending cuts.

I want to turn to another aspect of the Prime Minister’s financial plans. Can he confirm that the Government are now set to break the promise made in the coalition agreement:

“We will guarantee that health spending increases in real terms in each year of the Parliament”?

Being a bystander would mean having no plans to deal with our economic problems. This Government are cutting corporation tax, abolishing Labour’s jobs tax, reducing national insurance and increasing our jobs programme. No one should be complacent; complacency is having no answers. No one should be complacent, but we do see retail sales up, exports up, manufacturing up, interest rates coming down since the election and growth higher than expected. I am not in the slightest bit complacent about what we need to do, but let us not talk down the performance of our economy.

Turning to the NHS, we have increased the NHS budget by £10 billion in this Parliament. I must say to the right hon. Gentleman that only one party stood at the election on saving the NHS and its spending and that was this party right here. I am confident that we will fulfil our goal of real-terms increases every year in the NHS.

It is very interesting that the right hon. Gentleman says that he is confident. He should listen to what the Conservative-led Health Committee said only on Monday. It said that with inflation now higher,

“the Government’s commitment to a real terms increase in health funding…will not be met.”

We all remember those posters during the election and we all remember his face, airbrushed, on those posters. Will he now admit that he is breaking that promise?

We are not breaking that promise. We want to see NHS spending increase by more than inflation every year. Let me be clear about who supports this policy. The shadow Chancellor—this is not vague, but pretty clear—said, when asked whether it is right to protect NHS spending:

“There is no logic, sense or rationality to it at all.”

Let us be clear: on this side of the House, we want real-terms increases in health spending to ensure that we improve the health of our nation; the Opposition are committed to cutting the NHS.

I know that the right hon. Gentleman is good at the broad brush, that he is good at the airbrush and that he does not do detail, but he should read the report, which says that health service spending will be cut next year in real terms.

Let me turn to his next broken promise on the NHS. He pledged, and the coalition agreement says:

“We will stop the top-down reorganisations of the NHS that have got in the way of patient care”,

but that is exactly what the Government are forcing on the health service. Fewer than one in four doctors think that it will improve patient services and independent experts say that it will cost £3 billion. After six months, is not an old truth being confirmed? When it comes to the NHS, you cannot trust the Tories.

There are moments when I think I am up against Basil Brush. When it comes to protecting the NHS, only one side of this House is committed to protecting NHS spending and that is this side.

Now we come on to reforming the NHS. We are not reorganising the bureaucracy of the NHS; we are cutting and abolishing it. Because we are making a 45% saving in the bureaucracy of the NHS, that will save £1.9 billion. Because we are increasing the spending on the NHS, that money will go into hospitals, beds, nurses and doctors. All those things would be cut if it was up to the Opposition because they do not have a commitment to maintaining NHS spending.

The Prime Minister is breaking his promise and he does not want to admit it. What does he want to do? He wants to leave it to the back end of the pantomime horse, the Deputy Prime Minister, to break the promises. It is time that the front end of the pantomime horse took some responsibility.

I want to ask the Prime Minister about another broken promise, on the education maintenance allowance. Why does he not go a couple of miles away from here—I know that he does not talk to students, or only to those in China—to Southwark college and talk to the students and teachers there? The business teacher there wrote to me and said—[Interruption.] I would have thought that Government Members would want to listen to the fate of students and young people up and down this country. The teacher said:

“I see the benefits that the EMA provides for many of my learners. I see how they struggle to pay for transport…books and other essentials. How can we expect them to aspire to a better life if we deny them the means?”

The right hon. Gentleman wants to talk pantomime. I am afraid it will not be long before he is thinking, “Look behind you!”

The problem with the education maintenance allowance is that research shows that 90% of those who receive it would stay on at school anyway. As we are raising the school participation age to 18, it is right that we replace the education maintenance allowance with something that is better targeted. The right hon. Gentleman has to look at the bigger picture, which is that we inherited a completely wrecked set of public finances. His questions are always about this cut or that cut; we know which cuts he is against, but he has not made one single suggestion about how to dig the country out of the pit of debt that he left us in.

The truth is that the right hon. Gentleman began the year making promises and now he is breaking them. The promise on NHS spending—broken; the promise on the education maintenance allowance—broken; the promise on universal child benefit—broken; the promise on knife crime—broken; and the promise on new politics—broken. Should not his new year’s resolution for 2011 be to keep the promises he made in 2010?

It can be put quite simply: Labour started the year with a leader who was dithering and had no answers on the economy and it has ended the year with a leader who is dithering and has no answers on the economy. I suppose, in Labour terms, that is what passes for progress.

Q3. The Bletchley Park Trust in my constituency hopes to buy for the nation the personal papers of Alan Turing, the heroic wartime code breaker. It is confident of raising the funds to buy the papers, but there is a danger that the auction might take place before it has the chance to do so. Will my right hon. Friend do all he can to give Bletchley Park a fair chance to secure those important documents for the nation? (30543)

I would certainly like to do that, because I think my hon. Friend is entirely right—Alan Turing was a remarkable man. Many of the people who worked on cracking the enigma code at Bletchley Park during the war are still alive and we owe them a huge debt of gratitude. They made a decisive difference in winning the second world war and we should praise all of them. Of course I hope that private donors will generously support the fundraising campaign and I am very happy to work with my hon. Friend and do anything I can to make that happen.

Earlier, the Prime Minister expressed concern about unemployment. Unemployment in his constituency is 1.5% whereas in my constituency it is 7.3%. A full Jobcentre Plus service is available in Witney, but he has decided to close down the Deptford jobcentre. That cannot meet any test of fairness, so will he personally review that disastrous decision?

I will very happily look at the distribution of jobcentres, but the fact is that, through local government and other spending, we put a lot more money into deprived areas in our country. [Interruption.] Yes, we do. I had a little check before coming to Question Time and if we look at what is happening to grant changes—for instance, comparing my constituency with that of the right hon. Member for Doncaster North (Edward Miliband)—the cut in grant in my constituency is 27% greater than in his. I simply do not accept that the Government are not being fair and helping those who need help the most.

Q4. All of us in the Chamber will have had tragic cases of late diagnoses of cervical and breast cancer in our constituencies—cancers that should and can be survived. The Prime Minister promised to do more when he was in opposition. Now that we are in government, what is he doing about the unacceptably low survival rates? (30544)

My hon. Friend is absolutely right to raise this issue. The first thing we did was to make good on our promise of a cancer drugs fund. We put money into that fund so that thousands of people who were without the drugs they needed can now get them. We want to see further improvements on cancer screening and much more focus on cancer outcomes, and unlike the Labour party we are prepared to put the money in to make sure it happens.

According to the latest statistics, children of asylum seekers have been placed in detention centres on 665 occasions in the past year, which means that it is highly likely that there will be children in our detention centres this Christmas. This is not a party-political point. May I ask the Prime Minister, on behalf of the whole House, to give a commitment that by next Christmas, in 2012, there will be no children of asylum seekers in detention centres, and that there never will be again?

The hon. Gentleman has made an important point. In our coalition agreement we made a commitment to address the issue, and the Deputy Prime Minister will make a statement tomorrow about how we will end this scandal.

Q5. As naval aviation celebrates its centenary, will my right hon. Friend guarantee that the promised transfer of 20 Merlin helicopters from the RAF to the Fleet Air Arm will indeed take place? Otherwise critical mass may well be lost, and the first 100 years of a service that has defended us in peace and war may be the last 100 years. (30545)

My hon. Friend is absolutely right to raise that point. Of course I will look into the issue of the Merlin transfer. However, we should be clear about the fact that Britain will still have the fourth largest defence budget anywhere in the world. The Navy will have seven Astute class submarines, 19 destroyers and frigates, 14 minesweepers and other vessels, the Royal Marines—obviously—and our nuclear deterrent. We will have a large and fit-for-purpose Navy of which the country can rightly be proud.

The Prime Minister will be aware that there are two great football clubs in north London, Tottenham Hotspur and Enfield Town. He will also be aware that Spurs are considering moving across London to the east end—to the Olympic park. Will he join me, and the Spurs fans who signed a petition entitled “Say NO to ‘Stratford Hotspur’”, in urging the Spurs chairman to put the club and its history before shareholder value?

My recent experience has taught me to stay out of international football management. While paying tribute to the right hon. Gentleman’s club, to Enfield Town and, of course, to Arsenal as well—I think it right to do that—I will let the club make the decision. However, it is true to say that on the Olympic site there will be a fantastic stadium of which I hope one football club will take advantage.

Q6. Will the Prime Minister join me in thanking and expressing appreciation to the postal service workers across the United Kingdom—including those whom I visited in Inverurie, Dyce and Ellen—who are struggling through snow and ice to make their deliveries? Does he agree that the mail order firms that are cancelling Christmas in Scotland by refusing to accept orders should recognise that they cannot and do not match the universal postal service, and that for that reason it should be secured and protected? (30546)

The right hon. Gentleman has made an extremely good point. I am sure that all Members in all parts of the House—many of whom will take the opportunity to visit sorting offices this Christmas—will want to record our support and thanks for the very good work that postal workers do throughout the country in ensuring that everything is delivered in time for Christmas. I know that they are having a particularly difficult time in Scotland. Additional air and rail services have been laid on to speed the movement of mail in and out of Scotland, and Royal Mail itself has made a big investment—of £20 million—to try to deal with the most severe weather that it has faced for 30 years.

Again, let us all pay tribute to those who will ensure that cards and presents are delivered on time.

Q7. The right hon. Member for Gordon (Malcolm Bruce) is right. The situation has been horrendous in Scotland, and indeed in the north of England. The only people who are delivering are those in Royal Mail, as the private companies have offloaded their commitments on to it. The £20 million invested by Royal Mail is important. Will the Prime Minister give a straight answer to this question? Will he guarantee that universal service, and will he and his friend the Chancellor of the Exchequer, who is sitting next to him, review Royal Mail’s privatisation and step back from it? (30547)

The whole point of trying to get private capital and management involved in Royal Mail is to make the service better, and to ensure that it can go on doing all the things that we want it to do. Opposition Members—including the Leader of the Opposition—shake their heads, but the fact is that they were going to present plans in the last Parliament, because even they realised that this needs to be done.

Will the Prime Minister join me in paying tribute to the service of the Gurkhas and, especially, to my Chiswick constituent, Havildar Lachhiman Gurung, who died on 12 December aged 92? He won the Victoria cross while serving with the Gurkha Rifles in Burma in 1945, where he demonstrated

“outstanding gallantry and extreme devotion to duty, in the face of almost overwhelming odds”.

I certainly join my hon. Friend in paying tribute to the Gurkhas both past and present. Anyone who goes to Afghanistan and sees how many Gurkhas there are not just in the Gurkha Rifles but in some of the logistic regiments, serving our country extremely well, will know that we owe them the greatest debt of gratitude, and we must always make sure that it is paid in full.

Q8. This has been a momentous week, with the trebling of tuition fees for students and the average decrease of 10% in grants for local councils. We have also been told this week that the Chancellor has to build up a war chest of £50 billion just in time for the general election—paid for by working people and their families. [Interruption.] That is right; that is the question. (30548)

I am not quite sure what the question is. Let me just answer the point about fees by putting this point on the record. The Institute for Fiscal Studies has looked carefully at our plans, and it finds:

“By decile of graduate lifetime earnings, the Government’s proposals are more progressive than the current system or that proposed by Lord Browne. The highest earning graduates would pay more on average than both the current system and that proposed by Lord Browne, while lower earning graduates would pay back less.”

I say to the Opposition, including the hon. Gentleman, if they want a progressive system for tuition fee reform, that is what we offer. In terms of dealing with the deficit, it is absolutely vital that we get on top of it. That is good for everyone in this country, his constituents included.

Q9. Will the Prime Minister ensure that primary care trusts, strategic health authorities and all NHS bureaucracies serve patients, not their own interests? Will he further ensure that the Secretary of State for Health intervenes to stamp out any excessive failures caused by that unnecessary bureaucracy? (30549)

I agree with my hon. Friend, but the key is to try to get rid of so much of that bureaucracy. Under the previous Government, the number of managers went up faster than the number of nurses, and our aim is to reduce that bureaucracy, get rid of that bureaucracy and put power in the hands of GPs and their patients, so that the decisions taken in our constituencies about hospitals and services are driven by the choices our constituents make, rather than by bureaucrats. That is the key to those reforms and why I hope everyone in the House will support them.

Q10. Is there any truth in the rumour that tomorrow the Liberal Democrats will move the writ for the Oldham East and Saddleworth by-election for 13 January, thus denying the good people of Oldham a politician-free Christmas and new year? Is that unseemly haste over the festive season a cynical attempt by the Government to avoid the wrath of the public and especially students on tuition fees, school cuts and police cuts? (30550)

Do I gather that the Opposition are frightened of having an election? I would put the question the other way: why should the people of that constituency put up with not having a Member of Parliament, and what have you lot got to be frightened of?

Will the Prime Minister outline to the House the steps that the Government are taking to cut through the legacy of red tape and bureaucracy that we inherited from the previous Government in order to deliver real value-for-money front-line services?

There is no doubt that regulation has got out of control in this country. That is why my right hon. Friend the Business Secretary is introducing a new one-in, one-out rule—so that any time the Government want to legislate or regulate they have to remove a regulation first. That sort of discipline can make a real difference.

Q11. May I put on the record my appreciation, and the appreciation of many, of the goodwill and practical neighbourly support that the Prime Minister and Chancellor have shown to Ireland at this difficult time? It makes very good sense, because the Irish economy, the Northern Ireland economy and the British economy are closely intertwined. But the economic indications are that Northern Ireland is still in decline and the economy is in serious need of a boost. May I ask the Prime Minister for his assessment of the possibility of a boost to the Northern Ireland economy by reducing corporation tax to 12.5%? (30551)

The hon. Gentleman makes a good point about the economy in Northern Ireland. We want to see it recover and grow, but everyone in Northern Ireland knows that the size of the state—the size of government—in Northern Ireland has become too big, and we have to see a private sector recovery. We are looking at all sorts of ideas, including the enterprise zone to which my right hon. Friend the Secretary of State for Northern Ireland referred. I should also like to put on record my thanks to those Northern Irish Members who are going to support what we are doing to help the Republic of Ireland in its time of need.

Q12. The people of Bromsgrove are immensely proud of our brave servicemen and women. That is why Bromsgrove district council has decided to give the freedom of the district to the Mercian Regiment next month. Will the Prime Minister join me in congratulating the decision of the council, and does he believe that we can all do more to honour our heroes? (30552)

I certainly join my hon. Friend in doing that. Bromsgrove is absolutely right to honour the Mercian Regiment in that way. He brings out an important point. Yes, we have responsibility, as a Government and as a House of Commons, to deliver on the military covenant for our personnel in the armed services, but there is a broader responsibility on businesses, on the media, on us as individuals and on the whole country to work out what more we can do to recognise the bravery of these people who do so much on our behalf.

Q13. There are 1,238 students at York college who come from families poor enough to qualify for a full education maintenance allowance. That is one in three at the college. The chair of governors describes the Government’s plans for EMAs as “totally unacceptable” and the replacement funding as “woefully inadequate.” I know that the Prime Minister visits North Yorkshire from time to time, will he show that he cares about social mobility and that he really is a one-nation Tory by meeting people from the college to discuss— (30553)

I absolutely accept that we have got to do more to help people to get from the very bottom to the very top. That is why we have saved the per pupil funding and why we are increasing the pupil premium. When we look at what happened over the last few years, since 2004, child poverty rose by 100,000, inequality reached the highest level since 1961, and 5 million people were stuck on out-of-work benefits. That is why we need to change the way that we help people to get on in life, and that is exactly what we are committed to doing.

Q14. As we approach Holocaust memorial day, will the Prime Minister confirm that the Government will generously donate to the Auschwitz-Birkenau restoration fund? (30554)

I can do that. Auschwitz-Birkenau is a very powerful reminder of the ultimate consequences of intolerance, and it is only right that it should be preserved to bear witness to the deaths of the millions of victims who perished there and to act as a stark reminder of man’s inhumanity to man. The director of the Auschwitz-Birkenau Foundation has recently visited the UK to discuss funding with a number of Government Departments, and we are also involved in EU discussions. I think everyone in this House knows how important it is to maintain these memorials. We obviously remember the holocaust, but we must also remember that there have been other acts of gross inhumanity more recently. We have to go on remembering to stop that happening again.

Will the Prime Minister tell the House whether, when he appointed the ex-Member for Arundel and South Downs to the other place, he knew his thoughts on state benefits being an incentive to breed? Is that another example of the new politics the Prime Minister promised the country?

I do not know how long that one took to think up. The former hon. Member, who is now a Member of the House of Lords, completely withdrew those comments and apologised for what he said, which was completely unacceptable. I am prepared to leave it at that.

Q15. Is my right hon. Friend aware of the concern of many people at reports in the press that he plans to support high-speed rail regardless of next year’s consultation? Will he spread a bit of Christmas cheer by reassuring my constituents that he will keep an open mind and that he will not be railroading through a railroad? (30555)

I completely understand the concern that there is all the way along the proposed line. Obviously, people are worried about it and, yes, this is a proper consultation—it must be a proper consultation and it will be. As I have said before at the Dispatch Box, for 50 years we have been trying to deal with the north-south divide and have a more effective regional policy. I do believe that high-speed rail has a really effective role to play in bringing our country closer together and spreading economic benefit throughout all our country.

Students in Wirral tell me that they need their education maintenance allowance for travel to go to the sixth form or college of their choice. Catherine McCormack, the head of South Wirral high school, says:

“Without EMA, choice and diversity are not supported.”

Does the Prime Minister think that a choice of courses is only for those who can afford it?

I have to say to the hon. Lady that we looked very carefully at the study that was completed under the Government of the Labour party and it showed that nine out of 10 of those people receiving education maintenance allowance would have stayed on at school anyway. This is why the Labour party landed us in such a mess over the economy. We have to ask the question about value for money and whether we are spending money in the correct way. We are not abolishing EMAs: we are replacing EMAs with something more effective. At a time—[Interruption.]

At a time when we are legislating to raise the participation age to 18, we have to ask whether it is it is right to spend so much money on asking people to do something that by law they will be asked to do anyway.

Time and time again, we seem to be exporting extreme Islamist terrorists and suicide bombers to Afghanistan, Israel and now Sweden. What steps is my right hon. Friend taking to drain the poison of extreme Islamism from our country?

My hon. Friend raises an incredibly important point. If we are frank on both sides of the House, we have not done enough to deal with the promotion of extremist Islamism in our country. Whether it is making sure that imams coming over to this country can speak English properly, or whether it is making sure that we de-radicalise our universities, we have to take a range of further steps, and I am going to be working hard to make sure that we do. Yes, we have got to have the policing in place; yes, we have got to make sure that we invest in our intelligence services; yes, we have got to co-operate with other countries—but we have also got to ask why it is that so many young men in our country get radicalised in this completely unacceptable way.

We come now to the 10-minute rule motion. I call Nadhim Zahawi. [Interruption.] If the hon. Gentleman would just wait for a moment, may I, as always, appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and quietly so that the same courtesy is extended to the hon. Member for Stratford-on-Avon as they would want to be extended to them? [Interruption.] I hope that Members are on their way out, but large numbers of Members will of course be staying to listen to the hon. Gentleman.

St George’s Day and St David’s Day

Motion for leave to bring in a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to designate St George’s Day, or the nearest working day, as an annual public holiday in England with effect from 2012; to designate St David’s Day, or the nearest working day, as an annual public holiday in Wales with effect from 2012; and for connected purposes.

In all three primary party manifestos, we vowed to promote national integration. One of the most effective ways of achieving that is to make the saints’ days of St George and St David bank holidays in England and Wales respectively. This is a subject that means a lot to me and to many of my constituents in Stratford-on-Avon. I stood up and promised the people of Stratford-on-Avon that I would not add to the legislative burden that they already face and that I would take away from it. I promised that if I had the chance, I would introduce this Bill.

Unlike our neighbours in Scotland, Northern Ireland and the Republic of Ireland, England and Wales do not currently celebrate our saints’ days as bank holidays, which is something that I wish to change. It is quite right that in 2011 there should be a special one-off bank holiday to celebrate the royal wedding, but from 2012 onwards, the royal wedding bank holiday should be replaced by bank holidays that celebrate our two countries’ patron saints.

We all know St George as the famous dragon slayer whose bravery freed a town from the tyranny of a vicious dragon and eventually led the townsfolk to Christianity. I have to point out, however, that St George was an immigrant to this country. St George is widely believed to have been born in Turkey and served in the Roman army before being taken into English hearts. My hon. Friend the Father of the House, who is an expert on that region, tells me that he may even have been of Kurdish origin—I speculate further that his skin may have been my shade of tan. St David is remembered not only for his miracles and for his close affinity to nature, but as a great unifying force for Christianity and for Wales. Both saints had a huge impact on the culture of their respective countries. What they stood for is just as relevant today as it was way back then.

We all know our patron saints, but why is it important to celebrate them? The best answer is simple: it is through national days that we can celebrate what makes our nation so great. On such days, we can be yet more proud of the best aspects of English and Welsh culture and society, such as our history of tolerance, acceptance and scientific innovation, and the huge impact that we have had on the history of the world. There is so much to be proud of in our past and so much that our children can learn from, both in our successes and our mistakes.

In recent years, I have been saddened to see the symbols of our patriotism hijacked by the fringe right-wing of our country. Today, this House can go a long way towards reclaiming them. We can ensure that all who live in Britain, whatever their background, can join together and celebrate all that makes Britain great. I am a firm believer in the supreme value of our culture and history, and we should never let anyone tell us not to celebrate them.

I will now put to bed the one argument against such a change, which I have heard time and again, that an extra bank holiday would be bad for our economy. As a business man and entrepreneur who has built strong and enduring businesses, I reject the idea that one extra bank holiday will affect productivity. The working people of this country will do the work that they need to do regardless of a new bank holiday. We must remember that the whole concept of work has changed. Work is no longer just about turning up at a particular place at a particular time and then leaving at a fixed time. One beneficiary of the proposal would be small shops and businesses in our town centres, which would benefit from extra custom during the holiday. Our local pubs will undoubtedly attract many people who wish to toast St George or St David. Through the creation of special events for those days, our leisure and tourism industries will do well.

To further put the proposal in context, we should consider the relatively few bank holidays that we receive compared with our European and north American neighbours. We are 16th in Europe with only eight bank holidays, whereas France has 11, Sweden has 11 and Germany has 12. Even our notoriously hard-working American friends have 13 bank holidays a year, although I accept that they take less vacation time overall.

Interestingly, and by a strange coincidence, YouGov recently commissioned a survey into the British public’s attitude on this issue. It discovered strong public support for an increase in the number of bank holidays. More than two thirds of adults—68%—think that it would be appropriate for Great Britain to have at least nine days of public holiday a year. Of the calendar occasions that are candidates for the extra bank holiday, YouGov found that St George’s day is the most popular with 22% of support. That is just ahead of Remembrance day on 21%, which is the other clear favourite. The battle of Trafalgar and the summer solstice came third and fourth respectively.

I am delighted that the Prime Minister heard my call for the flag of St George to be flown over Downing street in the summer. It is high time that the flag was taken back from those groups that are not worthy of it. Today could be a huge step in the right direction. If passed, the Bill could be of real benefit to social cohesion in England and Wales, and I hope that colleagues will join me in supporting it and making it a reality. It would be a very fine wedding present to both nations. I commend the Bill to the House.

Question put and agreed to.


That Nadhim Zahawi, Claire Perry, Nick Boles, Keith Vaz, Brandon Lewis, Andrew Rosindell, Jonathan Edwards, Simon Hughes, Sajid Javid, Mr Robert Buckland, Mr Brian Binley and Robert Halfon present the Bill.

Nadhim Zahawi accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 13 May and to be printed (Bill 128).

Point of Order

On a point of order, Mr Speaker. Yesterday, as noted at column 814 of the Official Report, the hon. Member for East Dunbartonshire (Jo Swinson)—I have notified her that I would raise the matter today—effectively said that I had misled the House in the previous Parliament on whether the Americans would be able to maintain cluster munitions on British territory, for instance in Diego Garcia. The Foreign Secretary wisely said that he had no evidence that the House had been misled, but that he had not been able to see the papers of the previous Government. For the complete avoidance of doubt, may I make it clear that it was our complete intention that there would be no American cluster munitions on British territories anywhere in the world? Can you advise me of how I can put that on the record?

Loans to Ireland Bill (Allocation of Time)

The amendment has not been selected, but there will be an opportunity for a debate, and if necessary a vote, on the main motion.

I beg to move,

That the following provisions shall apply to the proceedings on the Loans to Ireland Bill:


1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at today’s sitting in accordance with the following provisions of this paragraph.

(2) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three and a half hours after the commencement of proceedings on the Motion for this Order.

(3) Proceedings in Committee, on consideration and on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption or six hours after the commencement of proceedings on the Motion for this Order, whichever is the later.

Timing of proceedings and Questions to be put

2. When the Bill has been read a second time—

(a) it shall (despite Standing Order No. 63 (Committal of bills not subject to a programme order)) stand committed to a Committee of the whole House without any Question being put;

(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with paragraph (1) of Standing Order No. 52 (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;

(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.

3.–(1) On the conclusion of proceedings in Committee, the Chair shall report the Bill to the House without putting any Question.

(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Speaker or Chair shall forthwith put the following Questions (but no others)—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded.

5. On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

6. If two or more Questions would fall to be put under paragraph 4(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chair shall instead put a single question in relation to those amendments or Motions.

7. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chair shall instead put a single question in relation to those provisions.


8. Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.

9.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.

10. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

11.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to re-commit the Bill.

(2) The Question on any such Motion shall be put forthwith.

12.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(2) The Question on any such Motion shall be put forthwith.

13. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates) at today’s sitting before the conclusion of any proceedings to which this Order applies.

14.–(1) Sub-paragraph (2) applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.

(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.

15. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

16.–(1) Any private business which has been set down for consideration at 4 pm at today’s sitting shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill today.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before the moment of interruption, for a period equal to the time elapsing between 4 pm and the conclusion of those proceedings.

I do not wish to detain the House too long in moving the motion. It seeks the approval of the House to consider all stages of this important Bill in a single day. With the co-operation of the House, the Bill will make a major contribution to the United Kingdom’s declared international commitments.

Why do we need to expedite the Bill? The loan to Ireland is novel and large, and the Bill is needed to give the Treasury the necessary authority to advance funds to Ireland. The loan agreement will require the Government to obtain all necessary authorisations before the first draw-down on the loan can be made. The international package is to be discussed at the International Monetary Fund tomorrow, and it is important that the Government, the IMF and the other lenders can be sure that legislation will be passed so that they can assess the adequacy of the total support package, hence the desire to proceed as quickly as possible today. Passing the Bill will also provide certainty to financial markets that the UK’s funding package will be in place. It is in no one’s interest to create further instability.

I do not think that anybody wants to waste time on the timetable motion unless necessary, but if my hon. Friend were to provide an assurance that the Bill can and will be used only for a single bilateral loan to Ireland, and that it will not be used for any other purpose, that might help it on its way.

I do not wish to pre-empt the remarks that my right hon. Friend the Chancellor of the Exchequer will make on Second Reading, but I can provide that assurance to my hon. Friend.

The Bill is needed to provide statutory authority for the Treasury to pay out the funds involved. Any loan agreement is contingent on obtaining that necessary authority. In improving the overall package of financial assistance to Ireland, our international partners need to be sure that the UK will have the necessary legislation in place to allow it to fulfil its part.

Will the Minister clarify one point that confuses me? The Bill is entitled the Loans to Ireland Bill, but the explanatory notes, which I know are not binding, keep referring to, and imply that there is, a single loan. How many loans will there be to Ireland? Is there a limit?

As my right hon. Friend the Chancellor will say in his speech, the loan will be disbursed in eight tranches, if called on by the Irish Government. That is the reason why the title is in the plural rather than in the singular.

I was drawing my remarks to a close, because I am very conscious that every minute I spend at the Dispatch Box in this debate means a minute less on Second Reading, but I shall take one final intervention.

I, too, do not want overly to delay the House, but we are using an emergency procedure on a Bill that will not go through the same processes as other Bills. It is therefore all the more important that we ensure that we rarely use such a procedure. Will the Minister ensure that the Government do not use this procedure on future occasions, if similar arrangements have to be made for other countries?

It is important that there is proper parliamentary scrutiny of measures such as this. That is why we sought to agree the timetable through the usual channels, and to ensure that there is time to debate amendments and that the Bill goes through the normal process of scrutiny. Given that the Bill is shorter, it can be scrutinised in a shorter period of time without compromising scrutiny. That is why I believe that we can deal with it today. I urge the House to support the programme motion.

I have a lot of respect for the Minister; he is one of the most able in the House. [Hon. Members: “ Hear, hear.”] However, it was not his best speech.

The hon. Member for Rhondda (Chris Bryant) made a point about emergency measures, but the Minister did not call the Bill an emergency measure—he just said that it is an important Bill and that it be would rather nice to get it through quickly. It is absolutely true that the Bill is not an emergency measure and there is no such urgency for it. However, it is not the duty of the House to say to the Executive, “It will be jolly nice to get the Bill through quickly.” We are here to scrutinise the Bill. It matters not what team Back Benchers are on: they are here to hold the Government to account. I said that as an Opposition Member and I shall say it as a Government Member. The Minister remarked that the longer he spoke, the more he would eat into time on Second Reading, but the Government designed the allocation of time motion in that way. When we were in opposition, we said that that such remarks were appalling, and they are also appalling in government.

This motion contains one of the most draconian guillotines we have ever seen in Parliament. It contains 16 separate restrictions on debate, it is longer and has more words than the Bill itself, and it is designed purely to restrict debate and to remove the right to vote on amendments in Committee. I am afraid that it is as bad as those we used to see under the previous Government. It is rubber-stamping at its finest. The motion proposes to rush through legislation at a speed that would win approval in North Korea and to take Parliament for granted.

This is not my first time scrutinising a Government who are trying to rush a Bill through Parliament. Coincidentally, the circumstances of a debate on a Northern Ireland Bill on 4 March 2009 were very much the same, in so far as the Government tried to rush through a Bill in one day when, as now, it was not necessary to do so. Therefore, I feel that we have come full circle. Here we are with a different Government—a coalition Government—who are trying to rush through another Bill.

As a trained chartered accountant, I am rather partial to my numbers. Therefore, I would like to read out a few. Three and a half hours is the amount of time that Parliament is being given for the Second Reading debate of the Bill; £3.25 billion is the minimum amount that the Bill proposes to give the Republic of Ireland; and zero is the probable chance that the House of Lords will be able to scrutinise it, because it will most likely be certified as a money Bill. Let me expand on those three figures. Three and a half hours for Parliament to debate a Bill on Second Reading—actually, I should have said that three and a half hours is the maximum time that we are being given, because the time starts from the moment that the allocation of time debate starts. If the allocation of time debate runs its full course and there is a Division, the time for a Second Reading debate on a Bill that proposes spending £3.25 billion will be a maximum of 15 minutes. The Chancellor will not have cleared his throat in 15 minutes. In other words, we will be spending £216 million a minute during that debate.

One could argue that none of these things matters—we saw it all the time in the previous Parliament—because we have the backstop of the other place, which cannot limit debates, and Members can scrutinise the Bill clause by clause and vote on amendments. Unfortunately, that is not the case with this Bill: because it will be certified as a money Bill, there will be limited time for debate in the other place. We therefore do not have the backstop, so it is up to this House to scrutinise the Bill properly. This is a most draconian guillotine motion and is entirely unnecessary, and I intend to try to divide the House on this most important matter. Whether one is for or against the principle of the Bill—or, indeed, whether one is indifferent to it—we as parliamentarians must demand proper time for debate.

It is important to set out the reasons why all stages of the Loans to Ireland Bill should not take place on one day. Let us consider the circumstances under which the Government can legitimately push their legislation through all its stages in one day. I understand that in national emergencies, such as those relating to terrorism, the swift progression of a Bill through Parliament is needed. However, the Loans to Ireland Bill is not one of those Bills. Since 1997, only a handful of Bills have been pushed through the Commons in one day alone. The last one was the Northern Ireland Bill in 2009, which I referred to a few moments ago, but let us look at the typical Bill that has gone through in one day and the precedents that this motion creates.

On 4 April 2001, the Elections Bill went through all its stages in one day, owing to the national crisis caused by the foot and mouth epidemic. Clearly that is not a reason for the Loans to Ireland Bill to go through in one day. On 2 September 1998, Parliament was recalled from its summer recess to pass all stages of the Criminal Justice (Terrorism and Conspiracy) Bill, as an urgent response to the terrible Omagh bombing. Again, that does not apply to today’s Bill. On 19 February 2008, the Banking (Special Provisions) Bill was passed in relation to Northern Rock, and therefore needed to be rushed through the Commons. The House sat until midnight on that day, which I understand was because of market sensitivity. Again, that does not apply to today’s Bill. None of those exceptional circumstances applies to the Loans to Ireland Bill. If this guillotine motion goes through, the Government will have set a dangerous precedent for curtailing debate and excluding proper parliamentary scrutiny on controversial issues.

I was intrigued to hear the hon. Member for Harwich and North Essex (Mr Jenkin) say in his intervention on the Minister that we should not waste any more time on the motion than is necessary. Does the hon. Gentleman agree with his hon. Friend, and is he as intrigued as I am to know under what circumstances time wasting would indeed be necessary?

This Government have put us in a Catch-22 situation, which the previous Government used to put us in too: time for debating guillotine motions is taken out of time on Second Reading. That never used to happen; it was something that the previous Government got into the habit of doing. That means that all these people on the Government Benches want me to shut up, so that we can get on with Second Reading. [Hon. Members: “Hear, hear.”] Well, my colleagues behind me are going to be disappointed. The newer Members of this Parliament are going to learn—I know that they are keen on this, because they want parliamentary scrutiny, not rubber-stamping—that there is a simple way for all my colleagues on the Government Benches and for Opposition Members to get into the debate, which is to defeat the guillotine motion in a vote.

We may have heard one or two “Hear, hears”, and I am certainly someone who wants to speak on Second Reading, but let me make clear my appreciation for what my hon. Friend is doing. Any responsibility for the curtailment of time for Back Benchers should rest squarely where it belongs, which is with those on the Treasury Bench.

I am grateful to my hon. Friend for his support. If we do not get it right today, this coalition Government and future Governments will use the same trick again and again.

What I am doing is not a wrecking manoeuvre; nor is it about stopping the Bill from making progress. All we need to do is defeat the guillotine motion now, and then there will be a full Second Reading debate, followed by the Committee stage and Third Reading. The current situation is an abuse of Parliament and its democracy. Normal rules are being abandoned so that the Government can get things through on the nod. Surely I am not mistaken that the only possible reason for proceeding today would be if the Minister had written a cheque for £3.25 billion last night and handed it to the Irish Government. Then I might be inclined to agree that we should get on with things today. However, the Minister does not seem to be leaping to the Dispatch Box to confirm that.

One argument for pushing the Bill through could be the lack of space in the parliamentary calendar and an inability to spare any more time to debate it, but we all know that that is not true. Even with recess upon us, we could have abandoned the Backbench Business Committee debate tomorrow—Thursday—and had the Committee stage and Third Reading instead. However, if that was not the flavour of the will of the House, we could have used Monday, for which a general debate is listed. If the general debate were abandoned, Government business would not be lost, and the debate could be rescheduled for another time. Alternatively, if there really is an emergency and the Bill really does need to be progressed now, let the House sit this Friday until the business is complete.

Parliament could be allowed a full day on Second Reading, which would occur after the allocation of time motion were defeated, and the Government could then choose Thursday, Friday or Monday for Committee and Third Reading. That would in no way hold up progress; nor could it be interpreted as letting our friends in Europe down. Indeed, the idea that they do not take our word for it that the Government are serious is also, I have to say, not believable. If the Government say that they are going to give £3.25 billion to Ireland in a loan, they know that that is what will happen, so that argument is just an excuse to push the Bill through in one day.

Clearly the issue at hand is not whether the Government will give £3.25 billion to Ireland. However, the Minister did not necessarily make it clear in his response to the hon. Member for Harwich and North Essex (Mr Jenkin) whether money would be going just to Ireland, or to Portugal or Spain in future too. Could the hon. Gentleman give us his views on that?

Mr Speaker, you would rightly tick me off if I answered that question. That is a matter for the Second Reading debate, because it is to do with the issues in the Bill. I am expressing no view on that at the moment. However, unless we have adequate time to discuss those issues, the hon. Gentleman’s point might not be clarified.

Lack of parliamentary time cannot be an excuse for this motion. The advantage of splitting the debate over two days is that it would allow a proper debate on Second Reading today. I believe that many Members would like to take part in such a debate. It would also allow amendments to be tabled in the normal way, and enable us to have a proper debate in Committee, with time for a debate and votes on each of the amendments. There would also be time for a Third Reading debate.

I understand that the Government have tabled a manuscript amendment today, although I have not seen it. That amendment has been tabled without allowing Members the time to consider it. That just shows the weakness of this procedure. If the allocation of time motion were defeated, we would have a full Second Reading debate and the Government would have to rearrange their business to provide for the Committee stage and Third Reading. The loan would still go through, but the Bill would have been properly debated and, if necessary, amended. Defeating the allocation of time motion would not wreck the Bill; it would simply give more time for proper scrutiny so that the Bill could be improved. We have already seen that the Government have tabled a manuscript amendment. What will happen if, during the 15 minutes of the Second Reading debate, a Member decides that they want to table an amendment? They just will not have time to do it.

How does the motion fit in with the principles behind parliamentary sittings? The present timetabling of our sittings is broadly based on the Jopling reforms and encompasses three principles. It is against those three principles that we should judge the Bill today. The first is that the Government must be able to get their business through, and, within that principle, ultimately control the time of the House. Secondly, the Opposition must have the opportunity to scrutinise the actions of the Government and to improve or oppose legislation as they think fit. Thirdly—this is of more interest to me—Back-Bench Members on both sides of the Chamber should have reasonable opportunities to raise matters of concern from their constituents. A number of my constituents have contacted me with concerns about this Bill.

A major role of Members of Parliament is to scrutinise and review legislation. It is a well-known fact—I doubt that anyone in the House would disagree with this—that the better the scrutiny, the better the Bill. It is also a major role of Members of Parliament who are not members of the Executive to hold the Executive to account, whichever party or parties make up that Executive. That is one of the most important roles we have as Members of Parliament. This motion removes that role. It is appalling that the coalition Government should try to stifle that essential function. I have long campaigned for more transparency and debate in Parliament. I strongly believe in strengthening the role of the Back Bencher. The erosion of parliamentary power to scrutinise legislation has been a long-adopted approach by successive Governments. This motion, I am afraid, is a step too far. Individual Members of Parliament attach a great deal of importance to scrutiny and accountability, and problems arise when the Executive try to deny us that right.

The Government have declared that amendments must be tabled before Second Reading, which is ludicrous. They ask MPs to table amendments before we have had a chance to hear what the Minister has to say. How can MPs properly table amendments when they have not heard the details and the arguments? Despite that difficulty, 11 amendments have already been tabled. The Government were forced to produce a three-page document—I have it with me—of amendments, and another five-page document on their justification for rushing the Bill through. These documents were produced only in the last few days. How can they, and the amendments, realistically be scrutinised if the Bill goes through all its stages today? It is just not possible.

The House of Lords got rather fed up with the Commons bouncing it, so it has now come up with a procedure whereby the Government have to answer a number of questions—I think it is eight—before they can get a Bill such as this through. Those questions are printed in the explanatory notes to the Bill. Let us look at some of them for a minute, and see whether the answers hold up to scrutiny.

The first question is: “Why is fast-tracking necessary?” The notes go on to explain that the proposal is for a bilateral loan, and that the timing of the UK’s proposed loan is currently unclear. They state:

“It is necessary to fast-track the Bill so that the UK’s international partners can be confident that the bilateral loan will be implemented.”

That is an absolutely hopeless answer to the question. It does not tell us why the Bill is being fast-tracked. It is ridiculous to suggest that our international partners would think that, because we had not taken another day or two to debate the Bill, the Government were not going to proceed with the loan.

The next question is:

“What is the justification for fast-tracking each element of the Bill?”

Again, there does not seem to be an answer. The notes state:

“The Bill is a short Bill, with few substantive provisions other than to provide for sums required by the Treasury”.

Yes, the Bill is short because many of the provisions deal with statutory instruments and affirmative resolutions. It is an important Bill, but it is short because many of the provisions do not go into detail. That is exactly why we need a proper Second Reading debate. I do not think that the Government have answered that question either.

The next question is a good one:

“What efforts have been made to ensure the amount of time made available for parliamentary scrutiny has been maximised?”

The answer is:

“The Bill is being published on the same day it is introduced and arrangements are being made for amendments to be accepted in advance of second reading in the House of Commons.”

How on earth does that answer the question about making time available for parliamentary scrutiny? It is like the Prime Minister being asked a question at Prime Minister’s questions and giving an answer to a completely different one. It might be a good answer, but it is not the answer to the question that was asked.

The next thing that the Lords want to know is this:

“To what extent have interested parties and outside groups been given an opportunity to influence the policy proposal?”

The answer talks about our European Union colleagues, but the key is in the last sentence, which states that

“there has been limited opportunity to give interested parties and outside groups an opportunity to influence.”

By the Government’s own admission, they have failed in regard to that question.

The next question asks whether the Bill includes a sunset clause. The Government can argue, with some justification, that it does, because it stipulates a period of five years. It does not tell us when the loans are to be repaid, but it places a five-year limit on the period in which they can be made. That is not what is normally understood by a sunset clause, however. Sunset clauses normally stipulate that in, say, a year’s time, Parliament will look again at the legislation to see whether it is correct.

The next question is:

“Are mechanisms for effective post legislative scrutiny and review in place? If not, why do the Government judge that their inclusion is not appropriate?”

The answer states:

“The Bill provides for regular reports”.

On that one, I will give the Government a tick. So far, they have passed one of the six tests. The next question is:

“Has an assessment been made as to whether existing legislation is sufficient to deal with any or all the issues in question?”

The Government do not really answer that one. They say:

“Statutory authority for such expenditure is required in accordance with the Concordat of 1932 between the Government and the Public Accounts Committee.”

I am unclear as to what that means, but it does not seem to answer the question that has been asked. The final question is:

“Has the relevant Parliamentary committees been given to opportunity to scrutinise the legislation?”

The explanatory notes were drawn up in such haste that the spelling of the question was incorrect, but the simple answer to it, as I hope my hon. Friend the Member for Stone (Mr Cash) might confirm, is that no such scrutiny has taken place.

In concluding my opening remarks, I want to say a few words about what I think is wrong. Let me state to the House how this mother of Parliaments should work in relation to timings of debates. The driving principle of reform should be the redistribution of power—from the powerful to the powerless. That means boosting Parliament’s power to hold the Government of the day to account. The House of Commons’ historic functions were to vote money for Governments to spend, and to scrutinise laws. It now barely bothers with the first, and does the second extremely badly. There was a time when legislation that had been formulated after months of civil service and ministerial deliberation was sent to the House of Commons which would pore over it, shape it and send it back, get it back, look at it again and improve it some more—Bill by Bill, clause by clause, line by line. Every piece of legislation would be put under intense scrutiny. Is it legally sound? Will it be effective? Is it worth the cost?

Let us compare that with today. Let me take Members on the journey of a piece of legislation as it passes through the modern House of Commons. It is likely to have been dreamt up on the sofa of No. 10. A Bill is drafted and it is sent to the House for a couple of hours of routine debate among a few MPs. Then the bells ring, the whips are cracked and suddenly, out of nowhere, all the Members turn up to vote. More often than not, they do not even know what they are voting for. The Bill limps through. Then it goes into Committee. The Committee’s duty is to look at the detail clause by clause, but it is packed full of people that the Whips have put there. So, surprise, surprise, the Government rarely lose a vote on any of the individual points of detailed scrutiny. Then it is back to the House to do it all again—debate, bell and then vote to wave the legislation through.

Every Bill now has a programme motion setting out how much time can be spent scrutinising and debating each part. There are automatic guillotines, and the time allowed for scrutiny is set in advance, before anyone can see whether or not a particular issue is contentious or complex. Watching a Minister in the Commons drawing out one point for an hour to fill the time, to an audience of dozing Back Benchers—that is not accountability. How can the mother of all Parliaments turn itself into such a pliant child?

Unfortunately, I cannot claim credit for that last section of my speech. It was in fact from a speech on fixing broken promises delivered on 26 May 2009 by my right hon. Friend the Member for Witney (Mr Cameron). I do not think that Ministers on the Front Bench today want to upset the Prime Minister. So they have an opportunity, before the conclusion of the debate, to say that they will withdraw the allocation of time motion, and that we will have proper debate.

For many years I have sat on the Back Benches imploring others to give more time for Parliament to scrutinise legislation. I believe that to be the fundamental role, not only of the Back Bencher, but of Parliament itself.

I am most grateful to my hon. Friend for giving me the opportunity to say just how much I stand behind the Prime Minister in his remarks, which my hon. Friend has so generously shared with the House. However, does my hon. Friend agree that if this bail-out is necessary at all, it is an emergency?

My hon. Friend is tempting me to enter the debate, which I am not going to do, and as time is short, I shall conclude my remarks.

Time is all we have as Back Benchers, and if that is taken away from us, so is power. I urge all parliamentarians in the House to vote against the guillotine motion.

I shall be brief. I want to commend the hon. Member for Wellingborough (Mr Bone) for his absolute consistency. The speech that he has just delivered is one that he would have delivered, and perhaps did deliver—certainly the gist of it—many times when he sat on the Opposition Benches. The points that he raises are extremely important in the general context of how Parliament operates.

I do not want to say a great deal about the Bill because we shall come to Second Reading shortly, but I will say this. We are used to having Northern Ireland business rushed through—sometimes for good reasons, sometimes for not so good reasons. I have had various discussions with the Secretary of State for Northern Ireland and others relating to important matters that we believe require legislation, not least an issue that was extremely important during the run-up to the general election—the fact that Members of this House who do not take their seats continue to claim lots of money for parliamentary purposes—and we were told that time would be made available to debate that, and for the House to have its say. We were also told that legislation on the issue of dual mandates would appear. Yet I am now told that the Government cannot do any of that because “there isn’t any time”.

The only point that I want to raise is this. The hon. Member for Wellingborough has spoken at great length, but the bottom line is that the Government will do what they will. The notion that “there isn’t any time” to do the necessary things and important things that have been laid out by the Government in relation to Northern Ireland is simply not tenable, given the fact that here we are today, setting time aside to rush through all stages of a Bill—I will not get into the merits of it; we will come to those—in one day. I say to the Government, especially the senior Members on the Treasury Bench, that they should reflect on the fact that we are being told that other important things cannot be done. It is clear that they can be done and should be done, and I urge the Government to take action as soon as possible.

There is one element of the guillotine motion that I particularly resent. That is the provision that if a group of amendments is being discussed when the guillotine falls, it will not be possible to vote on any more than the question that was before the House at that time, whereas under a traditional programme motion it would be possible, with the leave of the Chair, to vote on more than one of the amendments in the group.

My hon. Friend the Financial Secretary to the Treasury says he thinks it is reasonable that we should have the opportunity to give the Bill proper scrutiny. In my submission, scrutiny includes having the opportunity to test the view of the House on amendments before it. My concern is that if all the amendments are grouped together, and if the debate on that group carries on until the guillotine falls, it will only be possible to vote on one narrow amendment—amendment 3—although of course the guillotine motion allows the Government amendment to be voted on as well, because those are the biased terms in which the motion has been drafted.

The Bill is a very significant measure. I have had letters from constituents asking, “How is it that we can afford to lend £3.25 billion to Ireland when the Government are saying that they cannot do anything to make more money go to small businesses that are crying out for loans?” That is the sort of question that our constituents are asking, and I would have hoped that the Government would be more co-operative with the House by providing a bit more detail in the Bill.

We have heard that the Chancellor will be telling us in due course about the terms of the loan, the interest rate and the repayment schedule. Why could not those details have been included on the face of the Bill, to enable us to make an assessment and decide whether to table amendments? If the Government are really saying, “This is so desperately urgent that we need to do it straight away,” why were they not prepared to co-operate with the House a bit more and give us the maximum amount of information to enable us to deal with it in a constructive way today?

I am very concerned, and my hon. Friend the Member for Wellingborough (Mr Bone) has articulated the wider constitutional implications. We know that the other place was very concerned about the fact that the Government were taking forward a lot of emergency measures without giving the opportunity for proper debate and consideration—and that applied not just to money Bills but to other Bills too. This is a money Bill, so it will not be possible for the other place to consider it in detail. That responsibility falls fairly and squarely on this House.

We got a guarantee from the Government that if there was going to be fast-tracking or emergency legislation, the justification for it would be set out in the explanatory notes. I do not think the justification given in these explanatory notes is a justification for what the Government are trying to do today.

If this Bill were to be considered tomorrow or on Monday, we would have more time to debate it. Incidentally, we would also be able to consider what the Members of the Irish Parliament are saying on this very subject in their House today. If, for example, many of them were to say that they would not wish to repay the loan given to them by the United Kingdom, I would have thought that would be a very material consideration in our debate on the matter, but this motion denies us the opportunity to consider the implications of what transpires today in the Irish Parliament. I suspect that is not an accident; I suspect it is by design. That is why I will vote against this guillotine motion.

I wanted to intervene on my hon. Friend the Financial Secretary to ask for a further assurance. I am minded to support my hon. Friend the Member for Wellingborough (Mr Bone) by voting against this motion in the Lobby if there is a Division. However, I might refrain from doing so if my hon. Friend the Financial Secretary were to rise to his feet and assure me that the measures in the Bill could not be used to lend to Ireland through another international institution, such as the European Union. I would be grateful for that assurance.

Loans to Ireland Bill

[Relevant document: The uncorrected oral evidence taken before the Treasury Committee on Wednesday 8 December 2010, on Autumn Forecast, HC 664-ii.]

Second Reading

I beg to move, That the Bill be now read a Second time.

Two weeks ago I told the House that it was my intention to ask for authority to make a bilateral loan to Ireland as part of the multinational assistance programme for that country. I said that I judged it to be in our national interest, given our country’s close economic, financial and political connections to the Irish Republic, to be ready to help, and I want to thank all parts of this House for agreeing with that judgment.

Let me directly address the question of why we are taking this legislation through today, and why we are seeking to do it rapidly. The reason is that this week we expect the International Monetary Fund board to meet and agree the assistance package, the eurozone to sign off on its contribution, and the Irish Parliament to accept the international help that is offered. Let me say this to hon. Members in reference to the previous debate. I actually have the authority to make, under common law, a loan to Ireland and to seek at a much later date retrospective authority from Parliament. I decided—[Interruption.] Let me say that I decided that that was a wholly inappropriate thing to do, and that I should come to Parliament to seek its authority before signing the loan agreement. The loan agreement may be signed at any moment.

I am grateful to the Chancellor for giving way, but has he not let the cat out of the bag? He has just said that there is no urgency, because he had the power to do this anyway. If that had been said in the previous debate, the result of the vote might been different.

From what I could tell from what my hon. Friend was saying in the previous debate, he thought it important to have parliamentary scrutiny. It is true that I could have issued the loan under the common-law powers available to me, and come back at a later point to seek parliamentary approval. I thought the House would prefer me to seek parliamentary approval first, before making the loan—but there we go; you can’t please everyone.

The Chancellor suggested that it is at his discretion that he has brought forward this Bill. Is it not the case that the 1932 convention requires him to do so—and does not that, rather than his discretion, explain why this legislation is before the House?

I thank my right hon. Friend for giving way. Setting aside the technicalities of why we are debating this measure and how long we shall do so, and getting down to the substantive issue of the loan, can the Chancellor share with the House what the fees and the interest to the UK Government will be over the period of the loan if the Irish Government draw down the whole of the loan?

The second intervention draws me back into the rest of my speech, but in response to my hon. Friend the Member for Clacton (Mr Carswell), I have common-law powers to issue the loan and sign the loan agreement. I then have to seek statutory authority, but that could be done retrospectively. I thought it more appropriate to seek parliamentary approval first, and that was a discretionary choice that I had.

I will answer my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) directly a bit later in my remarks, when I get on to the terms of the loan that we are going to consider.

I am grateful to my right hon. Friend. If the point that he is making is such a good one—it may well be—why did he not include it in paragraph 14 of the explanatory notes, making a virtue of the fact that he was bringing this matter before the House now rather than seeking retrospective approval?

I said in an earlier statement to the House that I was seeking to do that, and I had hoped that hon. Members were paying attention to what I said at the time.

The legislation that we shall pass today will allow the UK to be ready in the new year to meet its commitments to one of our closest international partners. As has been noted, the legislation before the House is narrow in scope—it is explicitly a Loans to Ireland Bill—but it is still enabling legislation. It sits alongside the actual loan agreement, which sets out in detail what we will offer Ireland. To ensure that Members have as much information as possible available to them for today’s discussion, a summary of the key terms of the loan agreement, which was agreed with the Irish Government only this morning, has been available in the Vote Office for more than an hour now.

If my hon. Friend will allow me, I will make a bit of progress and then of course take some further interventions.

In my remarks today, I intend to address both the substance of the legislation and the loan agreement, but before that let me briefly say something about how we got here. Over the course of this year, it became increasingly clear that the situation in the Irish economy was unsustainable. Their sovereign debt markets had effectively closed and had little prospect of re-opening. Ireland’s market interest rates had risen to record levels, and Irish banks had become almost wholly reliant on central bank funding to maintain their operations, with no obvious prospect that that was going to change. This situation simply could not go on. We had been monitoring the situation for many months and had engaged in confidential discussions with our partners in the G7 and at ECOFIN about possible solutions.

Over the weekend of 20 November, Ireland’s Prime Minister made a formal request for international financial assistance. The UK, alongside the International Monetary Fund, the EU, the eurozone and some other member states—Sweden and Denmark—made an agreement in principle to take part in putting together an assistance package for Ireland. Since then, the various interested parties have been working round the clock with the Irish authorities to put together a package. Officials from the British Treasury have been in Dublin in recent days ensuring that our interests and concerns were represented, and I want to thank them for their hard work. At the end of November, Ireland agreed with the IMF and the EU a three-year financial assistance package worth €85 billion.

The document to which my right hon. Friend just referred is “for information purposes only” and is clearly not intended to be construed as part and parcel of the Bill. So can he explain why in the document the “conditions precedent” to the arrangements interweave the so-called “bilateral loan” with the European financial stability mechanism, and why an attempt is then made to bypass that by referring to the “Governing law” as “English law”?

I am going to discuss some of the conditions attached to the loan. The particular condition that my hon. Friend refers to ensures that the UK is protected if other parties to this international agreement change their arrangement with Ireland in some way that materially affects our ability to be repaid. That condition gives us an ability at that point to step in.

My right hon. Friend is perhaps confirming my concern, which is that the interweaving of the conditions between the so-called “bilateral loan” and the mechanism is such that they are, in effect, inseparable, so European Community law could well apply.

I know that my hon. Friend is assiduous on these points, but I think that on this occasion he is not correct. This is simply a fall-back mechanism for us to say that if Ireland in some way renegotiates its loan from the eurozone, from the EU or from the IMF, it is a condition of our loan to Ireland that we can step in at that point and examine our situation. That protects the British taxpayer and has absolutely nothing to do with European law or anything else; it is simply there to make sure that other parties to this international agreement must have due regard to what they are doing, and how that might have an impact on the ability of the British taxpayer to be repaid.

Two things are happening in Ireland at the moment. The first is that austerity reigns and the economy is going down on a daily basis. The second is that a whiff of elections is in the air. The right hon. Gentleman talks of renegotiation, but is it not a fact that renegotiation of a new Government in Ireland is very much on the cards?

Obviously we are not going to prejudge the outcome of any Irish general election. Of course we—not just us, but the IMF and others—negotiate with the Government of the day. Although the principal Opposition parties in Ireland have concerns about the Irish budget and the like, I understand that they have accepted the principle of international assistance, and the IMF has been in direct contact, and has engaged in discussions with them. The international community, including the UK, is satisfied that we are in a position to make this offer to the Irish Government, which is why I am bringing the Bill to the House today.

As I was saying, Ireland agreed to seek IMF and other support worth €85 billion, and the money will be used as follows: €35 billion will be used to support Ireland’s banking sector, with €10 billion going towards immediate bank recapitalisation; and the remaining €50 billion will be used for sovereign debt support. In terms of contributions to the cost of the package, Ireland itself will provide €17.5 billion towards the total. The remaining €67.5 billion will be split, with one third coming from the IMF, one third from the European financial stability mechanism, and one third from the eurozone facility and bilateral loans from the UK, Sweden and Denmark. I have agreed that our contribution should amount to €3.8 billion, or £3.25 billion at today’s exchange rate.

This significant package will help Ireland to deal decisively with its problems. It will help it to recapitalise its banks and set up a contingency reserve for future problems. It will also help the Irish authorities to cover the shortfall in their budget, which was passed by the Irish Parliament earlier this month. Their budget will see a fiscal consolidation of €15 billion by 2014, of which €6 billion will be implemented next year, as part of their strategy leading to a target budget deficit of 3% of gross domestic product in four years’ time.

Of course people ask why we are extending the loan to Ireland. We are doing so because it is overwhelmingly in our national interest to have a strong Irish economy and a stable banking system. This is not just about the Irish economy and Irish jobs; it is about the British economy and British jobs. A loan does not add to our deficit, and any increase in borrowing is matched, of course, by the commitment of the Irish to repay with interest. The answer to the question asked by my hon. Friend the Member for Stratford-on-Avon earlier is that if Ireland takes out all the loan that is being made available to it and pays it back with the interest that has been forecast, it would pay us £440 million in fees and interest over this period.

Let us remember that Ireland is the fifth largest market for British exporters and accounts for 5% of our total exports abroad. An interesting way for the House to think about it is that every man, woman and child in Ireland spends an average of £3,600 per year on British goods—that is how connected our economies are. Indeed, as has often been pointed out, we export more to Ireland than to Brazil, Russia, India and China put together, although we are trying to increase our exports to those four very large emerging markets. For some of our industrial sectors, such as food and drink or clothing and footwear, Ireland is our top export market. Ireland is also the only country with which we share a land border, and in Northern Ireland our economies are particularly linked, with two-fifths of exports going to the Republic.

I wish to reassure Members representing Northern Ireland that I am very aware of their constituents’ worries and the difficulty they face as a result of the problems in Ireland. That is why my hon. Friend the Financial Secretary recently visited Belfast to discuss these issues directly. I am open to any discussions that Members from Northern Ireland wish to have with me or the Treasury about the economic situation and indeed the banking situation in Northern Ireland. Just as our two economies are linked, our businesses and banking sectors are also interconnected. More Irish companies are listed on London exchanges than companies from any other foreign country. The two main Irish-owned banks have an important presence in the UK, holding between them about £30 billion of customer deposits. In Northern Ireland, two of the four largest high street banks are Irish-owned, accounting for almost a quarter of personal accounts.

My right hon. Friend has stressed the importance of the export market and our strong links with Ireland. So why did he find it necessary for paragraph 6(h), under the heading “Events of default”, in the summary document to set out that

“the Borrower not being or ceasing to be a member of the European Union”

would constitute a default? I would hope that we would support Ireland if we chose to do so, and not bind it into necessarily having to stay in the European Union, given the length and operation of the loan.

It is merely an observation that the fact that Ireland is a member of the European Union is not why we are making this loan; it has nothing to do with that. It has to do with the fact that Ireland is deeply connected to us. Indeed, we have just made a loan agreement with Iceland, which of course is not a member of the European Union, in order to seek to recover moneys that were spent on savers in Icelandic banks here in the UK.

As this crisis was triggered by the withdrawal of European Central Bank support for Irish banks, will the Chancellor give us an assurance that we will not be involved in any further refinancing of ECB liabilities should it do the same to another country?

I had a very specific choice. I had the opportunity—of course, I would have had to seek the authority of the House—to introduce a general Bill to allow me to make bilateral loans to any number of countries. That legislation would have been very easy to draw up, and it would have been easy to ask the House for its support. I have explicitly restricted this to a Loans to Ireland Bill because of the specific connections between our two economies.

May I confirm what the Chancellor has just said? The UK contribution to the entire package will be about 5% of the non-Irish contribution—about £3.5 billion—and that stands in comparison with some £12 billion of exports to Ireland, and, as he said, the Irish banks holding some quarter of the deposits in Northern Ireland. Is that the broad summary of where we are?

It is a reasonable summary. Of course we stand behind the International Monetary Fund as a shareholder of it, as are most countries in the world. I shall come on to the European financial stability mechanism, which I have already talked to the House about on a number of occasions. Like other contributors to the EU budget, we stand behind it. In a sense, the loan that we are proposing today is the direct British taxpayer contribution—or rather, the money that is borrowed on behalf of the British taxpayer. I shall come to the terms of the loan, but of course we expect to be repaid, and repaid with interest. We are doing this because we think it is absolutely in our national interest, for some of the reasons that have been set out.

On that point, may I welcome the fact that the Bill is before the House today and that approval is being sought before the loan is made? Will my right hon. Friend explain how we came to be part of the European financial stability mechanism, what approval the House gave to it and what level of debates there were about it?

As I explained to the House previously—my predecessor, the right hon. Member for Edinburgh South West (Mr Darling) is here, and might at some point want to give his own version of events—my understanding is that in the period between the general election and the formation of the Government, an emergency ECOFIN meeting was held to address the Greek situation and to provide confidence that the European Union and the eurozone stood behind other member states that were potentially in difficulty.

My predecessor ensured that we stayed out of the eurozone facility—I have acknowledged that in the House —but acquiesced in the use of article 122 of the treaty, which allowed the European Union to disburse funds when a natural disaster, such as an extreme weather event, was affecting a member state, to create a mechanism that could stand behind countries that got into difficulties. The decision on the use of that mechanism is taken by qualified majority voting, so although we could vote against its use in this situation, I did not think that that would achieve anything. I am focused, in a way that I shall describe, on trying to extricate the UK from the EU-27 mechanisms that stand behind eurozone countries. If hon. Members will bear with me, I shall talk about that later, and if people want to intervene at that point, that would be more sensible.

Let me move on to the connections between our banking sectors. Our banking sector has a considerable exposure to Ireland, but I should stress that in the opinion of the Financial Services Authority, the UK banks are sufficiently well capitalised to more than manage the impact of the situation in Ireland. For a long time now the devaluation in Irish asset values has been accounted for and priced in.

One thing is clear. It is undoubtedly in Britain’s national interest to have a growing Irish economy and a stable Irish banking system. In the judgment of both the Irish Government and the international community that was not going to come about without the assistance package we debate today. I would now like to explain to Members the principles of the Bill, and then take them through the heads of terms of the loan agreement.

The Bill has two substantive clauses. Clause 1 sets out the parameters under which the Treasury may make payments under UK loans to Ireland. As I explained earlier, the total international assistance package, including our contribution, is denominated in euros. However, we are making a bilateral loan in sterling so that Ireland bears the exchange rate risk over the coming years. Subsection (3) of the clause includes a cap on the total size of our bilateral loan. It is written on the face of the Bill that

“the aggregate amount of payments made by the Treasury by way of Irish loans...must not exceed £3,250 million”.

In other words, the £3.25 billion we originally agreed will be the maximum total size of our bilateral loan to Ireland. A sunset clause is also, in effect, built into the legislation. The period over which the loans may be offered begins on 9 December 2010, when the Bill was published, and ends on 8 December 2015.

Subsections (4) and (5) seem to say the opposite. They seem to say that the maximum amount may increase because of differences in the exchange rate. Is that not what they mean?

My hon. Friend is pre-empting my speech. I shall get on and explain exactly what those two subsections mean.

As I said, there is no expectation that we will have to make further loans to Ireland in the future. Subsection (4) is intended to prevent an increase in the size of the loan, unless an order is made by statutory instrument, but because the loan is denominated in sterling, a mechanism is needed to accommodate potential changes in the exchange rate in the period between the publication of the Bill and the signing of the loan agreement—that answers my hon. Friend’s point—which could happen in a matter of days. This is not about the exchange rate risk over the coming years—that risk is borne by Ireland—but merely a mechanism to deal with the fact that we are publishing the Bill before we sign the loan agreement, for the reasons that I set out earlier.

The Bill allows the Treasury, under subsections (5) to (7), to make an order once the Bill is in force to increase the limit, as long as that is done solely to take account of exchange rate fluctuations between now and 30 days after Royal Assent, without further Parliamentary procedure.

I am sure that my right hon. Friend will understand my saying that it would have been so much simpler if what he has just said had been specified in the Bill, instead of a blanket wording referring to substituting a greater amount. We would have then known that that was only intended to allow a margin of error depending on currency fluctuations. Subsection (4) is absolutely clear that there is no restriction.

No, let me explain. There are two separate subsections. Subsection (4) allows the loan to be increased substantively, but only with the authority and vote of this Parliament. If I were ever to seek a larger loan to Ireland, I would have to come here and get the vote of the House of Commons. That is what subsection (4) is about. I am making it clear that I have no intention at the moment of doing that, but subsection (4) provides for it, and would prevent us from having to pass further primary legislation. The protection for Members of Parliament is the same—they can keep a check on the Executive—because I would be required to get that affirmative resolution.

Subsections (5) and (6) refer to something different, which is the gap between the passage of the Bill and the signing of the loan agreement. There might be small movements in the exchange rate. We have signed up to this package of a contribution in euros, but we are making a sterling loan. As I explained earlier, I had the opportunity to sign the loan agreement and come retrospectively to seek parliamentary approval, but I am trying to do it the other way around because it gives Members of Parliament a much greater degree of control. That is why these two subsections are required.

I will be supporting my right hon. Friend in the Lobbies tonight, but I am slightly concerned about clause 1(4), which is rather open-ended about the amount that could be paid. Even though a change would have to be passed by the affirmative resolution, I think the Chancellor would confirm that would be agreed by only a very small number of Members and not the entire House.

My hon. Friend has a deep knowledge and experience of issues in Northern Ireland, and indeed the Republic, and I know that his Select Committee will be interested in what is happening with those economies. Let me reassure him that there would be a vote by all Members of the House if I, or any successor of mine—should there be one before 8 December 2015—ever sought to increase the loan. A vote in Parliament would be required, so the effect is exactly the same as asking Parliament to pass another piece of primary legislation. It would involve a vote of the House, which means the legislature exercising its control over and acting as a check on the Executive.

Will my right hon. Friend confirm that, notwithstanding previous assurances, this loan will not rank pari passu with the EU funds extended under the mechanism, but will be subordinated to them?

There is a convention that multilateral loans, such as those involving the mechanism and the IMF, rank senior in any loan agreement. Let me reassure my hon. Friend that I have examined this with great care and interest. The convention is pretty clear and long-established in international law that multilateral loans are senior. That means principally the loan from the IMF, but also the loan from the European mechanism, which we stand behind, so it is also in our interest that it is repaid. However, our loan will rank pari passu with the eurozone and the other bilateral loans. That has partly shaped our judgment about the interest rate we will charge and the point at which we will start to disburse our loan. I shall come back to that.

We expect full repayment to be made over the term of the loan. Clause 1(8) sets out that repayments of both the principal and the interest will go into the Consolidated Fund. We want the whole process to be as transparent as possible, so clause 2 creates a requirement for the Treasury to prepare and lay before Parliament every six months a report on any payments made by the Treasury by way of a loan to Ireland, any sums received by the Treasury by way of interest or repayment of such loans, and the amounts outstanding, in the period to which the report refers.

As I have said, I welcome the agreement across many parts of the House about the need to make this loan, which is in our national interest. I thank the Opposition in particular for their support, and to reciprocate their co-operation I thought we should look favourably on their amendments. I therefore propose to accept in principle the Opposition’s amendment 1, which would modify the Government’s reporting requirements in relation to the bilateral loans. We have today tabled a more appropriately worded version of the amendment which achieves exactly the effect that the Opposition intended. May I explain to my hon. Friend the Member for Wellingborough (Mr Bone) that this is why there is a manuscript amendment? I am trying not to tempt him, because I am sure that he could speak for even longer, but I want to explain this point because he has raised his concern about it. The manuscript amendment has been drafted by the Government’s parliamentary draftsmen in relation to an Opposition amendment that we propose to accept and it has exactly the effect that the Opposition sought.

Let me update the House on the terms of the bilateral loan that we have now agreed in principle with the Irish authorities. I apologise that this information was not made available much further in advance, but the terms were agreed only this morning with the Irish Government and I wanted all Members of the House to have this information available to them. The loan will be drawn in eight tranches, each with a 7.5-year term. The length of the loan is in line with the terms of both the European and IMF loans. The first tranche of our loan will be available to be disbursed in September 2011, which is later than for some of the other tranches that are being drawn down from partners such as the IMF and the European Union.

The interest rate charged on each tranche of the loan will be fixed specifically for that tranche. It will be set by adding a fixed margin of 2.29 percentage points to the appropriate market-determined interest rate—the sterling 7.5-year swap rate—at the time of disbursement. For example, at the present time, the estimated—I stress estimated—interest rate on the first tranche of the UK loan would be the sterling 7.5-year swap rate in September 2011, which on Monday stood at 3.65 percentage points, plus 2.29 percentage points. That would mean a hypothetical interest rate of 5.9% for the first tranche of the loan. The rate on our bilateral loan will be slightly higher than the estimated rate of 5.7% for the first tranche of the IMF and European mechanism funds, so we are charging a slightly higher rate of interest, but it is lower than the estimated 6.1% rate that the eurozone facility will charge on its first tranche of lending. That reflects the different costs of funding and is a measure of international confidence in the UK’s public finances.

Will my right hon. Friend inform the House how that rate of interest compares with the loan he mentioned earlier that the UK Government agreed with Iceland?

The interest rate to Iceland is substantially lower because, frankly, needs must: I am seeking to recover money from Iceland. I am dealing with a situation that I have inherited—obviously the Iceland loan relates to events that happened under the previous Government—and I need the support of the Icelandic Parliament. The rate of interest we are charging is slightly higher than the Dutch, who have also entered into an agreement with the Icelandic Government, are seeking. People might remember the circumstances at the relevant time—there was a pretty acrimonious dispute between Iceland and the previous UK Government—and we have sought to repair broken bridges. The terms of the loan that we have come to with Iceland mean that this country will get its money back. My judgment was that other terms might have meant our not getting our money back at all and that would not have been very sensible.

It is enormously welcome that this country is working with Iceland and Ireland to support them in these very difficult times. The Chancellor has mentioned the current 7.5-year swap rate; can he tell us how much higher it is than when he first announced our participation in this bail-out?

I do not think it has materially changed. I have been quite focused on trying to land it at the 5.9% rate, because that sits between the 6.1% and 5.7% rates of the other international parts of the package. That rate reflects some of the circumstances that relate to my hon. Friend’s earlier intervention.

The IMF will charge a floating rate, with a margin above its funding costs, in line with its pre-existing loan terms for an extended fund facility. The European loans, like ours, will charge a fixed rate on each tranche set using a margin above their own cost of funds. We will charge interest every six months and there will be a repayment of the principal at the end of the 7.5-year term of each tranche.

In common with the IMF, we will also charge a commitment fee for making the loan. We will charge half a percentage point on the total amounts that may be drawn on under the loan agreement for the forthcoming 12-month period. If the loan is drawn on, the fee will be waived and effectively replaced with the interest charged on the loan.

There are two conditions, which are set out in terms to which I draw the House’s particular attention. The first is that the IMF, as well as the EU, must be satisfied that Ireland is complying with the agreed restructuring plan. I think that that is a very important safeguard for British taxpayers. The second, crucial, condition is that there must be

“no amendments to the Restructuring Plan that would have a material adverse financial impact on the UK operations of Anglo Irish bank, Allied Irish Banks and Bank of Ireland”.

Given the scale of those banks’ operations in the UK, that second condition is significant, and it shows in a practical way why I believe it was right for us to provide the loan. It allows us to have a say in a restructuring plan that could otherwise have had a major impact on the UK and its banking system, and could potentially have cost the British taxpayer considerable sums of money without our voice even being heard. Making the loan has enabled us to set that condition, and to be part of the discussion about the restructuring plan and its impact on the UK subsidiaries of banks which have significant presences in Northern Ireland. I know that there is concern about the potential impact of the plan on jobs and the availability of credit in Northern Ireland, and, indeed, about its potential impact throughout the UK, given that Bank of Ireland owns the Post Office card account.

What the Chancellor is saying is particularly pertinent, given that the Post Office cash machine in Portcullis House was provided by the Irish banks.

May I ask a quick question?

Sweden and Denmark are at this moment finalising their loan agreement, and I do not think they have yet made that decision. As I have said, we decided to lend in sterling so that the exchange rate risk would be borne by the Irish rather than the British Government.

The official advice from the Treasury is that the loan agreement represents value for money for the British taxpayer. As I said earlier, it is also in line with the terms offered by both the IMF and the eurozone. I have laid before the House a summary of the key terms of the agreement, and a final written agreement will be forthcoming in the next few days—or, potentially, weeks—once the European and IMF assistance has also been agreed. I will, of course, keep the House informed.

One thing is clear: Ireland is a friend in need, and it is because our economy is currently in a stronger position than Ireland’s that we are able to offer it such reasonable and sensible terms for our bilateral loan.