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Commons Chamber

Volume 556: debated on Monday 14 January 2013

House of Commons

Monday 14 January 2013

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Falkland Islands

1. What recent assessment he has made of the readiness of British forces based in the Falkland Islands; and if he will make a statement. (136400)

My right hon. Friend the Defence Secretary is, as we speak, en route to Australia with the Foreign Secretary to attend the Australia and UK ministerial talks, and sends his apologies both to you, Mr Speaker, and to the House.

Before I answer the question asked by my hon. Friend the Member for Lichfield (Michael Fabricant) I am sure that he and the whole House would like to join me in paying tribute to Sapper Richard Walker, who was killed in Afghanistan last Monday. Sapper Walker was, by all accounts, an impressive young soldier. The loss felt by his colleagues, friends and family is unimaginable and a reminder of the difficult and dangerous job that our brave armed forces do every day. I was in Afghanistan last week and saw for myself the real progress that is being made in helping the Afghans take responsibility for their own security, which in turn protects us here at home. We honour Sapper Walker’s sacrifice and send our heartfelt condolences to his family.

Turning to the question, the Ministry of Defence keeps force levels in the south Atlantic under constant review to ensure that we retain appropriate levels of defensive capabilities. We retain the ability to reinforce the Falkland Islands should the need arise.

My right hon. Friend will know that there is increased sabre-rattling from President Cristina Kirchner and that on 11 March there will be a referendum in the Falklands regarding their future status. Does he think and is he confident that our present armed forces on the Falkland Islands can defend the islands, and are we capable of quick reinforcement should that be necessary?

We all hope and, indeed, expect that the referendum will reinforce the relationship between Britain and the Falkland Islands. This is, of course, a Falkland Islands Government initiative. On the ability to defend the Falklands, we have—this is all in the public domain—four Typhoon aircraft, a company of soldiers, a south Atlantic guard ship and, of course, submarines, but we do not comment on where they are to be found. I am confident that we can defend the islands and we also have Mount Pleasant airfield for immediate reinforcement by air.

In the event that the Argentines should illegally occupy the Falkland Islands again, what assistance does the Minister expect from French military forces in expelling any invaders? Has he had any discussions with his European counterparts with regard to their assistance this time around?

First, I think it highly unlikely that the Argentines will invade the Falkland Islands, not least because I understand that there is a clause in Argentina’s constitution that specifically excludes invading the Falkland Islands or taking them by force. I have not had any discussions with the French on this matter and nor do I think has my right hon. Friend the Secretary of State.

Further to that point, does my right hon. Friend agree that the Argentine armed forces are pretty much incapable of invading the Falkland Islands? Their submarines have been underwater for only six hours each this year and most of their aircraft are grounded through lack of spares and lack of training.

My hon. Friend makes a good point. Indeed, since the days of General Galtieri, there has been a definite separation between the civilian Government and the armed forces. Certainly, it does not appear—although one should not be complacent—that their armed forces are well equipped at the moment.


2. What recent discussions he has had with European Defence Ministers on the security situation in Mali. (136401)

The UK has been heavily involved in discussions on Mali, both in multilateral institutions and bilaterally for many months. Over the weekend, we responded swiftly to a request from the French for logistical assistance by making available two C-17 transport aircraft. The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Boston and Skegness (Mark Simmonds), who has responsibility for Africa, will make a statement to the House on the situation in Mali later this afternoon.

I met recently with my constituent, Caroline Hart, who, through the Joliba Trust, has done a great deal to alleviate suffering in Mali. One of her and her colleagues’ main concerns on the ground in that country is the widespread abuse of human rights on all sides of the conflict. Will my right hon. Friend please set out the steps that the Government are taking to ensure that human rights are at the centre of what we do as we engage in that conflict?

My hon. Friend makes a very good point. Mali is not a country that is renowned for good human rights. The rebel forces, who appear to be Islamist and linked to al-Qaeda, are likely to carry out even worse abuses than anything that has been seen before. We are supporting our French allies in Mali, in support of United Nations Security Council resolution 2087. I know that everybody at the United Nations will be concerned about human rights, as is everybody in this Government.

The Opposition share in the tribute offered by the Minister to Sapper Walker and his family at this dreadful time, following his loss in Afghanistan.

The situation in Mali is grave, with al-Qaeda in the Islamic Maghreb controlling huge swathes of the country. Unchecked, that could become a real threat to the UK and to others. That is why we support the action that is being taken. However, can the Minister spell out the full list of military capabilities that have been offered to the French, and will he rule out the deployment of additional UK military assets in response to the Mali crisis?

I am grateful to the right hon. Gentleman for his condolences to Sapper Walker’s family and for his support for our action in supporting the French. We gave the C-17 aircraft in response to a request from the French for support. They have not asked for any further assets, nor have we offered them. At the moment, we have no plans to deploy any ground forces to Mali.

I support with enthusiasm this well-timed illustration of European co-operation and hope that it is the harbinger of things to come. May I ask my right hon. Friend a number of questions about the military aspects?

Who will have command and control of the aircraft? Without going into details, will adequate and proper intelligence be provided? Since the French do not operate C-17s, is it the intention to deploy ground crew in support of the aircraft?

Buy one, get three free. First, I agree entirely with the right hon. and learned Gentleman about European co-operation. This matter gives the lie to those who say that we do not co-operate with our European allies and friends. I am getting lost thinking about what questions he asked. On whether we have adequate intelligence, the French have intelligence. We are sending our C-17s only into remote Bamako, the capital. We are sending C-17s because they are an asset that the French cannot replicate, so they have to charter such aircraft. I cannot remember what the third question was. [Hon. Members: “Ground crew.”] I do not believe that we are putting in a substantial ground crew, but I am sure that some people will be on the ground briefly. This deployment has a limited time scale of one week, although that could increase.

Armed Forces Covenant

3. What discussions his Department has had with other Government Departments on supporting the armed forces covenant. (136402)

9. What discussions his Department has had with other Government Departments on supporting the armed forces covenant. (136409)

The covenant is a matter for the whole of Government and sustained progress requires close working across Whitehall. To oversee that work and maintain the momentum, a Cabinet Sub-Committee on the armed forces covenant was established in February 2012, led by my right hon. Friend the Minister for Government Policy. The Committee met four times in 2012. It works closely with the covenant reference group, which includes representation from the service community and a number of key service charities, as well as armed forces advocates from Departments and the devolved Administrations.

Specifically with regard to co-operation with the Department of Health, will the Minister say what is being done to improve mental health provision for those who are serving and for veterans?

I assure the House that we work very closely with our colleagues in the Department of Health on these important issues. We have delivered improvements in mental health care provision, including greater access to mental health care for up to six months after discharge, an increase in the number of veterans’ mental health nurses, a 24-hour helpline, and a support and advice website, popularly known as the Big White Wall, which has proved popular with veterans, including some of those facing these challenges.

Given that about 300 out of the 430 local authorities, including Suffolk county council and Waveney district council, have signed a community covenant between the civilian and armed forces communities in their area, does the Minister agree that it would be fantastic if all Departments and local authorities that are yet to sign such a covenant did so by Armed Forces day on 29 June?

I am encouraged by the number of local authorities around the country that have signed community covenants and pledged to do their best for armed forces communities, the families of those who are serving and veterans. It would be fantastic if local authorities were to sign up by that date, but we should not have to wait until then—the more the merrier and the sooner the better.

In the Government’s annual covenant report, forces federations state that they

“remain deeply concerned at the cumulative effect of the impact of the pay freeze for many, allowances cuts, including significant and sudden reductions in overseas allowances that have been imposed on families mid-tour, and changes to pensions indexing.”

Is it not the case that, although the Government have enshrined the covenant in law, their actions simply undermine it?

I do not accept that last assertion. It is true that we have enshrined the key principles of the armed forces covenant in law, and I was proud to be one of those who served on the Armed Forces Bill Committee, which helped bring that process to fruition. I work closely with the Army Families Federation; in fact, one of my first appointments as a Minister in the Department was to go and talk to 300 Army wives at the AFF conference. I listen carefully to what it says and will continue to do so.

I welcome the publication of the report and note the comments of service charities on the covenant reference group, who state:

“We continue to hope that, in line with the 2010 Coalition Agreement, the Government will use any efficiencies and other monies that become available within the MoD budget, to invest in”

decent homes. Was it not therefore deeply careless that the Ministry of Defence very nearly had to surrender a reported underspend of hundreds of millions of pounds to the Treasury at the end of last year? Why did it not allocate at least part of it to housing, and will it do so now?

As the hon. Lady will know, some months ago we injected an additional £100 million for housing back into the programme, and we need to ensure that that money is well spent. I take a particularly close interest in the quality of service accommodation. At the AFF conference, which I mentioned in my previous answer, one serviceman raised with me an issue about the poor quality of his quarter, and two weeks later I went and knocked on his door to see it for myself. I cannot promise to do that for every serviceman who raises an issue, but I take the matter seriously and will most certainly continue to do so.

The reality and the rhetoric of the armed forces covenant are such that there is a feeling of betrayal in the Colchester garrison. In 1997, there were 33 Ministry of Defence police officers there looking after the Army married quarters and Army schools. In April, the last MOD police officer will be made redundant. May I urge the Minister at the very least to reinstate some MOD police at the Colchester garrison?

As ever, my hon. Friend mentions Colchester, which I know he represents vociferously on these matters. I have already had a meeting with the chief constable of the MOD police and one with the Defence Police Federation to discuss issues such as the profile of manning at sites. I am also planning in the near future to visit RAF Wethersfield, where, as my hon. Friend knows, the MOD police are based, and I intend to continue the dialogue at that meeting.

Does the Minister share my concern that Army regulars, including those serving in Afghanistan, reservists and trainees are likely to be badly affected by the Government’s bedroom tax, which goes against the whole direction of the covenant?

I am not sure that the effect will be exactly as the hon. Gentleman outlines, but he raises a specific issue, and to do it proper justice I will look into it when I get back to the Department and write to him about it.

British Defence Exports

Under this Government, there has been a sea change in both attitude and activity in support of responsible defence exports. There has been a concerted effort by senior ministerial colleagues, from the Prime Minister downwards, to support British defence exports by promoting proven British equipment. The announcement just before Christmas of the sale of 12 Typhoon and 8 Hawk aircraft to Oman is a good example.

Often when we talk about defence exports, we mean big deals by large companies, but as my hon. Friend will know from when he visited Oldbury UK in my constituency, many small and medium-sized businesses are involved in the defence sector. What additional support and encouragement is he giving to small and medium-sized enterprises to consider exporting more?

I was pleased that my hon. Friend was able to accompany me on my visit to the firm in his constituency to which he referred. I have been appointed the SME champion in the Ministry of Defence. Where possible I am seeking to raise the emphasis on procurement —both direct and through our prime contractors—towards SMEs, given the source of innovation that they so often provide. The next SME forum, which I shall be chairing shortly, will focus its activities on how we can improve export prospects for SMEs.

Notwithstanding the Minister’s answer that he is an SME champion in the MOD, does he not see it as incompatible with his Government’s default position to buy off the shelf rather than seek greater exports from British industry? Will he commit to giving extra effort and support to UK sovereign companies?

As the hon. Gentleman will appreciate, some larger procurements within the MOD cannot, by definition, be directed towards SMEs—the contract size is such that if it were awarded, the company would cease to be an SME. That said, the White Paper published in February last year made a specific pledge towards open procurement and to encourage the purchase of matériel through competitive process. That is the best way to maintain a fit industrial base in this country that is capable of exporting and winning orders through competition. Alongside that was a commitment to increase the proportion of goods purchased from SMEs.

UK/French Expeditionary Forces (Interoperability)

5. What recent progress he has made on improving the interoperability of UK and French expeditionary forces. (136404)

Following the 2010 Lancaster House treaties and operations in Libya, interoperability with France continues to improve—indeed, I have further examples of co-operation with our French allies. Two weeks ago, a Royal Navy helicopter operating from a French frigate as a part of Operation Atalanta played a significant role in the arrest of 12 Somali pirates. As I said, last weekend at the request of President Hollande we agreed to provide two RAF C-17s to support the deployment of French troops and equipment to Mali. We are working successfully to establish the combined joint expeditionary force—CJEF—which is planned to reach full operating capability in 2016. In the longer term we are taking forward a comprehensive portfolio of co-operation on equipment and capabilities that will provide both nations with the capabilities to meet the needs of our expeditionary forces including, for instance, unmanned aerial vehicles and missiles known as complex weapons.

In the light of events in recent days in Mali and British logistical support for the French operation there, will the Minister say a little more about what is being done to improve co-operation specifically on the sharing and deployment of military equipment?

On the deployment of military equipment, we are using the C-17s to deploy French military equipment. On joint working, we are particularly looking at Watchkeeper—an unmanned aerial vehicle—and future combat air systems, which are looking at very complex issues. We are also, of course, working together on the A400M.

In October 2010 the Prime Minister said that switching to the F-35C would increase operability with the French carrier. Given that the French do not have the right weapons, that their pilots would not be trained on the F-35, and that the F-35 could not land or take off on the Charles de Gaulle, what exactly did the Prime Minister mean?

Switching variant does not make any difference to whether or not the aircraft could land on the Charles de Gaulle. We are co-operating with the Charles de Gaulle and we do not see the two aircraft carriers as being interoperable; we see them as separate but linked assets, and we certainly support the French. Indeed, during Exercise Corsican Lion, the Secretary of State, the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne) and I had lunch on the Charles de Gaulle, and very good it was too. I assure hon. Members that we discussed equipment, interoperability and other matters.

Reserves Green Paper

6. What support he has received from major employers for the proposals set out in his Reserves Green Paper. (136405)

13. What support he has received from major employers for the proposals set out in his Reserves Green Paper. (136413)

As I informed the House on 26 November a number of large companies have shown their support for our reservists and the Green Paper consultation process. Some have held their own reserves awareness events. We have received over 2,400 responses to the consultation to date—not all from my hon. Friend the Member for Canterbury (Mr Brazier)—and we held a workshop on 11 January with major employers and the Secretary of State. We continue to engage with major employers, but also with medium-sized and small businesses, the CBI, the Federation of Small Businesses and other employer organisations to ensure that we capture the views of as broad a range of employers as possible.

I thank the Minister for that response, but the Government will know that I think it unwise to disband regular infantry battalions, such as 2nd Battalion the Royal Regiment of Fusiliers, before first being certain that the reservists can plug the gap. What objective measures exist for Parliament to gauge the progress of Government plans in this regard?

I acknowledge the strong interest that my hon. Friend has taken in the fate of his old regiment. I think that the whole House can understand his motivation for doing that. Our plan is for the Army to achieve its full strength of 30,000 trained volunteer reservists in 2018 from its current trained and in-training volunteer reservist strength of 25,000. These are early days, but I am delighted that the recent tri-service recruiting campaigns have produced a 25% increase in Territorial Army inquiries and that regular Army enlistment is up by 3% against a three-year rolling average. We regard both those statistics as good news.

What steps will be taken to ensure that there is not a one-size-fits-all approach to employers and reservists, and that instead the Government will consider factors such as the size and complexity of the business?

I pay tribute to my hon. Friend, who, as many in the House will know, was mobilised and saw active service on behalf of his country on Operation Herrick and therefore clearly understands this issue very well. I stress to him that we considered this question carefully in the consultation, and we are mindful that, proportionally, for some smaller and medium-sized employers it is a greater challenge to let reservists go and be deployed than it is for some larger organisations. We have been talking to employers about it and intend to set out the way forward when we publish the White Paper in the spring.

Will the Government legislate to ensure that employers cannot discriminate against reservists in their hiring policies, promotion or in other ways in the workplace?

I understand exactly the hon. Lady’s question, and we will lay out our proposals when we publish the White Paper in the spring. At the moment, our instinct is not to legislate and to try and persuade, but we understand the difficulty and will address the issue specifically when we publish the White Paper.

Again, we will lay out the exact profile for how we intend to deploy the reserves when we publish the White Paper. We should bear it in mind that the process will run for several years. Again, the answer will be addressed when we publish the White Paper in the spring, but I stress to the House how seriously we take this process. To use an old Army term, we will publish the White Paper, then cross the start line and get on with it.

What incentives are being offered to regular soldiers, upon discharge or redundancy, to join the volunteer reserve?

I thank my hon. Friend for his question and say in passing that I look forward to visiting the Newark patriotic fund in his constituency later this week. On the question about incentives, I hope that the House will forgive me if again I pray in aid the White Paper. We are considering the issue as we prepare our plan, which we will lay out in the spring, and I can assure him that we are mindful of his point.

We know that the Government are reducing the size of the regular Army, with the constant issuing of redundancy notices to members of our armed forces. There is clearly a concern that there will be a gap between regular service personnel and the new plans for reservists coming into place. How confident is the Minister that reservists will be able to meet those demands and that he can get employers to release reservists covered by the present legislation?

I hope that I have already mentioned the point about legislation in an earlier answer. With regard to numbers, we continue to manage the growth in the Army reserve and the reduction in regular numbers closely. Beyond the end of operations in Afghanistan, these trajectories will be kept under close review to ensure that we can take early action to maintain an appropriate force level to meet our planning assumptions.


7. What recent discussions he has had with his international security assistance force partners on the draw-down of combat troops from Afghanistan. (136407)

The timing and number of troop draw-down is a matter for individual countries, in discussion with the international security assistance force. However, we have regular and routine discussions with a number of our NATO and ISAF allies on a range of issues, including force levels in Afghanistan. With our allies, we remain committed to the strategy and time scales agreed at the NATO Lisbon summit in 2010. We also stand firmly by our commitments made at the Chicago summit in May, and we will continue to support the Afghan national security forces long after 2014 when our combat mission ends. As the ANSF continue to grow in capability and capacity, and increasingly take the security lead throughout Afghanistan, it is right that ISAF nations gradually draw down their force levels.

Can the Minister elaborate on the Department’s definition of combat troops? Perhaps more importantly, could he elucidate for the House the definition of non-combat troops—and will this change after 2014?

My hon. Friend asks a very good question. I was in Afghanistan last week. We envisage the primary role of British forces after 2014 to be assisting, mentoring and teaching at the Afghan national officer academy in Qargha outside Kabul. Beyond that, after 2014, we do not envisage any combat troops being involved in what one might describe as face-to-face operations with the enemy; we see them—if at all—in a mentoring capacity only.

As the President of the United States and President Karzai met last week and were reported to have discussed accelerating the process of the withdrawal of troops, will the Government consider following the policies of the Netherlands and Canada and bring our troops home earlier?

We work in close co-operation with the Americans and other ISAF allies, and we have a sensible trajectory to withdraw all our combat troops by the end of next year. We are already not involved in the face-to-face operations in which we were involved two years’ ago, and we are witnessing a thankful reduction in our casualties. We do not intend to bring our troops out early. We think that that would be a great disadvantage to peace in Afghanistan.

May I ask my right hon. Friend about the process of packing up and getting our kit out of Afghanistan and bringing it home? How long will that take? When will it begin and finish? How many troops will be tied up in that logistical task rather than the combat task? How much kit are we going to leave behind?

That was three or four questions. I shall indulge the former Minister—he is a knighted one, I note—but I know that the Minister will provide a pithy reply.

That is the second time today that I have been asked more than one question from the Liberal Democrat Benches. My hon. Friend is right to say that the withdrawal of our large amount of equipment in Afghanistan is a big issue. We are in negotiations with the Pakistanis and hope that we will be able to bring a great deal more back through the Pakistan land route than we are currently capable of doing. We expect to bring almost all our equipment out, although some may be gifted to the Afghans when we leave.

Does the Minister recall that the Secretary of State recently revealed to the House that there was a possibility that the Americans might take over Camp Bastion? Can he update the House on this matter, given that without the maintenance of one or more regional strategic bases, our interests in the area may well unravel after 2014?

My hon. Friend asks a good and searching question. Camp Bastion has had a great deal of investment. Notwithstanding the recent attack, it is a sensible place to have a base as it easily defensible, and we are in negotiations with the Americans and the Afghans on its future. I have no answer to give my hon. Friend at the moment, but I will keep him updated and, when there is a definite answer, I will write to him and let him know.

Middle East

10. What recent assessment he has made of the security situation in the middle east; and if he will make a statement. (136410)

Demands for greater political, social and economic participation continue in the middle east and north Africa. The situation in Syria continues to deteriorate and we are supporting efforts to deliver a political solution to the conflict. The UK also remains concerned over Iran’s nuclear programme and continues to work with other countries to achieve a diplomatic solution to Tehran’s nuclear ambitions. In short, we assess that the regional security situation is fragile.

General Sir David Richards is reported as being seriously concerned that Syria’s chemical weapons could soon be either used or lost into the hands of terrorists. Will my hon. Friend set out to the House the preparations made by NATO to prevent Assad’s use of chemical weapons?

We have made it perfectly clear to President Assad that the use of these dreadful weapons is absolutely unacceptable. We know where they are, we have defined and delineated them, and we have plans to deal with them in the event that the regime falls, as ultimately it must. We are also in talks with the country’s neighbours to ensure that these weapons do not find their way into the hands of third parties. We look forward to a more enlightened regime in Syria that has no use for biological and chemical warfare and that will comply with its international obligations.

Last week the Foreign Secretary made it clear that consideration is being given in the European Union possibly to lifting the arms embargo on the Syrian opposition. If that were to happen, what kind of equipment would we be supplying and what guarantee do we have that it would not get into the hands of radical, al-Qaeda-linked Islamist groups?

The hon. Gentleman will be aware that the Foreign Secretary, in Marrakesh at the end of last year, recognised Syrian opposition groups. The United Kingdom would like greater flexibility in the embargo on Syria, so that at some point in the future, possibly, we can supply the opposition groups that we are comfortable with with the means to deal with the situation; but there are no plans to do so at the moment and we will keep the matter under review.

I am sure the Minister recognises the significance of the previous work of the International Atomic Energy Agency in carrying out nuclear investigations inside Iran. Has he made any assessment of late of the likelihood of such investigations recommencing?

That obviously is a matter for the International Atomic Energy Agency, but the key to this is the imposition of sanctions. I note that the E3 plus 3 will be meeting Iran shortly to discuss those. I am particularly pleased to note that exports of oil from Iran have dropped by 45%. We have seen the consequences of that—the sanctions are working—not least through the hyper-inflation affecting that country at the moment.

Cadet Forces

As announced by the Prime Minister and Deputy Prime Minister on armed forces day 2012, the Department for Education and the Ministry of Defence are working together to enable 100 more state-funded schools to have cadet units by 2015. The extra cadet units will be formed through partnerships with existing units or by self-standing new units, both using third- party sponsorship. The Departments have identified £10.85 million to meet the training and equipment costs of the programme. More than 70 state schools have already registered their interest in the programme and the joint departmental team, supported by the reserve forces and cadets associations, will be working with schools to develop the most appropriate cadet option for each individual school.

I thank the Minister for that reply. Will he join me in commending the hugely dedicated leaders and committed cadets in my constituency, such as the Air Training Corps in Sandbach and Congleton, particularly the Tigers of 230 Squadron in Congleton ATC? Their dining-in night this week will celebrate another successful year of developing wide-ranging practical skills, confidence and qualifications, not least a clutch of bronze, silver and gold Duke of Edinburgh awards.

I am delighted to join my hon. Friend in paying tribute to those units and, indeed, to cadet units across the country, which do so much to foster the right values in our young people. I would also like to take this opportunity to pay tribute to Leading Cadet A. Green of the Sea Cadets Corps, from the Winsford and Middlewich unit, who was appointed a Lord Lieutenant’s Cadet recently. We commend that cadet too.

Private schools account for only 8% of all schools yet have 76% of cadet forces. Will the Minister confirm that, as a matter of urgency, he will switch the majority of the available funding to the state sector?

As the hon. Lady rightly points out, it is a historical fact that the majority of cadet units in schools have historically been in the independent sector. The non-school cadet units, however, are spread across the whole country. Within schools, the bulk of the funding is focused, as I said in my earlier answer, towards trying to promote cadet units in state schools. Of those 70, a number of the new units, including one at an Essex school in Westcliff, are up and running.

US Defence Policy

12. What discussions he has had with his ministerial colleagues on the shift in US defence policy from the Atlantic to the Pacific. (136412)

Regular discussions on defence policy, including US defence strategy, occur with Ministers both at home and abroad. The Defence Secretary will, for example, meet Secretary Panetta later this month and looks forward to meeting his successor at the earliest opportunity.

When the Defence Secretary meets Chuck Hagel or anyone else who might have been ratified, will he discuss what measures can be used to encourage collaboration so that we can maximise the assets available at the organisation?

My hon. Friend is absolutely right. We need to make sure we make the best we can out of assets that are under increasing pressure. I note that President Obama’s guidance issued on 5 January last year, “Sustaining US Global Leadership”, set the scene for how US defence is likely to go. I am particularly pleased to see a high degree of correlation between that and our own strategic defence and security review outcomes. We are close to the Americans, and we look forward to the relationship continuing and developing in the future, as they are, as it were, our best friends.

Defence Industrial Base (Scotland)

14. What estimate he has made of the number of people employed in Scotland as part of the defence industrial base. (136414)

There are over 15,000 military and civilian personnel employed in Scotland, including at the largest single site employer in Scotland, Her Majesty’s Naval Base Clyde. There are hundreds of contracts with defence companies operating in Scotland, but the Ministry of Defence no longer compiles employment statistics by region within the supply chain, as such information does not directly support either policy making or operations.

Does the Minister share my opinion that, from the perspective of the strength of our defence industrial base, from the perspective of job creation and retention and from the perspective of the effective defence of our nation, it is crucial that Scotland remains an integral part of the United Kingdom?

I entirely endorse my hon. Friend and neighbour’s view that maintaining Scotland within the United Kingdom will be the best way to maintain defence jobs in Scotland, to maintain a powerful industrial base in engineering and high-technology jobs and to provide Scotland with the best defence capability. The Scottish Government have yet to provide any answers on how they will provide such capability for defence and security in the unlikely event of an independent Scotland.

Last week, the UK Government published a paper about Faslane, which was widely reported together with incorrect job projections. Will the Minister dissociate the UK Government and the Better Together campaign from double counting and fabrication on such a serious issue?

The hon. Gentleman has clearly been reading information that is simply not emerging from the Ministry of Defence. The base at Faslane is the largest employment site in Scotland, with some 6,700 military and civilian jobs projected to increase by around 8,200 by 2022 as the Royal Navy moves all its submarines there. Those are the numbers.[Official Report, 16 January 2013, Vol. 556, c. 6MC.]

18. Every new procurement Minister promises the House to get a grip on MOD procurement and the costs arising from our defence industrial base. In the light of the latest National Audit Office report that the cost of the MOD’s major projects has risen by a staggering £6.6 billion and is 39 years delayed, what action is the Minister taking? (136419)

My hon. Friend asks what is being done to improve procurement in the MOD. I assure him that it is the top priority for the current year, at least for this procurement Minister. As I said earlier, we do not differentiate between Scotland and the rest of the United Kingdom when it comes to procurement.

In my view, the most interesting fact to emerge from the report from the National Audit Office was the improving trend in procurement. A reduction was forecast in the delivery costs of 13 of the 16 projects to which it referred, and 70% of the projected overspend relating to the remaining three related to increased fuel costs up to 2035 over which the MOD had no control whatsoever.

Has the Minister had an opportunity to consider last week’s report from the Scottish Affairs Committee, which states that a further 1,500 jobs at Her Majesty’s Naval Base Clyde could be lost by 2022 if Scotland became a separate state, and that 8,200 jobs relied directly on Scotland’s remaining part of the United Kingdom?

Order. I apologise for interrupting the Minister, but I must remind the hon. Member for Moray (Angus Robertson) that he is the leader of his party and a very senior parliamentarian. It ill behoves him—and it is beneath his dignity—to yap across the community like an undisciplined puppy. He must conduct himself with decorum. That is what we expect of him. We look up to him, and we want to continue to do so.

I was about to explain to the hon. Member for Glasgow North East (Mr Bain) that unfortunately, as I was in Afghanistan with my right hon. Friend the Minister for the Armed Forces last week, I have not had an opportunity to read the report from the Scottish Affairs Committee, to which I gave evidence before Christmas. However, I look forward to reading it, and will certainly look out for the interesting statistic that the hon. Gentleman has revealed.

Topical Questions

The Secretary of State’s first priority is and will remain the success of the operation in Afghanistan. Beyond that, his priority is to deliver the military tasks for which the MOD has a mandate. The MOD is also engaged in a major project of transformation to bring about the behavioural change that is needed to maintain a balanced budget, and to deliver equipment programmes so that our armed forces can be confident of being properly equipped and trained. With the benefit of a balanced budget on which to build, we now need to focus on the future and, in particular, on building the trust and confidence of the people who make up defence.

My right hon. Friend will be aware of the concern expressed in the recent Defence Committee report on cyber-security in defence. I know that cyber-security is a very sensitive matter, but what can the Minister do to assure the public that we are well and truly on top of it?

The Government will respond to the Select Committee’s report by March, and will take careful note of the issues that it raises. I should point out, however, that way back in 2010 the national security strategy established cyber-security as a tier 1 priority, and that within a very few months it established the national cyber-security programme, which involved expenditure of £650 million over 10 years. I was delighted to note—without being complacent—that the Economist Intelligence Unit recently ranked the UK at No. 1 in terms of preparedness for a cyber attack.[Official Report, 5 February 2013, Vol. 558, c. 3MC.]

We all welcome the number of councils that have signed up to the community covenant, which will help to ease the transition from military to civilian life. This morning I was in Dagenham with the council leader, Liam Smith, to launch Labour’s campaign for a veterans champion to be appointed in every council so that service leavers have a single point of contact when they need it. Will the Minister commit the Ministry of Defence to a campaign to encourage the appointment of a forces champion in every local authority in the country, regardless of politics?

I accept that the proposal is well meant, and I have already met some Labour MPs to discuss it. The actual implementation of the community covenant at ground level is a matter for individual councils, but, as the right hon. Gentleman may know, we have encouraged all councils—within the freedom that they have—to appoint armed forces champions, hopefully at senior level, to champion the needs of the armed forces and the veterans community in those local authorities. I am not averse to the suggestion, but the fact is that most councils are already implementing it.

T2. The Minister may be aware that last Thursday an exceptional debate on dementia took place in this House, with the consensus being that cross-government working must play its part in helping to meet this challenge of dementia. Will he assure me that the Ministry of Defence will play its part in helping us to meet that challenge? (136426)

Almost one in 10 adults in this country is an armed forces veteran, so clearly the increasing prevalence of dementia has implications for those veterans, too. As I have said in response to other questions, we work very closely with our colleagues in the Department of Health. They have primary responsibility for dealing with this challenge, but of course we also work closely with armed forces charities—the Royal British Legion and many others—to try to provide bespoke services for veterans who are dealing with this challenge in their life.

T8. Last week, 1.2 million people lost their entitlement to all or part of their child benefit. Can the Minister say how many people in the armed forces are affected by that change? Will he assure us that every single member of the armed forces has been notified that they would lose all or part of their child benefit? (136432)

I think we all regret any reduction in benefits. In the same way that members of the armed forces, such as myself—or my wife, more accurately—are losing child benefit, so we will all lose child benefit if we are paid the relevant amount. I am surprised that the hon. Gentleman should imagine that members of the armed forces are so ignorant of what is happening in the world that they need to be specially told. They are sensible people who can stand on their own feet and they do not need to be patronised by him.

Will Ministers join me in paying tribute to the service provided by the defence attachés across the world and to the very important contribution they make to defence diplomacy? Do Ministers agree that defence attachés also have a vital role to play in conflict prevention? Will the Minister make a short report to the House on how that work impinges on their other duties?

My right hon. Friend is absolutely right about this. In the short time I have been a Defence Minister, I have had the privilege of seeing the work of defence attachés in a number of countries and challenging situations. He can be assured that the Government recognise the importance of defence attachés and defence sections. He can also be assured that they will be at the front and centre of the forthcoming defence engagement strategy, which will be the blueprint for how the Government intend to take forward the extraordinarily important things that the attachés do, and the soft diplomacy in defence deliverables they are able to achieve. They will be absolutely at the front and centre.

Ministry of Defence reports in 2006, 2007, 2009 and 2012 showed that the majority of women in the armed forces were subject to unwarranted sexual harassment. Such harassment creates a climate in which rape and sexual assault can be prevalent; it creates a climate for these things to take place. What steps is the MOD taking to protect women in the armed forces?

We take this issue extremely seriously. I know that the hon. Lady knows a lot about it, and I hope that she will not mind my mentioning to the House that she and I met in my office last week for a little over an hour to talk about it in detail. I have had meetings with the Provost Marshal (Army)—the head of the Royal Military Police—to talk about the issue; he was also present at our meeting. I have also had meetings with people such as the chief constable of the Ministry of Defence police. So we take this issue very seriously. We absolutely do not tolerate any offences of this kind. When any are reported, they will be most thoroughly investigated. As the hon. Lady knows, we have also been running awareness campaigns to encourage servicemen and women who come across any offence of this type to report it immediately, so that appropriate action can be taken.

Order. May I gently say to the House that if we are to get through the list, which I would very much like us to do and as we usually do, we now need short questions and short answers?

T3. I congratulate the Secretary of State and his ministerial team on the efforts to balance the books, considering what they inherited from the previous Government. That approach is being adopted by the Prime Minister on EU budgets, so will the Minister update the House on the cost and efficiency of the European Defence Agency? (136427)

My hon. Friend will be delighted to know that at the last EU defence ministerial in Brussels, the United Kingdom stood alone in insisting on a freeze in the European Defence Agency budget for the third year in a row. The people of this country would think it perverse if we were to make the necessary cuts in defence in this country and then proceeded to vote for an increase in the budget for the European Defence Agency.

Further to the question from my hon. Friend the Member for Ilford South (Mike Gapes), is the Minister aware that there is a strong public perception that we are seeing a serious escalation in Britain’s role in Syria? Will he assure the House that we will not see any British troops in front-line roles in that country at any point?

We would need a legal basis to intervene in Syria. The humanitarian situation there is appalling, but we would need a legal basis and a clear opposition with whom to work. At the moment, there is no clarity, although we have recognised the National Coalition. We are waiting to see how the international diplomatic and political efforts work as we would rather see a political and diplomatic solution than a military one.

T4. May I preface my question by saying that my younger brother is a defence mental health professional? Is the idea that has been around that all serving personnel should have mental health assessments and training being progressed and what progress has been made on it? (136428)

I have been briefed on this specific issue by Professor Simon Wessely and his team at King’s college London, who are internationally renowned as experts in this field. They are researching this specific issue and we are awaiting the outcome of that research. I know you want brief answers, Mr Speaker, but the professor was knighted for his public service in the new year’s honours list and we most heartily welcome that.

In July 2012, a memorial to the Durham Light Infantry was unveiled at the National Memorial Arboretum in Staffordshire. The Northern Echo and veterans of the DLI have launched a campaign for a similar memorial in the DLI’s home county. Will the Minister support that campaign and say what else the MOD can do to ensure a fitting memorial can be unveiled to the DLI in County Durham?

I pay tribute to the proud history of that regiment. I visited the National Memorial Arboretum, but I cannot say whether, when I was there, I visited that specific memorial. As the hon. Gentleman knows, there are about 200. By tradition, the MOD does not pay for war memorials—that has been a tradition for many years. They are paid for by public subscription, but if the DLI, its veterans and others manage to raise the money for that memorial, I promise I will come and visit it.

T5. How can local organisations such as the admirable Congleton charity the Listening Out Loud Foundation, which has just opened its first home for seven ex-servicemen, obtain broader support? It is working with Cheshire East council and hopes to obtain agreement this week for another home. Is that not an excellent example of partnership working in this field? (136429)

Will the new state pension arrangements that will be announced today and implemented in 2017 mean that a member of the armed services who is 13 years from retirement today will have to contribute for nine years at the higher level but not receive the state pension?

We are working on the details of armed forces pension scheme 15 at the moment. We are still working on some of the fine detail, but I can already say—[Interruption.] Yes, I know, but we are still working on some of the fine detail for its implementation when it starts in 2015. I can already say that the Forces Pension Society has described the new pension as

“as good as it gets”.

T6. The Wetherby and district branch of the Royal British Legion in my constituency works hard to enable the reintegration of ex-personnel. What measures are the Minister and the Department taking to ensure that there is the necessary support for our men and women so that they can enjoy the quality of life they deserve after leaving the forces? (136430)

We work very closely with the Royal British Legion and many of the other service charities, such as Help for Heroes, Veterans Aid—a whole range of them—to try to do the best between ourselves and the charitable sector for veterans who have served in our armed forces. These are exceptional people who have done so much for their country and it is right that we support them appropriately.

On Wednesday 9 January I asked the Ministers present whether they had met and discussed with the Secretary of State for Work and Pensions the effect of the under-occupancy penalty in relation to housing benefit for service personnel and their families. The Minister’s response was that no discussions had been held with the Secretary of State for Work and Pensions. Is this state of affairs due to the Secretary of State for Work and Pensions refusing to meet, or has no request for a meeting been made by the Government’s defence team?

I think the hon. Gentleman will find that the Secretary of State for Work and Pensions is a former regular officer, so I think he understands as well as anybody the needs of our armed forces.

T9. Ministers will be aware of the great potential of Norfolk’s RAF Marham as a base for the joint strike fighter. Will they update the House on the timetable on which basing decisions will be made? (136433)

I will. As, regrettably, the decisions on the basing review have been delayed because of the autumn statement, we very much hope to announce the basing review soon and I shall make sure that the hon. Gentleman knows what the results are.

Medical analysis shows us that reservists are more susceptible than regulars to post-deployment mental health problems and post-traumatic stress disorder. What improvements are being made specifically to post-deployment care for reservists?

There was a time a while ago when reservists returning from theatre did not go through a full decompression package and did not get the full mental health briefing when they returned from theatre. We have now altered that so that reservists do go through the full decompression package and do get a full mental health briefing when they come back from theatre. I will not go into the point about who was in charge when some of these deficiencies existed.

T10. What discussions has my right hon. Friend had over how the Staffords’ name, traditions and role as armoured infantry will be retained in the Mercian Regiment? (136434)

Our policy is that where there are changes in the order of battle, it is very important that history and traditions of noble regiments are properly acknowledged. In the first instance we look to the regimental councils to agree among themselves appropriate proposals to do this. I understand that the Mercian regimental council has come up with proposals that are going through an approvals process. Providing they are reasonable, which we think they are, we will be happy to endorse them.

If the UK Government are to meet the costs of the C-17s for the Mali operation, will the Minister identify which Government Department will meet those costs?

I am afraid I cannot answer that question. Omniscient though I may be, I do not know the answer, but I will write to the hon. Gentleman and let him know.

For the third time of asking at three successive Defence questions, may I ask the Minister when we can expect the publication of the very important but long-delayed audited defence equipment plan?

The preservation of his good humour on the part of the hon. Member for Mid Worcestershire (Peter Luff) is remarkable in the circumstances.

May I thank the Minister for agreeing to meet me and the hon. Member for Gainsborough (Mr Leigh) to discuss the future of the Kirton in Lindsey base? Does he agree that where communities have had long-standing historic relationships with the military in their area, it is crucial that the Ministry of Defence has proper discussions about the future?

We are very keen to maintain good links between the armed forces and communities. I entirely agree with the hon. Gentleman and I look forward to meeting him shortly, when I hope we can come to a sensible agreement on the matter.

Thank you, Mr Speaker. NATO figures show that Germany, Spain, Italy, the Netherlands and many other alliance countries are spending less than 2% of their GDP on defence. What is the Minister doing to make sure that all alliance countries pull their weight?

The hon. Gentleman is quite right. Only three countries in NATO spend the target 2% of GDP on defence—Greece, ourselves and the US. This point becomes particularly important since the announcement in January last year by the US President about his change in posture. The hon. Gentleman can be certain that at NATO ministerial meetings we will make the point time and again that we cannot have the umbrella that NATO gives us if we do not underwrite the cost.

Attacks on Civilians (Burma)

(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Burmese army attacks on civilians in the Kachin state.

I thank the hon. Lady for her question.

Conflict between the Kachin independence army and the Burmese military has been ongoing in northern Shan and Kachin states since the breakdown of the ceasefire agreement in June 2011. There was an upsurge in violence in November and December 2012. As the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), said on 3 January, the British Government are deeply concerned by reports emerging from Kachin state of an escalation in hostilities, including the use of Burmese military helicopters and aircraft against Kachin independence army positions, including in areas around the state capital and Laiza. These tactics represent a marked escalation and pose a significant risk of civilian casualties. Indeed, we received on 13 and 14 January unconfirmed reports that a small number of civilian casualties had resulted from the fighting.

The British Government have been encouraged by the reforms made by the Burmese Government of President Thein Sein over the past 18 months. We have therefore adopted a policy of constructive engagement, but we have been clear that progress on ethnic reconciliation must remain the highest priority. The situation in Kachin is increasingly serious and could present a threat to such wider reforms.

In the past hour and a half, I have spoken to our ambassador in Rangoon. Earlier today he met one of the key Kachin civil society leaders to discuss the situation on the ground.

My right hon. Friend the Minister of State visited Burma from 12 to 15 December, raising our concerns over the situation in Kachin with the Burmese Minister of Defence and Minster Aung Min, the lead Government negotiator for the peace process. The Burmese Government reconfirmed their commitment to seeking a ceasefire with the Kachin independent army at that point.

During my right hon. Friend’s visit, he made clear to the Burmese Government three points, which remain especially pertinent given recent events. First, the British Government call for an immediate cessation of hostilities. President Thein Sein has called for the fighting to stop, saying that the Burmese Government

“does not want to pass on the conflict to the next generation.”

It is imperative that military commanders in Burma heed their President’s call for an end to hostilities.

Secondly, there must be unhindered humanitarian access to conflict-affected areas. In response to increased need, the Department for International Development announced in December 2012 an additional £1.5 million of humanitarian support for people displaced by fighting in Kachin and neighbouring states, bringing our total humanitarian aid contribution to the conflict in Kachin to £3.5 million and supporting 27,500 people to access food, shelter and clean water.

Thirdly, we call for both sides to return to the negotiating table and make renewed efforts towards a lasting peace. All sides, including the Kachin independence army, must come to the negotiating table and make renewed efforts to work towards lasting peace.

As I am sure the House would expect, we will continue our dialogue with both sides, and we stand ready to respond to any request for support in any mediation process between them.

I am grateful to you, Mr Speaker, for allowing me to ask the urgent question, as well as to the Minister for coming to the House.

The Minister referred to the fact that today, at 8.15 am Burmese time, a 15-year-old boy and a pastor were killed by a direct hit. Will he again raise with the Burmese Government the need to stop any firing on civilians, because BBC Asia has confirmed that these attacks are unprovoked? Will he also raise with the Burmese Government the fact that humanitarian aid is not getting through to 75,000 displaced people? He talked about DFID money, but will he ensure that any British aid is getting to the people who need it most? Given that the EU has suspended sanctions, will the Minister suggest to his EU counterparts that sanctions be reinstated if such direct action on civilians does not stop?

Has the Minister discussed the crisis with the Chinese Government? The planes are of Chinese origin and the gunships are Russian, so will he undertake to say to both Governments that the raids must stop?

Given that the Kachin state reached an agreement with the Burmese Government in 2011, and that other minority groups have also formed agreements with them—that is all being put in jeopardy—will the Minister take steps to ensure that the United Nations calls all parties round the table for a proper constitutional settlement, and perhaps a second Panglong conference? Finally, will he ask the Prime Minister to put Burma on the agenda at the G8 summit, when we have the presidency, so that we can hear the voice of the peacemakers, and will he report to the House?

I thank the hon. Lady for her questions. I repeat again, I am sure on behalf of the whole House, our deep regret at any civilian deaths. Our determination is to seek contact with all sides and that the hostilities cease altogether, wherever they are directed. But, of course, it is particularly upsetting if civilians are involved, and we have indeed made that clear to the Burmese authorities.

It is very important that UK aid support is getting through. We work with aid agencies on the ground, and I understand that the International Committee of the Red Cross is able to operate and get there, but, naturally, when individual circumstances arise and difficulties are created on the ground, that will not always be the case. However, the hon. Lady is absolutely right, and we are equally determined to make sure that that aid gets through.

Our position on sanctions is very clear. The sanctions in relation to Burma have only been suspended; they have not been lifted. Could they be reimposed? Oh, yes, they could. Whether or not the Foreign Affairs Council in April moves to lift rather than suspend them will depend on the progress that Burma is making in relation to the challenges it has been set in dealing with ethnic conflict and the political process. I do not doubt for a moment that the Burmese Government are well aware of the conditions that are likely to attach to any further progress in relation to sanctions.

The Chinese Government have already been contacted by the United Kingdom in relation to how it deals with those who flee across the border, whom the Chinese tend to see as economic migrants as opposed to our own definition, which would be those seeking to escape the conflict. This gives us an opportunity to engage directly with the Chinese Government. I genuinely do not know whether their participation through types of arms has been raised, but I note what the hon. Lady says and will raise that with my right hon. Friend when I next speak to him.

On 2 January, the UN Secretary-General called for the fighting to stop and for access to be guaranteed to the delivery of aid to vulnerable communities, including those displaced by violence. The UN Secretary-General’s special adviser, Vijay Nambiar, has recently returned from Burma. We hope that he will have the opportunity to brief the Security Council on his return very quickly and our concerns will be made known to him, but we will keep in regular contact.

I am afraid that it is rather too early for me to say what might or might not be on the agenda of the G8 summit. Let us hope that by that stage we will all have seen the progress in Burma that we wish to see.

I appreciate that the Minister had a telephone conversation this morning with the ambassador, but, as I asked in the House on Thursday, what specifically have the Government done to respond directly to the concerning reports coming from the Kachin border over the Christmas period? How will the Government make it crystal clear to President Sein that he cannot hold out the hand of peace and reform while allowing direct attacks on civilians?

As I sought to make clear, we have been very disturbed at the increasing violence in the state. We know that there is frustration on all sides with progress on the issues affecting the Kachin people and the Burmese Government. But a degree of patience has been called for, and whatever difficulties there are cannot be resolved by resort to physical violence. I can assure my hon. Friend that the ambassador, and my right hon. Friend the Minister of State in his recent visit, made very clear the UK’s concerns. He can also be assured, from my conversation with the ambassador this morning, that these conversations are taking place at the highest level and with great urgency. My hon. Friend is right: continuing progress in Burma on the relief of sanctions and the normalisation of relations is entirely dependent on how Burma handles its present responsibilities, and the world is indeed watching.

The Minister will accept that we welcome the reforms in Burma—I am sure we all agree on that—but does he agree that we must send the strongest message to Burma that it has to recognise the diversity of its people, whether that is minorities in Kachin or granting citizenship to the Rohingya in Rakhine? Will he give us more details of the work the UK Government can do at UN level to support ethnic reconciliation in Burma?

The hon. Gentleman is absolutely right. Ethnic reconciliation is a key factor in the return of normalisation of relationships between Burma and the rest of the world. We are engaged bilaterally and through the UN and others in doing whatever we can to provide support, encouragement and, where possible, examples of reconciliation within the United Kingdom to assist efforts being made in Burma.

The hon. Gentleman rightly mentions the Rohingya people. As he may know, the latest position is that the commission of investigation set up by the Burmese Government is hoping to report in March. There have been no further flare-ups since the violence in October. That might suggest that the political process is being taken seriously and has some opportunity to succeed, but it will not do so unless it tackles the question of citizenship, which the hon. Gentleman mentioned and on which the whole House is agreed.

As the Minister has stated that the International Committee of the Red Cross can apparently get through, are personnel and staff from our own Department for International Development able to work either alongside it or under the aegis of the ICRC on the ground?

I specifically asked this morning about the engagement of international aid agencies. As my hon. Friend will know only too well, the circumstances of engagement on the ground depend very much on security and everything else, but I was assured that international agencies are still working there. I am not currently in a position to say whether that includes our colleagues in DFID working alongside the ICRC or working to provide support, but as a result of my hon. Friend’s question I will make sure that the question is asked again. Ensuring that this aid is delivered directly is absolutely crucial in the circumstances.

As my hon. Friend the Member for Walsall South (Valerie Vaz) highlighted, Labour Members have been deeply concerned by the escalation of tensions in Kachin state over the past month and by the reports overnight that three civilians have been killed and at least four wounded—attacks that must be condemned. Despite how far Burma has come over the past year, the violence in Kachin state serves as a reminder to the international community of the further progress that it must make. Does the Minister think that the UK has put sufficient pressure on the Burmese Government over the past year to bring an end to the conflict?

I thank the Minister for his report on the discussions held by the Minister of State, the right hon. Member for East Devon (Mr Swire), but will he tell us in a bit more detail what contacts the Foreign Office has had with colleagues in the EU and the UN to concert international action?

There are disputed reports about the Government’s convoy to Kachin in December, which the rebels claimed contained ammunition. Has the Foreign Office been able to verify these claims and whether its destination was the army base?

There are also reports that Laiza residents are having to dig trenches and build shelters to try to protect themselves from the military’s attacks. Has the Foreign Office discussed with DFID and with international counterparts what immediate assistance can be provided to protect civilians?

As the Minister will be aware, the Chinese Foreign Ministry has called on the Burmese Government and the Kachin independence army to resume negotiations, and their spokesman has confirmed that

“China has already taken measures necessary to step up control over the border area and protects the lives and property of the border people”.

Has the UK made contact with China to discuss these more recent developments and the plight of Kachin civilians fleeing the violence? Does the Minister have an indication of what these “measures” constitute? Human Rights Watch has reported that China has in fact forced Kachin refugees back to Burma and was denying international humanitarian agencies access to the refugees in Yunnan province. What assessment has the FCO made of the treatment of the displaced and the options for those now escaping the violence? Will the Government work with the international community to ensure that Kachin civilians can access humanitarian support?

The immediate priority must be the welfare of those civilians and an end to the attacks, so what, in the Minister’s assessment, are the prospects for a ceasefire? Will the Government make it categorically clear that we will not tolerate air strikes and helicopter gunship attacks and that we will support the call on 2 January from the UN Secretary-General to the Burmese authorities to desist from any action that could endanger the lives of civilians living in the area?

I thank the right hon. Gentleman for his questions, which covered a range of areas that obviously concern the House significantly. We share with him and the House a sense of condemnation following the deaths of civilians, as well as their concern about the resurgence of hostilities. We have indeed made it clear to the Burmese authorities that there should be an immediate ceasefire and that hostilities should stop. There is no possibility of the political reconciliation process being able to take place until that happens. We therefore continue to make representations to both sides, because this is a complex issue that has many sides and we want to make representations to ensure that they play their part and that, when hostilities cease, there is a proper opportunity for the necessary political dialogue.

The right hon. Gentleman asked whether there had been sufficient political persuasion by the United Kingdom over the past year. My sense of the evidence of the progress that has been made comes from the visit of the Minister of State and the contacts that he has, as well as from the obvious progress that has been made in Burma in a variety of ways to ease the situation in different areas. However, as soon as one situation flares up again, we have to question that progress, and the House can be assured that we will continue to exert pressure.

It is obvious that progress must continue to be made if Burma is to resume its place among the rest of the nations. It understands that very well, and the forthcoming Foreign Affairs Council in April will accordingly be of huge significance. We will certainly expect to see further progress by then. In relation to that, contact is of course constantly maintained with partners in the European Union and the United Nations, and we certainly supported the calls made by the Secretary-General at the beginning of the year for a rapid end to hostilities. The right hon. Gentleman referred to the claims made by the KIA. I have received no details of their verification at this stage. He also asked about the preparations for a military attack, and that does indeed form a vital part of the consideration about humanitarian relief and assistance in those circumstances. That matter has indeed been raised.

As I said in answer to a previous question, we are well aware that China has been returning refugees because it classes them as economic migrants, rather than as people fleeing conflict, which would appear to the United Kingdom to be the more obvious way of classing those who are fleeing across the borders. We do indeed make representations to China that it should act responsibly and provide proper humanitarian care to those who are seeking relief from the violence and conflict. None of that will have any impact, however, unless work is done between the KIA and the Burmese Government to settle the issue. We will continue to make representations to the Chinese, but settling the issue is very much the most important thing.

The right hon. Gentleman asked about the prospects for a ceasefire. We would hope that, following the international pressure that has been brought to bear as a result of the incidents of recent weeks, and particularly those that took place over the weekend, the Burmese Government will take note of how seriously those incidents are being seen in foreign capitals around the world, notwithstanding the fact that the greatest tragedy is that being inflicted on those who are suffering the violence. That violence must cease so that a proper political process can take place.

European sanctions on Burma remain in place, but it is welcome that reconsideration of the suspension in April will take into account these worrying reports from Kachin state. The arms embargo also remains in place. Does the Minister agree that, for the foreseeable future, that should remain the case?

State Pension Reform

With permission, Mr Speaker, I would like to make a statement on state pension reform. I am pleased to announce that, as part of the coalition Government’s mid-term review, we shall be pressing ahead with our plans for a single, simple state pension, reassuring people that it pays to save, and making it easier for them to take responsibility for their own retirement planning.

Before I set out our plans for the future, I want to say a few words about the pensioners of today, who are and will always remain a priority for this Government. Within months of coming to power, we restored the earnings link with the basic state pension—something for which campaigners had been calling for 30 years. As a result, from April this year the basic state pension will reach its highest level as a percentage of average earnings for two decades. I should add that, on a freezing day such as this, the House will also welcome the fact that we have reversed the planned cuts in the cold weather payments, which are of so much value to poorer pensioners.

Last month was the 70th anniversary of the Beveridge report. The original idea from Beveridge was for a single, simple, decent state pension, paid at the end of a lifetime of national insurance contributions. We have drifted a very long way from that blueprint.

We now have two state pensions, entitlement to which arises under different terms, uprated according to different rules, with complex arrangements for people who are divorced or who become widowed. There are also special arrangements for married women that relate to a time when the prevailing wisdom was that men needed a pension and women needed a husband.

The state earnings-related pension scheme—often referred to as SERPS—is extraordinarily complex, with variable amounts paid out in retirement that no one is properly able to predict. This position is made even more complex by a system known as contracting out, whereby people in workplace pensions are able to opt out of the state second system.

The complexity in the current system means that, when it comes to telling people what they might get from the state, the Government have to write letters that include paragraphs such as this:

“At some time you chose to ‘contract out’ of the additional state pension by paying into an Occupational or Personal Pension. Because of this we make a contracted-out deduction (COD) from the maximum amount of additional state pension that we would otherwise pay you. We make changes every year to the additional state pension and the COD, but this may be at different rates. This means that your additional state pension could be different from the amount we have estimated and could actually be”

zero. This is nonsense.

Millions of people do not receive enough to live on from the two state pensions combined, so they rely on a third system of mass means-testing known as the pension credit. Those with small amounts of their own savings can find themselves little better off than others with no savings at all, and thousands more fail to claim the money they would otherwise be entitled to, some because they find it demeaning to do so. We can and must do better.

In 2011 we published our Green Paper, “A state pension for the 21st century”, and had more than 100 organisations and 1,600 individuals respond. There was a consensus that the state pension system needs to be simplified and strong support for the option of a single tier.

Today, the Government are publishing their plans so that the workers of today retire on a single, simple, decent pension, very much in line with the Beveridge model, but updated to fit with the modern age. This is a new pension system that reflects the fact that people are living longer and will be drawing their state pension at a later point in their lives, and that working patterns and family life have changed, with women much more likely to be working and becoming entitled through their own national insurance contributions. Working lives are more fragmented and people need to take more personal responsibility when it comes to planning and saving for their retirement.

Under our plans, someone who starts work under the new single-tier rules would become entitled to just one state pension set above the level of the basic means test. The full rate will be payable for 35 qualifying years of national insurance contributions. This reflects the fact that we are combining two pensions: a basic pension payable for 30 years and a state second pension based on national insurance contributions over a working life of up to 50 years.

Consistent with the current system, there will be credits for those who cannot pay national insurance because of caring responsibilities. Importantly, the new rules will be of particular benefit to many older women who have impaired pension records because they took time out to raise children during the 1980s and 1990s.

Every individual will qualify for a pension in their own right, with no complex rules about claiming pensions based on the NI record of a spouse. As the new single-tier pension will be set above the basic level of the means test, people who do the right thing by putting money aside during their working life will be far less likely to see it clawed back in retirement through the means-tested benefits system. This is particularly important in a world where millions of private sector workers are being automatically enrolled into workplace pensions, including many on lower incomes who will be saving for the first time.

The new system will be introduced in 2017 at the earliest. We need to let business know now that this is coming, but it needs time to adjust. When the new system is introduced, people will no longer become entitled to the state second pension, and so the whole complex system of contracting out will be abolished. Of course, national insurance contributions paid and that would, under the current system, have led to entitlement to a second state pension will be recognised. For example, when we introduce single tier, someone who retires in 2018 who has £160 in the current system will still get a pension of £160. Those workers who were previously contracted out will start to pay full national insurance contributions, like all other workers, but in return they will become entitled, potentially, to a pension at the single-tier level, rather than the much lower basic state pension today. For the vast majority of those people, the higher national insurance contributions that they pay will be more than offset by the higher state pension they receive.

The overall cost of the new system will be the same as that of the one it replaces. This is not a pensions giveaway for the next generation. A higher flat pension is affordable only because, in the long term, people will not become entitled to very large earnings-related pensions through the state system. In a world where everyone will be automatically enrolled into a workplace pension with a contribution from their employer, it no longer makes sense for the state to run its own separate earnings-related pension scheme. Higher earners are among those being automatically enrolled, with substantial employer contributions, so those who earn the most while they are working will continue to be the best off in retirement.

Later this week, we shall publish a draft Bill that will put our plans into law. I wrote to the Chair of the Work and Pensions Committee earlier today, asking whether her Committee will carry out pre-legislative scrutiny of our plans. I hope to receive a positive response to that request.

The White Paper also contains details of our plans for a more structured framework within which to consider future changes to the state pension age. However, I can confirm that there will be no further changes announced during the life of this Parliament. The plan is to review state pension age once every five years, starting in the next Parliament, based around the principle of maintaining a given proportion of adult life in receipt of state pension, as suggested by the Turner commission. Each review will be informed by analysis from the Government Actuary’s Department, with an independently led body reporting on wider factors that should be taken into account.

Our analysis shows that more than 10 million people who are at work today are not saving enough to generate the sort of income that they want to receive in retirement. The combination of a single, simple, decent state pension and the right to a workplace pension with a statutory minimum contribution from the employer will mean that, for the first time, there will be a firm foundation for retirement for the work force of today. I commend this statement to the House.

I thank the Minister for advance sight of the statement, although it was not as advanced as that of some newspapers over the weekend. However, he did have the decency to brief me as our paths crossed in a TV studio this morning.

Today was not supposed to be about pensions at all but about the unveiling of the Government’s flagship child care proposals, which took centre stage at the coalition relaunch last week. Unfortunately, the latest bout of coalition unity did not last even a week. The Government cannot agree on child care, but the Prime Minister was desperate to have something to talk about this morning other than Europe, so—voila—we have the pensions White Paper.

In all seriousness and in respect of the Minister’s commitment to this proposal, we will take the White Paper very seriously. However, I sound a cautionary note. The Government have form on pensions. We remember when the Government laid the 2011 Pensions Bill before the House. The Minister told the House that it was fair to all, but neglected to mention a huge unfairness. I talk, of course, of the targeting of women in their later-50s, who found that the goalposts for their retirement had been moved again at short notice. It took Labour’s digging to reveal that injustice and a Labour campaign to win Government concessions. There is therefore every reason to look closely at the detail.

The principle of a simplified state pension was laid down by the Turner commission and was supported by all parties. The Leader of the Opposition has reiterated our support for that principle. However, it is fair to note that Turner rejected an abrupt shift to a single-tier state pension, which is why the previous Labour Government adopted an evolutionary approach.

Even on my speed-reading of today’s White Paper, there will be heavy losers, steep cliff edges and significant costs if the proposal goes ahead as planned. For example, the briefing from the Government over the weekend was at pains to emphasise the women-friendly aspects of the measures. However, I want to ask the Minister directly about the 429,000 women born between 6 April 1952 and 6 July 1953. Is it the case that those 429,000 women will not qualify for the single-tier state pension, and yet men who were born between the same dates will?

Let me dig a little deeper. The Minister referred to existing pensioners. Is it the case that this proposal excludes all existing pensioners and all those who intend to retire before 2017? If so, what is his message to the 15 million or 16 million people, by my calculation, who will not be eligible for the new pension? How many pensioners does he estimate will remain on £107 a week rather than £144?

May I ask the Minister about the 1.4% national insurance tax rise on 6 million workers? As I understand it, the money raised by that tax hike will not be reinvested in the new state pension but will flow straight into Treasury coffers. If that is indeed the case, how much money will that tax grab raise, and why is the money not being reinvested in the new state pension?

More narrowly, will the de minimis 10 years of contributions be part of the process by which public sector workers and private sector defined-benefit contracted out workers will participate in the new pension? Specifically, will they need at least 10 years of contributions to the new state pension to get any pension whatever?

The Minister shakes his head, which is important. I would appreciate it if he referred to the matter in his response.

We also seek clarification on what the abolition of the state second pension means for savers. Will the state second pension part of people’s accrued rights be uprated by CPI, not under the triple lock that will apply to the single state pension? That is an important question. Furthermore, how many savers currently pay into the state second pension, and how many of them will receive a lower state pension than they would have done without this reform? In other words, how many losers will there be among those who currently save in the state second pension?

The Government claim to have learned from the 2011 Pensions Bill. They say, and have briefed widely over the weekend and this morning, that the big winners in the new system will be stay-at-home mums. Some context is needed here. The Labour Government put female pensioners at the heart of their pensions policy. Most importantly, they massively reduced the number of years of contributions that both men and women needed to get a full state pension. It was reduced enormously to 30 years from 44 for men and 39 for women. The Government propose to put it back up to 35 years. What will be the impact of that five-year rise in contributions? Specifically, will it reduce the number of pensioners eligible for a full state pension, on Department for Work and Pensions estimates? That is an important question.

May I ask the Minister about the rising state pension age, which he mentioned towards the end of his statement? The Government seem to propose a new mechanism for increasing the state pension age. I have two questions about that. First, the difference in life expectancy between a manual worker and someone doing a non-manual job will play itself out both in the amounts saved in the new state pension and in the fact that non-manual workers will get it, on average, for much longer than manual workers. How will the system be made fair, given the difference in life expectancy, with a rising state pension age?

The second question is related to that. What if manual workers in particular cannot work for as long as any new mechanism sets out that they should when the state pension age is raised? If they cannot do hard, physical labour, how will that affect the Government’s claim that there will be a massive reduction in means-testing in the new system?

Those are only some of the questions that face us as we consider the detail of the White Paper. I suspect that the argument will not disappear overnight, because there is much detail to be considered. I hope that the Minister will give us some provisional answers on important matters that are affecting our constituents and his own.

I thank the hon. Gentleman for what I would characterise as his broadly constructive response to my remarks. I welcomed his comment on the television this morning that

“the Labour party supports the principle of a flat-rate state pension”.

I welcome that because pensions are for the long term, and with two coalition parties united in support for this reform and support in principle from the official Opposition, we have a chance of stability in pensions policy, which would be good for all.

The hon. Gentleman says that the Government have form on pensions, and that is a fair cop: we restored the earnings link after 30 years, we ruled out 75p increases, and last year we introduced the biggest ever cash rise in pensions. He asked about women in their late 50s, many of whom are the very women who were penalised for time spent at home with their children. Although they got some protection on the basic pension, they did not get it on SERPS and the state second pension. The Government are putting that right for the very group of women about whom he asks.

The hon. Gentleman asked about women born in certain months, and the equivalent men. The changes are based on state pension age, and as he knows, that is different for men and women so the implications are also different. The April 2017 change is based on when people’s state pension age falls. He asked about people who “retire” but that is not really the right word—it is all to do with someone’s state pension age and whether it is before or after the change.

The hon. Gentleman asked how many pensioners are on £107. To be clear, someone who has worked in the public sector throughout their life—a teacher, for instance—would be on £107 because they contracted out of the other bit. In our system, from day one they would also be on £107 because we will take account of past periods of contracting out. Future service in the public sector at the full NI rate will add years to that £107. It is not a cliff edge; the exact day before or day after for those people is the same, but they can then work off that contracted-out deduction.

The hon. Gentleman asked about the national insurance rebate and—interestingly—suggested that we spend it on pensions. That is obviously a matter for a future Chancellor, but given that the public sector, the NHS and schools will pay significantly more national insurance, it would be interesting to know whether the hon. Gentleman’s position is that that money should go from the NHS and schools into higher state pensions. He asked about the 10-year de minimis. Let us be clear that we are not saying 10 years in the new system—the requirement is 10 qualifying years in someone’s lifetime. That is because there are backpackers who do a couple of years of bar work and 40 years later we are paying them a state pension for another 20 years. The sorts of people who would be excluded are those who come for a few years, do not really have any skin in the game and pay just a few years of national insurance. They will not get a pension—that is how we save money to spend on pensions.

On state second pension uprating, as I mentioned in my statement, for someone on £160, the first £144—at least earnings—will be triple locked in our White Paper and the balance will be linked to the CPI as SERPS is currently. The hon. Gentleman asked about people who pay into the state second pension, and except for about 5 million public sector workers and a couple of million private sector workers, everybody else pays into the state second pension. He said they were all losers—obviously they will not accrue S2P, but they will accrue a bigger flat-rate state pension.

The hon. Gentleman mentioned the April 2010 changes to qualifying years which he described as an “enormous” reduction. That is, therefore, also an enormous cliff edge of the sort he accuses the Government of making, and there were virtually no transitional arrangements for that. Someone who retired a day before that enormous cliff edge got nothing, whereas someone who retired the day after got the benefit of 30 years’ contribution. There are precedents for such things. When the contribution years were set to 30, women’s state pension age was still 60. In our world, and in the future, it will be 65, 66 or 67, and it is hard to see why in a working life of 50-odd years someone should get a pension for 30 years of contributions. We are merging a pension with a 30-year rule with another pension with a 50-year rule, and we have 35 as a sort of weighted average.

Finally, the hon. Gentleman asked about differences in life expectancy. I gently point out, however, that when the previous Government legislated for a pension age of 66, 67 and 68, they did precisely nothing about differences in life expectancy. We are recommending an independent panel to look at the issue and advise the Secretary of State.

I thank the Minister for his statement. Does he agree that the task of tackling complexity is vital and that this arrangement seeks to address those many older pensioners who do not seek means-tested top-ups because it is too complex and they are often to dignified to do it?

My hon. Friend is right. In every interview I have done today, we have had to spend about 20 minutes explaining how the current system works before we deal with the change. I welcome the fact that consumer organisations such as Age UK, although it has questions about the details, has warmly welcomed the principles of our reform.

I thank the Minister for his statement and for listening to the most recent report on pensions by the Work and Pensions Committee. When we looked at auto-enrolment, we said that a flat-rate state pension was important. On behalf of the Committee, I accept his invitation to conduct pre-legislative scrutiny.

The final outcome of the pension reform will, we hope, be a simple and easy-to-understand state pension, but already, from this afternoon’s exchange, it sounds as though getting there will be incredibly complicated. Will the Minister give us an idea of how long the transitional arrangements will be in place? I suspect that the Committee will spend a great deal of time analysing those arrangements to ensure that they are fair.

I am grateful to the hon. Lady both for her Committee’s report calling for the state pension to be sorted out and for her willingness to undertake the scrutiny. We will work closely with, and support, her Committee in doing that. She is absolutely right: transition is the messy bit. With pension reform, it would be lovely to start with no history and a blank sheet of paper, but we cannot do that. The straight answer to her question, however, is that transition is particularly important for those closest to pension age, who will have a complex history and rights built up. For younger workers, it is straightforward: they will do the 35 years and get the £144. Transition is complicated and messy in the early years, but it quickly works its way through the system, and we have worked hard on the statements we will send to people. They will be clear and say, as it were, “Under the bonnet, the workings might be complicated, but you’ve got this so far. Do this many years, and you’ll get £144.”

Does the Minister agree that the current pensions system is not working and does not guarantee pensioners the financial security to which they are entitled? Will he confirm that the triple lock guarantee will still apply to the new single-tier pension, thus avoiding the 75p increase fiasco we saw under the last Labour Government?

The current position is that we are obliged by law to uprate by at least earnings, and our policy is to go further and have the triple lock, as is mirrored in the White Paper. The legal position in the draft Bill will be at least for earnings uprating, but all our illustrative estimates in the White Paper are indeed based on the triple lock.

I congratulate the pensions Minister and the Secretary of State on delivering the White Paper against the restriction the Treasury imposed on them—that the reform be delivered at no extra cost. So that the House and the country can understand how successful they have been in driving a coach and horses through the restriction, might the Minister tell us the largest increase in contribution that any worker will face under his scheme?

I enjoyed the right hon. Gentleman’s column in The Guardian today. He imagined that we would make this pension reform work by not making it contributory, but I hope that I have clarified for him that people will still need 35 years of contributions or credits to draw the pension. The straight answer to his question is that the rebate is 1.4% and applies to a band of earnings from the lower earnings limit of about £5,500 to the upper earnings limit of about £40,000. It is 1.4% of that band.

I commend my hon. Friend for the biggest state pension reform for 50 years, but how will it tie in with the other big development, which is auto-enrolment in workplace pensions?

I had the great pleasure of joining my right hon. Friend the Secretary of State at Asda this morning—when he caught up on a bit of his shopping—and meeting shop workers who had just been automatically enrolled by Asda. It was fascinating talking to them, because some were in the scheme already, but many were not. Those who had been auto-enrolled were going to stay in, and one said, “It’s not that much money. To be honest, I drink more than that in the pub over a month.” People are being brought into workplace pensions. We do not want them opening their newspapers and being told, “Don’t bother saving, because you’re just going to be means-tested.” We believe that we have dealt with that problem today, which will make auto-enrolment work as well as state pension reform.

The Institute for Fiscal Studies has said today that the proposals will mean

“a cut in pension entitlements for most people in the long run.”

I am also concerned that they touch on public sector pensions and other areas of devolved competence. Will the Minister ensure that his Department engages in constructive technical discussions with the Scottish Government on the transitional process?

I have written to the devolved Assemblies and the Scottish Parliament about our announcement today. On the hon. Lady’s question about costings, let me say that for the next couple of decades or so we will be spending pretty much the same as now—it is within the same cost envelope—but we will be getting the bill down for younger workers by the middle of the century. It will not be down relative to today—the share of national income going on pensions will be substantially bigger than today—but it will not be rising quite as fast. We are ensuring that workers in their 20s will be automatically enrolled so that they have a savings culture as well as state pension.

I warmly welcome this announcement, and I think we will get to the right place. How long does the Minister expect that the current complex system will have to remain in place? Will we have to keep paying people pension credits for 40 years or more, or will there be a taper so that everybody will eventually receive the new pension?

I am afraid that the taper is sometimes called the grim reaper. The process is that everybody who has already reached pension age by 2017 will have their rights under the current rules. I have every anticipation that those rights will be honoured for as long as people are in a position to draw them.

Could the Minister expand on people who have SERPS that sit with private pension companies? What will happen to those pensions? He says that some who have opted out into SERPS may not qualify for the single tier. How will he explain to people the relationship between those with SERPS who have a private pension and how they will qualify for the single tier? It sounds a little complex to me.

At the moment, we have a two-tier work force: those who are paying full national insurance and drawing a basic pension and a SERPS pension; and those who pay a reduced national insurance, who just build up a basic pension. In the future it will be simpler: there will just be workers who pay national insurance and build up rights under the single tier. We have to honour the past and deal with its complexity, but going forward every year will be a year’s worth of single-tier pension—a thirty-fifth of £144 for everybody. Whether they were previously contracted in or contracted out, it will be the same for everybody.

I welcome the statement. Out there in the real world my constituents are heartened by us in this place seeking to simplify an aspect of financial payment for once. In relation to young entrepreneurs and many of those who are self-employed, can the Minister assure me and the House that those who pay into the national insurance pot will, under the single-tier system, see full payment and full benefit from the contributions they make?

I am grateful to my hon. Friend for mentioning the self-employed. At the moment, the self-employed build up rights under the basic pension—the £107—but not the equivalent of the £144. In our world, there are just people who pay national insurance, build up qualifying years and build up a pension. The self-employed are therefore potentially substantial beneficiaries of the new and simpler system.

Will the Minister confirm that workers currently in the private sector who contracted out may also see, in addition to having to pay higher national insurance contributions, either higher contributions towards their private pension or a reduction in benefits?

Yes, the hon. Lady is right. We have talked to the CBI, the National Association of Pension Funds and major pension employers. They are clear that they do not simply want to take the national insurance rise on the chin; they want the freedom to adjust their private sector pension scheme in response. However, we have calculated that, even allowing for that, the bulk of people who are within 20 to 25 years of pension age will still get more back, from the extra national insurance and any reduction in their private pension, through the enhanced state pension than they have lost.

Does the Minister agree that a modern pension system needs to reflect the changes in a modern work force, and that what he is announcing today will help self-employed people, and women who have not been able to work and have a variable contribution record?

Yes, the new system is designed to treat people as people, rather than as dependants. It removes the distinction between employee and self-employed, contracted in and contracted out. Given that these boundaries are somewhat permeable—people might be self-employed one year and part time the next and so on—this will streamline the system and make it easier for people to build up the 35 years they need.

Somebody mentioned the 75p increase earlier. The reason for that was that the previous Conservative Government broke the link and then it was related to prices, so let us be clear about that. Secondly, the problem with pensions actually started when the previous Conservative Government, in terms of industry, gave incentives to people to opt out of SERPS and into private schemes—that is how we got ourselves into this mess today. How many people will lose out under these proposals?

We are publishing later this week, along with the Bill, a detailed impact assessment of the changes over a series of decades. In the White Paper we have published today, the hon. Gentleman will see a chart that shows that, for I think at least 35 to 40 years, a majority of people affected by the changes will gain rather than lose.

I congratulate my hon. Friend on what the Government have achieved and seek clarification on two points. From which budget will the NHS and other public sector employers have to find the additional national insurance contributions? Are small employers in constituencies such as Thirsk and Malton being asked to increase national insurance contributions as well as contribute towards a private pension scheme?

In answer to my hon. Friend’s first question, the NHS as an employer already pays the reduced rate of national insurance from its own resources; it will have an increased rate of national insurance. Obviously the Exchequer will have an increased revenue. It will be a matter for the Chancellor of the day to decide what to do with that increased revenue, but the NHS as an employer will pay more national insurance—that is a fact.

In answer to my hon. Friend’s question about small firms in her constituency, very few small firms run contracted-out defined-benefit pensions, so the only people paying increased national insurance will be those who are contracted out who run these special final salary schemes. We have allowed those schemes to adjust their rules to offset the cost if that is how they choose to proceed, but most small firms will not be affected.

Crucial to these proposals is the notion that parents who take time off work to bring up children—stay-at-home mums—will register for national insurance pension credit in order to get their cumulative 35-year tally of contributions. However, surely the Government are not saying that the only way to get these credits is to apply for child benefit, because from 7 January not everybody has been eligible for child benefit payments. That would be ridiculously complex and confusing, would it not?

There are two groups of people. First, those who are currently receiving child benefit that will cease because of the changes for people with higher-earning spouses will continue to get credits under this system—they are in the child benefit system with a zero award. For people who have their first child under the new regime, we already put information in what is called the bounty pack—which new mothers get—to encourage them to claim child benefit, not least because even if their spouse is a high earner at the moment, that might not always be so, so they should always claim child benefit anyway, to ensure they get their credits.

The remaining contracted-out final salary pension schemes currently receive a 3.4% national insurance rebate. That will go, which will be a cost to those employers. We have talked to the pension funds, the CBI and so on. They have said that a fair response is to allow the schemes to reduce accrual rates—for example, to offset any additional cost—and that will be a provision in the pensions Bill that we publish later this week.

The Minister just referred to women applying for child benefit, even though they might not be entitled to any award. Does he not think that we are potentially storing up a big problem for the future, in that many women will see no reason to register for a benefit to which they will not be entitled?

Just to be clear, even if we were not doing any of this pensions stuff, although someone might be the partner of a high earner when their baby is born, people’s relationships change. It is therefore always advisable for them to claim their child benefit anyway—even if, in the end, they receive a zero award—which also sorts out the pension credits problem.

Along with tens of thousands of other women in their 50s who took a career break to raise their children, I very much welcome these measures, but can the Minister explain to me and other women returning to work how they will interact with the auto-enrolment pension scheme?

Where a mother spends time out of the labour market and then returns to work, her pension rights at the £144 rate will be fully protected. If those women are not in an auto-enrolment scheme, they are not contributing, the employer is not contributing and they are not building up rights under that scheme, but we are ensuring that there is a firmer foundation. If those women carry on receiving, for example, maternity pay during maternity leave, then pension contributions can be taken from maternity pay, which can keep their pension contributions going.

Will the Minister emulate the splendid example of Barbara Castle in 1975, who secured all-party support for the introduction of SERPS? Will he also consider a reform whereby retirees who are fortunate enough still to be in work while receiving the basic pension should continue to pay national insurance? That would be fair, affordable and acceptable and would bring in between £2 billion and £3 billion a year.

I would certainly warmly welcome all-party support. I have tried to approach the issue in as constructive a way as I can, because we want an element of stability in the pension system. I am not convinced that levying national insurance contribution on working pensioners is the way forward. Clearly, what we want is some flexibility in retirement. We want to get away from this cliff edge where people are either working or retired. We are interested in a model of phased retirement, partial drawing of pensions, deferring retirement and part-time work. As soon as we say, “You are either working or retired; you pay national insurance or you do not”, we get back to the cliff-edge model that we are trying to move away from.

I welcome this statement, which will reduce the complexity of the pensions system, reduce means-testing and reduce the uncertainty for future pensioners. Will the Minister say whether it will also reduce administration costs within the Department for Work and Pensions?

It will indeed. To give a flavour of the scale, at the moment nearly half of all pensioners are entitled to some sort of means-tested benefit. That is an extraordinary and absurd situation. If I tell the hon. Gentleman that by the time the system is fully implemented, we will be down to one in 20 pensioners being entitled to pension credit, that provides an example of the scale of the change we are bringing in.

In his statement, the Minister made much of the need for plain language, so will he confirm that under the proposals a significant number of women will not receive the new higher-rate single-tier pension in 2017, even though men born on the same date would receive it? Will he also confirm that that potentially affects some 430,000 women across the UK, including 39,000 in Scotland?

I think I have already dealt with that point. Pension ages are changing, and they will not be the same for men and women until 2018. If we have a system based on pension age, it will be different for men and women by definition until they are equalised. It seems to me that the only way to run a system is to base it on people’s actual state pension age—rather than have an actual state pension age and then bring single tier in on a different day for a set of people born in different periods. That would introduce extra complexity, which we are trying to stop.

I welcome this statement, as the problems of complexity and inequality that have been identified are all too familiar to my constituents, and they have without doubt undermined this country’s savings culture. Will the Minister explain, however, how the new proposals would affect carers in my constituency? Can he guarantee that his commitment to simplicity would go all the way down to user level?

I am grateful. Carers receive the carer’s allowance, and there are other sorts of carer’s credits. Carers will thus end up with credits for the full £144—or whatever the final rate ends up being—so this has the potential to be a significant benefit to them. The hon. Lady is absolutely right that it is all very well for us to talk about simplicity, but people need to experience simplicity. That is why the White Paper provides an example of a pension statement. It is a single piece of paper saying, “You have built this amount up; if you do this many more years, you will get the full pension.” Everybody will know the rate: it will be a standard figure, and much harder for future Governments to tinker with.

I have been contacted by my constituent, Mrs Slater. She is a widow, aged 59. She tells me she was informed on her husband’s death that she would benefit from his working life and national insurance contributions. She is now concerned that a flat rate will mean that his hard work will no longer be counted when she retires. Will Mrs Slater will be better off or worse off under these proposals?

I am grateful to the hon. Gentleman, because I understand the concern that any change creates for people. In 2017, I assure him, we will work out people’s pension rights under our new system— 35 years for the full £144, with deductions knocked off for past periods of contracting out—and if that figure amounts to less than the rights someone has already built up, they will start from the higher one. We will honour the past. People will not build up new rights under those sorts of arrangements, but those they already have will be honoured.

I have been contacted by many of my constituents over the last few months who have been concerned about the investment that they have already made in SERPS and in the state second pension. Will the Minister confirm that contributions already made will be honoured and that pensions will not be rounded down as a result of this policy?

Yes, I can give my hon. Friend the assurance that he seeks. If a pension document says, “You have already built up a pension of £160, £170 or whatever”, people will get at least that amount. Going forward, people will not be able to build up those sorts of pensions in the future, but when they have built them up already, we will recognise those contributions.

The 1.4% rise in employee national insurance contributions and the 3.4% rise in employer contributions appear to involve an initial windfall of about £6 billion a year for the Treasury. What guarantees will there be in the Bill that current members of public and private sector pension schemes do not lose out in real terms as a result of these changes?