House of Commons
Monday 11 June 2012
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
New Equipment (Expenditure)
Before I answer the question, I am sure the House will wish to join me in paying tribute to the three servicemen who have lost their lives in Afghanistan since the House last met: Captain Stephen Healey of 1st Battalion, The Royal Welsh, who was killed by an improvised explosive device in the upper Gereshk valley on Saturday 26 May; Corporal Michael Thacker, also of 1st Battalion, The Royal Welsh, who was killed by gunfire in Nahr-e Saraj on Friday 1 June; and Private Gregg Stone of 3rd Battalion, The Yorkshire Regiment, who was also killed by gunfire, on Sunday 3 June. We owe them a debt of gratitude for their service and sacrifice, which we will never forget. I know the thoughts of the whole House will be with their families and loved ones.
I am sure the House will also want to join me in paying tribute to the bravery of the British and American forces involved in the operation to rescue aid worker Helen Johnston and her three colleagues, and to the Afghans for the huge help they provided throughout. The rescue operation was conducted with immense skill and professionalism in the most difficult terrain imaginable. Through this operation, we send a clear message to terrorists around the world that the UK will not tolerate the kidnapping of our citizens.
As I announced to the House in May, the core committed equipment programme—which covers investment in equipment, data systems and equipment support—amounts to just under £152 billion over 10 years. This includes some £80 billion for new equipment and its support and, for the first time, over £4 billion of centrally held contingency to ensure the robustness of the plan. In addition, the Department has a further unallocated £8 billion in the equipment budget. This will be allocated to projects not yet in the committed core programme only when it is necessary to commit in order to ensure the required delivery, and when the project in question is demonstrated to be affordable and with military advice.
May I join the Secretary of State in offering my condolences to all those brave troops?
My visit to Afghanistan last year served to bring home to me how important it is for our troops that any uncertainty about future equipment supplies is eliminated. Therefore, will my right hon. Friend offer more details on the £4 billion contingency fund that is in place to ensure the robustness of the equipment programme?
I agree with my hon. Friend that what our armed forces particularly want to know is that, unlike sometimes in the past, they will always have the protective equipment and the support helicopters that they need. Through our balancing of the equipment plan and introducing the £4 billion contingency fund, they will have much greater assurance that that will the case. That is the least we owe to them.
Whilst having a long-term plan for defence equipment is crucial for our conventional military capability, does the Secretary of State agree that we also need to be investing in cyber-defence capability, to combat threats to our national security from this rapidly evolving threat?
The Department certainly recognises the rapidly evolving threat from cyberspace, and we keep it under constant review. The national cyber-security programme has provided the Department with £90 million, and the Department has allocated some additional funding to increase investment in cyber-security this year, enhancing our existing capabilities. It will also be increasingly appropriate to consider cyber-security issues as an integral part of wider projects that depend on networked command and control capabilities.
The sums the Secretary of State mentions are, indeed, substantial and will guarantee thousands, if not tens of thousands, of jobs. How many of those jobs does he envisage will be in Scotland in the event that Scotland decides to be separate?
Clearly, at this stage it is not possible to identify how many jobs will be created in different parts of the United Kingdom by the equipment programme we currently envisage. However, we enjoy an exemption from European Union procurement rules in respect of defence capabilities when we are procuring them in a way that protects our national defence capability, and if Scotland were not a part of the UK, it would be competing for defence contracts in the open market along with other providers in Europe and beyond.
Since May 2010, £1,250,000 worth of kit and equipment have been stolen from the Ministry of Defence and its bases across the UK. That includes night vision goggles, body armour, military uniforms and boots, and even an aircraft fuselage. How much of the new spend will be covering unexplained thefts which have not been investigated and for which only one person has ever been prosecuted?
The hon. Lady can probably do the maths: she says £1.25 million worth of equipment has been stolen, and I have announced a £152 billion investment, so she can work it out for herself. As a member of the Defence Committee, which asked questions about this matter, she will know that of the equipment listed as stolen, a significant amount has been recovered, but not necessarily netted off against that figure, so in fact the total is probably less than the £1.25 million she suggests.
May I, on behalf of the Opposition, join in the condolences offered to the families of the three servicemen who, tragically, gave their lives serving their nation?
A decision has been taken to cut the co-operative engagement capability, which was designed, among other things, to enable and support a reduction in the number of type 45s from eight to six. Dropping the programme, which has already cost the taxpayer £45 million, therefore poses capability risks. Will the Secretary of State tell the House what were the strategic—not the budgetary—reasons for his changing his mind?
I notice that the hon. Lady did not tell the House what was the strategic reason for Labour having delayed the programme for five years, before we grasped the nettle and decided to cancel it. We take decisions on the basis of advice from the Armed Forces Committee, which takes the budget available and decides what the priorities should be. In this case, the First Sea Lord and his colleagues on the Armed Forces Committee have decided that the programme is not a high priority for naval spending.
The Ministry of Defence provides pensions and compensation for personnel injured due to service, and benefits for the dependants of those whose death is due to service, through the armed forces pension schemes and armed forces compensation scheme. However, we also have a duty of care to ensure that personal accident and life insurance cover is available to those service personnel who consider they require it. This cover is voluntary and separate from the benefits provided by the Government. The Ministry of Defence arranges personal accident and life insurance cover through the PAX and service life insurance schemes provided through Aon Ltd and the Sterling Insurance Group respectively.
In a sense, we already provide cover for those on the front line in the matter I have described—through the armed forces compensation scheme and the armed forces pension schemes—so that anyone who suffers in consequence of their military service is compensated appropriately. The hon. Lady will be aware that, after the previous Government ordered an independent review of the armed forces compensation scheme, the amounts payable were substantially increased. If members of the armed services decide, for personal reasons, that they want to seek cover additional to that, we are determined to ensure that they are not disadvantaged or prevented from doing so on account of their service in the armed forces. That is why we intervened in the market to ensure that the schemes I mentioned are available, but it would not be right for us to go out and procure those policies on behalf of individuals: these are personal decisions that those individuals make. We provide death-in-service and injury-in-service benefits; it is up to—
I will not start an Adjournment debate on the matter, Mr Speaker, but the armed forces compensation scheme, although first class, does not go quite far enough. It was recently reported that as many as 50 soldiers killed on the front line in Afghanistan had no private life insurance at all. Could not the MOD do more both to encourage and to facilitate the provision of private life insurance to everyone on active service in Afghanistan?
We do encourage individuals to take out additional cover, but people’s circumstances will vary enormously in terms of mortgage liabilities, the size of their family or anything else they wish to cover for. We heavily subsidise these schemes while people are on active service in Afghanistan, but it would not be right for the state to assume responsibility for this and take it over completely.
Aircraft Carrier Cover
The strategic defence and security review confirmed the Government’s intention to re-introduce a carrier strike capability from around 2020. This capability will be delivered by the Queen Elizabeth-class aircraft carrier, operating the STOVL— short take-off and vertical landing—variant of the joint strike fighter. Until then, the Government have accepted that expeditionary air power will need to be deployed by other means, which may include agreements with allies regarding overflight and basing rights. In addition, the Government are considering the scope for us to co-ordinate carrier strike operations with those NATO allies that currently operate aircraft carriers, including the United States, France and Italy, both prior to and following the re-introduction of the United Kingdom’s own capability.
As a good Unionist, I must emphasise that the carriers are being built by the United Kingdom, and that many English yards, as well as Scottish yards, are making a fine contribution to these outstanding ships. The best thing that I can say to my hon. Friend is that it is two thirds of a century since the United Kingdom built a warship outside the UK—that happened during the second world war—so the facts speak for themselves.
I can confirm what my right hon. Friend the Secretary of State has said on many occasions: as of the end of April, we had committed £39 million on conversion studies and a further £1 million on an air-to-air refuelling study. We do not think that the money has been wasted. Changing the variant was considered the best course of action under the SDSR, and these costs were necessarily incurred.
I can confirm that both carriers will be built; it will be a decision in the next SDSR as to whether or not both are operated. Similarly, we are following an incremental acquisition policy on the joint strike fighter itself. Therefore, I cannot give my hon. Friend the comfort he is seeking at this stage, as this relates to a commercial negotiation and a strategic decision for the next SDSR.
War Widow Pensions
War widows have our deepest respect for their loss. War widows today span the generations, from those who have lost their husbands in world war two through to those who have died in Iraq and Afghanistan. I would like to take the opportunity to pay tribute to the work of the War Widows’ Association, whose tireless help and support is invaluable. Payments are made through either the armed forces compensation scheme or the former war pensions scheme. In addition, pensions may be paid through one of the occupational armed forces pension schemes.
I am grateful to the Minister for his reply. My constituent, Iris Thorogood, is an 85-year-old former chairman of the War Widows’ Association, an organisation founded in 1971, at a time when war widows received very little by way of a pension. I am sure that Iris, and indeed the War Widows’ Association, would appreciate confirmation from him that, contrary to some rumours being peddled, war widows have received the full increase of 5.2% this year, in line with disability benefit, and will continue to do so?
First, I pay tribute to Mrs Thorogood and reassure her about the 5.2% uprating of her pension, in line with the Department for Work and Pensions disability benefit. I was very surprised at the recent comments by the shadow Defence Secretary about
“veterans’ and war widows’ pensions being frozen year-on-year.”—[Official Report, 14 May 2012; Vol. 545, c. 265.]
That is completely incorrect, and it is a pity that he does not know a little bit more and is not a little bit better informed of such important issues in his brief.
Given the unveiling of the Royal Air Force Bomber Command memorial later this month to remember the 55,000 airmen who died during the second world war, does the Minister agree that when we are talking about war widows’ pensions, we must give accurate information and not engage in the skulduggery of misleading people about this?
I certainly do, as I believe I have already made clear. I am proud to be an honorary member of the Bomber Command Association, and I look forward to the opening of that memorial at the end of June. We need to remember the debt that we owe to those 55,000 people from Bomber Command who died and to all the others who died in the second world war, as well as to their dependants and their surviving widows.
The wide range of assets capable of conducting maritime surveillance were reviewed during the strategic defence and security review and decisions were made in the light of our future requirements and the challenging circumstances facing the Government. Due to the financial legacy we inherited from the previous Government, including the woeful mismanagement of the Nimrod MRA4 project, we had little choice but to cancel that project and make a number of other adjustments to our force structure. I believe we have the capabilities we require in this area, but we keep our requirements under close review against operational circumstances. Should the threats change, we stand ready to respond.
The Government have made a commitment to additional maritime surveillance with respect to Somalia because of the serious maritime threat posed there. What additional steps are the Government taking to support the Prime Minister’s peace process initiative in Somalia and what steps are they taking on the threat to the peace process caused by piracy?
The hon. Gentleman is right to point to the importance of the international efforts being made in Somalia, in which the UK is proud to play a part. Surveillance is certainly a part of the international effort, but the UK did not specifically engage to undertake it—it is done on an international basis, and other allies provide the surveillance capabilities.
The Minister’s right hon. Friend the Secretary of State has said that he has balanced the budget, but the lack of maritime surveillance demonstrates that he can make such a claim only because he has cut the equipment budget so deeply that he has left our nation with a capability deficit. He cannot deny that we have a capability deficit in terms of maritime surveillance.
The hon. Gentleman has answered his own question. If one has had to balance the budget having inherited a £38 billion black hole, inevitably certain capabilities would have had to be deleted. I remind him that the previous Government were using alternative methods of providing maritime surveillance. They considered that such methods would be adequate for a two-year period, and we have concluded that they provide sufficient cover for a further period.
London Olympics (Security)
The armed forces recently conducted an extensive exercise to test their operational readiness to provide safety and security, in support of the police, during the Olympic and Paralympic games. The exercise achieved its objectives and I am confident that we are well placed to deliver this important role.
I am grateful to the hon. Lady for the constructive way in which she engaged with the Army on the air defence missile site at Blackheath in her constituency for the exercise, and to her constituents, the overwhelming majority of whom were supportive of it.
The Secretary of State mentioned the proposal to site surface-to-air missiles on Blackheath as part of the Olympic security plan. It is my understanding that a final ministerial decision has yet to be taken. When will that decision be made, and will the Department be in direct contact with residents who live in close proximity to the proposed site to inform them of it?
The hon. Lady is right. We have received the military advice on the outcome of the exercise and Ministers will now consider it and make a final decision on the deployment of ground-based air defence systems. As you would expect, Mr Speaker, when a decision is taken, an announcement will be made first to the House, but I will ensure that the Army engages with residents who live in close proximity to the site to ensure that they are aware of all the ramifications of any decision to go ahead and deploy.
The arrangements for effective command and control will involve military commanders being embedded with police gold commanders in their headquarters. I cannot give my hon. Friend a guarantee that they will use a common communications system, but the key decisions will be made by people sitting in the same room. They will then be passed down the respective chains of command.
My constituents living in Bow quarter are rightly concerned about the Ministry of Defence’s plans to base surface-to-air missiles on their rooftops ahead of the Olympics. I wrote to the Secretary of State about that more than a month ago. When does he intend to respond to my request for a meeting to explain the risks to my constituents and answer their concerns? The consultation has been very thin.
I am not aware of a request from the hon. Lady, but the Army and MOD officials have engaged with a number of Members of Parliament who have sought a briefing. She is welcome to come to the Ministry of Defence at any time for a detailed briefing. There appear to be a very small number of her constituents who are opposed to the proposal, and there has equally been significant support from other areas. There is no risk to residents of the building. The water tower at Bow quarter was selected on military advice, because it is the right place to locate this particular defensive equipment.
The Army has engaged with local authorities in the first place, and more recently with local community groups. We have a standing Army capability to go out and engage with any groups that want to be engaged with, and to brief Members of Parliament. I am very happy to brief any Members who are affected by the proposals.
I regularly speak with the Minister for Housing and Local Government and raise such issues as are necessary. My hon. Friend will be aware of the consultation recently undertaken by the Housing Minister on what more can be done, and particularly on statutory guidance on giving precedence in social housing lists to service personnel with local connections when they leave the services.
The Minister will be aware of the recent changes to the housing allowance, which mean that those aged between 25 and 35 will have to share. Exemptions have been announced for those living in homeless hostels and for certain offenders. Will the Government consider also exempting servicemen returning from active duty, particularly those who may be at risk of redundancy?
My hon. Friend will know that Lancashire county council’s Councillor France has expressed his concern, and I am grateful to my hon. Friend for also doing so. We obviously always keep an eye on the matter, but the changes to the shared accommodation rate were discussed between Ministry of Defence officials and Department for Communities and Local Government officials prior to the announcement in June 2010. We will take a look at how we can best serve our personnel, but those who are exempted are those who are considered to be in difficult circumstances, such as people leaving prison. I do not think our personnel leaving the armed forces should be equated with, for instance, those leaving prison.
The Minister also has responsibility for forces accommodation. The Government recently announced that they would be giving an extra £100 billion, but they forgot to inform the public that they were taking away £141 million. Armed forces accommodation is the largest single issue raised in complaints to the authorities. What will the Minister do to address the sorry state of some of our armed forces accommodation?
First, I should say that we announced £100 million extra, not £100 billion, for accommodation?
The hon. Gentleman is quite right, but there has been no hiding the fact that we have had a three-year pause in the amount that we have put into forces accommodation. He will know why—we inherited the most ghastly financial situation. I have talked the matter through with the families federations, and they understand that times are very hard. If he does not understand that, he should read the newspapers.
May I remind the Minister of the armed forces covenant in respect of housing? In his discussions with his colleagues in the Department for Communities and Local Government has he been advised of when the mandatory guidance will be issued to councils on that matter? Will there be more money in significant areas of garrison towns?
We are discussing the matter. I am not sure that mandatory guidance will be given, but there will be guidance on giving preference to those leaving the armed forces. We are very concerned about the matter, and we are continuing to uprate kitchens, bathrooms and so on with the money that we are spending. I know that the hon. Gentleman is as well aware as I am of the difficult situation in which we find ourselves.
I want to raise an issue about housing on which I am sure there will be all-party consensus. Recent research by Lord Ashcroft showed that a third of junior ranks in the Army and more than a quarter of those from the armed forces who have applied have been refused a mortgage, loan or credit card in the past five years. Although individual circumstances can always lead to a refusal, that number is far too high. Will the Minister agree to cross-party talks, involving service charities and the military, on how to deal with this and other issues of discrimination raised in the report?
Of course, I am very happy to indulge in cross-party talks on such matters. I talk to service charities the whole time about them. For instance, the right hon. Gentleman talks about mortgages being refused, but that is one thing that we have put right. Although I am not blaming the previous Government in particular, it is a fact that British Forces Post Office addresses were not accepted by mortgage companies. We have now said that they are to be accepted—[Interruption.] I hear the hon. Member for North Durham (Mr Jones) saying from a sedentary position that that is not true, but that was what I was told by all the service charities and servicemen to whom I spoke.
For the purpose of this question, I shall set aside the partisanship and ask the Minister about the issue again. When one in five members of our forces is shouted at in the street and almost as many are refused service in a pub, hotel or elsewhere, we must all go further. There are sensible examples of legal protections for other specific groups that go much further than the military covenant to protect against discrimination, harassment or abuse. In the light of the research, in the build-up to Armed Forces day and as part of these indulged in—or indulgent—all-party talks, will the Minister consider new legal protections for those who keep our country safe?
I hear your strictures, Mr Speaker. I am not sure whether new laws are required. What is required is a greater respect for our armed forces and the truth is that most people in this country view our armed forces with great pride, which the four out of five people who are not subject to any form of abuse will recognise. Now, I notice people wearing uniform in the streets much more often, for instance. Once upon a time, that was actively discouraged because one did get abuse, typically from long-haired left-wing students, but that was just when I was young.
On the question of social housing, a problem that has come up in my constituency is what happens when someone who has been in the armed forces returns to an area from which they have been away. They want social housing, but the local council has a regulation that people cannot get such housing unless they have been there in the past year. Is that something we can put right?
It is, and that is what my right hon. Friend the Minister for Housing and Local Government is talking about. When someone has been away for 10 years —perhaps they have been abroad, serving in Germany with the Army—they should have the opportunity to register for a house and to get precedence in the area where they lived for all their life before joining the armed forces to serve their country.
Birmingham city council was probably the first specifically to ring-fence new social housing provisions for ex-members of the armed forces. Is the Minister aware of any other councils in the west midlands following suit, as, although what Birmingham does is magnificent, it is not sufficient?
Here I call on the help of my civil servants, because I am not aware of any other councils in the west midlands following suit. I applaud Birmingham city council—under, I think, Conservative administration —for putting this to one side—[Interruption.] Then under Conservative administration. I applaud the council and, as the hon. Lady will know, we are encouraging the community covenants that lead to such activities.
A balanced budget gives our armed forces confidence that once a project is in the programme, it is real, funded and will be delivered, so that they can plan with certainty. The balanced budget is a firm baseline for the transformation to an armed forces that are smaller, but that will be adaptable, agile, well equipped with the best technology and supported by a Ministry of Defence that is re-focused around their needs.
Will the Secretary of State give me a further assurance that in future we will never again return to an unbalanced defence budget, which saw us buying very expensive, high-ticket items while our brave personnel were going without some of the basic equipment they needed in theatre on the ground?
My hon. Friend has put her finger on the problem: in the past we had an armed forces budget that was out of kilter, and were trying to support armed forces that were not properly resourced. The consequences were inadequate protective equipment and inadequate military equipment to do the job they were being asked to carry out. I believe that we have an absolute moral responsibility, when we ask people to put themselves in harm’s way, to equip them with the kit that they need to be as safe as possible in doing that.
My right hon. Friend will be aware that we live in a very uncertain world, in which new threats are evolving—we have already heard mention of cyber-security threats. Is he convinced that now that we have a balanced budget, there is scope to tackle these new threats and to provide the kit that our armed forces need?
As my hon. Friend says, we live in a very uncertain world and the threats are changing, and technology also is changing very rapidly. Precisely for that reason, we have kept £8 billion-worth of headroom in the equipment programme, rather than allocating every last penny of it, as was the practice in the past. Too often in the past, we have had to cancel or abandon expensive commitments in order to respond to changes in technology or threat. We should not be in that position in future.
In terms of the budget and the impact on armed forces personnel, what is the Secretary of State’s policy on service personnel who have lost a limb or have other disabilities staying in the armed forces? Has an across-the-board decision been taken that anyone who has lost a limb will have to leave, or is it down to individual circumstances or commanding officers?
It is down to individual circumstances. We have given a clear commitment that as long as someone who has suffered injuries on active service is in the process of treatment or rehabilitation, where it is appropriate for them to remain in the Army, they will so remain. Once they have completed the rehabilitation process, we will do our very best to find positions that they can fill in the Army. Many service people who suffer disabilities as a result of their service have been found positions that they can continue to hold down in the Army, but we cannot give a guarantee that nobody will be medically discharged after they have completed the rehabilitation process.
Given that the Secretary of State’s statement about supposedly balancing the defence budget relates only to the 45% of the budget spent on equipment, how will his announcements this week of compulsory redundancies in the armed forces affect the other, unaccounted for, 55% of the budget? When can we expect the details of how he has balanced the rest of the budget?
I am not sure that the hon. Gentleman was here when I made my statement, but he is completely wrong; my statement related to the whole budget, not simply the equipment plan. As he will know, the announcement of a reduction in the size of our armed forces was made last year. We are now making a series of tranches of redundancy announcements, of which the one due tomorrow will be the last for the Royal Navy and the RAF, to get us eventually to armed forces of the size specified for Future Force 2020 in the strategic defence and security review.
The news that the defence budget is balanced is obviously very welcome, but there will inevitably be a certain amount of scepticism about it. Does my right hon. Friend accept that if he is to dispel that scepticism, the sooner he can provide absolute clarity about exactly how he has balanced the budget, and exactly how the £38 billion black hole that Defence Ministers referred to is calculated, the better?
I accept that there will be a certain amount of scepticism. In relation to the equipment plan, there are two parts to the answer. First, the armed forces committee has confirmed that the equipment plan that we set out and funded does deliver the capabilities required for Future Force 2020. Secondly, we have submitted the programme to the National Audit Office for review, and we will publish the result of that review in due course. In respect of the 55% of the annual budget that is not taken up by the equipment plan, the proof of the pudding is in the eating, and Members in all parts of the House will look to see a defence budget that comes in within the spending plan total, as they did in 2011-12.
Innovation ensures that we are able to access and deliver technology into our systems and equipment to provide continuing operational advantage to our armed forces. That is why our recent White Paper, “National Security Through Technology”, highlighted the importance of investment in science and technology. It also recognised the contribution of commercial investment in developing new technologies. Using open competition in defence acquisition ensures that we are able to deliver the best and most innovative capabilities at an affordable price. In addition, the success of the Centre for Defence Enterprise in bringing through suppliers new to defence, particularly small and medium-sized businesses, which are important sources of innovation, led to our decision to broaden the centre’s remit, including the mentoring of smaller companies.
During the recess, BAE Systems announced the closure of the historic Scotswood road site in Newcastle, with the loss of more than 300 jobs. This brings to an end a 165-year history of skilled engineering, the longest continuous site of tank manufacture anywhere in the world, as well as bringing great distress and uncertainty to my constituents. Does the Minister agree that refusing to take into account the wider economic implications of defence procurement undermines not only innovation, but jobs and communities across the country? Will he agree to meet me and a delegation from BAE to see what can be done to save the site?
I have enormous respect for the hon. Lady’s expression of concern for her constituents, and I pay tribute to the work that those people have done over many years to support the armed forces. However, it is not true to say that the policy that she describes is the cause of the problem. The problem is that BAE Systems has not won contracts at this site. Meanwhile, the Warrior sustainment programme, the Scout SV programme, the Foxhound programme and the integration of the urgent operational requirements continue around the United Kingdom, generating thousands of highly skilled and important jobs. I very much regret that BAE Systems has been uncompetitive, but it is not the fault of the Government. The company must answer why it could not compete successfully for contracts.
The budget after 2015 will be set at the next spending review. Our current planning assumption is for a flat real-terms budget settlement overall, with a 1% real-terms increase per annum in the equipment and support budget, as agreed with the Treasury.
I completely accept that, and as I said to my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) a few moments ago, I am aware of the fact that the degree of confidentiality around the defence budget invites scepticism when such announcements are made. As soon as we have the report from the National Audit Office, we will publish it.
Scottish Independence (Royal Navy Construction Projects)
The defence industry in Scotland, particularly shipbuilding, plays a key role in equipping and supporting the UK armed forces. Defence contracts sustain thousands of skilled jobs and generate billions of pounds for the economy of Scotland. The Government greatly value the highly skilled work force in Scotland. Although the Government are not making plans for separation, as we are confident that the Scottish people will continue to support the Union in any referendum, it is worth noting that the UK has not had a complex warship built outside the UK since world war two. Were we to do so in the future, companies in a separate Scotland would, of course, be free to compete for those contracts, along with international bidders. However, any exemption from EU rules governing public procurement contracts would apply only to warships ordered from our own national yards.
The Minister has made very clear the position of Scottish shipyards, should separation for Scotland take place. Can he clarify the position for suppliers of fixtures and fittings based in Scotland when applying for contracts, if those contracts are given to English shipyards?
The way the EU rules work is that if a Government declare something to be warlike, they can claim an exemption from the EU competition rules on the basis of national security. In the case that the hon. Gentleman describes, those contracts would be non-warlike and would be subject to normal competitive rules. Scottish companies would have to win against global competition.
Can the Minister confirm that in the allocation of naval contracts and defence expenditure in general in Scotland, he will give no credence whatsoever to the notion that such expenditure should be governed by something approaching the Barnett formula—an idea which is as naive as it is risible, not least because it ignores strategic objectives, fails to take account of differing geographical levels of threat, and of course, from Scotland’s point of view, ignores the location of industrial capacity?
I can confirm for my right hon. and learned Friend that the Government would be governed by no such notion. Scotland does well out of defence at the moment; it has one of the UK’s three naval bases, it will have one of the UK’s three RAF operating bases and it has an Army brigade. Those who would seek to change that situation should spell out what it would look like under a separate arrangement.
Scotland also has a disproportionate underspend. The Scottish Government and the Scottish National party are, of course, very much in favour of continuing defence procurement co-operation, regardless of the constitutional situation. We believe that it is good for jobs, for manufacturers and for the taxpayers of both Scotland and England. With so many defence sector jobs in England dependent on Scottish taxpayers’ contributions towards procurement, why do not the UK Government simply concede that it would make perfect sense to continue with procurement co-operation if the Scottish people decide that they want defence decisions to be made in Scotland itself?
Defence procurement co-operation of the sort the hon. Gentleman describes would completely contravene EU competition rules. We are allowed to procure non-warlike stores only on an open and competitive basis, so the defence industry in Scotland would have to compete with South Korea, or whichever other country it might be, for future defence contracts.
Regimental Structure (Wales)
My right hon. Friend the Secretary of State has engaged in a number of discussions about the structure of regiments in Wales and, indeed, those elsewhere in the United Kingdom as part of the study into the Army’s future force structure.
In his speech last Thursday the Secretary of State said that regional identity and recruitment capability were important criteria. Does the Minister accept that 1st The Queen’s Dragoon Guards—the Welsh cavalry—fulfils both criteria and, therefore, every effort should be taken to ensure that the regiment is saved?
Any decisions made will respect regional and national identities, but they will have to be made on objective criteria, including geographical considerations that link closely to recruitment and the need to get the right balance of capabilities and the maximum operational output.
We accept that there will be a reduction in the number of regiments, but given that any artificial increase or staying the same of Scottish regiments, some of which were recruited at only 78%, will have a knock-on effect throughout the United Kingdom, does the Minister think that the shadow Secretary of State for Defence consulted his Welsh and English colleagues on the likely effect of keeping an artificial number of Scottish regiments?
My hon. Friend is quite right; if we are to see a reduction in the regular Army from 102,000 to 82,000, it is inevitable that some units will be disbanded. The criteria by which those units are selected must be objective, as I have described. They must recognise the recruitment strength and the right balance of capabilities. It would not be right for favour to be shown to one part of the country at the expense of another.
The Minister will be well aware that Wales provides an above-average number of Army recruits, compared with the UK average, and of the tremendous symbolic importance of having a distinctive Welsh identity when the regiments are redrawn, so will he take both factors into consideration when making his decision?
The Ministry of Defence plans to invest around £1.4 billion between now and 2014-15 on the assessment phase of the successor submarine programme, as announced to Parliament in May last year. The total cost of the assessment phase, including long-lead items, will be around £3 billion by the time it is complete in 2016-17. Without that investment, it could not be guaranteed that a successor submarine would be available in time to ensure a continuous at-sea deterrent.
The decision finally to go ahead is welcomed on the Opposition side of the House, and indeed in my constituency, but the previous Secretary of State put the cost of delaying at between £1.2 billion and £1.4 billion, so is the new Secretary of State’s estimate of the extra cost of delay higher, lower or about the same?
My departmental responsibilities are to ensure that our country is properly defended now and in the future through the delivery of the military tasks for which the Ministry of Defence is mandated; that our service personnel have the right equipment and training to allow them to succeed in the military tasks; and that we honour our commitments under the armed forces covenant. In order to discharge those duties, I have worked with the chiefs of staff and my senior officials to ensure that the Department has a properly balanced budget and a force generation strategy and a defence equipment programme that are affordable and sustainable in the medium to long term, details of which I have already announced to the House.
Will my right hon. Friend join me in congratulating the members of the armed forces who played such a splendid role in the magnificent diamond jubilee celebrations, remembering that many of those men and women fought bravely in Afghanistan until recently?
My hon. Friend is absolutely right. The relationship between the monarch and the armed forces is historic and important. Her Majesty the Queen, as head of the armed forces, has maintained and strengthened those links throughout her 60-year reign, and she enjoys the deep loyalty and affection of her armed forces. The diamond jubilee celebrations were a welcome opportunity for the armed forces to demonstrate the affection and esteem that they have for Her Majesty.
May I bring to the attention of the Secretary of State the comments of the head of Army manning, who said that the 4,100 soldiers, sailors airmen and women facing redundancy this week should transfer to vacancies in the Army, Navy or Air Force? Does the right hon. Gentleman appreciate how angry this comment has made those who are being rewarded for their years of service with a P45, and can he confirm how many vacancies are currently available?
I have read the article by the head of Army manning, and I am surprised at the newspapers’ interpretation of it. I recommend that the hon. Lady also reads it.
Those people who are being made redundant and who wish to apply for another job are, of course, encouraged so to do, be it in the Army, the Air Force or the Royal Navy. When I served in the Army, there were people from the Air Force and from the Navy who had transferred and joined—and some from the foreign legion as well.
T2. I welcome the MOD’s recent award of a £350 million contract to maintain the Royal Air Force’s Hercules aircraft, which will sustain 500 UK jobs. Can the Minister say what other steps are being taken to support the UK defence industry? (110568)
Absolutely I can. I too welcome the award of the Hercules integrated operational support contract, which will save the MOD £170 million by replacing several short-term contracts with one overarching contract. It is another example of the policy that we set out in our recent White Paper, with a list of measures to improve the lot of the British defence industry, including a £160 billion equipment programme, strong support for responsible exports, support for small and medium-sized enterprises in the defence sector and strong support for the previously declining science and technology budget.
T8. When Sir John Holmes reports on his review of the medals system, is the Prime Minister likely to keep his pre-election promise so that after 67 years the surviving Arctic convoy veterans at last receive a British medal in acknowledgement of their brave service? (110575)
Perhaps I should be clear that the remit of the medals review is to look at the process and at the factors that are taken into account when making such decisions. So the review will look at the framework and the basis on which decisions are taken, and it will then be for individual decisions to be reviewed within any new framework that is put in place.
T3. Defence diplomacy is a key component of Britain’s soft power capability. What steps are the Government taking to ensure that defence diplomacy is therefore at the forefront of our foreign and defence policy, and will the Minister highlight some of the programmes currently being pursued in the MOD? (110569)
May I say, with all honesty, that I am most grateful to my hon. Friend for his question? I know that he takes a very keen interest in the issue, and he is absolutely right to emphasise the importance of defence diplomacy as a very cost-effective and vital part of our armoury. It is one of seven military tasks set out in our 2010 defence review, and together with the Foreign and Commonwealth Office we are now finalising a detailed defence engagement strategy. That will set out the contributions made by, for example, defence training, defence attachés, defence advisory teams, de-mining and, as in Pakistan, the help to develop a centre of excellence for counter-IED capability, to which of course I add defence exports and the role played by Ministers and senior military officials in travelling throughout the world in support of defence diplomacy—I having visited no fewer than 23 countries in the past two years.
The Prime Minister, the Defence Secretary and I have all made it clear that the traditions of the Scottish regiments will be respected. There is not, and never has been at any stage, a plan to do away with those identities, which will remain in the long term as part of the Army in Scotland.
T4. This afternoon we have heard the Minister speak of the objective criteria that will be used to determine how the infantry will be cut. For the avoidance of doubt, will he reassure the House that one of those criteria is not the upcoming Scottish referendum? (110570)
Yes. I am happy to say to my hon. Friend that I went to Brize Norton to see the new C-17 aircraft a couple of weeks ago, just a few days after it had been delivered. This aircraft will reinforce the vital, strategically important air bridge with Afghanistan, which is especially important at a time when the ground lines of communication through Pakistan are closed. In the longer term, the C-17 represents a step change in our capability to support operations, including humanitarian operations and disaster relief, and, very importantly, to support the aero-medical evacuation of wounded personnel back to the United Kingdom.
The Chief of the General Staff is in the final stages of an analytical review of recruiting demographics and manning across the Army, looking at the future needs of the Army but also at the very important historical threads that run through the Army. As soon as we have completed that exercise, I will make a statement to the House, and I confidently anticipate that that will be before the summer recess.
T7. Encouraging strong leadership in our armed forces is vital to the development of an agile fighting force, so will the Secretary of State join me in welcoming the recent appointments of Commander Sarah West and Commander Sue Moore, both of which are major milestones demonstrating the achievements of women in the armed forces? (110574)
The House will know that Commander West has been appointed as the first woman commander of a major warship, HMS Portland, and that Commander Moore has become the first woman to command 1st Patrol Boat Squadron. Both appointments were made entirely on merit, and they are very well deserved. I think that the whole House would wish to congratulate those two women and all others who come into such positions of authority.
In response to my earlier question about the closure of BAE Systems on Scotswood road, the Minister seemed to prefer to criticise BAE Systems, and therefore some of my constituents, than to answer my request for a meeting to see whether we could find a way to save these jobs.
It is always a pleasure to meet the hon. Lady. I extended an invitation to her to discuss another subject, but she did not respond. I am always happy to meet her—[Interruption.] On the strictly professional matter of innovation. I intended no criticism of her constituents whatever. They have done a first-rate job. However, the other companies put in lower, better value bids and so won the contracts. That is the problem, and there is no answer to that.
An effective and trusted Afghan national army is key to a smooth transition. When I visited Afghanistan last year, I heard that although recruitment is going well, attrition remains a challenge. Will the Secretary of State look into the fact that attrition rates are not monitored for the different ethnic groups, so we do not know whether there is more of a problem with the Tajiks, Pashtuns, Hazaras or Uzbeks? That information would surely be useful in addressing the problem.
I am grateful to the hon. Lady. My understanding, although I will have to check this, is that attrition is measured by ethnic group in the army. I will take the matter up with my Afghan counterpart on my next visit and let the hon. Lady know what I find out.
The cadet forces provide great opportunities for young people to train in teamwork, leadership and discipline. I very much enjoyed being a cadet when I was at school. What is the Department doing to ensure that more young people avail themselves of those wonderful opportunities?
We are very keen to encourage more cadet forces. Indeed, I had a joint conference with the schools commissioner at the end of April on this matter. We are pushing it forward and will find the resources. I am delighted that my hon. Friend gained from the cadet experience and learned about things such as integrity, teamwork and leadership. I, too, was a cadet, but I will leave it to the House to determine whether my character improved.
Given that the Government are proceeding with the short take-off and vertical landing variant of the joint strike fighter, will the Secretary of State say when a decision will be made about the basing of that aircraft? Does he agree that RAF Marham would be an ideal location because of its engineering facilities and its proximity to the US base at Lakenheath?
My hon. Friend is nothing if not diligent in promoting the case for RAF Marham to be the home base of the STOVL JSF aircraft. We are well aware of its engineering capabilities and of its proximity to USAF Lakenheath, where F-35s are likely to be based. The decision does not need to be taken yet, and it will not be taken until it needs to be.
Any suicide is a tragedy. The UK has much lower rates of suicide in the armed forces than the US. Research is being done on the matter as we speak, in particular by Professor Simon Wessely of King’s College hospital. Although we remain concerned, for people over 25, service in the armed forces means, curiously, that one is less likely to commit suicide than others. I am happy to discuss the matter further with the hon. Gentleman.
Next month, the UK will join other Governments at the United Nations to negotiate and agree an international arms trade treaty. We are often told that Britain’s arms controls are among the strictest that one will find anywhere. Does the Minister recognise the benefit to Britain and the world of reaching a strong agreement with as many countries as possible, even if certain countries opt not to become signatories at this time?
The UK is strongly committed to an arms trade treaty and is pushing for it to be as broad and effective as possible. We are encouraged by the fact that certain countries that we did not think would be supportive are showing more encouraging signs as we get near to the negotiations.
Changes to the Budget
Where’s the Chancellor?
Order. The Ministers who appear are chosen by the Government, and it is not for me to explain that choice. Members ask, “Where’s the Chancellor?” The Chancellor is appearing before the Leveson inquiry, as Members know perfectly well. We welcome Minister Gauke.
The Budget supports working families and re-establishes the UK’s reputation as a leading place to do business. It continues to deal with the record peacetime deficit that we inherited, so that the state no longer borrows £1 in £4 it spends, as it did when we came to office.
The Budget contained 282 measures. Having said that we would consult on some of its measures, we have made changes to three. On VAT for hot food, it is right to end anomalies and ensure that VAT is applied fairly between businesses. Where fish and chip shops had to charge VAT, supermarkets selling the same products did not. Having consulted, we have revised the relevant tests to ensure that, for example, bakers cooking hot savoury food that is left to cool are not caught in the changes.
On VAT for static holiday caravans, we have listened to hon. Members, who argued that static caravans should be treated more akin to second homes and not like touring caravans. Given that static holiday vans fall in a grey area between residential properties and temporary holiday accommodation, and given the relevant tax regimes that apply to them, a 5% rate of VAT is a fair compromise.
On tax reliefs, we continue to think that the system we inherited—which allows the wealthiest to pay the least tax, meaning that cleaners can pay a higher rate than their bosses—is unfair. We will therefore move to cap reliefs to ensure that this is addressed. However, having engaged with the sector, we will exclude reliefs relating to charitable giving from the cap.
These changes are small in the context of a Budget that lowered tax by £170 for 24 million people. The amounts concerned are tiny compared with the total tax changes announced in the Budget—in monetary terms, less than 2% of the Budget changes and 0.0002% of total receipts. The Budget continues to have a neutral impact on the public finances, and we remain on track to tackle the unprecedented debt and deficit we inherited. This is a Budget that improves the country’s competitiveness by cutting the top rate of tax, reduces corporation tax to give the UK the most competitive rate in the G20, and rewards and supports hard-working families by helping to take 2 million people out of income tax altogether.
I thank the Minister for his answer, but regret the absence of both the Chancellor and the Chief Secretary to explain this series of U-turns.
This statement leaves a number of questions unanswered. On 16 April, the Exchequer Secretary told the House:
“The same approach should apply to mobile caravans as to static, non-residential caravans, and to a hot pie served in a fish and shop and one served in a bakery.”—[Official Report, 16 April 2012; Vol. 543, c. 130.]
On 12 April, in relation to the proposed cap on income tax relief for charitable donations, he said:
“The policy that we’ve announced is a sensible one.”
What new evidence has come to light since then and during the recess that has led the Government to change their mind? The reality is that the facts have not changed. This is a Government who do not like to be held to account for their mistakes. The Minister has tried to make a virtue out of the Government’s abandonment of policies that prove to be unpopular and unworkable by saying that they are listening. However, failing to do the necessary work on a policy before announcing it and then sneaking out a reversal when they hoped no one was looking is not consultation—it is total incompetence. Is it not the truth that this Government were so desperate for money-making measures that they took from whomever they thought they could, hoping to get away with it? The result: a total and utter shambles of a Budget.
The mistakes that are still in the Budget are, however, the worst ones of all: a tax cut for millionaires while asking millions to pay more, and no plan for the jobs and growth that we desperately need to get our economy back on track and our deficit down. As the Minister and his colleagues are making such a virtue of listening and of their readiness to change course and make the occasional U-turn, perhaps now they will listen—to the millions of pensioners hit by the granny tax; to the millions of families hit by cuts to their tax credits; to the 1 million young people out of work; to the businesses struggling to break even; and to everyone in this country suffering from the double-dip recession made in Downing street and crying out—[Interruption.]
Order. The House needs to calm down, on both sides. I remind the shadow Chief Secretary to the Treasury that the narrow focus of the question covers changes to the announced policy. I know that she will concentrate on that narrow matter, as this is not a Second Reading debate on the Budget.
Given the number of U-turns that the Government have made in the past two weeks, it is difficult to know where to start. Will they now change course on the biggest mistakes in the Budget—cutting tax credits for working families, the granny tax and cutting tax for millionaires while asking ordinary people to pay more? The country is crying out for the Government to change course and to get a grip on their policies, which dug us into this hole and this recession.
The hon. Lady says that the Government were desperate for money-making measures. Why does she think we needed such measures? She might have noticed that her party left the biggest peacetime deficit we have ever faced. The extraordinary thing about the Labour party is that it always believes that there is a magic money tree that we can get money from. I am afraid, however, that we have to take steps to reduce the deficit. Even with these changes, we remain on the course that we set out. This was a fiscally neutral Budget, and we are not taking risks with the public finances, which is the U-turn that the Opposition want us to take.
The hon. Lady asked how a Budget could be changed and why we had departed from what it set out to do. I should like to remind the House what happened four years ago. In 2007, the then Chancellor of the Exchequer announced the doubling of the 10p rate. A year later, his successor had to come to the House—not in a Budget, but weeks later—and set out additional tax cuts of over £3 billion. They had got their policy wrong and they had destroyed their credibility by doubling the income tax rate for the poorest earners in this country. That is an example of a Budget shambles.
The Government should not apologise for making these U-turns. This is parliamentary democracy at work. It is because Members of this House argued strongly for changes in the Budget that such changes have occurred. Let us contrast that with what happened under the last Government. When their own Back Benchers asked for changes, the Government would not agree to them. This Government should be proud of these changes; they should not apologise.
Let us put this into context. In the last year of the forecast period, the Budget measures that we announced in March would have resulted in an additional £1.14 billion for the Exchequer. As a consequence of these changes, that figure will now be £1 billion. These are relatively small items, but we have listened to the specific cases that have been made on the three elements. We had already made it clear that we wanted to consult carefully with charities and philanthropists on one of them. We have listened to the arguments and we have made changes. In the overall scope of the public finances, however, they will not make a significant difference.
The Minister did not mention the reverse on VAT for listed places of worship. My constituency has the oldest Baptist church and the oldest Methodist church, so do the changes announced by the Government on listed places of worship apply only to the Church of England or to all denominations?
They apply to all denominations, but to provide further clarity we made it clear that we would change the level of grant available under the listed places of worship scheme to reflect the need; after consultation with the Churches, we have increased that number, but there is no change to the tax law relating to VAT for listed places of worship.
Let me reassure the Minister that Liberal Democrats welcome the change both to the pasty tax and the caravan tax. [Interruption.] We would also have liked a third change—to keep the top rate of income tax, but we did not win that argument. Will the Minister join me and make sure that all Ministers turn up the volume—[Interruption.]
Let me remind the House that the urgent question relates to the subject of changes made by the Treasury to the Budget presented to the House on 21 March. Questioning must be focused on that narrow terrain. I know that in that respect we can rely on Mr Stewart Hosie.
The Minister said that these U-turns, however welcome, would be neutral in terms of the Budget, so will he confirm that by the time we get to 2016-17 the Government will still take out of the economy £155 billion a year in tax increases and service cuts?
May I pass on a huge thank you to the Chancellor and to the Minister from Pathfinder Park Homes, a manufacturer of static caravans in my constituency, which is delighted with the reversal on VAT? In its view, it has saved its business.
Given that the policy does not come into effect until 1 October, we do not think any damage will have been done through the policy. We think that addressing the anomalies is the right thing to do, and we have taken the opportunity to improve the policy we initially announced.
Evidently, the most urgent question relating to the Budget changes are those to VAT on static caravans and hot pastries, while across the channel we literally have financial Armageddon happening. What would the Minister contrast between the management of this country’s finances and the management of those of Europe?
In respect of all the measures we are discussing today, this Government have been listening to the arguments. As far as charities are concerned, once we had reached the conclusion that we would not proceed with a cap on relief for charitable giving, we felt it only fair to make the announcement as soon as we could—and we did so.
Before I feel tempted to congratulate the Minister on the changes he has made, I should perhaps declare a personal prejudice and a personal interest in the reduction in VAT on pasties.
Welcome as the Minister’s consultation with Back Benchers has been, may I ask him to continue to focus on the main aim of the Budget, which is to ensure that we do not go down the same road as the rest of Europe?
Given that other applications of VAT are being U-turned, why is its application to sports nutrition products not being U-turned as well?
We had almost a full day’s debate on these measures, initiated by the Opposition, and the changes made by my hon. Friend are almost exactly the changes for which the Opposition asked. Given that my hon. Friend and his colleagues have listened to Opposition Members, would it not be rather better for them simply to say “Thank you” and sit down—as I say “Thank you” to the Chancellor and his colleagues for the changes in respect of VAT on listed places of worship?
Marshall’s Bakery in Pewsey, which is in my constituency, will be delighted by the news, as the Minister will know because he received a large petition from its customers. I am proud to be part of a Government who listen to people, but will the Minister please assure me that he will never, ever listen to any economic advice from the Labour party, whose view is that the way to get out of a borrowing crisis is simply to borrow more?
Let me point out to the hon. Gentleman that three changes have been made in the 282 measures announced in the Budget. As for the 50p rate, the problem was that it did not raise any money. The measures that we have announced will raise five times more money from the rich than the policy pursued by the Labour party.
On behalf of the thousands of people who supply, make and sell the £180 million of Cornish pasties produced each year, and the millions of people throughout the country—including my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke)—who enjoy eating them, may I say “Thank you” to the Minister? It is great that we finally have a Government who listen and do not plough on regardless.
Will the Minister explain why he chose to listen to representations on pasties, caravans and charities, but not to representations on the granny tax? Was it because pensioners do not have loud enough voices, or because he does not care about them?
Will the Minister join me in welcoming the comments of the chief executive officer of Greggs that the Government should be “applauded” for the way in which they have “conducted themselves”, and for listening to the views of the industry? Will he also acknowledge, as Sir Terence Leahy has, that the Government should maintain their course and— unlike the Labour party—keep the British economy sound?
Again, I am grateful to my hon. Friend for his comments. We have listened to strong arguments and responded accordingly. That is what a sensible Government do—and I really must contrast that with the approach taken by the previous Government, in particular with regard to the 10p rate of income tax.
Does the Minister agree that business stability is important and that, for example, a caravan tax rate of 0%, 20% and 5% in six weeks is not good for business planning? Has he written to his hon. Friends who voted for those measures to apologise for hanging them out to dry?
Most of my constituents want their Government, regardless of political hue, to be a Government who listen and appreciate their views. In this case, the changes made by my hon. Friend and the Treasury team have hugely benefited listed places of worship, which are an important part of our regeneration campaign, and an important local company, Janes Pantry, which makes pasties. They have also been much appreciated by all of us who donate to charities. We cannot have it both ways: we cannot have a Government who listen and then criticise them when they do. I am grateful to the Government.
Unfortunately, the Exchequer Secretary’s attempt to clarify the skip tax appears to have added to the confusion. Will he engage with the industry in the same spirit as he has engaged with others, and consider the eligibility of fines residue from trommel equipment being eligible for the lower rate of duty?
My understanding is that Her Majesty’s Revenue and Customs is continuing to work with the industry to provide clarity in this area. There have been concerns; I think there was a misinterpretation of earlier advice and I believe that that is in the process of being addressed.
I greatly welcome the consultations, but will the Minister confirm that the Government will stand firm on the main facets of the Budget, which have resulted in tax cuts for 25 million people, council tax frozen for the second year running and fuel duty being 10p lower than it would have been under the other lot?
Order. I am sorry if I did not explain the position sufficiently clearly—although I must say I thought I did. Some Members are making speculative bids for extending the U-turns. They may wish to do so, but the terms of the urgent question relate specifically to the announced changes. I am sure that understanding that point will not be beyond the ingenuity of the hon. Member for Wansbeck (Ian Lavery).
I am disappointed in the hon. Gentleman. He started out as such a good boy, and it is a pity that he spoiled that thereafter. I know that a similar sin will not be committed by the hon. Member for Kingston upon Hull East (Karl Turner), because he is a good listener and a quick learner.
I welcome the Government’s U-turn on the caravan tax, which would have adversely affected many thousands of people throughout the country. However, will the Minister take this opportunity to apologise to the 350 employees of Willerby Holiday Homes in my constituency who were told that they would potentially be made redundant as a result of the Government’s barmy idea, and will he describe the effect on the industry of the introduction of the 5% tax on caravans?
First, let me say that I am grateful to have an opportunity to return to the Dispatch Box. On the point the hon. Gentleman raises, I really do not think that the changes, which in our original proposals would not have come into effect until October and which now will not come in until April, can be the source of some of the current difficulties within the caravan industry. We think we have the right policy now and that a 5% rate is fair.
With permission, Mr Speaker, I will make a statement on Syria.
The whole House will be united in support for the Syrian people. They have endured 15 months of fear and suffering. Eighty-seven thousand people have fled to neighbouring countries and up to 500,000 are internally displaced. As many as 15,000 people may have died, and thousands of political prisoners are imprisoned and at risk of mistreatment and torture.
Each day, reports emerge of savage crimes. The Syrian military are surrounding and bombarding towns with heavy weaponry, then unleashing militia groups to terrorise and murder civilians in their homes. Those deliberate military tactics are horrifyingly reminiscent of the Balkans in the 1990s. Two weeks ago in al-Houla, 108 civilians died in this manner, including 49 children under the age of 10. A similar atrocity appears to have been committed last week in al-Qubair, where 78 people were killed, including women and children. UN monitors attempting to report on those events have been shot at and obstructed.
These grotesque crimes have illuminated to the world the nature of the events in Syria and the conduct of the Assad regime. It is attempting, with utter inhumanity, to sow terror, to break the spirit of opposition in Syria and to try to reassert control. This is as futile as it is morally reprehensible. By branding their opponents terrorists and using tanks against them, the regime is driving Syrians to take up arms to defend their homes; and by singling out particular communities, it is inflaming sectarian tension. There are credible reports of human rights abuses and sectarian attacks by armed opposition fighters, which we also utterly condemn. We also have reason to believe that terrorist groups affiliated to al-Qaeda have committed attacks designed to exacerbate the violence, with serious implications for international security.
As a result, Syria today is on the edge of civil war. That could lead to thousands more casualties, a humanitarian disaster and human rights violations on an even greater scale, and instability in neighbouring countries. We are working intensively to find a peaceful means of resolving the crisis. Our approach, in close coordination with our European partners is: first, to push for implementation of the Annan plan as the internationally agreed road map to end the violence; secondly, to increase the pressure and isolation felt by the regime; and, thirdly, to ensure justice, accountability and humanitarian assistance for the Syrian people. I will take each of those in turn.
First, the United Nations and Arab League envoy for Syria, Kofi Annan, has set out a six-point plan to end the violence and to start a political process to address the legitimate aspirations of the Syrian people. It is backed by two UN Security Council resolutions, 2042 and 2043. The latter mandated the deployment of the 300 UN monitors who are now on the ground in Syria. I pay tribute to them for their difficult work in dangerous circumstances. As Kofi Annan has made clear on many occasions, the onus is on the regime to call off its military assault, to adhere to a ceasefire and to allow a process of political reform. Political transition must be based on democratic principles and reflect the needs of all Syria's minority communities, including Kurds, Christians and Alawites. On 1 April, the Syrian regime committed itself to implementing the Annan plan, and on 12 April it announced a ceasefire. It has not kept either of those commitments.
Two weeks ago, I discussed the situation with my Russian counterpart, Sergei Lavrov, in Moscow. I made the case for Russia to use its crucial leverage with the Assad regime to ensure the full implementation of the Annan plan, since the collapse of Syria or descent into civil war would be against Russian interests as well as those of the wider world. I also raised the issue of arms sales to the Syrian regime, which we believe should be stopped immediately.
In Istanbul, on 1 June, I held talks with members of the Syrian National Council and other opposition representatives, including Kurds, and I returned there last week for discussions with Secretary Clinton, the Turkish Foreign Minister and the Foreign Ministers of 12 European and Arab nations. I am in regular contact with Kofi Annan, and preparations are in hand for a meeting of the friends of Syria group, which now numbers more than 80 countries, in early July.
Last Thursday, the Russian Government put forward their own proposal for an international conference on Syria. Such a meeting could help generate momentum behind the Annan plan. However, it would have to be a meeting that led to a change on the ground, and did not just buy time for the regime to kill more innocent people. So, in our view, any such meeting would need to be based on a common understanding that it would lead to a political transition; it should include genuine steps to implement the Annan plan; and it should only involve nations that are committed to being part of the solution in Syria. We will discuss with our partners whether it is possible to agree concerted international action on this basis; my right hon. Friend the Prime Minister will take forward these discussions with other Heads of Government when he attends the G20 meeting in Mexico next week.
Making a success of the Annan plan also requires the Syrian National Council and other opposition groups to put aside their differences, to unite around the common goal of a democratic transition and to assure all Syria’s minorities that their rights will be protected in a multi-ethnic and democratic Syrian state. This has been my consistent message in all my discussions with opposition figures. We welcome the meetings with opposition groups that will be held in Istanbul later this week and subsequently in Cairo, which have our active support.
The Annan plan is not an open-ended commitment; it cannot be used indefinitely by the regime to play for time. If it is not implemented, we will argue for a new and robust UN Security Council resolution aimed at compelling the regime to meet its commitments under the plan, and requiring all parties to comply with it. So we have already begun discussions at the Security Council on the elements of a resolution. We do not want to see the Annan plan fail, but if, despite our best efforts, it does not succeed, we would have to consider other options for resolving the crisis and, in our view, all options should then be on the table.
Secondly, we are taking steps to increase the isolation of the regime. On 29 May, we expelled three Syrian diplomats from London, including the chargé d’affaires, in co-ordination with the United States, Canada, Australia, France, Germany, Japan and other countries that took similar steps. We are also in discussions with Arab League and like-minded countries about measures to tighten the stranglehold on the regime’s resources and external sources of support, building on the 15 rounds of EU sanctions that already target 128 individuals and 43 entities.
Thirdly, we are acting to help end impunity for atrocities, and we are supporting the humanitarian needs and legitimate aspirations of the Syrian people. Britain co-sponsored the UN Human Rights Council resolution of 1 June, which was carried by 41 votes to three. It condemned the al-Houla massacre, mandated the UN commission of inquiry to investigate and gather evidence about it, and highlighted the recommendation of the UN high commissioner for human rights that the UN Security Council should refer Syria to the International Criminal Court. We are working on a further UN Human Rights Council resolution to reinforce these objectives.
We also sent a team of British experts to Syria’s borders in February and March to gather testimony from Syrians. The team found evidence of violations of international law and international human rights law, including murder, rape, torture, unlawful imprisonment, enforced disappearance and persecution. This work to document abuses is being continued. The team of Syrians that helped to document the al-Houla massacre was trained by the United Kingdom, and we are working closely with the United States and the UN commission of inquiry to ensure that any evidence is collated and stored for use in a future legal process. We are also increasing UK funding for the Syrian opposition and civil society groups, providing £1.5 million of assistance in this financial year to help provide human rights monitoring and media training for activists, and other non-lethal support, such as communications equipment.
My right hon. Friend the Secretary of State for International Development and his Department are working with the UN and the international community to ensure that urgent humanitarian assistance gets to the 1 million people estimated to be in need. The Syrian regime has now agreed a plan to respond to humanitarian needs. There can be no further delay in its implementation, and humanitarian agencies must be allowed full and unhindered access to all areas in Syria. Britain has helped to provide emergency food supplies for nearly 24,000 families inside Syria, safe drinking water for 30,000 people, blankets for 5,000 people, medical assistance for up to 25,000 people and support to refugees in neighbouring countries.
The coming weeks must see an intensified and urgent international effort to stop the violence and restore hope to Syria, and the British Government remain absolutely focused on this goal. If all the efforts I have described fail, Britain will work with the friends of Syria group to increase further the isolation of the regime and to adopt sweeping new sanctions across the world.
We will not rule out any other option that could at any stage stop the bloodshed, and we will not relent in our efforts to ensure the political transition, justice, accountability and security that the Syrian people need and deserve, and to support greater political and economic freedom in the middle east. This freedom is not only the legitimate right of all the peoples of the region, but the foundation of lasting peace, stability and prosperity.
The time has long passed for the Assad regime to stop the killing and torturing of its people, and it is time now for all nations on the UN Security Council to insist on the cessation of violence and on the political process, which remain the only peaceful way to resolve this mounting crisis.