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Commons Chamber

Volume 546: debated on Thursday 21 June 2012

House of Commons

Thursday 21 June 2012

The House met at half-past Nine o’clock


[Mr Speaker in the Chair]

Bill Presented

Small Charitable Donations

Presentation and First Reading (Standing Order No. 57)

Mr Chancellor of the Exchequer, the Deputy Prime Minister, Mr Secretary Hunt, Danny Alexander, Mr Mark Hoban, Mr David Gauke, Miss Chloe Smith and Mr Nick Hurd, presented a Bill to provide for the making of payments to certain charities and clubs in respect of certain gifts made to them by individuals, and for connected purposes.

Bill read the First time; to be read a Second time Monday 25 June, and to be printed (Bill 28) with explanatory notes (Bill 28-EN).

Backbench Business

British-Irish Parliamentary Assembly

Before I call Mr Laurence Robertson, let me point out that the debate is heavily subscribed and I have therefore imposed a five-minute limit on each Back-Bench contribution after that of Mr Robertson.

I beg to move,

That this House has considered the matter of the work of the British-Irish Parliamentary Assembly.

I thank you, Mr Speaker, and the Backbench Business Committee for this opportunity to discuss the work of the British-Irish Parliamentary Assembly, which I shall refer to as BIPA. I also thank my right hon. Friend the Minister and other right hon. and hon. Members for attending the debate—the good turnout demonstrates that the work of this body is recognised.

BIPA was started in 1990 as the British-Irish Inter-Parliamentary Body to foster a common understanding between the bodies represented on it. It has 68 members, including 25 from both Houses of the UK Parliament, 25 from both Houses of the Irish Parliament, 15 from the United Kingdom’s devolved institutions, and one member from each of the Isle of Man, Jersey and Guernsey, so a wide area is well represented.

A parallel body at ministerial level, the British-Irish Council, was set up in 1998, and at this stage it is appropriate for me to say that BIPA seeks closer links with that body. BIPA holds two plenary sessions a year, one in the UK and one in Ireland. The 44th plenary session was held in Dublin between 13 and 15 May, and, not for the first time, it was attended by the Taoiseach. In addition, all members present were welcomed to the President’s official residence at Phoenix park by Mr Michael D. Higgins, the President of Ireland.

I would like to quote from a speech made by the Taoiseach to BIPA:

“I know from my own time as a member of the association the importance of the work of BIPA. Now that I am Taoiseach, I can see very clearly the contribution you continue to make in support of peace, prosperity, reconciliation and political friendships and understanding between these islands.”

A strong commendation indeed. The Taoiseach referred to the importance of British-Irish relations, and his sentiments are borne out by the facts, especially with regards to securing the peace in Northern Ireland and trade.

The UK is by far Ireland’s biggest export destination and, in turn, Ireland is the UK’s fifth largest export market. As the Prime Minister has said on many occasions, we export more to Ireland’s 4.5 million people than we do to the third of the world’s population in China, India, Russia and Brazil. That important statistic is rather worrying in some ways, and I suggest not that we reduce our trade with Ireland, but that perhaps we should try to increase it to further corners of the world. Even in recent times of economic difficulty in 2010-11, trade between Ireland and the United Kingdom actually increased.

Issues such as trade were discussed at the plenary session in May by a number of speakers, including senior executives from Glen Dimplex, Greencore and GlaxoSmithKline, and the importance of trade links was referred to by the Irish Finance Minister. The plenary session also heard from the Irish Minister for Transport, Tourism and Sport, who referred to the fact that 600 passenger and freight services and 60 air routes run between the UK and Ireland every week, resulting in 2.9 million British visitors to Ireland last year alone. Those are startling statistics.

The Irish Health Minister told the plenary session that Ireland is looking to learn from the UK’s experience of health care. We heard from Darina Allen from Ballymaloe cookery school about good healthy food, and from Dr Maurice Manning on the importance of correctly handling the decade of centenaries that we are now in.

Interestingly, the plenary session also approved a motion by the right hon. Member for Torfaen (Paul Murphy), a former co-chair of BIPA, which expressed concern about the proposal to close RTÉ’s offices in London. I hope he will raise that matter in a few minutes if he catches your eye, Mr Speaker. Finally, the work of the four sub-committees—on sovereignty matters, European affairs, economic affairs and environmental and social affairs—reported to the plenary session. I thank committee members for their work in preparing reports on important issues, not least one on flooding, which is an issue close to my heart, given that I represent Tewkesbury.

I thank the hon. Gentleman for giving way and for his assiduous activities as co-chair. Does he believe, like me, that we need to take the sub-committee reports further in Parliament and the devolved Assemblies? A lot of hard work has gone into them, but perhaps more action should sometimes come out of them.

I thank the hon. Gentleman for his very good intervention. Developing close relationships with the British-Irish Council would be a start, and we could report to that body about the assembly and sub-committee’s work. I wanted this debate to highlight the existence of BIPA and its work. There is a long way to go to get the Government to take on board what we are doing, but at least this is a start—the Minister is here and listening—and I certainly think the hon. Gentleman makes a very good point.

The plenary session was expertly arranged by the Irish members and secretaries. In particular, I pay tribute to my co-chairman, Joe McHugh TD, who is a skilled, dedicated and helpful co-chairman, for all his work and the support he gives me as a relatively new co-chairman. The legendary Irish hospitality was also on full display at the plenary session, as I am sure everybody can imagine, including at the President’s house. The Irish take BIPA very seriously, as was reflected in the Taoiseach’s speech that I read out earlier, but there has been suspicion and concern in the past—this is no reflection on the work done by my predecessors and previous BIPA members—that it is not taken quite as seriously on the British side. That is one reason I wanted this debate and why I am so pleased to have secured it. We are striving to match the enthusiasm and commitment of the Irish, and we will hold the 45th plenary session, from 21 to 23 October, in Glasgow. We look forward to going there. I said that there had been a trade or economic theme to the plenary in Dublin, and we hope to follow a similar line in Glasgow, when I am sure we will be treated to many interesting lectures and discussions about some of the products we might find in Scotland.

I would like to thank our staff on this side of the Irish sea, Robin James and Amanda Healy, for their hard work in putting all the meetings and everything else together. Without their help, we could not hold the meetings. We will be visiting Dublin next week for steering committee meetings, and on Monday we will discuss how we might move things forward, including how we might bring to the Governments’ attention the work of the steering committees, as was mentioned earlier.

Some people consider BIPA a talking shop, but, given the history between the two countries, particularly the terrible experiences in Northern Ireland, I would suggest that talking is extremely important for relations with Ireland and within Northern Ireland. Had we not had people talking in the past, we would not have achieved the relative peace we have in Northern Ireland—I say “relative”, because challenges still lie ahead. Just last night on “Newsnight”, there was a harrowing report about some activities in parts of Northern Ireland. There are people who want to wreck the peace process and return to the bad old days, so I would suggest that if BIPA is a talking shop, it is a very useful talking shop, because it enables us to get together with people who perhaps have different views and aspirations, but who all agree that democracy and talking to each other are the way forward.

As many people in Ireland said and continue to say, relations between our two countries are at an all-time high. I was greatly privileged last year to be in Ireland for part of Her Majesty’s visit, and I have to say it was an awesome visit. The success of the visit, of course, was down to Her Majesty’s enormous dedication and extraordinary talents, but it was also down to the extremely warm welcome and wonderful preparations on the Irish side. It really cemented relations to an extent that had not been seen before. We look forward to future relations with Ireland. If BIPA has made a contribution to the development of peace in Northern Ireland and the close relations between the UK and Ireland, I am pleased to be part of that, and I pledge to work as hard as I can to help steer the organisation in the right direction.

I do not want to speak for any longer, because several Members wish to speak, but I want again to thank you, Mr Speaker, and the Backbench Business Committee for allowing us the time to debate this issue and to bring to Parliament’s attention this body’s work and to report the news of its most recent activities.

The right hon. Member for Torfaen (Paul Murphy) will also have 10 minutes in which to speak.

I am grateful for this opportunity to speak and to follow the hon. Member for Tewkesbury (Mr Robertson), who is doing a very good job as the co-chair of this important assembly. The Backbench Business Committee should be congratulated, because this is the first time in 22 years that the assembly’s work has been debated on the Floor of the House of Commons. It is none too soon, because the assembly, formerly known as the British-Irish Inter-Parliamentary Body, has played an enormous role in the development of peace in Northern Ireland and in relations between Britain, Ireland and, in more recent years, the devolved Parliament and Assemblies.

My own involvement, first as co-chair of the body and then as a Northern Ireland Minister, goes back to 1998, when I addressed the body in Dublin not long after the Good Friday agreement was signed. The hon. Gentleman rightly pointed to the body’s work from 1990 to 1998, and he was right that it was a talking shop, but before 1990 there was no talking. The whole purpose of the body was to bring together parliamentarians from London and Dublin to break the ice in the hugely tense relations between Britain and Ireland at the time. If Members cast their minds back to the 1990s, they will remember some very difficult occasions, and harrowing and dreadful events, that had to be dealt with, but, in all those years, the body stuck it out, talked together and went to sessions in Britain and Ireland to deal with those enormous issues. The assembly, whose first chair was Peter Temple-Morris, certainly did a tremendous job in helping to bring about peace in Northern Ireland.

The assembly has taken on a unique new role in recent years. Although it is called the British-Irish Parliamentary Assembly, it brings together parliamentarians from the devolved Administrations—from Edinburgh, Cardiff and Belfast—and from Guernsey, Jersey and the Isle of Man. That is an important development, because no other body in these islands brings together parliamentarians from all those different Administrations and jurisdictions. And it has proved very successful. Best practice is shared between parliamentarians, and meetings are held between members of the assembly, whether formally or informally, right across all the islands represented.

A welcome feature over the past few years has been the involvement of the Democratic Unionist party. Over the last number of years its members, as well as members of the Ulster Unionist party, have played an enormous role in bringing forth the case for Unionism in the British-Irish Parliamentary Assembly. The Social Democratic and Labour party—and, indeed, Sinn Fein—have been members of the assembly for many years as well. It is that enormous wealth of experience of parliamentarians from right across the islands that has made the body completely different from any other.

Members may recall that the peace process in Northern Ireland was divided into three—just like Caesar’s Gaul. The third strand of it was east-west relations—the relations between Dublin and London. What was envisaged—and what is now in existence—was a parliamentary aspect to that, namely the British-Irish Parliamentary Assembly, but also, as the hon. Member for Tewkesbury has said, the British-Irish Council, which represents the Governments of Britain and Ireland and the devolved Administrations. There is, in my view, room for improvement in relations between the British-Irish Parliamentary Assembly and the British-Irish Council. They both deal with similar issues—relations between our different countries. I hope that the Government will look seriously at how the British-Irish Council will deal with BIPA in years to come—I also hope that the Minister will refer to that in the wind-up. When I was a member of the British-Irish Council, I addressed the assembly on the very issue of improved relations. I admitted then—and I still believe—that there is certainly room for improvement.

I wish to conclude on the issue of RTÉ and the presence of that important television and radio company here in Britain. For many years now it has had a significant presence in Westminster. RTÉ proposes to close down that presence because of the enormous financial pressures that it is under. I understand that, but members of the assembly have debated the issue in Dublin and an early-day motion has been tabled here in the House of Commons. It is our belief that RTÉ should still have a presence here in Great Britain, albeit not necessarily in its current form. It could be, for example, that RTÉ might share an office with another television or radio company, just as the BBC does in Dublin. However, given the continuing importance of British-Irish relations, the enormous significance of the Irish diaspora here in Great Britain, the fact that tens of thousands of British people work in Ireland and the political importance of the relationships between these islands, it is important that RTE should retain its presence here. I hope that the Minister and the shadow Minister will be able to comment on that important issue as well.

The British-Irish Parliamentary Assembly has been a tremendous force for good in the last 22 years. It has certainly helped to improve the peace in Northern Ireland. It has brought together politicians from wide and disparate backgrounds, which, more recently, has meant that it has become a forum for parliamentarians from the devolved Administrations as well. It has gone from strength to strength. I am delighted that we have had the opportunity to address this important issue today in our House of Commons.

It is a privilege to follow the right hon. Member for Torfaen (Paul Murphy), who has served both as the British co-chairman and as the Secretary of State for Northern Ireland. I congratulate my hon. Friend the Member for Tewkesbury (Mr Robertson) on securing this debate. I say that for a number of reasons, one of which has no relation to British-Irish relations. This debate sets an important precedent for this House, because there are a number of parliamentary bodies on which Members are represented, but about which we hear very little in the Chamber, such as the Parliamentary Assembly of the Council of Europe, the Parliamentary Assembly of the Organisation for Security and Co-operation in Europe and the NATO Parliamentary Assembly, as well as the Inter-Parliamentary Union and the Commonwealth Parliamentary Association. I hope that we can perhaps prevail upon the Backbench Business Committee to consider those bodies as subjects for debates in this House as well.

I pay tribute to two former Members of this House for the work they have done on the British-Irish Parliamentary Assembly. We have already heard about Peter Temple-Morris—Lord Temple-Morris—who was the founding co-chairman on the British side. He is to be commended. I would also like to mention a former Conservative colleague, Michael Mates, who, through all the years of the Conservative party being in opposition, was the British co-vice-chairman—a post I now hold—on the Conservative side. He certainly made it his job to rally Conservative Members to participate fully in the assembly.

The interesting thing about those two, and about my hon. Friend the Member for Tewkesbury and me, is that our links with Ireland are very tenuous. We cannot claim family links, through grandparents or great-grandparents, but we share a belief that if British and Irish people talk together, many of the problems that have been seen to divide us can actually unite us. In these islands the British and Irish people share history, economic links, a language, a legal system and culture. All that was brought together in the recent visit by Her Majesty the Queen to Dublin. I hate—I always have, and I think everybody in this House would too—the IRA and what it brought about, but it had a view that was shared in Dublin and by most Irish people. Although I have the greatest of respect for nationalists, whether they are Irish nationalists, Scottish nationalists or Welsh nationalists, I think they are wrong. However, I admit that in a democracy they must be able to present their views, and that is absolutely right. However, there is more that unites us in these islands than divides us.

I chair the European affairs committee in the assembly. We have recently produced reports for the assembly on EU migrant workers, a problem that both jurisdictions have had to cope with in the economic downturn. We have looked at other European Union policies, in particular, some of the EU’s regional policies, whereby apparently disparate regions in different countries have come together to find economic solutions. We are currently looking at the implications of the European convention on human rights in all our various jurisdictions.

I think we do tremendous work, but I want finally to make a plea to the Minister. I feel that the east-west dimension, which includes the British-Irish Council and the British-Irish Parliamentary Assembly, should work much more closely together.

Let me say what an honour it is to follow the hon. Members for Tewkesbury (Mr Robertson) and for North Dorset (Mr Walter) and my right hon. Friend the Member for Torfaen (Paul Murphy). Let me also congratulate the hon. Member for Tewkesbury on securing this debate.

I am vice-chair of committee C in the assembly, which deals with the economy, a subject that is—if I said “popular”, that would probably not be the right word, but it has certainly had a lot of attention focused on it. I hope that both Governments will look at, and take on board, our recent report on small and medium-sized enterprises and the problems they are experiencing. It was an excellent report, and we are going to look at credit unions next.

As my right hon. Friend the Member for Torfaen said, the next plenary session will be in Glasgow. I can assure him and all those attending from this and other Houses that they will have an excellent time. I know that those who practised drinking Irish whiskey will be looking forward to the real thing, so I invite them to try it when they come to Glasgow.

One thing that has come out of what has been said so far is the fact that the United Kingdom and Ireland have never been so close. Her Majesty the Queen had a lot to do with that. I believe that her visit signalled a togetherness that was not there before and that a lot of hatreds were buried that day when she set foot on Irish soil. The people of Ireland took her to heart, and it has been said many times since how much they appreciated her going there. The visit will have a lasting effect on the relationship between this country and Ireland.

The Irish nation has had a great influence on the west of Scotland. More than a few people came over during the potato famine and other sad times in Ireland. My own grandmother came from Ireland, although, sadly, I never had the opportunity to meet her and find out her story. That is my loss, and I need to bear it. There are many people of Irish descent in the west of Scotland, and the rivalry is still there between those on either side of the divide, although not to the same extent that it once was. We live as one nation these days and get on together a lot better. I believe that that is because of the relationship between Ireland and the United Kingdom. The leadership that has been shown by both Parliaments has had a lasting and increasing effect, on both sides of the Irish sea.

The need for co-operation has never been so great, particularly in times such as these. I say that as one who is involved with the BIPA economic committee. Ireland is important to this country, and we are important to Ireland. It is only right, therefore, that we should have mutual respect for each other and a mutual desire to work with each other. I believe that that co-operation will become even greater in the years to come, and that, as we come out of recession, there will be opportunities on both sides of the Irish sea to build up those relationships even more.

I look forward to a time when BIPA is not only taken for granted but looked at and listened to in the same way as other such bodies throughout the world are looked at and listened to. We have brought forward a lot of good ideas and put many good reports to both Parliaments, and I look forward to seeing the Government’s response to our report on small and medium-sized enterprises. It is remarkable that the problems affecting those over the water in Ireland are so similar to the problems in this country. We are similar, we are the same people and we speak the same language. We in Scotland certainly hold Ireland very dear. We have more than a little respect for the country and many of us regularly take holidays there. It is important that the British-Irish Parliamentary Assembly should go forward, for the benefit not only of this House but of the Irish people.

I congratulate my hon. Friend the Member for Tewkesbury (Mr Robertson) and the right hon. Member for Torfaen (Paul Murphy) on securing the debate. They are, of course, current and past co-chairs of the British-Irish Parliamentary Assembly, and I am pleased to recognise their individual contributions to that important institution.

My own history with the British-Irish Parliamentary Assembly—and the British-Irish Inter-Parliamentary Body, as it was—goes back some considerable time. I attended a plenary session in Cork as long ago as 2004, when I was a member of the Northern Ireland Affairs Committee under the chairmanship of the then right hon. Member for East Hampshire, Michael Mates—whom my hon. Friend the Member for North Dorset (Mr Walter) has mentioned—who also sounded out whether I would like to become an associate member of BIPA, which I subsequently did.

My hon. Friend the Member for North Dorset mentioned closer co-operation. I understand that the new British-Irish Council standing secretariat, established in January 2012 in Edinburgh, has met the BIPA secretariat to discuss the implementation of the various areas for improvement. I hope that my hon. Friend will welcome that as a constructive move forward. The right hon. Member for Torfaen asked about RTÉ, a matter that concerns us all. RTÉ is an independent broadcaster, and it must make its own decisions, so I cannot comment further on that.

Relations between the British and Irish Governments and the levels of political stability in Northern Ireland have greatly advanced since the time I attended that meeting in Cork. We are a world away from the situation in 1990 when the British-Irish Inter-Parliamentary Body was established to provide a forum for parliamentarians based in Westminster and Dublin to discuss areas of mutual concern. We can all reflect on those changes and welcome them wholeheartedly. At that Cork meeting in 2004, most of the proceedings were taken up by discussions on the prospects for arms decommissioning and the need for all the main Northern Ireland political parties to enter into talks.

BIPA played an important role in developing understanding between parliamentarians from the United Kingdom and our colleagues in Ireland in those years, as the right hon. Member for Torfaen reminded us. It was set up to get people to talk, when they were not doing so. It is worth remembering that, as we consider BIPA today. At a time when getting together to talk was a huge step for some of the Northern Ireland parties, members of BIPA talked and explored ways in which progress might be made. BIPA’s subsequent expansion in 2001 extended the desire to gain mutual understanding of each other’s positions to the Northern Irish and Welsh Assemblies and to the Parliaments of Scotland, Jersey, Guernsey and the Isle of Man.

It might be difficult or impossible to quantify properly, but none of us should doubt the value of BIPA. The Secretary of State has been an attendee at several plenaries now. I share his enthusiasm and look forward to attending again. Perhaps even more important are the opportunities for building relationships offered by talking long into the evenings at BIPA gatherings. As here at Westminster, having contact in—I shall use a euphemism—a relaxed environment with those whose views we think we oppose often reveals more shared insights than we realise. That was certainly my experience over several pints in Cork. I would not seek to emulate the record of my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), but I remember drinking a fair few on that occasion. At that Cork meeting, our main concern was that the Northern Ireland Assembly should get up and running again. In 2004, it was two years into a five-year suspension. Many issues in Northern Ireland remain to be resolved, but we are much further on than we were.

It is instructive to note that the most recent BIPA plenary was taken up not by Northern Ireland politics but by consideration of the deepened understanding and co-operation between the British and Irish Governments, and of the commitment given by the Prime Minister and the Taoiseach in March to explore ways of enhancing that relationship even further.

I listened with interest to the hon. Member for Glasgow North West (John Robertson) when he talked about the recent BIPA reports that he had been involved in, and about the large number of people from Ireland who live on the west coast of Scotland. I can attest to that fact, as the former Conservative and Unionist candidate for Greenock and Inverclyde in the 1997 election. I fought Greenock and Inverclyde, and they fought back. They won. Among the many people of Irish descent associated with Scotland is that great actor, Sir Sean Connery, who resides in the Bahamas and supports Scottish independence from there. It is a nice warm place from which to do it. I believe that his grandparents came over to the west of Scotland from Ireland.

The activities of the recent BIPA plenary built on the historic visit by Her Majesty the Queen to Ireland last year. At BIPA in Dublin last month, the Taoiseach called that visit “ground-breaking”. That is only one of many superlatives used to describe the event when it is mentioned. When we discuss the current state of British-Irish relations, it is mentioned often. As we continue to celebrate Her Majesty’s diamond jubilee year, I want to acknowledge again her personal contribution to our relationship with our nearest neighbours.

I look forward, along with the Secretary of State, the First Minister and others, to welcoming Her Majesty to Northern Ireland next week. I know that that welcome will be extended by many thousands of people from across the community. Indeed, we heard earlier this week that the supply of 10,000 tickets being distributed to members of the public by Ticketmaster had been exhausted within six minutes. Those answering the telephones at the Northern Ireland Office, who have been more used to press inquiries over the years about one political development or another, have been besieged by people wanting to know how they too can join in the celebrations on the Stormont estate. That might not be entirely welcomed by my staff on the end of the phones but it is, I feel, a positive development and a clear indication of the high regard in which Her Majesty is held in that part of her realm.

The BIPA plenary in May discussed the commitment given by the Prime Minister and the Taoiseach to continued and increasing co-operation. That is essential as both countries face the economic challenges of which we are all, alas, so well aware. Details are already emerging of increased collaboration on making our businesses more globally competitive, on ensuring that we share progress in research and development that is to our mutual benefit whenever possible, on increasing trade between our countries and on generating sustainable employment as we both seek to grow our way out of these difficult economic times. We are committed, alongside our Irish friends, to ensuring this is more than a token gesture. The outcomes will be discussed at summit level annually, and I know that officials across Whitehall are already engaging with their Irish counterparts.

I have personal experience of the importance of sharing understanding with colleagues in the Irish Government. My discussions with Jimmy Deenihan, the Minister for Arts, Heritage and the Gaeltacht have, I hope, provided us with a useful basis on which to approach the forthcoming decade of anniversaries and commemorations. We know better now than ever before that a shared understanding of how we might remember and interpret the events of the past has an important impact on our future direction. We are committed to ensuring that such anniversaries are handled sensitively, and in a way that enhances understanding and cohesion rather than challenges those goals.

There is so much more I could say about this excellent institution if I had the time. I think that the British and Irish Governments, members of BIPA and its committees, and its attendees share an understanding of the challenges we all face. In particular, we can welcome much more progress over the years in relation to its work on Northern Ireland.

On Tuesday, I was pleased to be able to welcome the First and Deputy First Ministers and potential sponsors of high-profile events in the programme being developed for Derry/Londonderry’s year as UK city of culture in 2013—just one of the areas of co-operation. Also in Londonderry, the “Peace One Day” concert today marks the beginning of 12 weeks of celebrations around the London 2012 Olympic and Paralympic games. I am pleased to say that Londonderry is, quite rightly, playing its part tonight in the launch of the Cultural Olympiad. Next week, the Irish Open returns to Royal Portrush for the first time since 1947, and Northern Irish major winners Rory McIlroy, Graeme McDowell and Darren Clarke will be as big an attraction as any of the international stars taking part.

In conclusion, I know that colleagues here at Westminster and in Dublin, and Members from both places who attend the British-Irish Parliamentary Assembly, will share in the excitement and will welcome the opportunity that the coming months provide for Northern Ireland to showcase its many unique and varied attractions to the world.

I pay tribute to the work of the British-Irish Parliamentary Assembly, and to the hon. Member for Tewkesbury (Mr Robertson) for obtaining this important debate and for his work as co-chairman of the assembly. With his colleague from the Irish side, Joe McHugh TD, he has led BIPA with commitment and determination. I also pay tribute to my right hon. Friend the Member for Torfaen (Paul Murphy), whose association with BIPA, service to the people of Northern Ireland and involvement with the island of Ireland is well documented. Indeed, I acknowledge all of those involved in BIPA, many of whom are here this morning.

The relationship between the UK and Ireland is very special. Although it was once difficult and strained, it has been totally transformed by the peace process in Northern Ireland into a real friendship between close neighbours. Her Majesty the Queen’s visit last year showed just how much our bond has deepened and developed. This truly is a golden age for British-Irish relations, and while Her Majesty’s visit is the most prominent example, there are so many facets to our relationship that a range of sometimes small but often significant things are happening on all levels.

That is because the ties between the UK and Ireland are bonds of people, places and history. Our shared past is complicated, intense and has often been marred by conflict and division, but in this year, the 100th anniversary of the third Home Rule Bill and the Ulster covenant, the relationship is transformed. We stand shoulder to shoulder now as friends and neighbours, and the special link between our countries has deepened, widened and developed as we both strive for a fairer, more equal and more just society.

What the UK and Ireland also share are values. The values of Irish people and of the Irish in Britain are my values and those of the people of Britain, too—the importance of fairness, family, looking out for each other, working together, and taking pride in identity, pride in community, and pride at playing a part in doing our bit to make society better. The contribution of the Irish in Britain to society here is immense in every area of British life—whether it be business, civic society, the media, culture and arts, and, of course, politics. I see that in my own constituency in Gedling and in the city of Nottingham.

I thank my hon. Friend the Member for Vale of Clwyd (Chris Ruane), the chair of the all-party group on the Irish in Britain, whose work here in this place on behalf of that community has made such a significant contribution to enhancing the understanding of all of us. I know that he and others, as the Minister mentioned, are working hard at the minute to try to influence RTÉ, the Irish state broadcaster, to retain its London bureau, which is so valued by Irish people in Britain and by those in Ireland with family members living here or with an interest in British affairs.

I had the privilege of speaking to the Irish Labour party’s centenary conference in Galway earlier this year, and on a trip to Dublin recently I met TDs and senators from all parties in the Oireachtas. At each, I was struck by the interest in UK politics and the knowledge of the work of MPs and British parliamentarians, and was delighted to hear of their friendships with many in this House. While discussing a wide range of topics with them, it was clear to me that we have much in common on issues such as security, immigration, tourism, transport and health. It underlined to me the importance of working across boundaries as parliamentarians to face challenges together.

The fact that representatives from the administrations and institutions in Scotland, Wales, Northern Ireland, Guernsey, Jersey and the Isle of Man attend BIPA adds much to the work of the assembly. Alongside colleagues from the national Parliaments in Dublin and London, the willingness of BIPA members to encourage engagement and co-operation on matters of mutual interest and concern is of great benefit to us all. There are indeed many difficulties and challenges that face people across these islands. The harsh economic realities impact on families in London, Dublin, Belfast, Edinburgh and Cardiff, and sharing experiences and learning can help not just us as parliamentarians but, more importantly, the people we represent.

During that visit to Dublin, I went to the national war memorial in Islandbridge, which commemorates those Irishmen who died in the world wars. It was an incredibly moving experience, and I was very grateful to the Royal British Legion in Ireland for presenting me with a list of Irish soldiers who had served in a regiment closely connected with my own area of Nottinghamshire, the Sherwood Foresters. I also met the Gaelic Athletic Association in Croke park, and was very touched when its president presented me with a history of the organisation. I was also impressed with the work of the GAA in communities across Ireland, and its acknowledgement and efforts to reach out beyond its traditional base in Northern Ireland.

Both places are hugely symbolic for many people in Ireland, but they are also symbols of hope and of the outworking of the peace process, which has opened them up to those who might not previously have been comfortable with aspects of their history. I know that there are many differing perspectives on that history, but ultimately it is shared. In that sense, we can choose either to use the different perspectives of it to entrench division, or we can use them to learn about history, ourselves and each other, and bring communities together in a new understanding of what happened during that troubled past. I know that is the wish of the vast majority of people in all the islands and part of the mission of BIPA.

It is perhaps the peace process in Northern Ireland that has both transformed and is the greatest testament to the new era in British-Irish relations. Labour Members will speak up for peace and progress, as the Minister and we all do, but we do so particularly as the party in government that helped, with others, to bring about the Good Friday agreement and all that flowed from it. East-west relations and the forging of new alliances across all the devolved Administrations and between the UK and Irish Governments were an important part of that.

As the Opposition, we will hold the Government to the promises made to help to deliver a real peace dividend for Northern Ireland. We will also, of course, give our support to the Government in enhancing and developing relations between the UK and Ireland, particularly in relation to Northern Ireland. Although much progress has been made, we must make sure that the political focus does not prematurely move on. We need to continue to work together on Northern Ireland and, as I have said before, in recognising continuing progress, we still need to understand the threats that remain and recognise the special circumstances that exist.

As the Irish President, Michael D. Higgins, said at the reception he hosted for BIPA in Dublin last month,

“while it is only right that we celebrate how far we have come, and how close and strong the relationships across these islands remain, we must not allow any complacency to dislodge our work or deflect from our efforts.”

I know the President would be pleased to hear his words echo through the work of the embassy of Ireland here in London; the efforts and friendship of Ambassador Bobby McDonagh are valued by me and many others in this House. I know, too, that all Members will join me in thanking his deputy, Barbara Jones, for her work over the last number of years and wishing her all the very best as she takes up her new role in the joint secretariat of the British-Irish intergovernmental conference in Belfast—another example of the closeness of roles and relationships in these islands. Similarly, the UK’s ambassador to Ireland, Dominick Chilcott, his predecessor, Julian King, and the deputy head of mission, Andrew Staunton, have all made hugely significant contributions to British-Irish relations. I know that I speak for the Minister, and indeed for all Members, when I say that those individuals are worthy of mention on the Floor of the House in recognition of the vital work that they have done and are still doing.

We all know that the people of Northern Ireland and their representatives are still wrestling with the consequences of the past as they move forward, and this is no time for us to fail to give them the priority that they both demand and deserve. For our part, we will try our very best to meet the challenges of supporting the peace process, standing up for the people of Northern Ireland, and helping to build the prosperity that its people deserve.

The House recently debated some of the fantastic things that are happening in Northern Ireland in this year of 2012. As I said on that occasion, one of the privileges of my position is that it enables me to visit Northern Ireland regularly, and to see for myself the wonderful things that are taking place there. Only a fortnight ago, I was honoured to join the right hon. Member for Belfast North (Mr Dodds), Diane Dodds MEP and the Lord Mayor of Belfast at city hall to witness the culmination of the Olympic torch relay, which saw the famous flame travel throughout Northern Ireland and visit Dublin. Is there a better metaphor than the great symbol of the Olympic flame for the interconnectedness of all of us in these islands, the progress that we have made, and our hope for the future?

Next year Derry will become the first UK city of culture. I was delighted to visit it with my hon. Friend the Member for Foyle (Mark Durkan), and to meet some of those who were involved in preparing for what promises to be a fantastic 12 months. Indeed, only this week I joined the Minister of State at a celebration of the UK city of culture here in Parliament.

As shadow Secretary of State for Northern Ireland, in the short time available to me I have concentrated my remarks on the contribution that BIPA has made to the peace process and to British-Irish relations in that context. However, I know that its role goes far beyond that. It has the potential to develop and add to its work, and, by doing so, to enhance the work of those in the House of Commons and in all the other legislatures that make up its membership. I look forward to helping it to continue that great work, and I know that all Members on both sides of the House remain steadfast in their support of the British-Irish Parliamentary Assembly and committed to its mission.

I am grateful to the hon. Member for Tewkesbury (Mr Robertson) for securing this valuable debate. I made my first visit to BIPA in Dublin a couple of months ago as a new member, and the address from the Taoiseach was a tremendously important, satisfying and gratifying experience for me. I was interested and impressed by his and the Irish coalition Government’s approach to the very difficult economic climate, and the way in which the Government were dealing with the problems. The assembly’s discussion of a range of issues affecting both Ireland and the United Kingdom was also important and interesting.

I am half-Irish myself. I come from Northern Ireland and have spent most of my time in the north rather than the south, but have studied the history of both north and south over its many tumultuous years. When I was invited to join BIPA, my Irish side—my mother’s side of the family—felt proud to be involved in an assembly which, as others have said today, has achieved so much during the last 20 years.

As I listened to the Taoiseach’s speech, one thing in particular occurred to me. Let me echo a call that has come from a number of Members today. I value enormously the support that BIPA has received from the Minister and the Secretary State, and also from the last Government. However, I think that it would be a wonderful opportunity for our own Prime Minister to address a future assembly meeting and to afford us the same the courtesy that we were afforded by the Taoiseach in Dublin, and I shall be lobbying for that.

One of my colleagues referred to some of the security issues that still affect Northern Ireland, and in that context I believe that BIPA will have both an economic and a political role long into the future. The next BIPA conference will take place in Glasgow in a few months’ time. I look forward to attending it, and to hearing what the First Minister of Scotland will say when he addresses the assembly.

Given the long-standing links between both islands—the United Kingdom and Ireland—I believe that BIPA will have a strong and lengthy future. I know that some Irish people who have been in Britain for many years are concerned about some of the challenges posed to the British Government by the austerity programme, and I too am concerned about the possibility of cuts in the financial support that the Government provide for the Irish diaspora in Britain. I am sure the Minister would agree that we should protect that support irrespective of the financial challenges we face, because it demonstrates the strength of the bond between Britain and the Irish. I shall keep a close eye on the position.

I agree with my hon. Friend the Member for Tewkesbury that we must encourage the Irish Government to retain RTÉ in London and in the United Kingdom, where it plays an important role. I, too, think that RTÉ needs to come up with slightly more flexible working arrangements, which would cut costs while allowing a very important broadcasting service to continue.

It is a privilege to be a new member of BIPA, and I look forward to being a member for many years to come.

I am pleased to be able to take part in a debate that I am sure represents the highlight of today’s parliamentary business for you, Mr Speaker. I can think of no other occasion today that will outshine it. I congratulate the hon. Member for Tewkesbury (Mr Robertson) and the right hon. Member for Torfaen (Paul Murphy) on securing the debate.

It has already been pointed out that for many years the Democratic Unionist party did not participate in BIPA. I do not want to go over the history in too much detail, but I think it important to put the debate in context. The predecessor of the current assembly was seen by Unionists as being responsible for the Anglo-Irish agreement, whose legacy poisoned political relations in Northern Ireland for many years and led to many difficulties in the Province. Thankfully, however, we have come through those difficulties, and in 2001 BIPA was established.

During the DUP visit to BIPA in 2006, I met members of it along with our current leader, Peter Robinson, and a number of colleagues. We were not full participants, but expressed our belief that there was a role for a body that would improve east-west inter-parliamentary relations and would involve devolved parliamentarians as well as Members of the Irish Republic and United Kingdom Parliaments, and we made it clear that when devolution was restored on an appropriate basis, we would play a full role in BIPA as currently constituted.

When devolution was restored on terms that were acceptable to the people of Northern Ireland, we participated fully from that moment on, just as we have participated in the Northern Ireland Assembly and the Northern Ireland Executive. When our party says that we will enter arrangements and commit ourselves to them fully, we stick to our word. We believe that Northern Ireland is the better for the current stability in Northern Ireland, in the Assembly and the Executive, and in this inter-parliamentary body.

I welcome the DUP’s participation, of course. The British-Irish Council and its relationship with the assembly was mentioned earlier. Is the right hon. Gentleman in favour of the assembly having a closer working relationship with the BIC and exercising some kind of parliamentary oversight of it?

The BIC is meeting today in Stirling, and our First Minister and other Ministers are taking part, dealing with important issues such as what is happening in the devolved regions in respect of youth unemployment, marine energy technology and other areas where regions and Governments can learn best practice from each other. I have no difficulty in that relationship between the assembly and the BIC developing further. I listened carefully to what the Minister said about the discussions that are taking place and I welcome that.

It is good that there is co-operation and communication at ministerial and parliamentary level, and I pay tribute to DUP Northern Ireland Assembly Member Jim Wells, who plays a very active role in that respect. I note in passing—I will make no further comment on this—that there are no representatives from the Northern Ireland parties in this House on BIPA. That is not necessarily a bad thing because we are trying to create a body that encompasses all the relationships. It is not focused primarily on north-south; it addresses east-west issues, too, as the former chairman of that assembly, Lord Cope, said in October 2011:

“The British-Irish parliamentary meeting has taken on a much wider dimension in recent years. It used to be all North-South but now it’s east west—that’s the main focus.”

I welcome that. It represents the appropriate way forward for addressing issues such as trade, as the co-chairman of BIPA, the hon. Member for Tewkesbury (Mr Robertson), mentioned. The hon. Member for Glasgow North West (John Robertson) talked about his work on small and medium-sized businesses. These are important matters that need to be discussed and taken forward at inter-parliamentary level. The primary focus of all our constituents now is economic concerns, such as trade, rather than political issues.

In this context, we should recognise that the Irish Republic recently received a massive bail-out, courtesy of British taxpayers. We supported that because we believe it is in our interests to ensure that the Irish economy recovers. Nevertheless, that serves as a reminder of the new context for relations between the United Kingdom and the Irish Republic.

We still face many challenges. The Minister and others referred to the dissident threat. The Opposition spokesman, the hon. Member for Gedling (Vernon Coaker), pointed out we must not be complacent and take for granted the progress we have made. We must remain focused on the important work that goes on in Northern Ireland in building peace and in moving the political process forward. Members of this House must not think everything in Northern Ireland is now settled; there are still many challenges. However, there is no doubt that forums such as BIPA, the BIC and others that bring together parliamentarians and Ministers make a major contribution to building peace and maintaining political stability.

The British-Irish Parliamentary Assembly’s mission is to promote co-operation between political representatives in Britain and Ireland. It is a much-needed group, promoting not only co-operation but an understanding of our cultural links and our broader interdependence. As has been mentioned, 42% of Irish exports are to the UK and Ireland is Britain’s fifth largest trading partner. That underlines our financial interdependence.

I come from Liverpool, where almost all of us have Irish roots—hence the city’s name, “the capital of Ireland.” We have deep family ties. In common with many other families, my ancestors will have landed at Liverpool port in the 1800s. Two brothers married two sisters and so the family journey began.

There are now new ties as a result of Liverpool, Dublin and Cork all having become the capital of culture—Liverpool became the capital of culture in 2008. This led to an explosion in construction in those cities. The consequent property boom was fuelled by massive lending by the banks. When the property market collapsed, the Irish banking system was plunged into crisis. There is much to learn from that.

The Irish Government carried out a sizeable fiscal consolidation, which they are continuing. Ireland’s success in cutting its deficit, shrinking its banks and returning to modest economic growth has distinguished it from other parts of the eurozone that were also built on a construction boom. Given our links with Ireland, it is important that we have constant dialogue so we can learn from each other.

What have the Irish done to get out of their economic crisis? They have developed their small and medium-sized enterprises, and they have been increasing exports. Ireland’s exports rose by 4% in 2011, and went on to grow strongly in the first months of 2012. Most of that has come from SMEs, but it also comes from the pharmaceutical and chemical sectors.

As I have an interest in the SME sector, I elected to serve on the economic affairs group, along with the hon. Member for Glasgow North West (John Robertson). We looked at how well the Irish are adapting. There are 198,500 SMEs in Ireland, employing 1.2 million people. Ireland’s central bank says SMEs face significantly tougher lending conditions than similar firms elsewhere in the eurozone. It also says that demand for credit is no different in Ireland from elsewhere in Europe, but the Irish SME sector faces challenges in paying back its borrowing, with problems in respect of 30% of loans. The latest research by central bank economists shows that while demand for credit among Irish firms is at, or above, the eurozone average, the lending conditions imposed by the banks are significantly tougher in terms of collateral requirements, interest rate charges, size of loans available and rejection rates. BIPA has been addressing those issues of late.

We are looking at the impending funding gaps, too. Between now and the end of 2016, banks will be unable to supply between £84 billion and £191 billion of the finance needed to support the growth in the UK economy.

The report that was produced was very good, but does the hon. Lady agree that the Irish side seemed to take it much more seriously than the British side, and that we would like the Minister and the British Government to be a wee bit more enthusiastic about what BIPA is trying to do?

I am not sure that I agree that the Irish are looking at it more seriously, but they are ahead of the curve. They have been through the turmoil in advance of us, and there is much that we can learn from what has happened there. They also realise how tough it is for small companies to get money from the banks. I hear similar stories from small businesses in the UK, including locally in Wirral West.

Across the water, Labour is in coalition with Fine Gael, because Labour recognises that difficult decisions need to be made in respect of the economy. Does my hon. Friend agree that politicians in southern Ireland are being more inclusive and constructive in dealing with the serious problems they face?

We will all deal with our economic difficulties in different ways, and we all have to agree about the difficulties, admit to them and see what is on the horizon. We are looking here at how we move forward and what we are going to do. There is no point putting our heads in the sand and thinking that conditions are easy for small and medium-sized enterprises, because they are very tough indeed. What is reported can sometimes be very different from the actual practicalities and realities of the situation, which some of us are probably hearing about from our small businesses. That was very much reflected in the conversations in BIPA’s economic committee, as well as in what we are hearing over here. People were looking forward, and that is what we have to do. We have heard the issues and we know the economic turmoil we are going through, but we need to work out the steps to take to move forward.

Does my hon. Friend agree that this is not just about trade, because a series of issues associated with our relationship with Europe, fishing and other such matters, are very important?

I do agree with that, and I shall now discuss my recommendations. What we were looking for was: the aggregation platform to give SMEs access to the capital markets; an increase in the number of private placement investors in the UK market through an industry-led initiative; encouragement for more retail investment in corporate bonds issued by UK companies; and more private equity and support for all businesses, which we are in fact doing here in the UK with all the latest seed investment funds. So I think it is important for Ireland and the UK that we continue with our co-operation and continue learning from each other, because we are so interdependent and both countries need that for our continued growth and prosperity.

Hon. Members will not be surprised to learn that I have a different view of history from the right hon. Member for Belfast North (Mr Dodds), so I will quickly record that without long rehearsing it.

Many hon. Members, including the current chairman, the hon. Member for Tewkesbury (Mr Robertson), have rightly paid tribute to those who first established BIPA—in fact, it was a tier first, then it was a body and now it is an assembly. It should be remembered that all of them have made a huge contribution to changing the nature of relationships and attitudes between and within these islands, and they reinforced a dynamic that did spur the peace process in many positive ways. It should also be remembered that when John Hume first argued that there were three sets of relationships at the heart of our problem—those within Northern Ireland, within Ireland and between Ireland and Britain—which he said all needed to be accommodated and reflected in the solution, that was contested. It is now accepted by everybody, and those three sets of relationships are the three strands at the heart of the Good Friday agreement.

I apologise for the fact that I was not here earlier. May I say to the hon. Gentleman that when we met for the first time in February 1990, when the troubles were continuing, and crimes and atrocities were being committed by the IRA and loyalist paramilitaries, we were not certain whether it would be the only meeting we would hold, as both sides were so apprehensive? I am so pleased—obviously, given that I later become a co-chairman—that we were highly successful in continuing the dialogue for the first time between parliamentarians from both countries.

I fully take the point that the hon. Gentleman has made. The point that I was about to make was that by creating a framework of British-Irish relationships, through the Anglo-Irish agreement, the inter-parliamentary tier and the British-Irish Inter-Parliamentary Body, space was opened up for dealing with the problems that were then vexing the narrow ground of Northern Ireland politics. By changing the relationship between Britain and Northern Ireland, we, in many ways, opened up possibilities for politics in Northern Ireland and indeed between north and south. That is why I want to pay tribute to all those who made a huge contribution to British-Irish relations in this context.

The right hon. Member for Belfast North mentioned the fact that, peculiarly, no Northern Ireland Members of this House are members of the assembly; we seem to be banned persons. Four Members of the House of Lords who live in Northern Ireland are members of the assembly, and a further one is an associate member. Apparently, if someone from Northern Ireland has a mandate, they are somehow subversive and are not accepted for the purposes of that assembly—I regret that. As the one party that was always on the body and that first advocated such a thing, we perhaps feel a wee bit peculiarly disadvantaged in this regard.

As has been pointed out, great work has been done in many of the reports. I also wish to endorse what the hon. Member for Tewkesbury and the right hon. Member for Torfaen (Paul Murphy) have said: we need to get the assembly better connected with the work of the British-Irish Council. I am talking about not just taking reports from BIC and tracking its work, but acting as more of a policy outrider at times for BIC, exploring some of the issues, and perhaps scoping some of the problems and making suggestions about how things might be looked at or advanced.

The marine environment is one of the areas we should look at, as that is one thing that all eight Administrations in these islands and their territories actually share. The different jurisdictions have made moves towards various marine legislation and have made different moves on marine management organisations. Surely we need to ensure that we have a coherent framework for marine management, where the regimes are at least compatible and comparable.

The issue of communications is another that should have been addressed more heavily at a British-Irish level. We are left with the situation in Ireland where we have two, rival digital platforms. I have a border constituency, where people have to buy one device if they want to get their Saorview digital TV and another if they want to get Freeview. That is nonsense and it has been a failure. The issue could have been addressed only at the British-Irish level, not at the north-south level.

The digital economy presents challenges and opportunities, some of which also extend to things such as minority languages. We need to think about how our digital platform is catering for the different minority languages and the Celtic regions within these islands. So there is more that we should be thinking about in these areas, and the assembly again provides an area where we can do that. In that context, I wish to share the concerns expressed by others about the RTÉ presence in London.

Human trafficking is a huge issue in the eyes of many people in this Parliament, and it has been discussed in different devolved Assemblies and in the Oireachtas. That issue needs to be examined at the British-Irish level, because we need to deal not only with the international trafficking into our common travel area, but with the internal trafficking both within the different jurisdictions in these islands and between them. We need to address those issues.

Organ donation may also be an issue that we need to examine, as the various legislatures in these islands are perhaps examining it differently. We need to examine not only whether we should have opt-out legislation, but whether we have the right infrastructure to ensure that where we do have donors, we are maximising the number of organs that become available. Is there the right sharing and transfer of the organs that are available throughout these islands? Many people suggest to me that there is not. That could be looked at, too.

There is also the issue of adoption apology to address. In the previous Parliament, the then Prime Minister told us that he wanted to make an apology in relation to what had happened to people who were forced into orphanages and then transported. There are serious issues between Ireland and Britain in that regard. The whole issue of adoption apology should not be an issue for just one Government; it is a common issue throughout these islands. It is a crying shame in our historical social relationship and it is one that should be addressed.

Thank you, Mr Speaker, for allowing me to speak in this debate. May I confess at the beginning that I am not only a member of BIPA, but a member of the Select Committee on Northern Ireland Affairs, serving under the excellent chairmanship of my hon. Friend the Member for Tewkesbury (Mr Robertson)? I congratulate him on obtaining this debate from the Backbench Business Committee.

I am not going to pretend for a moment that I am a great expert on Ireland or Northern Ireland. Indeed, it is only in the past two years that I have got to know the place at all, during the course of a trip. When I was first in southern Ireland, I was struck by seeing the horses run down the pavements too; I had not seen that in central London in my lifetime.

We have to remember that our relationship with Ireland is not just a close trading one; we have a common approach to how we look at law. Both the English and the Irish take a common law approach to law, whereas in continental Europe it is much more to do with civil law. So we have a series of interests that we need to make sure we work on together.

As others have said, there is the question of trade and how closely Britain and Ireland work together. As I understand it, we have more trade with the Republic of Ireland than with all the BRIC countries—Brazil, Russia, India and China. We should ensure that we work closely with southern Ireland because we have common trade interests, such as employment regulation. Last year, our exports to southern Ireland were worth about £15.9 billion, whereas our imports from southern Ireland were worth about £12.5 billion, so we made a profit—a rare commodity—from the relationship. That is incredibly good news.

On Monday, I was delighted to attend the reception for Derry city of culture, because we in Plymouth are considering trying to become the city of culture in, I believe, 2014. We hope to learn lessons from Derry.

We should be looking firmly and hard at how we can work with the southern Irish Government on our common interest in marine science. The hon. Member for Foyle (Mark Durkan) stated the case for that commonality of interest in marine matters. I hope we will continue to campaign to bring UK and Irish fishing waters back under national control, because that will be an important part of how we look after fish stocks.

Immigration has also been an issue. Yesterday, the Northern Ireland Affairs Committee had a long conversation with representatives of the UK Border Agency. Because there is no recognisable border between our country and Ireland, immigration has to be handled with care, and we have to make sure that happens.

I am delighted to have attended one or two BIPA meetings at which we have worked closely together on various matters. Close working by the two countries is a brilliant idea, because it puts us in the position where we can ensure that the British and the Irish points of view are expressed in no uncertain terms, so that the European Union understands that we will act in our national interests and will not simply do what the French or the Germans tell us to do. I am also keen for us to work closely with the Irish to sort out their economic problems, because I am convinced we will thereby be able to get out of the mess of our public finances.

I speak as a long-time member of BIPA. I have been a member for 10 years and I am proud to wear my BIPA tie here today, as many others are doing. I also speak as chair of the all-party Irish in Britain group. According to the last census, there are 600,000 first-generation Irish in Britain, and on her visit to Ireland the Queen said that 6 million people of Irish ancestry lived in the UK. We reformed the all-party group two years ago, and I pay tribute to its secretary, Martin Collins, who provided an excellent debate briefing for all hon. Members, on both sides of the House. I pay tribute, too, to the hon. Member for Tewkesbury (Mr Robertson), who is an assiduous co-chair of BIPA, with Joe McHugh.

Over the past 25 years, under Governments of both main parties, great progress has been made on Irish issues. I pay tribute to former Prime Ministers John Major, Tony Blair and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and to the present Prime Minister, who showed excellent leadership in relation to the Saville inquiry and welcomed the Irish Taoiseach earlier this year. We are not talking only about relations at the Executive level, however. Back-Bench relationships are also important, and BIPA acts in two ways by helping to cement those Back-Bench relationships across the Irish sea. I pay tribute again to the former Conservative Ministers, Michael Mates and Lord Peter Brooke, who were excellent members of BIPA, and to past chairs, including my right hon. Friends the Members for Torfaen (Paul Murphy) and for Neath (Mr Hain) and my hon. Friend the Member for Walsall North (Mr Winnick), who co-chaired BIPA. They helped to build those common bonds between Irish TDs, British MPs and representatives of the Assemblies across the UK.

Developing relationships and trust is an important function of BIPA, but it is also about developing policy. We have four committees; the one of which I am a member is chaired by Lord Alf Dubs and has done a fantastic job, over many years, looking at key issues such as migration, the Irish in Britain, on which we have had two inquiries, and renewable energy in the islands.

As I mentioned in an intervention on the hon. Member for Tewkesbury, a lot of time, effort and resources goes into the committees. They are staffed by representatives from the House of Commons and the Oireachtas, and we collect evidence and data and draw up policies, but quite often they are just filed. Last year, I sponsored a debate on the Irish in Britain, which had excellent coverage in the British and Irish press. I think it is incumbent on us, as members of BIPA, to ensure that every time we issue a report, there is at least an Adjournment debate in the House, so that we can discuss how the report’s recommendations can be implemented, or at least looked at.

Looking to the future of BIPA and the all-party Irish in Britain group, we want to make sure that RTÉ is not downgraded in the UK, as has been proposed. The decision is for the Irish Government and RTÉ itself, but we need to ensure that we have proper coverage of British events in Ireland and Irish events in Britain, and an RTÉ base in London is key to that. I look forward to cross-party co-operation on that and other issues that affect the Irish in Britain and in Ireland. I end by saying that I am very proud to be a member of BIPA.

With the leave of the House, Mr Speaker, I will make a few closing comments.

I thank all those who have taken part in the debate and made interesting and useful contributions. I pay tribute to the members of the Northern Ireland Affairs Committee who have attended. The hon. Member for North Antrim (Ian Paisley) has been present for most of it, and of course we heard from my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile), who raised a number of issues, but I thank everyone who participated.

A comment was made that no Northern Ireland Members of Parliament are members of BIPA. The hon. Member for Belfast South (Dr McDonnell) is a member of BIPA, but as a Member of the Northern Ireland Assembly. I shall certainly take up that point when we next meet.

My hon. Friend the Member for North Dorset (Mr Walter) pointed out that neither he nor I, nor many other Members, necessarily have a direct connection with either Northern Ireland or the Republic of Ireland. That is true, so why do we get involved? Well, we get involved because we care. We care about Northern Ireland, we care about the Republic of Ireland and we care about the relationships we have. The only reason we are involved is our commitment to the process in Northern Ireland and to forming closer links with the Republic.

The hon. Member for Glasgow North West (John Robertson), welcoming us to Glasgow, said that we will enjoy some “proper whisky”—I think that was his description. I look forward to that, but I think we will celebrate other Scottish products as well. We look forward to extending the discussions about trade and the economy to the next plenary session in Glasgow.

I join in the shadow Secretary of State’s tribute to Barbara Jones, the deputy ambassador to London. I thank her for the friendship she has shown to the cause and to me personally. I wish her well in her new role.

T he point was raised about whether the Prime Minister should attend in Glasgow. He has certainly been invited, as has the Deputy Prime Minister, so we hope that their busy schedules will allow them to afford to BIPA the same respect as has been afforded by the Taoiseach and many other Ministers in Ireland. I would like to thank all Members for taking part in the debate and the Backbench Business Committee for allowing us time to hold it.

Question put and agreed to.


That this House has considered the matter of the work of the British-Irish Parliamentary Assembly.

Proceedings interrupted (Order, 13 June)

Secondary Education

(Urgent Question): To ask the Secretary of State for Education to make a statement on reports that he plans to scrap GCSEs, end the secondary national curriculum and replace examination boards with single-subject bodies.

The coalition Government’s education reforms are designed to raise standards in all our schools and give every child the opportunity to acquire the rigorous qualifications that will enable them to succeed in further and higher education and the world of work. We have already taken steps to make the curriculum in primary schools more rigorous, with a new emphasis on getting every child to read fluently and widely for pleasure, higher standards in essential arithmetic and new, more demanding expectations of the level of scientific knowledge each child will master. Draft programmes of study for our primary curriculum are out for consultation and we look forward to engaging with parents and teachers on how to help every child achieve more. We inherited a situation in which far too many children left primary school unable to read, write or add up properly. That was a crime against social justice and we are determined to put it right.

We are also taking steps to inject greater rigour into secondary education. The introduction of the English baccalaureate measure has resulted in the numbers studying physics, chemistry, biology, history, geography and foreign languages all rising. At the same time, we have already made GCSEs more rigorous by tackling the re-sit culture, ending modules and restoring marks for spelling, punctuation and grammar, but the evidence we have heard from parents, pupils, our best schools and our top universities shows that we need to consider going further.

Children are working harder than ever, but we have been told that the exam system is not working for them. Before Christmas The Daily Telegraph reported on the competition between exam boards to dumb down qualifications—[Laughter.] I do not regard falling standards in our schools as a laughing matter. Heads have told us that the current league table system incentivises weak schools to push students towards soft subjects and easier exams. Parents and students have told us that there are weaknesses with current GCSEs, which privilege bite-size learning over deep understanding and gobbets of knowledge over real learning. Academics have reported that headline improvements in exam results have not been matched by profound improvements in understanding, with researchers from King’s college London reporting today that teenagers’ maths skills have declined over the last 30 years.

We have been considering how to address these concerns and plan to issue a consultation paper shortly. We would like to see every student in this country able to take world-class qualifications, such as the rigorous and respected exams taken by Singapore’s students, for example. We want to tackle the culture of competitive dumbing down by ensuring that exam boards cannot compete with each other on the basis of how easy their exams are. We want a curriculum that prepares all students for success, at 16 and beyond, by broadening what is taught in our schools and then improving how it is assessed.

These are inevitably challenging ambitions that will require careful implementation. That is why we want the conversation on how we raise standards to be broad and inclusive. It is in all our interests that all our children do better than ever before. Although we want a broad conversation, we are also determined to reach a clear conclusion: a state school system in which every child is challenged to do much better, in which there are no excuses for failure and in which every child is introduced to the best that has been thought and written and given every opportunity to achieve their utmost.

My hon. Friend the shadow Education Secretary has asked me to put on the record the reason for his absence today: he is attending a meeting in Edinburgh with two of his constituents and the Spanish consul-general about the murder of their son in Spain. He sends his apologies.

GCSEs may well need improving, but a two-tier exam system that divides children into winners and losers at 14 is not the answer. The Opposition believe in a modern education system that promotes high standards, rigorous exams and a broad curriculum that prepares young people for the world of work and to succeed in life, but it seems that Ministers are in favour of going back to the future. They have cut education spending by the largest amount since the 1950s. They believe that Victorian-style rote learning is the way to teach our children. They want to bring back a two-tier exam system, designed in the 1950s, that will separate children and close off opportunity.

We on the Opposition Benches believe in rigour and high standards for all, but we also believe in a broad curriculum that prepares young people for work, so we will set a series of tests to ensure that the changes meet both. First, Labour wants higher literacy and numeracy standards. The key is to raise teaching quality across the board. Is there any reason to expect these proposals to deliver that? At best, they are a distraction from the central challenges. Standards rose under Labour because we focused on literacy and numeracy. It was we who inherited a weak system for maths and English from the Tories. Only three in 10 pupils—that is 60%, because I know that the Secretary of State is not very good at maths—got a good GCSE in 1997, more than half—[Interruption.]

Order. Sir Tony, you are now officially a statesman, and a statesman should not yell across the Chamber. Calm yourself.

No point of order is required at this stage. I shall hear the hon. Gentleman on another occasion, with great anticipation.

I was just testing their numeracy; the figure is, of course, 30%. We improved literacy and numeracy standards. More than half achieved five good grades at GCSE, including English and maths, in 2010. Secondly, the Government appear to be writing off a quarter of all young people at 14 with the return to the CSE. There is strong evidence that children’s performance—

Order. I feel sure that the hon. Gentleman is moving towards a conclusion—he certainly should be—and it might be useful if there was a question mark somewhere.

Of course, Mr Speaker.

How will these measures improve and promote social mobility? How will a return to 1950s qualifications help to prepare young people for a 21st century world of work? Is not this nothing more than a softening-up exercise to disguise a fall in attainment as Tory cuts, disruption and teachers leaving have an effect on pupils’ ability to learn? Parents, pupils and employers will be asking today what evidence there is to suggest that a return, back to the future, to the CSE and O-levels will actually work.

I am grateful to the hon. Gentleman for his questions and associate myself with his remarks about the hon. Member for Liverpool, West Derby (Stephen Twigg), who I know is unavoidably detained on constituency business. I hope that the whole House will note that he is doing his first and most important job: representing those who elected him.

The hon. Gentleman asked a series of questions—[Interruption.] He asked a series of rhetorical questions. He invited us to consider that what the Government are reported to be putting forward would lead to a two-tier system. The sad truth is that we already have a two-tier system in education in this country. Some of our most impressive schools have already left the GCSE behind and opted for the IGCSE or other more rigorous examinations. It is also the case, sadly, that 40% of children do not achieve five good GCSEs, including English and maths, in our system. He said that, under the proposals that are being reported, 25% of children would be left behind. The sad truth is that at least 40% of children have been left behind under the current system. There is no excuse not to act. [Interruption.] I note what the hon. Member for Westminster North (Ms Buck) says from a sedentary position, but given the questions the hon. Member for Cardiff West asked, I think that trading percentages across the Dispatch Box is not an area in which Labour Members can consider themselves strong.

The hon. Gentleman also alleged that the proposals were an attempt to move backwards. Far from it. They are an attempt to ensure that our education system stands comparison with the world’s most rigorous, because although there have undoubtedly been improvements in our schools and by our teachers over the past 20 years, they have not been sufficient to ensure that we keep pace with other jurisdictions. As Singapore, Hong Kong, Alberta and New Zealand, have improved their education systems, we have fallen behind them in relative terms, and we need to ensure that our young people have qualifications that are every bit as rigorous and a curriculum that is every bit as stretching.

The sad truth is that, if we look at the objective measure of how we have done over the past 15 years, we find that on international league tables our schools fell in reading from 523 to 494 points, in maths from 529 to 492 and in science from 528 to 514. Every objective academic study of what has happened in our education system has drawn attention to the weakness of our qualifications. We aim to address that in order to ensure that the next generation get what they deserve—a world-class education and world-class qualifications.

Order. I do not intend to allow this to run beyond 11.30 am, because there is very substantial pressure on time. I am sure that Members will draw their own conclusions as to the importance in these circumstances of brevity.

I welcome improved rigour, stretch and achievement for our most able pupils, but the central problem facing this country is not about its most able pupils but about the lowest-performing and, all too often, the poorest. How will these changes and proposals improve the outcomes for the lowest deciles of achievement in our population? Socially and economically, we cannot afford the tail that we have inherited from the Labour party.

My hon. Friend makes a very good point. One of the principal problems with our education system is not only that it has fallen behind other nations, but that it is one of the most inequitable, stratified and segregated. The way in which we tackle that is not by dumbing down on qualifications, but by raising expectations at every level.

I appeal to the Secretary of State to stop rubbishing everything that happened before he came into office; BG—before Gove—is not a very attractive proposition. Will he tell the House why Margaret Thatcher introduced a common national curriculum and a common examination system in 1988?

I am at pains, I hope, never to rubbish everything that preceded this Government, but I want to tell the truth, and the truth is that, although there were improvements, many as a direct result of the right hon. Gentleman’s stewardship of the Department for Education, wrong turnings were taken, one of which, I am afraid, was to allow a race to the bottom in examinations, which serves no one’s interests.

I congratulate my right hon. Friend on his excellent statement and, in particular, the idea of a single examination board. Does he agree that we have not had a free market in exams; we have had a state-sponsored race to the bottom? Sweden has a single exam board and has had no grade inflation for the past 20 years.

I am grateful to my hon. Friend for her point. Not only does the Swedish experience inform the case, but Mr Conor Ryan, a distinguished former special adviser to the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and to the former Prime Minister, Tony Blair, said this morning:

“There are some…good ideas in what appears to be being considered”

by the Department for Education. He continues:

“It makes perfect sense to have a single exam board for each exam.”

That view weighs heavily with me.

Given that the Secretary of State is rightly concerned to ensure that no children fail, why is he so obsessed with schools? All the evidence points to the idea that perhaps at three years old, but certainly by the time they enter school, their life chances are determined. Might one invite him to be equally obsessive about the foundation years as he is about schools?

I am very grateful to the right hon. Gentleman for the point that he makes. Absolutely: we believe in intervening as early as possible, which is why we have extended the number of hours of pre-school learning that we offer, particularly to disadvantaged children. More can be done, however, and we are reforming the early years foundation stage. The Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), who has responsibility for children and families, is doing fantastic work in that area, and I look forward to working with the right hon. Gentleman to do more.

The coalition Government have been determined to raise aspiration, and the Secretary of State has set out some ideas about the qualifications system. Does he agree, however, that we must not create a system that, for the 40% of students to whom he has just referred, creates a concrete ceiling that prevents them from moving beyond that 40%? I am very concerned that a two-tier system will do just that.

My hon. Friend, as ever, makes a very valid point. One thing we need to do is ensure that more students are capable of taking more rigorous examinations. If we look at other jurisdictions that are performing better than us, such as Singapore, we find that 80% of students there take their O-level examinations, some at 15, some at 16 and some at 17. I see no reason why we cannot have a similarly rigorous situation here. He is also right that there should be no cap on aspiration, and one of our deepest problems is that some schools and some local authorities are insufficiently ambitious for their young people.

The Secretary of State is absolutely right to say that there is a close link between educational achievement, opportunity and social mobility, so the question is not “Change or no change?” but “What kind of change?”

What is his reaction to the analysis published in the Financial Times of his proposed reforms, suggesting that the new CSE will be a poorer person’s qualification and a northern qualification? Would it not be a tragedy if any such reform reinforced the educational divides that exist, instead of providing a bridge out of them?

That is a typically acute point by the right hon. Gentleman; every time he speaks on education, I hear a voice of good sense. It is absolutely right to say that we need to tackle a culture low aspiration that has held students back in many northern cities and in places such as east Lancashire for far too long. Any reform of the examination system and curriculum needs to ensure that we do not place a cap on aspiration in those areas.

I have had a look at the Financial Times analysis and think that it suffers from one thing: it itself is a prisoner of the culture of low aspiration that we are tackling. I hope to work with the right hon. Gentleman and other fair-minded people to ensure that we do not fall into that trap.

We absolutely do, and one of our first reforms was to ensure that they would count in league tables in order to inject additional rigour.

Most parents want more rigour in their schools, and I think that, on reflection, many families will welcome the changes that are being suggested and consulted on. Will the Secretary of State make it clear to schools that introducing additional maths is a great way forward? It has happened in Northern Ireland and has been terrific for future science graduates.

Again, the hon. Lady talks good sense on education and is absolutely right. One strength of the Northern Ireland system is its emphasis on greater rigour and stretch in mathematics, and more and more students are achieving those qualifications. We have sought to pay mathematics graduates more to encourage them to consider teaching, and to create new centres of excellence, new 16-to-18 free schools in mathematics, but there is so much more to do, and I look forward to working with her on that.

Does my right hon. Friend agree that the weakness that has characterised the British education system for a century and a half has been a failure to produce enough people with technical and vocational qualifications, partly because of a presumption that they were for the less able and less academic? Can he reassure me that his reforms will tackle that weakness and ensure that technical and vocational qualifications that are of the utmost rigour and held in the highest esteem are available to all?

My right hon. Friend makes a very good point. One weakness in the implementation of the Education Act 1944 was that the third strand, technical schools, did not receive the investment that they should have done, and as a result a weakness in technical education, which this country has had since 1851, was reinforced.

The advent of university technical colleges, an idea pioneered by Kenneth Baker and Andrew Adonis, is going some way to dealing with the problem, and Alison Wolf’s report, which has injected additional rigour into vocational qualifications, also helps to meet that challenge, but we need to do more, including reforming the funding of further education colleges in order to strengthen vocational subjects.

I do wonder whether the Secretary of State ever visits schools and speaks to pupils and teachers. Children’s progress and achievement can currently be judged by the children themselves and by employers within a common framework. CSEs had little value in the past, so how can he assure me that they will have any value in the future? I cannot see how they can.

I do visit schools, and I am constantly inspired by the amazing job that so many brilliant teachers do. I am encouraged by the fact that more and more teachers are more and more enthusiastic about the changes that we are making, which will inject greater rigour into the system. One of the problems that we face, however, is that employers do not have faith in D and E passes at GCSE at the moment; they do not consider them an appropriate springboard for success at work. We need to work with employers and others to ensure that they have more faith in the qualifications that our young people achieve.

As somebody who sat GCSEs in their first year, 1988, and saw the watering down of standards at the time and the knock-on watering down of standards that followed for A-levels, I welcome what my right hon. Friend has said today. Building on the point that he has just made, does he accept that whereas 30 or 40 years ago somebody could go to an employer with five O-levels and that would mean something, today the fact that a person has 10 GCSEs is becoming increasingly meaningless to many employers, despite that person’s hard work?

My hon. Friend makes his point effectively and with typical pungency. Among employers there is a lack of confidence in many of the qualifications that exist at the moment. The people let down most by that are hard-working and intelligent students. I am convinced that we have the best generation of teachers ever in our schools and that students are working harder than ever. That is why we need to change the exam system—so that it works as hard as they do.

I know from personal experience, having prepared students for many different qualifications, of the inadequacy of O-levels and CSEs, compared with GCSEs, in setting and assessing standards. Will the Secretary of State reassure the House and those outside it that any changes to our examination system are strongly and rigorously evidence-based and not based on hunch and assumption, so that he does not make a wrong turning that damages the UK economy and young people’s lives?

The hon. Gentleman, who was an outstanding principal of an outstanding further education college, makes a very good point. I emphasise again that it is natural, when we seek to reform our examination system, that people will look backwards and think that we are moving back to a situation that we inherited. We are not; we are moving forward to ensure that our qualifications are more rigorous, stand comparison with the best in the world and take account of precisely the point that the hon. Gentleman made about the need for evidence.

The multitude of examination boards is confusing for pupils, schools and, above all, universities. May I urge the Secretary of State to work closely with the Russell group, the leading group of universities, to make sure that we have an independent, rigorous examination board in which all universities can have confidence?

My hon. Friend makes an absolutely vital point. In order to ensure that the new examinations and curriculum are properly rigorous, we need to listen to parents’ concerns, work with teachers and, above all, make sure that academics are engaged in the debate to ensure that the qualifications can become the world’s best.

The introduction of GCSEs was a progressive Thatcherite policy; I am worried about the Secretary of State, who is ditching his Thatcherite credentials. My main concern about the proposal is that it is going to be divisive and that pupils who do not achieve the opportunity to go on and do an O-level equivalent at 14 will be left behind. Can he assure us that that is not his objective?

Absolutely. I can also reassure the hon. Gentleman that in matters of ideology, I am a Blairite; I believe that what is right is what works. One of our problems at the moment is that the GCSE system is not working for all students. I absolutely agree that we need to ensure that our qualification system raises aspiration for all students, and ensures, as in Singapore, that 80%, and rising, of students can acquire the qualifications that enable them to go on to further and higher education.

It is well reported that the Yorkshire-based supermarket Morrisons found the standard of its school leavers so poor that it had to refer them for remedial job training. Does that not highlight the issues that we face? It beggars belief that we should not be looking at those issues.

Yorkshire is a generous county that adopts children from whatever background and turns them into men.

It is not just Morrisons; in 2009, Sir Terry Leahy said that standards among the students that he was recruiting to Tesco were “woefully low”. We have to listen to employers. They demand a greater level of technical, mathematical and literacy skills from all their students and we need to improve our education to ensure that whatever route children follow, they receive a 21st century education—and that means additional rigour to compete with the world’s best.

Can the Secretary of State explain how going backwards to a 1950s qualification will help young people prepare for a 21st century world of work?

The hon. Lady, whom I greatly respect, has fallen into the trap, perhaps taking her cue from those on her party’s Front Bench, of thinking that the measure is a move towards the 1950s. Let me take this opportunity, which she has kindly given me, to reassure her absolutely that we want not to look backwards but to look outwards. We want to ask ourselves why there are other countries that have stronger exam systems and also make opportunity more equal. Why do countries such as Singapore, Hong Kong, Canada, Australia and New Zealand manage to have both a higher level of absolute attainment and a more equal society, including a more equal education system? That is what we want to achieve and I hope that we can count on the hon. Lady’s support in that mission.

My right hon. Friend is right to concentrate on raising standards, and employers will welcome what he has said today, but can he confirm whether he plans to abolish the national curriculum for secondary schools?

We want to make sure that the national curriculum in secondary schools is properly aligned with qualifications. One of the problems is that, to my mind, there are many admirable aspects of the secondary curriculum that we inherited, but also some very weak aspects. One of the problems is that both what is admirable and what is weak in that curriculum is overshadowed by what people have to do to acquire qualifications. In that sense, our secondary school system is the wrong way around in that weak qualifications determine what is taught and the only things considered worth teaching are those that are assessed. I want to change that to make sure that our qualifications are rigorous and that much of what goes on in secondary schools that is not assessed is properly regarded as valuable.

The Secretary of State has sought to assure the House that he is not looking backwards, but he is being uncharacteristically coy about what he is actually proposing. Is it true that he is seeking to reintroduce something akin to the O-level? If so, how will he avoid the reintroduction of CSEs? The problem is not simply a cap on aspiration, but the stigmatisation of young people in their teens.

The hon. Gentleman makes a fair point. I have not said more at this stage because at the Department for Education we are considering how to deal with a very real problem. I have laid out what I believe are the problems with the examination system that we have inherited. I am clear that certain points need to be addressed, but I want to ensure that in the collective national conversation about how we address these problems we are clear that we need to end dumbing down and the race to the bottom. To do that, we need to ensure that we look to what happens in the world’s best jurisdictions and learn from our best academics, teachers and the increasing number of parents who recognise that we need to change our education system to keep pace with the world’s best nations.

Does the Secretary of State agree that one of the major advantages of a single exam board is that it will allow children in more difficult circumstances—looked-after children, those in military families or those whose parents separate or move for other reasons—to slot straight into the exam board and know exactly where they are going to be for their education?

My hon. Friend makes a very good point. One of the advantages of avoiding that race to the bottom in single subject areas is precisely the degree of certainty that she alludes to.

The hon. Member for South West Norfolk (Elizabeth Truss) talked passionately about the use of the free market in education. In a free market, the weakest go to the wall. Does the Secretary of State support the view that children who need to be supported to aspire and achieve should simply go to the wall?

I do not. I think that the hon. Lady is misrepresenting what my hon. Friend the Member for South West Norfolk (Elizabeth Truss) said. Forgive me; she would never misrepresent, but she misconstrued my hon. Friend. My hon. Friend was calling for a single exam board in each subject and for steps to be taken to deal with one of the adverse aspects of poorly regulated competition. That is a critical thing that I hope we can agree on across the House. Sometimes, competition can raise standards, but poorly designed competition can sometimes lead to a race to the bottom. We need to recognise when competition is right and when it needs to be dealt with.

Secondary head teachers in Swindon, some of whom have been meeting me only today, will welcome reforms to the examination board system. Can my right hon. Friend assure me that the terms of reference for setting up the new boards will explicitly refer to rigorous and high standards in future examinations?

Has the Secretary of State looked at what is done in the country that leads the education achievement tables, Finland, which is very different from what he is proposing?

I look very closely at what happens in Finland and other high-performing jurisdictions. Finland is in many respects an outlier, but one of the things that is common to it and to other high-performing jurisdictions is a great degree of rigour in the examinations that students take at the end of their studies. A recent report by Ofqual compares our A-levels with some of the qualifications and examinations that Finnish students sit in their final years at school, which are exceptionally rigorous. However, the most important thing about the Finnish education system is that it attracts and retains the very best people in teaching. That is why the changes that we have made to initial teacher training announced last week are so important.

The Secretary of State rightly paid tribute to the hard work being done by schools and pupils. Does he agree that it is a great shame that the Opposition have automatically assumed that these proposals are divisive and bad for schools and pupils, not recognising that they are a legitimate way of tackling the problems that employers and universities are telling the Department about?

That is a typically fair point. I want to seek consensus on the correct way forward, because that is in the interests of all our children. Looking at what has gone wrong in the past, mistakes were made by previous Conservative and Labour Governments, and I hope that we can work together to put them right. I believe that behind the inevitable political commentary by the hon. Member for Cardiff West (Kevin Brennan) there was a recognition, as there certainly is among those on the Labour Back Benches, that we have suffered from a culture of low aspiration for too long and need to address that by raising standards for all.

Order. I am grateful to the Secretary of State. I am sorry to disappoint colleagues, but we must move on. I am sure that there will be many opportunities to air these matters in the weeks and months ahead.

Business of the House

The business for next week will be as follows:

Monday 25 June—Consideration in Committee of the Electoral Registration and Administration Bill (day 2).

Tuesday 26 June—Opposition Day [3rd allotted day]. There will be a debate on the national health service followed by a debate on defence. Both debates will arise on an Opposition motion.

Wednesday 27 June—Conclusion of consideration in Committee and remaining stages of the Electoral Registration and Administration Bill (day 3).

Thursday 28 June—Debate on a motion relating to fiscal measures to strengthen the green economy, followed by debate on a motion relating to the appointment of a Minister for older people. The subjects for these debates have been nominated by the Backbench Business Committee.

The provisional business for the week commencing 2 July will include:

Monday 2 July—Motion to approve ways and means resolutions relating to the Finance Bill, followed by remaining stages of the Finance Bill (day 1).

Tuesday 3 July—Conclusion of remaining stages of the Finance Bill (day 2).

Wednesday 4 July—Estimates Day [1st allotted day]. There will be a debate on UK-Turkey relations and Turkey’s regional role, followed by a debate on the work of the UK Border Agency.

Further details will be given in the Official Report.

[The details are as follows: There will be a debate on: UK-Turkey relations and Turkey’s regional role; 12th report from the Foreign Affair Committee of Session 2010-12, HC 1567, and the Government response thereto, CM 8370. Followed by a debate on the work of the UK Border Agency; 15th report from the Home Affairs Committee of Session 2010-12, The Work of the UK Border Agency (April-July 2011), HC 1497, and the Government response thereto, CM 8253, and the Committee’s 21st report of Session 2010-12, Work of the UK Border Agency (August-December 2011), HC 1722.]

At 7 pm the House will be asked to agree all outstanding estimates.

Thursday 5 July—Proceedings on the Supply and Appropriation (Main Estimates) Bill, followed by debate on a motion relating to VAT on air ambulance fuel payments, followed by a further debate to be nominated by the Backbench Business Committee.

Friday 6 July—Private Members’ Bills.

I should also like to inform the House of business in Westminster Hall:

Thursday 5 July—Debate on adoption.

I thank the Leader of the House for announcing the business for next week.

The visit to the UK by Aung San Suu Kyi is an opportunity for us to pay tribute to her enormous courage and determination in leading peaceful opposition to the Burmese dictatorship. The personal sacrifices that she has made in spending most of the last quarter of a century under house arrest have been enormous. Her bravery and fortitude have been an inspiration to many and deserve the deepest admiration. Members in all parts of the House will be looking forward to the speech she will deliver to both Houses later today. Because of the courage of Aung San Suu Kyi and others, Burma is finally taking the first tentative steps on the road to democracy. Does the Leader of the House agree that it is important for the UK to do all we can to help to ensure democratic reform in Burma?

If in Burma the signs are promising, in Egypt there are worrying signs that the military is reluctant to give up power, and in Syria the Government’s actions in massacring their own people are completely unacceptable. Will the Leader of the House give an undertaking that the Foreign Secretary will continue to keep the House aware of the efforts being made to ensure the transition to democracy in all these regions?

This week Members will have received a letter from the Culture Secretary announcing a U-turn on the planned draft Communications Data Bill Green Paper, which was to be published this summer. It was delayed until the autumn, and now we are told that it will not be published at all. Instead, we are promised a White Paper some time next year. In his letter, the Culture Secretary told Members that this would incorporate the Government’s response to the Leveson report. Is not the position of the Culture Secretary and the Government getting beyond parody? Does the Leader of the House really think that it is remotely credible for Lord Justice Leveson’s report to be sent to this Culture Secretary to consider, given that he has, to put it kindly, a strong personal interest in the conclusions?

The Prime Minister rushed to the TV studios to condemn the tax avoidance scheme used by Jimmy Carr. Oddly, he did not take the opportunity to condemn as “morally repugnant” the tax avoidance scheme used by Conservative supporter Gary Barlow, who has given a whole new meaning to the phrase “Take That”. If he is also “morally repugnant”, why has he just been given an OBE in the birthday honours? Why is the Prime Minister’s view of what is dodgy in the tax system so partial? Sir Philip Green has interesting tax arrangements, but far from being labelled “morally repugnant” in a Mexican TV studio, he got a Government review to head up.

While the Prime Minister talks the talk in the TV studios, the reality is that his Government are cutting Her Majesty’s Revenue and Customs’ resources, making it much harder to tackle tax avoidance schemes, while in the botched Budget his Government have given every millionaire a legal way to reduce their tax bill by cutting tax for the richest 1%. Will the Leader of the House arrange for the part-time Chancellor to make a statement to explain why the Government are cutting taxes for millionaires when hard-pressed families are struggling to make ends meet?

Another U-turn this week was the admission by the gaffe-laden Minister for the Cabinet Office and Paymaster General that the Government had recruited additional special advisers, breaking the spirit, if not the letter, of the Tory election manifesto and the coalition agreement. May I tell the Leader of the House that the difficulties that the Government are experiencing are not because they have too few special advisers but because they stand up for the wrong people? They make the wrong choices: the wrong choices on the economy, the wrong choices on tax cuts for the richest 1%, and the wrong choices on HMRC funding.

The U-turn on special advisers is the latest in a long line. Will the Leader of the House update Members on how many U-turns the Government have performed over the last month? We have had U-turns on the pasty tax, the skip tax, the caravan tax, aircraft carriers, and the special advisers cap. Have I missed any? [Interruption.] Oh yes, the charity tax. Given this record, and for the convenience of Members, will the Leader of the House, alongside announcing the forthcoming business, in future also announce the forthcoming Government U-turns?

I suppose that there was a tangential connection with next week’s business in some of that.

May I, too, start on a consensual note and endorse what the hon. Lady said about the visit of Aung San Suu Kyi? We are all looking forward to her address in Westminster Hall. It is a sign of the progress that has been made in Burma that she feels able to leave Burma confident that she will be able to return. It is quite right that this iconic person should be given the opportunity to address both Houses in Westminster Hall later on. It is indeed our objective to play a key role in supporting genuine democratic change in Burma. Aung San Suu Kyi will be seeing the Prime Minister, the Deputy Prime Minister, the Leader of the Opposition, the Foreign Secretary and the Secretary of State for International Development, and that dialogue will take forward the agenda for change. There is a heavy weight of expectation on her shoulders, and I feel some sympathy with her for carrying that burden.

The Foreign Secretary will certainly want to keep the House up to date on the worrying events in Egypt and Syria, so I can give the hon. Lady that undertaking.

On the proceedings on the Leveson report and the way in which that gets reported back to the House, I think that the machinery we have set up is absolutely correct. We debated the position of the Culture Secretary last week, and his position was endorsed in a vote at the end of that debate.

On tax avoidance, we are introducing a number of measures that the Labour party failed to introduce, such as a general anti-avoidance rule and measures to ensure that at least some tax is paid by those on high incomes. Of course, the Chancellor will be at the Dispatch Box on Tuesday to answer questions.

The hon. Lady ended on U-turns and wrong choices. Today I read an article in The Times by the shadow Home Secretary, in which she conceded that Labour did not get it right on immigration:

“In government we didn’t do enough to address people’s concerns on immigration. By the election, we had lost the argument”.

That was one wrong choice, and I welcome that admission. I hope we can expect it to be the first in a series of articles by Opposition Front Benchers outlining their mistakes over the 13 years. When can we expect an article in The Times from the shadow Chancellor, confessing that Labour did not get it right on the economy either?

I appreciate that the Procedure Committee published its report on our sitting hours only yesterday, but is the Leader of the House aware of the desirability of the Government’s responding to the report soon so that we can have a debate before the summer recess? Will he use his offices to see that a debate on sitting hours, whether in Government time or in Backbench Business Committee time, takes place sooner rather than later?

The whole House is grateful to my right hon. Friend and his Committee for their report on sitting hours. I encourage all hon. Members to read it. The Government will of course seek to make an early response to facilitate the debate to which he has referred. I see an advantage in dealing with the section of the report on Monday to Thursday sitting hours at an early stage. I will report back to him and to the House if time for such a debate can be found before we rise for the summer recess.

I, too, welcome the report on sitting hours by the Procedure Committee. As a Select Committee report, it almost certainly falls to the Backbench Business Committee to allocate the time. With this being a new Session, I have a new plea. So far, only Thursdays have been allocated for Back-Bench time. Will the Government allocate something other than Thursdays for Back-Bench time, so that not only important reports such as the sitting hours report by the Procedure Committee but other matters with votable motions can be debated not on a Thursday?

I am grateful to the hon. Lady for that question. Of the 40 days in the Chamber that were allocated to the Backbench Business Committee in the Session that has just ended, 17 were not on Thursdays. It is therefore not the case that they are all Thursdays. None the less, I take to heart her plea for more non-Thursdays. There may be a non-Thursday before the recess. I take her point on board and, as always, we will seek to accommodate the hon. Lady and her Committee as much as we can.

May we have a debate on extending the excellent provisions for councils to borrow to build social housing? Headingley in my constituency is now achieving a better balance between family houses and houses in multiple occupation. However, we want councils to be able to buy properties so that the mix can be extended and the balance improved further.

I understand my hon. Friend’s keen interest in improving the quality and quantity of the social housing stock in his constituency. I welcome what he said about the freedoms that we have given local authorities recently. I will raise the point with my right hon. Friend the Secretary of State for Communities and Local Government. Apart from local authorities, there is the additional resource of housing associations, which already have the freedom, to which my hon. Friend referred, to buy houses on the open market if they want to. Because they can borrow and top up their allocation with private funds, routing money through housing associations often enables public money to go further than if it was routed through local authorities.

I am sure that the right hon. Gentleman will agree that the Sustainable Communities Act 2007 could do much to protect and promote local public services, jobs and thriving places, and to empower people. We have, however, been waiting for more than a year for the associated regulations. Media reports suggest that the regulations have been signed off by the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark). May we have a statement from him about when he plans to publish the regulations, or should we just quietly forget the whole thing?

There are questions to Ministers at the Department for Communities and Local Government on Monday week. In the meantime, I will ask my right hon. Friend to write to the hon. Gentleman to bring him up to date with our plans to publish the regulations to which he has referred.

Will the Leader of the House facilitate a debate on the public perception of the politicians in this place and, more specifically and pertinently, now that the dust has settled, on whether that perception was enhanced by last week’s Opposition debate?

As I said at the end of that debate, it was not a good debate. I would very much welcome a debate along the lines that my hon. Friend has suggested, in which Members from all parts of the House could outline the steps that we can take individually to drive up the public’s perception of and confidence in Members of the House. If such a debate took place, I very much hope that Members on all sides would listen to the repeated injunctions from Mr Speaker that we should use temperate language and have regard to the impact of what we say in this Chamber on those who are watching.

I am glad that you have a good sense of timing, Madam Deputy Speaker. I was sitting on the edge of my seat, waiting for news of the Lords reform Bill, but I heard nothing. Will the Leader of the House confirm that when the Bill is introduced, it will include provisions for the ending of the link between a peerage and sitting in the legislature, and that it will end peerages being given to anybody? While we are at it, should we not abolish baronetcies, because now that we have parliamentary knights, who have earned the right, and since a baronetcy can never be inherited by a woman, but only by a man, surely it is time, in an egalitarian era, to get rid of them?

I think that was a wholly unnecessary and provocative remark! Some baronets were Labour MPs, such as Tam Dalyell. I am not sure what he would have thought about that comment. As the hon. Gentleman knows, we published a draft House of Lords Reform Bill, which proposed some of the measures to which he referred. There was then a report by the Joint Committee on the draft Bill, and the Government are reflecting on it. We will introduce a Bill to reform the House of Lords and plan to do so and to have a Second Reading debate on it before the summer recess.

Will the Leader of the House find time for a debate on the private rail companies? One of my constituents bought a ticket with his young person’s railcard, but when he was inspected on the train he was found not to have the railcard with him. He was charged not only the mark-up to the adult fee, but the full adult fee plus a £60 administration charge by East Midlands Trains. May we have a debate on the practices of some of these companies?

I am sorry to hear of the misfortune that happened to my hon. Friend’s constituent. I am sure that as his Member of Parliament my hon. Friend will take the matter up with the train operating company to see whether it might consider its actions. There will be Transport questions a week today, when there will be an opportunity to raise the matter with my right hon. Friend the Secretary of State for Transport.

As the co-chairman of the Conservative party has been travelling abroad on official Government business with her business partner, who has involvement with the extremist Islamic group Hizb ut-Tahrir, may we have a statement from the Prime Minister on whether he will honour his pledge to ban that organisation, which he made before becoming Prime Minister?

I will raise with the Home Secretary the question of banning that particular group. However, the hon. Lady should be careful about making accusations about who travels along with whom, because I am sure that that is an issue that could be raised by Members on both sides of the House.

I, too, would like a debate on anomalies in the rail fares pricing system. Constituents in Marsden and Slaithwaite in my patch are constantly baffled that it costs three times as much to travel just one stop in a direction that goes across different passenger transport executives as it does to go 20 miles in the other direction to Leeds.

I understand the perplexity of my hon. Friend’s constituents. There is a consultation on ticketing that ends towards the end of the month. I encourage him and his constituents to make representations to that review of ticketing policy. There is a separate consultation exercise on devolving more autonomy to local organisations to resolve issues such as ticketing for local journeys. There are therefore two opportunities to influence the fares structure to which he has referred.

Will the Leader of the House consider having a debate on the quality of management in our country? A recent Chartered Management Institute report suggested that 38% of the managers in this country are not very good at all. That affects every aspect of our lives and ultimately leads to our country underperforming. Given the low morale of staff in this place, which I remarked on only two or three weeks ago, is he doing something about raising the standard of the management of this place so that the people who work here actually feel that we care about them?

Responsibility for managing the House of Commons is an issue not for the Government but for the House of Commons Commission. As a member of that Commission, I take very seriously, as I know the hon. Member for Wallasey (Ms Eagle) does, our responsibility to the staff who work here, who give us a good quality of service. We are aware of some areas of concern and my door is open to representatives of the staff of this House to come and talk to me. On the broader issue, the Enterprise and Regulatory Reform Bill currently going through the House may offer an opportunity to debate the quality of management in this country.

The nation’s corner shops rely heavily on tobacco sales to sustain their business. As the Government are pursuing a number of policies designed to reduce tobacco consumption, may we have a debate on how we can support our corner shops, which are a lifeline in so many communities?

I note what my hon. Friend says about the importance of small shops. So far as standardised packaging is concerned, there is currently a consultation exercise, which I think ends on 10 July, on the case for and against standardised packaging of cigarettes. The Government have not made up their mind—we want to await the outcome of the representations that have been made—and I urge my hon. Friend and her constituents, if they have not already done so, to join members of relevant trade associations in making representations to the Department of Health on this important issue.

The chief constable of West Mercia police has indicated that a strategic merger between the force and Warwickshire will result in a reduction in front-line officers and police community support officers. Will a Minister come to the House to explain why the promise that there would be no front-line reductions in police has been broken?

I am not sure that there are active proposals to do what the previous Government proposed—they were persuaded not to do it—and merge some of the police forces in this country. So far as front-line services are concerned, the Home Secretary has repeatedly made it clear that although police authorities have to take difficult decisions, we believe that through having joint services and intelligent commissioning, by getting other people to carry out some of the services currently performed by police officers, the quality and integrity of front-line services can be maintained.

Local Reading mum Rebecca Rye has raised concerns with me about the health effects on her son Edward of so-called energy drinks. Given the growing research evidence, including a paper from the university of Miami, there is significant cause for concern for vulnerable groups about effects such as seizures, strokes and even sudden death. As parents are very concerned, may we have a statement from a Health Minister or a debate in Government time about this very important subject?

I understand my hon. Friend’s concern. There is concern about the impact on some people of high energy drinks. The UK Food Standards Agency considers that the effects of caffeine are transitory and without permanent health effects. It has published advice that children and other people who are sensitive to caffeine should consume such drinks only in moderation. If my hon. Friend has further evidence, the FSA and the Department of Health would very much like to have a look at it to see whether that advice needs revision in the light of the evidence.

This week, the Welsh First Minister said on the Floor of the Senedd that he was actively canvassing for the relocation of Trident to Milford Haven. The reaction of the people of Wales to this news is one of horror. Will the Leader of the House ask the Secretary of State for Defence to make a statement on what progress there has been in the intergovernmental negotiations on this issue?

We had Defence questions a few days ago, on Monday last week, and I do not think that the opportunity to ask Defence questions arises again until September.

In the mean time, I will ask my right hon. Friend the Secretary of State for Defence to write to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) to bring him up to date with the discussion to which he has just referred.

My right hon. Friend may be surprised to hear that a city with the cultural history of Chester does not have its own permanent theatre. However, the local council has inspirational plans to build a new 800-seat theatre in the city centre. May we have a debate on funding for art facilities so that I could highlight and champion this exciting project?

I am delighted to hear that the City of Chester is contemplating having a theatre and that it has the strong support of my hon. Friend. He will know that decisions on capital funding for projects like this are made by the Arts Council at arm’s length from central Government. If he has not already done so I encourage him and his local authority to contact the Arts Council to make sure that this is on its radar and that there is a constructive dialogue about how we might make progress. I am sure that my hon. Friend will be invited to the opening if and when it is built.

Project Merlin was announced to the House with great fanfare by the Chancellor of the Exchequer. Its catastrophic failure led the Chancellor to make a series of announcements in his Mansion House speech, but despite the fact that we had a Treasury statement last Thursday, the Chancellor still has not come to the House and given us an opportunity to question him on this matter. I know that the Leader of the House genuinely believes in the importance of this Chamber, but why have we not had an opportunity to speak to the Chancellor about this?

For many businesses in South West Devon, overheads such as rent and staffing costs are fairly stable, but business rates seem to be escalating out of control, often for precious little in return. The situation is made worse by an appeal system that is completely clogged up and that takes months to navigate. What do the Government intend to do to clear this logjam and ensure that my constituents receive a swifter, fairer hearing?

I am sorry to hear about any delay in hearing appeals from my hon. Friend’s constituents about the rateable value of their business premises. I will certainly pursue that with Ministers at Department for Communities and Local Government. It is worth putting it on the record that we have doubled small business rate relief, which helps roughly half a million small businesses. Also—this may be of relevance to my hon. Friend—we have scrapped Labour’s ports tax, thereby helping many businesses operating in areas such as Plymouth.

The crossroads of the UK’s motorway network is the junction of the M1 and the M6 at Catthorpe, which is used daily by many businesses based in Rugby. The Government have rightly scheduled funds for an upgrade, but there have been two serious accidents in the past week, one of which involved yet another fatality. May we have a debate to consider what temporary measures could be taken immediately and how to make permanent changes to avoid further loss of life?

I am sorry to hear about the loss of life. As my hon. Friend has said, we have committed funds to this project, but I think a public inquiry is needed first. The Highways Agency is aware of the recent accidents and, subject to the result of police investigations into their causes, will look at what measures might be possible to improve the safety of the junction in advance of the major improvements to which my hon. Friend has referred.

Will the Leader of the House find time for us to debate last Thursday’s announcement by the Secretary of State for Work and Pensions on child poverty and the forthcoming consultation on how it is measured and on whether this means that the Government are opening up the Child Poverty Act 2010?

My hon. Friend raises an important point and there will be a debate on social mobility in Westminster Hall on 28 June, in which it might be possible for her to raise this issue. We take seriously the commitment to tackle child poverty. As my right hon. Friend the Work and Pensions Secretary has said, we believe that the current measurements are wrong. Discussions are under way to see whether there are better measurements and whether we need to look beyond having a simple mathematical calculation of poverty and look at some of the root causes to make sure that they are tackled as well.

I know that the Leader of the House is extremely keen that Members should hear new Government policy first, or at the earliest opportunity. As Ministers cannot make statements here first—they seem addicted to going to television studios and newspapers—would it be possible each week to publish in which television studios, programmes and papers these statements are going to be made?

I think that the first debate chosen by the Backbench Business Committee was one on ministerial statements. There was then a report by the Select Committee on Procedure, which we debated. I have consistently made it clear that Ministers take seriously their obligation, when the House of Commons is sitting, in the first instance to announce major changes of policy to the House. That is the policy of the Government, of which I constantly remind my Cabinet colleagues, and we intend to adhere to it.

May we have an urgent statement on the European Union and animal experiments? My constituent Louise Jackson is concerned about a new EU directive which will scrap the historic protection that Britain has granted to stray cats and dogs, stopping them being used in laboratory experiments. Losing a pet is distressing, but the idea that it could end up in someone’s lab is unacceptable. Will my right hon. Friend urge the Government to stand up to Europe on the issue?

Like other hon. Members, I have had representations from constituents who share the concern referred to by my hon. Friend. I can give him a categorical assurance that the UK does not allow the use of stray dogs and cats in animal experiments. We do not envisage any circumstances in which the use of stray animals could be justified in future.

May we have a statement from a Local Government Minister on the performance of councils with respect to revenue collection? The Leader of the House will be as shocked as I am that Labour Enfield council has failed to collect £4.9 million in unpaid penalty charge notices since 2010 and yet, despite that, it is putting up parking charges, which are harming our town centre and introducing new charges on a Sunday.

I understand my hon. Friend’s concern, which he has expressed on several occasions at business questions. I understand that a meeting is taking place in Enfield on 4 July and I encourage residents who are opposed to what is planned to go along to that meeting. So far as the Government are concerned, we have removed the policy of setting charges to discourage the use of cars and we have introduced the policy that parking enforcement should be proportionate but, crucially, we expect local authorities to have regard to the impact of parking charges on businesses in the town centre. I commend my hon. Friend for the vigorous campaign that he has launched.

May we have a debate on honesty in prison sentences? According to a parliamentary answer from the Ministry of Justice this week, someone who is sentenced to prison for six months can be released in six weeks, someone sent to prison for 12 months can be released after three months, and someone sent to prison for two years can be released after seven and a half months. A debate would allow the Government to explain to my constituents why that is a satisfactory state of affairs, and if they do not think it is a satisfactory state of affairs, perhaps they could explain what they will do about it.

In the previous Session we had extensive discussions on the Legal Aid, Sentencing and Punishment of Offenders Act 2012. During the passage of the Bill, my hon. Friend raised many of those issues. Some of his suggestions were dealt with by my right hon. and learned Friend the Secretary of State for Justice in response. We have no plans for another debate on sentencing policy, but it is open to my hon. Friend, as a former member of the Backbench Business Committee, to seek a Back-Bench debate in Back-Bench time.

Interest Rate Swap Products

I beg to move,

That this House has considered the matter of the mis-selling of interest rate swap products to small and medium-sized businesses; notes the work undertaken by the Financial Services Authority in this respect; and calls for a prompt resolution of the matter.

I thank the Backbench Business Committee for awarding me the debate. It has received a number of fine applications for time in the main Chamber and I am grateful for the opportunity to raise the issue of the mis-selling of bank interest rate swap products. A number of colleagues have indicated their willingness and a desire to speak in the debate, so I shall try to be as concise as I can in my opening remarks.

The issue came to my attention in dealing as an MP with the hassles raised in constituency surgeries. It is a great advert for doing surgeries: we never know what will come through the door. Back in the autumn of last year, a constituent came in to talk about interest rate swaps, collars, caps and similar things. I was a self-employed business person for 15 years before I was elected to this place, and it crossed my mind that this business man who was talking about the loss of his business and his hotel and the potential loss of his house might be finding an excuse for his business failure. I am not a hard-hearted individual, but I have been in business for a long time and I have the view that there is the rule of buyer beware in transactions with banks and other financial institutions. I therefore listened to his case attentively but with a degree of scepticism, wondering whether he was looking for an excuse for what happened to him.

The more I listened, however, the more I thought that there was something that I should look into, and the crux for me came when I tried to get hold of the verbal agreement between my constituent, Mr Colin Jones, and his bank. It took us a long time to get the bank to allow us to see a transcript of the verbal agreement, and by that point I understood something about the nature of interest swap derivatives and what was meant by swaps, caps and collars. I had a degree of understanding that we were not considering a straightforward financial product.

My concern, which became apparent from the transcript, was that time and again—on four if not five occasions—during the telephone conversation that was the basis of the legal agreement the bank described the product as a fixed rate one. The bank even went so far as to say, in essence, “Mr Jones, it is basically a fixed rate product. It will protect you in the same way as a fixed rate product would protect your house.” His problems and the financial effect of his decision to sign up to that product have been extremely damaging. He was misled, given that the description of the product as akin to a fixed rate product was, to say the least, economical with the truth.

I congratulate the hon. Gentleman on securing this debate. I apologise for being a tad late in getting to the Chamber. I assume that the person his constituent was talking to was fully qualified under the Financial Services Authority to sell that product. I have some constituency business in which, clearly, there is a real issue about the competence and qualifications of the person doing the selling. Has the hon. Gentleman come across any similar problem either in his constituency or as a result of this debate being called?

There have been examples of such scenarios, which have come across my desk as a result of what has now become a campaign. One of the reasons for holding the debate is to ensure that more cases come forward, because the more information we have, the easier it will be for the FSA, for example, to bring the issue to a resolution and for the banks to acknowledge that there is a problem. The hon. Lady makes an important intervention.

I have a slight confession to make. I spent a great deal of my 20 years in business dealing with swaps, collars, caps and all sorts of financial instruments. The case highlighted by my hon. Friend of its being a fixed rate product in a sense misses the point. In general, such products were hedges—they were there to mitigate risk. A lot of customers went awry because the bank would often present the products as a loan but would gear up much more if the risk could be mitigated. Such financial products were often sold on that basis.

That is an important point. My comments will state clearly that those products are not necessarily wrong. The question at stake is whether the products were sold appropriately, and whether there was a degree of mis-selling. Sophisticated investors, understanding what they are doing, should have the right to enter into such agreements. My question is whether the banks should be going after businesses with turnovers of less than £200,000 a year.

I have a constituent, whom I will not name for understandable reasons, who has suffered a loss in excess of £1.5 million as a result of such a product. Does my hon. Friend not agree that the banks have an extra responsibility, because they are often dealing with inexperienced people who, nevertheless, place a massive trust in their long-term relationship with their banks?

That is a key point. Time and again, businesses have told me that their relationships with banks go back 15 or 20 years, and that they believed the banks had their best interests at heart. In some situations, however, they have clearly been sold products that they did not understand, but they trusted their bank manager because they had dealt with them for so long.

Having been persuaded by Mr Jones’s transcript to look into this issue, I started asking questions, and as a result I came across the Federation of Small Businesses working hard on this issue and the organisation Bully-Banks. We have identified literally thousands of businesses that have been affected, and debates such as this are necessary to show that the House understands and cares about the problem and wants to see a resolution.

I congratulate the hon. Gentleman on his leadership of this debate. He is looking for evidence and examples, but has he come across Guardian Care Homes, a firm with two care homes in my constituency? Its problem was that the term of the swaps that it was sold far exceeded the term of the loans to which they were linked.

That is a key issue. In many cases, the term of the swap is longer than that of the loan, which the Financial Services Authority believes to be evidence of mis-selling.

Evidence about the background to interest rate swaps suggests that banks started to target small businesses from about 2006 onwards. The practice was probably curtailed in 2008-09, although there are a few examples of such products being sold after that. In a number of cases, banks have settled with businesses out of court. My concern is that banks have placed significant gagging orders on those businesses, which stops them explaining the terms and conditions of the settlement.

Existing regulations should have been taken into account when these products were sold. Swaps are financial derivatives covered by section 85 of the Financial Services and Markets Act 2000. They are, therefore, a regulated product and any adviser who tries to sell them has a duty to understand the needs of their customer. That is a key point. A fair, clear and not misleading explanation of the product must be provided to the customer, yet in many of the cases I have seen the information provided was far from satisfactory.

I, too, congratulate my hon. Friend on securing this debate. Does he share my concern about the experience of Castlewood Hotels in my constituency? It was sold such a product by the bank and told that if it did not accept it, its business could be in jeopardy in future.

Again, that is an important point. In significant numbers of cases a swap product has been sold to a business as a condition of a loan being made available, so that the future availability of credit was dependent on the acceptance of a swap product. Obviously, a business in need of finance would be persuaded of the need to take up that product in order to receive finance, and that is a key issue.

I am grateful to my hon. Friend for securing this important debate. As he will know, the Committee is already looking into this matter and has written to the FSA and the Financial Ombudsman Service asking them to investigate fully and get back to us. He may not be aware, however, that we also raised this issue with the chairman of the FSA, who has promised to provide a progress report by the end of July. The Committee is extremely anxious, not least because a number of its members, including me, have seen constituents with exactly the sort of complaint my hon. Friend outlines.

I am aware that the FSA has promised to provide a progress report, and I sincerely hope that that will be with us before the end of July, if not sooner. My concern is that businesses are being put into administration as we speak—we have seen examples of that this week alone—and in the current economic climate we should not accept the loss of any businesses or jobs as a result of mis-selling.

Do we not also need to get on with it because lots of claims are time-limited? Some of my constituents have only until October this year to launch a claim, and they need to know the position of the FSA and the Financial Ombudsman Service so that they can decide whether to have recourse to the law.

That is an important point. As many of these products were sold from 2006 onwards, many affected businesses are now watching the clock run down on their opportunity to take action. That crucial point should resonate within the Chamber and outside.

In addition to the two duties I have mentioned, advisers must also take reasonable steps to show that the client understands the product and the risks involved. The bank must also take steps to ensure that the product is suitable. Mr Jones was sold a product by RBS. I wrote to RBS on his behalf, and was shocked that, in one transaction, I could highlight seven breaches of conduct of business sourcebook regulations. I cannot take the time to go through all seven examples, but I shall give a few. For one, RBS never sought to quantify the termination costs for the swap, which is a pretty severe piece of negligence, in my view. Neither did it take reasonable steps to ensure that it was in possession of sufficient personal financial information about Mr and Mrs Jones, which is also a big issue. It did not take reasonable steps to ensure that they understood the nature of the risks involved or provide a suitability letter. These are breaches of COBS rules and should be taken very seriously. To break seven such rules in one case raises the question: what were the banks doing?

I can highlight a number of general mis-selling examples. In some cases, businesses have been provided with a product not suitable for them and products have been described as similar to fixed rate mortgages, as I have already mentioned. There are also numerous examples of no opinion analysis being provided, meaning that a business was offered one product alone. I challenge the banks to state that that was not because of commission issues.

That is the key. Many businesses have contacted me about that very point. It was a case of, “Take it or leave it.” Only one product was offered, and obviously people who needed finance for their businesses took it, with the dreadful consequences we have seen.

That is a good point. I have a constituent, whom I will not name, who is a farmer and was offered such an arrangement completely inappropriately. He said specifically that he did not want it. None the less, his bank, Barclays, wrote to him on 6 June 2008 with a contract, which he read in detail, but on 10 June sent him the final contract, into which it had slipped two clauses that turned it into this sort of agreement. He accepts that he probably should have read the second document, but it did not indicate at all that it had changed the arrangement. That was very poor.

That is another example that should be taken on board in this debate.

Another example of general mis-selling already touched upon is where a swap is for a period longer than the loan. I have also seen examples of where the swap was for a sum in excess of the loan. Another crucial example is where the break cost for terminating the swap was described in one e-mail from a bank as being £9,000 but, three years later, when the customer approached the bank to break the swap, a figure of £135,000 was quoted to settle. I fail to understand how it could go from less than £10,000 to £135,000 in three years. That is another example of mis-selling. Another one worth mentioning is where the bank classified the client as a professional client and experienced derivative trader. I can assure the House that the business in question was blissfully unaware of the nature of the product it was buying, yet, for paperwork purposes, the bank had described it as a professional client rather than a retail client.

It is generally agreed that there is an issue here. The FSA accepts it is an issue. Bully-Banks, an organisation representing 350 victims, has done some work highlighting that 96% of businesses in its organisation were approached about such products by relationship managers. Businesses did not go looking for these products; they were approached with a solution to a problem that often they did not have. Some 87% of businesses surveyed by Bully-Banks were unaware that the adviser was not an adviser but a salesperson, and there was a general lack of understanding. In 95% of cases, businesses stated categorically that they entered into these agreements on the basis of advice and guidance given by their bank relationship managers.

I would like to offer my hon. Friend an explanation of why banks are doing this kind of mis-selling. In my private Member’s Bill last year on the regulation of derivatives, I explained how mark-to-market rules allowed banks to up-front unrealised cash flows to declare profit immediately on moneys that they have not received. I wonder whether the Treasury Committee will investigate whether that is a key factor in encouraging this bad business.

Order. Before the hon. Gentleman rises to deal with that point, may I gently remind him that he was supposed to speak for about 10 minutes? He has been extremely generous in taking interventions, but there is a time limit for everyone else who wants to contribute, and it is getting shorter the longer he speaks.

Thank you for your guidance, Madam Deputy Speaker. I will refrain from taking any more interventions and finish my comments.

The figures from Bully-Banks illustrate the fact that businesses feel that they have been mis-sold such products. The final figure from Bully-Banks that is worth mentioning is that 75% of its members claim that the swap product was a condition of the loan agreement that they entered into. Some Members might say that the way forward is therefore for individual businesses to take legal action on that basis, but I have concerns about that. A solicitor said to me yesterday that the problem in England and Wales is that the law is far too bank-friendly. There is a concern that in many cases businesses that take legal action face costly cases before the banks finally settle and put in place a gagging order. It is also a concern that small businesses should be expected to fund their own cases when they are already in crisis

I will not take another intervention, due to the guidance from Madam Deputy Speaker.

Small businesses that have to take legal action also face the risk of losing the support of their banks. There are examples of loans being called in or overdraft facilities being taken away from businesses that are taking action. I therefore do not think that the way forward is necessarily to expect individual businesses to take action against the banks, unless we can have some certainty that the banks will not act in that way.

The scale of the problem is significantly greater than we have accepted to date. Today the Law Society Gazette gives the figure of about 4,000 businesses affected, with about £1 billion-worth of potential claims. In my view that figure is probably an underestimate, so the scale of the problem should be taken seriously.

Let me state what I am calling for from this debate. It is very easy to have a debate in which we all highlight our concerns about individual businesses and our belief that the banks have behaved badly, but this House has a responsibility to try to offer a solution. We need to encourage the Financial Services Authority to move more quickly to a resolution of this issue. It needs to inform the banks that, for example, they have an obligation and a responsibility to act fairly with their clients. We also need some transparency from the banks about the exact size of the problem. We know, for example, that between 2006 and 2010 the banks engaged in significant amounts of swaps. Some of them might have been completely legitimate, but quite a few were sold to small businesses.

Those small businesses are feeling under pressure from their banks, so my specific request today is for the Minister to call on the FSA to give written assurances that the banks will not adversely treat any business that makes a complaint. We live in a country governed by law. If a business wants to make a complaint, it should not be subject to undue pressure from its bank. In the same way, if a complaint has been made to a bank or the FSA, the bank should refrain from foreclosing on that business. Those are my short-term requests for the Minister. In the long term, I think it is crucial—

Order. The hon. Gentleman was allocated 10 minutes. He has now been speaking for 20 minutes. There are about 15 Members wishing to take part in this debate, which is due to conclude at 2.30 pm. Will he please now make one more, brief remark and then resume his seat?

I was coming on to my final request, which is that in the long term we must avoid a repeat of what happened with PPI—payment protection insurance—which has created an ambulance-chasing gift for solicitors of disreputable means. We should have a system that allows such cases to be settled in a constructive manner, in agreement between the FSA, the banks and their clients.

I remind Members that the time limit is eight minutes for Back Benchers. There are a large number who wish to participate in this important debate. It may therefore be necessary to reduce the time limit. We shall have to see how we proceed, but we shall start with eight minutes.

I, too, would like to applaud the hon. Member for Aberconwy (Guto Bebb) for delivering such a fantastic speech. I want to tell the House about a similar case in my constituency. It is the case of Guardian Care Homes, and it has already been mentioned by my right hon. Friend the Member for Wentworth and Dearne (John Healey). The company’s headquarters are in my constituency, but it employs about 900 staff in 30 care homes across the country. Small and medium-sized enterprises such as these need to be supported, rather than exploited.

I recently met members of the senior management at Guardian Care Homes, and I was shocked by what they told me. In 2007, they were sold two interest rate swap products, which were taken out against existing loans that had been taken out to improve the business model and to improve the care homes. They also said that the bank that sold them the products told them that this was a condition of getting the original loans, and that the products would protect them against interest rate rises. They were not informed of the dangers and financial implications of interest rate falls, however. According to Guardian Care Homes, the bank did not at any point during the sale of those swaps fulfil its obligation to explain that such costs could be incurred.

Guardian Care Homes also discovered that the swaps that had been sold to them vastly exceeded the original terms of the loans, by 10 and 15 years respectively, which made things incredibly difficult for the company in the long term. An independent study of this specific case recently described the bank’s behaviour as reckless, and a complaint has been made against the bank. It beggars belief that banks were requiring SMEs to take these products alongside loans, and I look forward to hearing the Minister’s response to these points today.

Even if the case involving the company in my constituency had been a one-off, it would have been extremely worrying, but there appear to be hundreds, if not thousands, of SMEs in the same situation. I am sure that we shall hear of cases in other right hon. and hon. Members’ constituencies later. Anecdotal evidence from SMEs suggests that, in many cases, swaps were bought without the companies having received any legal advice on their nature. The banks have a duty when selling financial products to ensure that the products and the risks involved are identified to businesses, and that there should be no coercion involved. I have written to the bank in question and requested that no punitive measures be taken against the company in my constituency while the complaint is ongoing.

The scale of this problem is far greater than we are being told. I have two examples in which the people I have spoken to are not going to take action. They have other clients and they are afraid to take action because they fear that they will be punished and that future relationships could be damaged. This is a huge problem, and we are seeing only part of it.

I totally agree with the hon. Gentleman. I would very much like to hear from the Minister today whether the Government have a grasp of the scale of the problem, as it is certainly significant.

Like my hon. Friend, I have written to the head of Barclays, which was responsible for selling the two swaps that have cost Guardian Care Homes at least an extra £12 million so far. Does my hon. Friend agree with the point being made on both sides of the House that such small companies are often afraid to complain, for fear that their loans will be pulled? Does she also agree that a moratorium is needed following complaints, and that firms should be able to make collective challenges for redress?

I thank my right hon. Friend for making those points, and I hope that the Minister will be able to respond to them in due course, if not today.

There seems to be an extremely worrying level of coercion involved in the banks’ selling these products to small businesses without making sufficient information available. I have no doubt that what happened to the company in my own constituency has been replicated across the country. That is regrettable at a time of such difficult economic uncertainty when small businesses are the backbone of the British economy. We need to make sure that they are supported, not systematically exploited.

I have a quick point. One of my constituents took his local bank manager to Bristol to talk to Barclays about what had happened, yet that local bank manager did not understand it. If bank staff do not understand what is going on, how is a farmer who has so many things to consider every day meant to understand it?

The trust between the bank and SMEs certainly seems to have been exploited, as the hon. Member for Aberconwy demonstrated, although one would have hoped that the banks would support small, viable businesses rather than exploit them.

I shall not speak for much longer, as I know others want to contribute.

Let me end by asking the Minister a few specific questions. Will she reassure us that the Government are taking this issue seriously? What are the Government doing to ensure that SMEs struggling with these swap agreements are supported in the short term and will not have punitive measures imposed on them by the banks if they complain? What steps are the Government taking to ensure that this practice will not happen in future? Do they have any idea of the time scale for the Financial Services Authority report?

The hon. Lady is making her case in a typically powerful way. One of my constituents sought legal recourse against Barclays and was subsequently threatened with foreclosure of his loan, which would result in him being forced to sell his house, even though he was not in arrears, unless he signed a waiver removing his right to take legal action. Does the hon. Lady agree that such punitive action is utterly unconscionable?

I think it is utterly disgusting that this is happening. We are told that our banks are too big to fail. They have taken advantage of significant Government intervention, yet now we find that they are not even supporting viable small businesses across the country. Something needs to be done about this urgently, so I look forward to hearing what the Minister has to say.

I start by adding my congratulations to my hon. Friend the Member for Aberconwy (Guto Bebb) not only on securing today’s debate, but on the immense work he has done on this subject over the past few months.

I do not pretend that the mis-selling of interest rate swap agreements is a huge issue in my constituency; in fact, it has been raised by only a very small number of constituents who are local business owners. For the individuals affected, however, it is a massive issue, and as they contribute to the local economy, provide jobs for local people and use local services to assist with their businesses in the region, the knock-on effect has the potential to be very significant indeed.

It has been reported that RBS and Barclays, two of the UK’s biggest high street lenders to small business, have sold roughly 7,000 of these products between them. I can certainly add Lloyds bank to the list, as one of my constituents has had significant difficulties with that bank, which sold him this product several years ago.

Interest rate swap agreements are highly complex. As one of my constituents pointed out, these are the territory of corporate bankers, but have been sold to chip shop owners, to care home providers, as we have heard, and indeed to landlords. A constituent who approached me is the owner of a company that rents out a significant number of properties in Southampton, largely to the student market. He pointed out that, should his company fail, 1,000 individuals could be turfed out on to the streets of Southampton in the middle of their studies. What redress do these businesses have should it all go wrong?

Fear of the bank calling in the debt has kept many quiet. Micro-businesses have the option of going to the Financial Ombudsman Service, but that is possible only for those with small turnovers employing fewer than 10 people. My affected constituents are not eligible for assistance from the ombudsman, having too high a turnover and too many employees. So they have been forced to consider court action. However, as one of them said:

“how can you sue a bank you need to support you?”

In any case, the maximum redress the Financial Ombudsman Service can award is limited to £150,000, which is scant compensation when one of my constituents assures me that he has been charged an additional £6.1 million on a £3 million loan and he has already made payments into the interest rate swap agreement of over £1 million.

Does my hon. Friend agree that this looks like old-fashioned extortion? Were the banks not simply trying to obtain the maximum possible rate, with the threat that rates might rise even higher unless people took advantage of the product?

Let me reply to my hon. Friend by quoting a constituent who said to me, quite seriously, “I would have been better off going to Wonga.”

I welcome the FSA’s decision to review these products, and sincerely hope that the outcome will be assistance for the thousands of small businesses that have been affected. We should not forget that they are the lifeblood of the British economy. As that same constituent said, he is paying £3 million on top of the interest on an £8 million loan. The loan was for only three years, but the swap product was for 10. As he said, if he had not been stuck in the product he would have expanded more, employed more people, and paid more tax to the Exchequer. He also came out with a fantastic remark which really hit home in describing precisely the sort of small business man to whom these products have been sold. He said, “I left school with no qualifications. I learned my maths by scoring darts at my father’s pub. Yet suddenly I am involved in interest rate future, caps, collars, derivatives, curves, flows. All I wanted was a loan.”

My constituent is in no doubt about the fact that the loan to expand his business was dependent on the swap product. He has been quite clear about the position. His bank has been threatening him, telling him not to raise the matter with his Member of Parliament or to pursue the complaint via the courts. Land sales over which the bank has had a charge have been delayed until he makes his intentions regarding court action known to the bank. All the while, his business has been saddled with a swap product which, against the odds, he has managed to service. It has cost him more than £1 million over the last four years, and his business, family and employees have faced uncertainty.

I commend the work of my hon. Friend in pursuing this issue. I have no doubt that, as the motion says, prompt action is needed to ensure that small businesses do not continue to suffer as my constituents have. Their banks must not be allowed to threaten them.

I, too, congratulate the hon. Member for Aberconwy (Guto Bebb) on securing the debate, and on the work that he has done in encouraging Members in all parts of the House to become involved in local cases.

My constituents do not want their names to be used because they are embarrassed by their position—although they have no need to be, because, as we have already heard today, they are not the only ones to find themselves in such a position. In November 2007, they were invited to a meeting in Glasgow by the Bank of Scotland. There was a fancy PowerPoint presentation, but it did not explain adequately the downside of the product that my constituents were being offered. Indeed, this was described by the bank’s relationship manager—which is a laugh in itself—as a win-win situation. The Herald, which has taken up the cause, described it rather more accurately as a “heads they win, tails you lose” situation.

The contract was struck verbally in a tape-recorded conversation. My constituents had had a 20-year relationship with the bank, and it seemed reasonable to rely on verbal trust and good will, because that had been their experience over all those years. They believed that they could take the bank’s word, and that the bank would follow through what had been agreed. They are shocked by the scale of the impropriety that they have witnessed, and we know that they are not alone in that view.

The bank’s behaviour in derivative selling has been reprehensible. It has bottled out, in the words of my constituents, because the rate swing does not suit it, and it has no appetite to proceed with what was agreed although no risk is posed to it. My constituents feel that the bank should be compelled to implement its selling commitments, or at least to reverse the arrangements as far as the point of sale to remove the premium/penalty element, which it is working both ways to suit itself with no regard for what it agreed with its customers. It seems confident that it can get away with that because the structuring of the arrangements relied on verbal trust and good will.

To add insult to injury, the bank has destroyed the tape of the conversation, wiping out the evidence that proves the verbal side of the bargain. When they requested the tapes, they were first told the bank had them, then they were told they had been lost in the wake of the bank merger, and finally they were told the tapes had been destroyed as the bank keeps them for only one year. How convenient for the bank. That has left my constituents even more vulnerable, however—and, frankly, conned. The bank refuses to discuss the matter with them in any meaningful way, denying a meeting with anyone with any genuine decision-making power. This has been ongoing for months, and they received a response to their complaint only yesterday. It was a glib and bland response; the bank did not engage in any meaningful way with what was a very detailed complaint.

Mr Clive Adamson of the Financial Services Authority told me its rules require the firm to investigate the complaint and respond to the consumer within eight weeks. The bank is therefore breaching FSA rules in respect of the complaints procedure, in addition to its conduct in the original sale.

So far, these are the only constituents who have contacted me on this matter, but I feel sure many more of them have been affected. The Herald estimates hundreds of struggling Scottish businesses have been caught up in this, with the 83%-taxpayer owned Royal Bank of Scotland alone costing thousands of UK companies £3 billion in extra bank payments. Its investigation shows that UK small businesses—which, as we all know, are crucial to our economic recovery—may have paid at least £10 billion in extra interest costs for IRSPs, and face extra liabilities of over £20 billion, potentially impacting on 80,000 jobs.

This is not a trivial matter. It has consequences for economic growth as well as for the individual businesses concerned. The financial ombudsman has rejected 66 complaints relating to the sale of IRSPs against RBS, apparently because the banks have a disclaimer saying that they do not give advice. How do we define “advice”, however? There was certainly hard-sell, weighted towards the positive aspects of deals, and it appears that the banks did not abide by their responsibility to ensure that any product they sell is appropriate, in the customer’s best interests and fully understood.

I realise that these are complex financial instruments that take time to investigate. However, action must be taken as soon as possible. It is undoubtedly true that regulation has in the past been insufficiently robust, so I welcome the creation of the Financial Conduct Authority, especially as it will focus on early intervention.

Previous mis-selling situations have gone on and on, and have caused a great deal of distress to the victims. We know from experience that the worry these issues causes can lead to serious health problems and some people die before justice is done.

We already know that the banks are not being transparent over this matter, and in some cases are being downright obstructive and unco-operative. We should not allow stalling tactics to impede putting in place a remedy. It is our responsibility as elected representatives to take this up immediately and encourage those who have been affected to come forward. Experience shows that a collective response is more effective in getting things sorted out.

It is not in the interests of the banks to have another long-running mis-selling scandal unfolding in a very public way. That will do nothing to restore public confidence. I understand that there is a six-year time bar for claims as well. Speed is of the essence, therefore, and I urge the Government to do all they can to make sure this situation is dealt with quickly.

I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this important debate and on his excellent work on the matter under discussion.

I am a former finance director of a £1 billion global business, so I am well aware of the benefits of bank services and financial products such as exchange rate hedging, but I am shocked that they are deemed appropriate for small businesses. Like other Members, I have received complaints, and I shall highlight two of them.

Stephen Lilley is a constituent of mine and I believe he is present in the Gallery now—probably. He has given me permission to raise his case. He owns a hardware company in Marske-by-the-Sea, and in late 2006 he bought an interest swap covering 15 years. I have read the telephone transcripts of the conversations between HSBC and the directors of his company whereby the swap was agreed, and they show a clear example of mis-selling.

The directors made it clear that this was their first ever business venture. They wanted loans for a maximum of 15 years and hoped to have them paid off before the end of that period. During a complex discourse on the products, one statement made was:

“The reason we do this rather than doing say an…inclusive fixed rate is that in the future if you want to renegotiate or look at your lending margin, obviously you can’t do that if it’s included as part of the fixed rate”.

Those were apparently warm words. A number of other inappropriate comments were made in the conversation, and no mention was made of the fees being earned by the seller.

The climate is tough for the hardware shop and, in a move that can be described only as bullying, it is now being charged £500 a month for a “relationship manager” who provides no service. I fail to understand the logic of charging a struggling business an extra fee for struggling. Mr Lilley is not a young man and he now faces the real prospect of losing his business and his house, and, as I understand it, still being locked into a financial product that was badly sold. It is difficult for him to fight the bank on which he depends so heavily, and I see it as our responsibility to fight for people in his position.

I would also like to highlight the case of another of my constituents. The case of Mr Roy Myers has been mentioned on the BBC, and it has features common to many of the other cases we are hearing about. Roy owns the outstanding O’Grady’s hotel in Redcar and the Victoria pub in Saltburn. He is not naive; he has owned other pubs and hotels, and formerly had a responsible job in Her Majesty’s Revenue and Customs. He had negotiated a loan and was presented with a base rate swap agreement to sign on the very day when he simply expected to sign for the loan. No proper selling took place and he was given no options. It was never properly explained to him that he was locked in for 10 years and that there could be huge exit costs. Mr Myers had previously bought and sold businesses and paid off loans, and he never expected to be locked in like this because of a financial product.

My hon. Friend mentions that the exit costs had not been properly explained. Does he share my concern about this issue, as my constituent is in a situation where what were called “negligible” exit costs ended up being worth more than 50% of the value of the loan?

I thank my hon. Friend for that comment. He raises an important point that is true of many of the cases we are talking about today.

To be fair to the banks—not a phrase I expect to hear a lot in this debate—I have pointed out to Mr Lilley and Mr Myers that people in their position may have considered a fixed rate term product had it been offered at the time. So some of the loss figures we are now talking about may be a bit misleading, as they can be calculated only with hindsight and, in effect, constitute a one-way bet. Mr Lilley did in fact make small gains through rate hedging in the very early months of his contract, but these products remain toxic. Clear discussions should have taken place at the time as to whether the borrowers wanted variable or fixed rates.

Many small businesses such as those I am discussing are reluctant to challenge their lenders on these specific issues, as they do not want to put their bank facilities at risk. The Financial Ombudsman Service rarely upholds complaints, so their only recourse is a litigation process, which, obviously, serves only to incur more costs. Bankers seem to be working for themselves first and for their clients second. We heard just a few weeks ago about Goldman Sachs referring to its clients as “muppets”. This world of over-complicated products and dodgy selling has to stop.

A small business person should be able to rely on a bank to work in their interests, and not be seen as a sales channel to another part of its organisation. We should not expect business people to be personally expert in these kinds of products, nor should they have to pay separately for a financial adviser. We should also remember that accountants—and I am one—may not be allowed to give advice on these kinds of products unless they are also registered as financial advisers. So these products have clearly been designed to make money for the banks, which, by definition, means extracting more money from the small and medium-sized business sector. Some of these products are no more appropriate for small businesses than they would be for a household mortgage. Banks are surely worried about their reputations, and I have been very happy to name and shame HSBC today. Banks can recover their reputation by dealing constructively and generously with those affected, rather than engaging in continuous and expensive litigation. Special consideration should be given to those such as Mr Lilley, whose arrangement, made in November 2006, would almost certainly have breached the FSA suitability regulations introduced in November 2007. I agree with the hon. Member for Wolverhampton North East (Emma Reynolds) on the urgency of dealing with this problem, given that Mr Lilley’s arrangement is six years old in five months’ time.

I salute my constituents’ bravery in coming forward and hope that more will do so. I hope also that right hon. and hon. Members will support the recently announced FSA investigation. Finally, I hope that the Minister will act swiftly on the FSA’s recommendations and take another step to stop such predatory activity by banks in our vital SME sector.

Diolch, Mr Deputy Speaker, I am grateful to you for the opportunity to speak. As others have done, I congratulate the hon. Member for Aberconwy (Guto Bebb) on his hard work and on securing this debate on the Floor of the House.

Two constituents have visited my surgeries to highlight the problems they have endured as a result of these complex products. I shall not pretend to understand how they work, but the end result has been devastating for my constituents’ businesses. I am therefore glad to learn today that the FSA is to investigate and the Treasury Committee has interest rate swap products on its radar.

What strikes me in the cases brought to my attention is the aggressive manner in which the products were sold to businesses, often by bank managers who had been dealing with the businesses for some years. It is clear to me that local bank managers were under orders to sell the products, without themselves understanding what they were selling. Relationships with local businesses are built up over a number of years, so those businesses would have trusted their local bank manager. After the initial meetings, specialist teams were brought in to process the deal. The business men who came to see me in my surgery said that they felt under enormous pressure to sign up to the deal. They were told that only a small window of time was open to them to take what was deemed to be the opportunity of a lifetime.

I suspect that what we are seeing is the unholy mix of retail and investment banking. The job of a local bank manager is to pursue boring banking, but it is clear that, in this instance, they were selling products they would not normally be associated with, resulting in disastrous consequences for the businesses that entered into the deals.

The products were sold as offering protection in the event of interest rate rises. In the pre-crash years, that would have been a concern to any household or business that was taking out a large loan, so it is easy to understand why the products would be attractive to many businesses. In his recent statement on banking reform, the Financial Secretary to the Treasury equated them to a fixed rate mortgage, but my understanding of a fixed rate mortgage—I hope I am right, because I have one myself—is that the loan repayment stays constant for the duration of the loan term, which certainly is not the case with these swap products. As interest rates fell following the financial crash, businesses’ repayments started to increase enormously.

Sad to say, after two years in this place I have morphed into an arch-cynic. It seems to me a huge coincidence that heavy selling of interest rate swap products started in 2006 and 2007. In the case of Barclays, it is clear that the investment arm was pushing the products on the retail bankers. I am interested to know whether the FSA or the Treasury Committee, as their work proceeds, will be able to find out whether local bank managers were working to commission to identify clients who could be targeted to sign up to the products.

Financial planners are clever people. They would have been more aware than anyone that their own recklessness was about to end in the bust of all busts in 2008. They would surely have been aware that the obvious policy response of the central bank to such a crisis would be to ease monetary policy so that interest rates fell; and that the loan repayments of anybody signed up to these products would increase significantly. For the bank, of course, its customers’ misfortune would be good news, as the extra repayments would enable it to recapitalise after the crash. Even better, as has been the case with my constituents, with businesses going bust the banks would have assets to sell for even greater profit. In my view, this makes the complete separation of retail and investment banking an imperative. The recent commitment in the White Paper to creating separate accounting units will not be enough. If my reading of the White Paper is correct, these products are actually exempted.

My constituents had initially agreed to a normal standard loan agreement with the bank. They did not understand the implications of signing up to these products, especially the exit fees. As the Monetary Policy Committee lowered interest rates, their repayments reached an unsustainable level at nearly double what they had been under the normal standard loan arrangements. On the invitation of their local bank manager, they met officers from Barclays Capital. They were completely unaware that their business was being transferred from the local bank to the investment arm. Every time they queried the terms of their loan with Barclays, they were hit with enormous fees, which furthered their business’s spiralling financial problems. They inform me that the local bank manager was unable to deal with their queries, despite charging the fees.

From the evidence I have received from constituents on these products, it is clear that profitable businesses have been mis-sold products by their banks. I look forward to reading the findings of the FSA and the Treasury Committee. I will finish by saying that I associate myself completely with the proposals put forward by the hon. Member for Aberconwy.

I, too, would like to add my name to the long list of people who will be congratulating my hon. Friend the Member for Aberconwy (Guto Bebb) on securing not only the debate, but a great deal of support from the outside world and a community that has been badly affected by these events.

I suspect that we are now at the beginning of what will amount to yet another large mis-selling scandal. I completely endorse the comment of my hon. Friend the Member for Aberconwy that the last thing we need is the spectacle of bus loads of ambulance-chasing lawyers charging across the countryside looking for businesses that have been mis-sold these products. It is incredibly important that we try to resolve the problem before members of the legal profession take advantage of it as an opportunity to feather their nests. These events come at a time when small businesses are struggling to make sales and win orders and contracts. It is a time when the banking system is adding yet another problem to small businesses. It is something we need to try to resolve.

These products, which really amount to caps and collars, should have been relatively straightforward products. They should not be dissimilar to a fixed rate mortgage. Rather than being like a fixed rate mortgage stating that the customer will pay 3% or 5% for five years, for example, they should have stated that the customer would pay between no less than 3% and no more than 8% over a five-year period or whatever. In that respect, such a product would have been a very straightforward cap and collar.

The problem is that the products were written before this period of super-low interest rates. Of course, interest rates have since fallen well below the collar, so the products are not actually cap and collar products; they are cap and noose products. Rather than holding the interest rate at the lower level, the noose has the effect of bouncing the interest rate up, thereby creating a higher rate than the customer would otherwise have expected and, in some cases, than they would have paid at the rate of interest in the first place.

The result is that these products are far more complex than they would normally have been. I declare a history of serving as a compliance officer for an FSA-regulated firm before being elected to this place. We used to spend a huge amount of time ensuring that we classified our clients properly to make sure that the products that were sold were aligned with the abilities. I fear that what is happening here is that we have a misalignment of customer classification. There are salesmen who are not experts in the products and do not know a huge amount about them, and they are selling them to customers who are clearly not experts in the products at all. Under these circumstances, a huge problem is brewing.

The Chair of the Treasury Committee mentioned the fact that in yesterday’s Sub-Committee meeting we met Adair Turner, who assured us that he would go to great lengths to investigate the whole process. Subsequently, I asked Martin Wheatley, the other witness and director of the FSA’s conduct business unit, whether the authority will be looking into the whole business of misclassifying clients as well as salesmen, and he said that without a shadow of doubt it will be specifically doing so, so I sincerely hope that we will reach a speedy resolution on that issue.

The hon. Gentleman makes the powerful point that we do not expect small business owners to be experts, but that their accountants are not often experts, either. The people whom they deal with who will most often be experts are their bankers, so where does he feel that small business owners should get their independent financial advice from?

That is an incredibly important point. We live in an ever-increasingly complex world, and banks are competing against each other to come up with more and more sophisticated products that appear to be user-friendly, such as simple fixed rate mortgages. But as products become more complex there are more hidden elements in the contracts that people sign, such as in the one under discussion, whereby in a completely unforeseen period of super-low interest rates, business owners have to pay what amounts to a fee to buy themselves out of the contract’s residual value.

People then get into very complex calculations to try to understand what is going on, and the economic value of, and internal rate of return on, the contract. That is when things go way above the pay grade of most people, apart from those specialists sitting in dealing rooms in Canary Wharf who really understand such stuff. So, as part of the banking review and the Financial Services Bill that is passing through Parliament, we need to look very carefully at the classification of customers and of salespersons in order to get back to the fundamental point that we have to match products to a customer’s ability to deal with them.

I have seen cases in which, through a process of legal discovery, a very clear e-mail trail has shown banks wilfully deciding not to explain the disadvantages of such products and, sometimes, a complete mismatch between the length of their loans and the length of the product they were selling. Does my hon. Friend agree that this is not just about people not understanding the situation, but about an intention in many cases by people not to inform customers because they wanted the business for their own bank?