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House of Commons Hansard
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Commons Chamber
10 June 2013
Volume 564

House of Commons

Monday 10 June 2013

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Home Department

The Secretary of State was asked—

Foreign Criminals (Removal)

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2. What steps she is taking to prevent abuse of article 8 of the European convention on human rights in respect of the removal of foreign criminals. [158490]

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Last July, we changed the immigration rules to ensure that, under article 8, the rights of society are properly balanced against the individual rights of foreign national offenders. The rules received the unanimous support of this House. Unfortunately, some judges are not applying the rules as Parliament intended, and our Immigration Bill will give the full force of primary legislation to them.

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I am grateful to my hon. Friend for his answer. What more can he do to try to ensure that judges strike the proper balance between the rights of the individual and the rights of society, which are sometimes under threat from them? Can he persuade judges to listen to the will of Parliament?

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I am grateful to my hon. Friend for that. Of course this House thought that that is exactly what it had done, as it sent a very clear message to judges about the balance that this House, on behalf of society, had struck to put the rights of the innocent first. Judges have not got the message, which is why we will legislate to make sure that it is reflected in the law.

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Given what the Minister has just said, why on earth was the number of foreign criminals deported in 2011 just 4,522, whereas in the last year of the Labour Government it was 5,528? The Government are failing on this, and it is little to do with what he has said. Given that one of the best ways of making sure that suspected criminals are deported from this country is the European arrest warrant, which extradites them elsewhere, why on earth are the Government thinking of withdrawing from it?

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The hon. Gentleman should know that this is about exactly the reason I set out; he will know, if he has done his research, that between 2011 and 2012 there was a significant increase, of more than 1,000, in the number of appeals made by criminals to prevent their deportation. That is exactly why we need to take action, and it is another area we will deal with in the Immigration Bill.

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May I congratulate my hon. Friend and the Home Secretary on the determination with which they have pursued this matter? I invite my hon. Friend to recall the remarks made by the Prime Minister last week in answer to me, when he expressed great concern about the European Court of Human Rights, which has been subverted from its original intention. Are the Government still prepared that the United Kingdom should secede, because the British people are absolutely fed up with this Court?

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My hon. Friend will know that the Government have laid out our position clearly. I suspect that the issue he mentions—what happens to the Human Rights Act and with this country’s relationship with the European Court—will be dealt with in debate at the general election.

Benefit Tourism

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4. What steps she is taking to reduce benefit tourism. [158492]

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The Home Office will tighten regulations to time-limit the right of unemployed European economic area nationals to reside and claim benefits to six months, unless they can prove they are looking for a job and have a genuine chance of getting one. The Department for Work and Pensions is also taking steps to tighten further its rules on access to benefits.

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The Minister recently visited Wales to see at first hand the work that enforcement officers are doing to stop illegal workers. Will the Secretary of State use the forthcoming Immigration Bill to tackle illegal immigrants who are accessing services to which they are not entitled?

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I am grateful to my hon. Friend for his question. My hon. Friend the Minister for Immigration was pleased to be able to visit Wales to see this at first hand. We will indeed use the Immigration Bill better to regulate migrant access to benefits and public services. We will: get tougher on employers of illegal workers; prevent illegal migrants from obtaining driving licences; and require private landlords to make checks on prospective tenants. We will also further restrict access to social housing and restrict migrant access to benefits by tightening the habitual residence test and closing the loophole that currently allows migrants without a right to work here to access contributory benefits. With our European partners, we will also tackle free movement abuse and its impact on social welfare and public services, and we welcome the commitment by EU Ministers at last Friday’s meeting of the Justice and Home Affairs Council to finding EU-wide solutions to this problem.

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The Home Secretary mentioned access to housing, which is clearly an important point in relation to people coming into this country. What work has she done with the Department for Communities and Local Government on this issue, particularly in relation to private landlords? How can we do this if we do not have a statutory register?

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Nice try, but the answers on the statutory register are the same as the Government have been giving the Opposition for some months now. I have had a number of discussions with the Secretary of State for Communities and Local Government, as has my hon. Friend the Immigration Minister. I am pleased to say that we have proposals that will ensure that we can indeed tighten access to housing for illegal migrants.

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23. The good people of Bracknell want their local health services to be used appropriately. Apparently, there is more than £500,000 outstanding on invoices to overseas patients, just from Heatherwood and Wexham Park Hospitals NHS Foundation Trust. Does the Secretary of State agree that migrant access to the NHS needs to be better regulated? [158511]

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I thank my hon. Friend for his question, particularly as, like him, I have constituents who use that trust. We have a national health service, not an international health service. The rules governing migrant access to the NHS are too generous and ineffectively applied, meaning that they are open to abuse. That is why the Government propose reforming the residence test that governs free NHS access, and are proposing options under which temporary migrants would make a contribution before they used our health service— either through an up-front NHS access fee, or through comprehensive health insurance. We also intend to end free unrestricted access to general practitioners by visitors and illegal migrants, and to introduce measures better to identify patients who must be charged.

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The impact of the migration rules on the benefits bill can cut two ways. This afternoon, the all-party group on migration, of which I am a member, published a report showing that some British families have been forced to claim benefits because a spouse who could support them cannot be admitted to this country. Will the Home Secretary consider the report of the all-party group carefully, especially the impact of the family migration rules on benefits claims?

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I can assure the hon. Lady that the Government look carefully at all-party group reports on areas that relate to, or affect, the Home Office. On the changes that we propose to access to public services, and on the whole issue of people coming to join families, there is a principle, which is about being able to ensure that where people are accessing public services, they are services that they have contributed to. This is a great concern for many members of the public, and it is right for the Government to tighten it up.

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I welcome everything that my right hon. Friend is doing in this area. May I urge her, in the context of the all-party group, to carry out a realistic assessment of how much it costs to support a family, especially in southern England, and of whether the limit of around £18,500 is high enough?

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When we set the limit we did not just pluck a figure from thin air; we asked the independent Migration Advisory Committee to propose a figure. It proposed a range of numbers, from £18,600 to a higher figure. The Government chose to go with £18,600; we felt that was the appropriate figure to use, although, of course, the amount is higher for those who have children in the family. When there is one child, it goes up to £22,400, and it goes up for each further child thereafter. I assure my hon. Friend that the work was done independently by the Migration Advisory Committee.

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I was left unclear about the Secretary of State’s earlier answer about private landlords. If we do not know where landlords and private lets are—we will not know that without a statutory register—how exactly will we make the system work?

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I have to say to the hon. Lady that the Opposition have been calling for a statutory register of landlords for weeks, if not months, but it is something that, in 13 years in government, they did not bother to introduce.

Operation Alice

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5. What progress is being made on Operation Alice; and if she will make a statement. [158493]

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The Metropolitan police are conducting an investigation under the supervision of the Independent Police Complaints Commission. My hon. Friend will understand that there is nothing that I can add to that in Parliament without straying into the territory of a criminal IPCC investigation.

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We have a situation where police from the Met appear to have fabricated evidence against a Cabinet Minister; the Met Commissioner is put in charge of the investigation and admits to discussing the case with journalists; in breach of his own rules, he fails to keep a note of the discussion; and, six months later, we do not even have a report. Does my right hon. Friend agree that the Commissioner has a lot of questions to answer?

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I am as eager as my hon. Friend is to see justice done at the end of this episode, but I am sure that he will understand that the service of justice would not be improved by my providing a running commentary, from the Dispatch Box, on an ongoing criminal investigation.

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The Commissioner promised a ruthless search for the truth when he established Operation Alice, but, as the hon. Member for Croydon South (Richard Ottaway) said, this has taken eight months, involved 30 investigating police officers and cost the taxpayer £144,000 for an incident in Downing street that lasted 45 seconds. We are not asking for a running commentary; we are just asking the Minister when we can have a timetable so that this and other investigations currently costing £23 million in terms of past errors by the police are investigated thoroughly but quickly?

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This is an investigation done partly by the Metropolitan police, who are operationally independent, and by the Independent Police Complaints Commission, so it is not for Ministers to set timetables. Indeed, I urge the House to recognise that to ask Ministers to intervene closely and in detail in the work of operationally independent police forces or the IPCC would be the wrong way to go.

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In view of the revelations of the past week, will the policing Minister put in place a strict disciplinary code that requires all police officers of all ranks to keep a comprehensive and accurate record of all contacts they have with the press?

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I will, as ever, listen carefully to my right hon. Friend’s suggestions, but I emphasise the important distinction, which I know he as much as anyone would recognise, between actions that should be taken by Ministers and actions that need to be taken by operationally independent police forces.

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After a terribly bruising encounter at the hands of the media, the right hon. Member for Sutton Coldfield (Mr Mitchell) attempted to clear his name in the press. It now seems apparent that he was the victim of media spin at the highest level of the Metropolitan police. Does the Minister understand that this case is particularly important not because the wronged party was a Member of Parliament but because it could happen to any one of our constituents who do not have the vehicle to put things right?

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I absolutely understand the importance and the very many lessons that may well be drawn from that case. What I should not and will not do is draw any conclusions in the middle of the investigation.

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The Channel 4 “Dispatches” programme took 10 days to establish that the video record was completely at odds with the police account of events. Since the police have now interviewed 800 officers, spent £144,000 and taken eight months apparently to go nowhere, might it not be an idea to invite Channel 4’s “Dispatches” to be put in charge of the investigation, as it appears to be more effective and would certainly be more independent?

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I am, as ever, grateful for my hon. Friend’s suggestions, which I am sure will be heard in the appropriate quarters.

TPIMs

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6. How many people made subject to a terrorism prevention and investigation measure order have subsequently been charged and prosecuted since the inception of the TPIM regime. [158494]

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10. How many prosecutions have been brought against those subject to a terrorism prevention and investigation measure regime was introduced. [158498]

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Prosecution is always our preferred option to deal with terror suspects. TPIMs are used to protect the public from individuals whom we cannot currently prosecute or deport. The police will seek a prosecution if new admissible evidence comes to light. As of 28 February, the end of the last reporting period, four charges had been brought in relation to TPIM subjects, with one prosecution.

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Given that the Minister sought to make more prosecutions a central feature of his argument for replacing control orders with the TPIM regime, and that there has been very little progress in prosecution— I think there were three failed prosecutions for those who had breached their TPIM order—does the hon. Gentleman regret making such proud boasts in the House that have proved so ridiculously optimistic, if not downright wrong?

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As I indicated, prosecution remains the primary objective in relation to terrorism offences. I hope the hon. Gentleman would, for example, congratulate the work of the police, the Security Service and prosecutors in successfully securing lengthy prison sentences today in respect of six individuals for planning a terrorist incident in Dewsbury last year. The focus certainly remains on investigating TPIM subjects, and I would have hoped that he recognised the package of TPIMs plus the additional resources that have been made available to the police and the security services for that purpose.

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The independent reviewer of terrorism, David Anderson QC, has recommended that the Government release the regional location of individuals who are subject to a TPIM. This information would let my constituents know whether potential terrorism suspects had returned to London. Why did the Minister refuse this perfectly reasonable request?

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I congratulate the independent reviewer, David Anderson, on his work. He has underlined the fact that the TPIM regime continues to provide a high degree of protection against those subjects who cannot be prosecuted or deported. We considered carefully his specific recommendation on the location of TPIM subjects. We believe that such disclosure might make it harder to manage TPIM subjects and add to community tensions, but we will certainly keep his recommendations under review.

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One individual currently on a TPIM is AM, who was originally detained for being involved in a plot to bomb an aircraft. He was described by Mr Justice Wilkie in the High Court as “highly intelligent” and

“prepared to be a martyr in an attack designed to take many lives”.

Under the coalition’s TPIM regime, he has been allowed back to London. As his TPIM has already been renewed once, it cannot be renewed again. Will the Minister confirm that once AM’s TPIM expires next year, Ministers will have no power to supervise him or restrict his movements?

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For TPIM subjects, the time period is a maximum of two years, as the hon. Lady highlights. At the end of that period, a number of alternatives may be available. If there is sufficient evidence, it may be possible to bring a prosecution. At the end of that period, if there is evidence of new terrorist-related activity, it is possible to secure a further TPIM. The Security Service and police robustly enforce the TPIM regime and manage subjects in the community, and I have every confidence in their ability to do so.

Front-line Policing (London)

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7. What assessment she has made of the ability of the public to access front-line police services through the provision of local police stations in London boroughs. [158495]

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My right hon. Friend the Home Secretary and I regularly meet the Mayor of London and the Metropolitan Police Commissioner to discuss policing in London. The Mayor and Commissioner are responsible for ensuring that their officers are accessible. Following extensive consultation with the public, led by the Mayor's office, the Met will add 2,600 officers to neighbourhood policing teams, and there will now be around 200 safer neighbourhood bases to enhance this access.

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West London has lost 400 police officers in the last three years, 44 in Hammersmith and Fulham. Half of all police community support officers have gone and now my local police station, Shepherd’s Bush, is closed to the public. When my constituents cannot find an officer or a police station, does the Minister seriously expect them to report serious crimes such as rape and sexual abuse in their post office or in Tesco?

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I hope that the hon. Gentleman and his constituents welcome the fact that crime in Hammersmith and Fulham has gone down by more than 4.5% in the past year. I am glad that he brought up the Shepherd’s Bush front counter because the latest data show that the number of visitors each day to that counter was fewer than six. If he thinks that that is a good use of police resources, frankly, he is not fit to run the proverbial whelk stall.

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Wandsworth came pretty much the lowest in a reform think tank league table of visits to London front desks, with only 1.2 visitors an hour. My local police inspector has confirmed that as a result of shutting a front desk, he can put more resources on the front line. Does the Minister agree that that is a good use of the police’s time?

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I do agree. My hon. Friend makes exactly the right point. The way to cut crime is to have police officers deployed correctly, not to have buildings open that in many cases very few people ever visited.

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In addition to losing more than 200 police officers, in Westminster, three out of the four police stations north of Oxford street are closing. This is not just a question of access for reporting crime, although that can be important, but of community bases from which safer neighbourhood teams can operate. Does the Minister agree that the Mayor’s consultation proposal of surgeries of one hour a week to replace those police stations represents a massive reduction in police accessibility?

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No, I do not. The hon. Lady says that front counters are important for reporting crime, but only one in eight crimes are reported that way, so they are not as important as they used to be. She needs to accept that a more flexible approach to making the police accessible—for example, by making them available at regular times of the week in places where people are anyway—is much better than having them sitting in police stations that we know many people will never visit.

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On policing resources in London, following the strong words of the Metropolitan Police Commissioner, will the Minister join the Opposition in condemning the recent attacks on Islamic institutions, which put many lives at risk and sought to spread fear among our communities, and will he ensure that all our religious institutions are properly protected from those who wish to spread hatred, division and terror?

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I am very happy to share the hon. Lady’s sentiment. I am sure that everyone in the House will abhor and reject in the strongest possible terms the attacks on religious institutions that we have seen since the terrible event in Woolwich. I commend the Metropolitan police for ensuring that the protection available is greater than normal, because that is very important.

Policing

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8. When she next expects to discuss policing with the Police Federation. [158496]

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Both the policing Minister and I regularly meet representatives of the Police Federation and other policing partners to discuss a wide range of issues, and we greatly value those meetings. We will continue to engage with police officers and staff to ensure that their opinions help to shape the future of policing.

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Is the Home Secretary reviewing the use of community resolutions, which were used 10,000 times for serious violent crimes last year, and which the Police Federation has said are connected to the police having to do more with less?

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We are looking in general at the whole question of out-of-court disposals to ensure that they are being treated proportionately but also consistently across the country, but the whole question of community resolutions and restorative justice plays an important part in resolving crime, and victims often welcome such resolutions, but of course we keep that under review.

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Did the Police Federation persuade the Home Secretary that any of the proposals in either of the Winsor reports were unreasonable or unfair?

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I thank my hon. Friend for his question. I am pleased that the recommendations of the Winsor report on important reforms to police pay and conditions are, in the main, being put into place. There are one or two aspects that the police arbitration tribunal decided to refer back or not to progress at this stage, and on both occasions I accepted its response, but I must say that I was not persuaded by the Police Federation’s argument that we should abandon the Winsor proposals.

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24. When the Home Secretary next meets the Police Federation, will she discuss police numbers in Harrow, where we have seen a reduction in the number of PCs, PCSOs and other police staff from 516 in March 2010 to just over 400 three years later, a 22% drop and part of the loss of over 4,000 PCs and PCSOs in London since the general election? [158512]

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I hope that the hon. Gentleman welcomes the fact that crime in London has fallen by 3% over the past year or so, which I think reflects the work that has been done by police offices and others. We all want to see crime continue to fall, because that means better protection for our constitutions, whether in Harrow or anywhere else.

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When the Home Secretary next meets the Police Federation, will she highlight the success in Northamptonshire, where crime is falling and the new police and crime commissioner, Adam Simmonds, and the chief constable, Adrian Lee, are not moaning about their lot or about budgetary restraints but getting on with providing an effective three-point policing plan that involves a crackdown on criminals, prevention rather than cure and maintaining police numbers and visibility at 1,220 full-time equivalent officers?

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I wholeheartedly endorse my hon. Friend’s comments. I think that that is a good example of how chief constables and police and crime commissioners—Adam Simmonds is doing a first-class job as PCC in Northamptonshire—can work together to ensure that they deliver what the public want, which is policing that reduces crime, which has gone down by 4% in Northamptonshire, and confidence in the security of their neighbourhoods.

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Further to discussions that the Home Secretary might have with the Police Federation, what recent discussions have been held between the Police Service of Northern Ireland and the police service on the mainland on the secondment of police officers to police the G8 conference in Enniskillen?

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There has been considerable contact on this matter. My right hon. Friend the policing Minister met representatives of the Police Federation of England and Wales to discuss any issues that they wished to raise about the secondment of officers to work alongside the PSNI to police the G8 conference. I am pleased to say that I have met a small number of police officers who will be giving mutual aid to Northern Ireland and who were very complimentary about the training course they have undergone to do that work.

Visas

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9. What assessment she has made of increases in waiting times for visa decisions. [158497]

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The Home Office’s performance in granting visa applications overseas has been excellent and remains so, with average waiting times decreasing rather than increasing. As I have acknowledged myself at the Dispatch Box, there have been problems with our in-country performance in the past financial year, but since the abolition of the UK Border Agency and the creation of UK Visa and Immigration we have got that on the right path, with waiting times decreasing too.

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We are probably all aware from our own casework of the real problems that visa delays cause for our constituents. Given that the average waiting time for a skilled worker—somebody whom the British economy needs—has gone up from 36 days in 2010 to 56 days in 2012, does the Minister really think that measures of the kind he mentions are going to crack the problem, and if so, when are we going to see the results?

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I acknowledged openly and honestly that there had been a problem in the past financial year, and that is what the figures quoted by the hon. Gentleman reflect. However, as I said, in the past quarter the figures have improved, so when they are published in the instalment of that information that we give to the Home Affairs Committee, he will see that we are getting things back on track. There is an open session with Members of Parliament this Wednesday, and I hope he will attend to listen to the steps we are taking to improve performance.

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Will the Minister pay particular attention to the business community in China, where there is evidence that people are being disincentivised from coming to the UK because it is easier to get elsewhere in the EU and because of the time taken? Surely there is an argument for having a fast-track procedure for bona fide business visitors from China so that they can come to Britain to help our economy.

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I am grateful for that question because it gives me an opportunity to set out the excellent performance we deliver on visas applied for from China. We grant 96% of visa applications and deliver 95% of those within 15 days; for business visitors, we deliver the vast majority within five days. We are increasingly rolling out premium services, with an ongoing increasing performance level, for the very reasons that my hon. Friend sets out.

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The recent report on family migration by the all-party migration group—I am vice-chair of the inquiry committee—shows that the processing time for non-European economic area partner applications has significantly increased over the past 18 years. What is the Minister doing to keep families united rather than dividing them?

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My response to the hon. Gentleman, who takes a very close interest in these matters, is similar to the one that I gave to the hon. Member for Birmingham, Northfield (Richard Burden). He is right: in the past financial year, those processing times increased. We have split family applications for spouses from, so to speak, straightforward applications, and we are making decisions on them much more quickly. They had been grouped with applications that were taking a great deal of time. The hon. Gentleman will see in the latest figures that we have made a great improvement, and I hope to see more of that in future.

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The Minister clearly has a personal commitment to getting waiting times down—I thank him for his recent visit to Cambridge to see some of problems there—but will he be able to change the culture within the new borders agency? After all, the permanent secretary, Mark Sedwill, said:

“Most of us will still be doing the same job in the same place with the same colleagues for the same boss.”

We want the Minister to succeed, but will he be able to?

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I very much hope so. I was encouraged by my visit to Cambridge with my hon. Friend, where I listened, yes, to some of the concerns that people had, but also to an acknowledgement by the university, for example, that it had seen recent improvement. The new interim director general of UK Visa and Immigration, Sarah Rapson, has a great commitment to creating such a culture. I think that the decision taken by my right hon. Friend the Home Secretary to end the UK Border Agency and set up the new approach will be successful.

Crime Levels

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11. What assessment she has made of the contribution of police measures to falling crime levels. [158499]

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14. What assessment she has made of the contribution of police measures to falling crime levels. [158502]

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Recorded crime is down by more than 10% under this Government. The latest figures show that this downward trend is replicated across every police force in England and Wales. Our reforms are working.

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In my own area of West Mercia, crime fell by a huge 11% last year. This is due in large part to the dedication of people such as Inspector Ian Joseph and his team in Redditch. Will the Secretary of State join me in congratulating West Mercia police on the excellent work they do in Redditch and the wider region?

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I am very happy to join my hon. Friend in congratulating West Mercia police on the 11% fall in crime shown by the most recent figures and, in particular, Inspector Ian Joseph and his team in Redditch. Dedicated police officers across the country are working to keep our streets safe and to protect members of the public.

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According to the latest figures, crime in Warwickshire has decreased by 12.4%, meaning that 80 fewer crimes a day are being committed across the county. This reflects the excellent work of the officers of the Warwickshire police force and I am delighted that its chief constable, Andy Parker, has been reappointed for another two years. Will the Home Secretary join me in congratulating Warwickshire police force and commit to supporting forces such as Warwickshire in reducing crime through strong neighbourhood policing?

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Once again, I am happy to join my hon. Friend in congratulating all the officers of Warwickshire police force on the work they are doing and, indeed, Chief Constable Andy Parker on his reappointment.

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The Home Secretary will know that one of the most expensive crimes to investigate is child sexual exploitation. She will also know of this morning’s excellent report by the Home Affairs Committee. When I started a campaign about these gangs five years ago, the police told me on occasion after occasion that the reason they were so slow to respond to the total scandal of the exploitation of children was that it was expensive and the resource implications were immense. Do they have the resources now?

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We will of course look very carefully at the Home Affairs Committee report. I am aware that a number of Members remain concerned about ensuring that the police response to cases of child sexual exploitation is appropriate. As well as the hon. Gentleman, my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) has taken a particular interest in the issue. Across Government we have pulled together a cross-departmental piece of work to look at the lessons we need to learn from recent and, indeed, historic cases of sexual exploitation. I am pleased to say that my right hon. Friend the Minister for Policing and Criminal Justice will lead that work at ministerial level, asking questions about the police response and ensuring that it is appropriate.

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It is vital to use police time properly, but Ministers are taking police officers off the beat for 152,000 hours in order to train them in things such as changing the name of a litter clearing notice to a community protection notice and of a crack house closure order to a closure order. That is not the best use of police time, is it?

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I am pleased to say that the figures show that the percentage of police officers who will be involved on the front line is going up under this Government. Moreover, through the action we have taken to reduce bureaucracy and red tape—something the previous Government did not do—this Government have cut the number of hours taken on bureaucracy by 4.5 million man hours.

Illegal Labour

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12. What change there has been in the number of businesses fined for employing illegal labour since 2010. [158500]

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Dealing with illegal working is a priority for the Government. As has been mentioned, I attended an illegal working operation in Cardiff about a week ago and saw a number of successful arrests of people who were working illegally. We want to do more of this. Recent figures have not been as encouraging as one would have hoped. This year, with the creation of the immigration enforcement command, I am determined to see an increased focus on the issue in order to deliver the results we expect.

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Despite all that, the Minister has not had much success, has he? In 2010, 2,092 companies were fined for employing illegal labour, but by 2012 that figure had almost halved to 1,215. Will he work with other Departments, not just to get a grip of illegal employment, but to tackle the abuse of zero-hours contracts and of the minimum wage, so that British workers are no longer undercut by cheap, illegal labour from abroad?

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I do not think that the hon. Gentleman listened to my answer. I acknowledged that the statistics had not been as good as we had hoped. I will take no lectures from somebody in the party that let immigration spiral out of control and that had no grip on the system. It is this Government who are getting a grip and who have seen net migration fall by more than a third.

Legal Highs

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13. What assessment she has made of the potential effects of incorporating legal highs in the scope of the Misuse of Drugs Act 1971. [158501]

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The Government have banned a significant number of so-called legal highs following expert advice, including two groups of drugs from today. That sends a clear message about their harms and gives law enforcement bodies more powers to take action. We continue closely to monitor new drugs through our early warning systems to inform our response.

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I welcome my hon. Friend’s response, especially given that my local council has spent two years prosecuting the sellers of an illegal high called Gogaine, which left a 17-year-old student in hospital suffering convulsions. The prosecution fell mainly because the product was labelled as harmful and not fit for human consumption. Will my hon. Friend commit regularly to review the list of legal highs to ensure that as new legal highs come on to the market, they can be banned immediately?

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I am aware of the extremely serious case in my hon. Friend’s constituency and we have received representations about it. I pay tribute to him for raising that harrowing example in the House. We actively monitor new substances and already control hundreds. We act rapidly to respond to new threats and continue to keep our response under review.

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Several constituents have approached me about the serious consequences of taking legal highs, including the famous Black Mamba. There seems to be no help or redress, and the Government do not seem to be helping the victims to prevent legal highs from getting into the hands of their friends or anybody else.

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The hon. Gentleman touches on an important point. When people talk about legal highs, there is a tendency to believe that just because a substance is legal, it cannot be harmful. That is certainly not the case, as we heard from my hon. Friend the Member for City of Chester (Stephen Mosley). That was a severe warning. The Government try to protect the public through appropriate changes to the law, including the two that I have mentioned, which take effect from today.

Child Sexual Exploitation

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15. What training is undertaken by police forces in respect of child sexual exploitation cases. [158503]

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All front-line police officers receive training in protecting and safeguarding children. Dedicated child protection police officers also receive specialist training in investigating child abuse cases, and the College of Policing is delivering additional training for front-line staff so that they can recognise, protect and refer children at risk of child sexual exploitation.

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Children who are being sexually exploited are sometimes involved in antisocial behaviour, theft and other criminal offences. Often, the underlying problem is missed because the child is perceived to be an offender rather than a victim. Does the Minister agree that the training for all police officers should include an understanding of the behaviour associated with child sexual exploitation, including criminal behaviour, so that sexually exploited children are identified at an early age and police resources are used as effectively as possible?

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The hon. Lady’s point about training is right and I mentioned training in my answer. I am sure she will welcome the fact that the College of Policing and the Crown Prosecution Service will shortly consult on a fundamental review of investigative guidance on child sex offences, precisely so that we can develop greater expertise and sensitivity throughout the system.

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In the course of the inquiry by the Home Affairs Committee into grooming, one excuse that we heard for areas failing to tackle child sexual exploitation was that prosecution was difficult. Does the Minister agree that with forces in Lancashire and Oxford demonstrating that innovative investigative methods can be used successfully to back up witness testimony, there is no excuse for any police force failing to protect victims or to prosecute these depraved criminals?

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I agree completely with my hon. Friend. I commend her and the rest of the Select Committee on the report that they produced today. She is right that one improvement, which needs to be extended, is in the capacity of the police to investigate and of prosecutors successfully to prosecute those who commit these disgusting crimes. A number of trials around the country have led to multiple convictions and I know that many more such cases are in the pipeline. I hope that sends a clear signal that this crime is absolutely unacceptable and that the police are getting better at rooting out those who commit it.

Asylum Seekers: Deportation

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16. What plans she has to speed up the deportation of those refused asylum in the UK. [158504]

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We want to continue to deport those who have no right to be in the United Kingdom, whether they are failed asylum seekers or foreign national offenders. Increased use of detained fast track and our national removals centre will reduce the risk of absconding, as well as being more successful in deporting people.

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One of the frustrations felt by all our constituents about the asylum and wider immigration system is the seemingly endless ways in which failed asylum seekers and immigrants are able to keep on appealing. I hope that the Minister and my right hon. Friend the Secretary of State will use the forthcoming immigration Bill to clamp down on the many rights of appeal.

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I am pleased to be able to tell my hon. and learned Friend that that is exactly what we are going to do. The immigration Bill plans to reduce the number of decisions it takes to remove someone who has no right to be in the country. Reducing the number of appeals will make the process easier and swifter.

Scottish Independence

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17. Whether Scots would be able to retain UK citizenship if Scotland became an independent country. [158505]

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Decisions on UK citizenship are for the UK Government. Any decisions on the retention of UK citizenship by Scottish citizens after independence would be affected by future Scottish Government policy decisions. To date, the current Scottish Government have not set out what their proposed policies would be in these areas.

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I am grateful for the Secretary of State’s response, which will be noted by my constituent Colin White. Does she wish to take the opportunity to debunk the myth peddled only last week by high-profile Scottish National party supporter Jim McColl? He said that a vote for independence would mean that Scotland would remain a part of the United Kingdom.

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I am happy to help the hon. Gentleman and debunk that myth. To be absolutely clear: a vote for independence is a vote for a Scotland that will be outside the United Kingdom. The referendum offers a fundamental choice between staying in the UK or leaving it and forming a new independent Scottish state. That is the legal reality of independence. As the Prime Minister said in Stirling on Friday:

“There is simply no challenge we face today where breaking up Britain is the right answer.”

The United Kingdom is stronger together and better together.

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We just wish that the Prime Minister would come to Scotland much more often, because it increases support for independence. The right hon. Lady will know that after independence it will be possible to keep a UK passport. The real question is why, with a new dynamic Scotland in charge of its own resources and making its own peaceful contribution to the world, anybody would want anything other than a Scottish passport in Scotland.

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I suggest to the hon. Gentleman that he thinks very carefully about what he has said, and perhaps looks at the Hansard record of it. As I made clear in answer to the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann), decisions about UK citizenship rest with the United Kingdom Government. However, if there is a vote in the referendum for separation, Scotland will become a separate state and not be part of the United Kingdom. That is a very simple fact and I suggest the hon. Member for Perth and North Perthshire (Pete Wishart) recognises it.

Topical Questions

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T1. If she will make a statement on her departmental responsibilities. [158514]

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This is my first opportunity to address the House on the dreadful events that took place on the streets of Woolwich on 22 May, and to offer in this House my deepest sympathies to the family and friends of Drummer Lee Rigby. This shocking and barbaric crime has been rightly condemned by all communities in our country. I would like to pay tribute to those brave civilians, police officers and medical staff involved in dealing with the incident; they represent the best of this nation. As I said at the time, this was not just an attack on an individual soldier, but an attack on everyone in this country—people of all faiths and of none.

Sadly, in the aftermath of this horrific incident we have seen an increased number of attacks on mosques and Islamic centres. These are deplorable, disgusting acts. British Muslims make a valuable contribution to our society. The murder of Drummer Rigby was no more in their name than it was in mine or in the name of anybody in this Chamber. I welcome the extra steps taken by the Metropolitan police and others to counter this threat to them. Alongside the increased tensions, however, we have also seen some actions that give great cause for hope. We have seen leaders from all faiths condemn the attack. We have seen far-right supporters invited into a mosque to enjoy cups of tea and football. We have seen religious leaders from different faiths openly embracing each other in a show of unity. This House, like the whole country, stands united against violence, extremism and terror.

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What steps is my right hon. Friend taking to prevent the abuse of free movement rights within the EU?

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I have consistently raised the problem of the abuse of free movement at meetings of the Justice and Home Affairs Council, and we are working with other EU member states to curb that abuse. Free movement of persons is a long-standing principle of the EU, but those rights are not unlimited, and the Government take a robust approach against those who come to the UK not intending to work, but simply to rely on benefits. Abuse of free movement is not just a UK problem; it will take the joint efforts of all our EU partners to tackle it. We have been raising concerns for the past three years at meetings of EU Ministers, and I am pleased to say that last Friday it was decided that the European Commission and Ministers would take the issue forward.

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I welcome the Home Secretary’s condemnation of the vile attack on Drummer Lee Rigby and of the recent attacks on Islamic religious institutions. I also welcome her comments about the importance of protecting all our citizens and communities from hatred and of supporting hope instead.

The Home Secretary will agree that the intelligence we get from abroad is vital to our national security and to protecting people against terrorism, but that it needs to be gathered under a clear legal framework with proper safeguards, checks and balances in place in order to maintain public confidence. In addition to the Foreign Secretary’s forthcoming statement, will she therefore respond on the issue of the legal framework operating for the Home Office? Will she tell us whether all Home Office, police and security service requests for intercept information from the internet, whether secured from UK agencies or from abroad, are governed by the Regulation of Investigatory Powers Act 2000 and covered by ministerial warrants and the oversight of the intercept commissioner?

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As the right hon. Lady said, my right hon. Friend the Foreign Secretary will make a statement shortly on this issue. She will also understand that it is a long-standing principle that the Government do not comment on intelligence matters, but I want to make it absolutely clear, as my right hon. Friend has also made clear, that at all times GCHQ has operated fully within a legal framework. I recognise that Parliament has a legitimate interest in these matters, which is why the Intelligence and Security Committee has a remit to look at such issues, and my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) has indicated that his Committee will indeed be conducting an urgent inquiry.

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I welcome the Home Secretary’s response, and clearly the House will listen to the Foreign Secretary’s statement shortly too. I understand that she cannot answer publicly about the content and detail of intelligence procurement, but will she set out very clearly what the legal framework is that governs Home Office and Home Office-related access to intercept and intelligence, and will she write to me setting out her understanding of the current legal framework? It would be very helpful. Will she also confirm that the ISC will have the full support of the Home Office and herself in accessing all the information it needs to pursue this issue? She will know that because intelligence is so important for our future and our national security, public confidence in it must be maintained.

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As the right hon. Lady is aware, intercept warranty is covered by RIPA, and as I said, my right hon. Friend the Foreign Secretary will shortly make a statement about the legal framework under which the agencies operate. I suggest that she waits for that statement. I am clear that the ISC will have available to it the evidence it needs to conduct the inquiry, and it is right and proper that it does that. Of course, it has a new status in terms of its relationship with Parliament. I think people will want the Committee to conduct that inquiry, as my right hon. and learned Friend the Member for Kensington, who chairs it, has indicated it will.

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T2. What plans do the Government have to regulate covert surveillance by private investigators? [158515]

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We are looking into the compulsory regulation of private investigators, which would apply to private investigators involved in covert surveillance. I hope that my hon. Friend will welcome the fact that we expect to be in a position to make an announcement shortly.

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T5. Last year, the number of inspections to enforce the minimum wage fell to half what it was in the final year of the last Government. Why?

[158518]

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That is really a matter for the Treasury, but I think I know where—[Interruption.] Let me just answer the question. I think I know where the hon. Gentleman is going with this. I have checked these matters carefully. If we compare the whole period of the last Labour Government, from when the national minimum wage was introduced, with the whole period of this Government, we can see that this Government have been prosecuting at a slightly faster rate. However, we are not doing it fast enough. We have set up a number of taskforces, including one in the constituency of my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), which is taking significant action on these matters and will continue to do so.

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T4. Despite the 30% reduction in net migration since this Government came to power, people across North Wiltshire are extremely concerned about the whole issue of immigration, particularly with regard to Bulgaria and Romania later this year. What steps will the Minister take to ensure that people from Bulgaria and Romania in particular are not tempted here by the ability to avoid our tax system or, even worse, the ability to benefit from our benefits system? [158517]

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On Bulgaria and Romania, my hon. Friend will know that in the Immigration Bill and elsewhere we have set out a number of changes that we are making to ensure that only people who are here exercising treaty rights—who are here working—can access the benefits system. My right hon. Friend the Home Secretary set out some of those earlier. I hope my hon. Friend will see that tough and firm action continue.

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T8. I would like to press the Secretary of State a little further on the question of a landlord register. Does she agree that it might assist her in some of her other duties, such as in relation to antisocial behaviour? If she wants to see how a landlord register can be introduced as a self-financing system—and one that has worked very well—she should look no further than north of the border, where one was introduced by the Labour-Lib Dem coalition. [158521]

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I thought I would have a go this time. My right hon. Friend the Secretary of State answered very well before, but I thought I would take a different tack, because it gives me an opportunity to say, as my right hon. Friend did, that we will bring forward proposals to ensure that landlords have to check the immigration status of tenants. I have had some good discussions with my right hon. Friend the Secretary of State for Communities and Local Government. We will be bringing those steps forward, and I am confident they will be sensible, proportionate and effective.

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T6. Have Ministers checked whether the family migration rules are compliant with our obligations under the United Nations convention on the rights of the child? [158519]

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Yes, we are confident that they are. Last week I met the chair of the all-party group on migration, the noble Baroness Hamwee, to discuss the report. The Government will consider the recommendations in that report, but my right hon. Friend the Home Secretary has set out clearly the objective of the family migration rules: to ensure that those who want to make their family life in the United Kingdom are able to support their families, rather than expecting the taxpayer to do so.

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T9. Reductions in overdose deaths; reductions in in-patient A and E admissions for drug addicts; reductions in house burglary; increases in employment of drug addicts in treatment—on all these indicators, Bassetlaw is outperforming the rest of the country. Why? [158522]

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It must be because Bassetlaw has an outstandingly talented local MP, I assume. The hon. Gentleman is right to draw the House’s attention to the three strands of the Government’s strategy: reducing demand, restricting supply and building recovery. Great progress is being made on all three in Bassetlaw and elsewhere.

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T10. My constituents are fed up with extremists and hate-preachers such as Anjem Choudary receiving thousands of pounds of benefits. Will my right hon. Friend look at limiting those benefits? [158523]

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It would not be appropriate for me to comment on the benefit position of an individual, but I regularly meet the Secretary of State for Work and Pensions to discuss policy proposals on a range of issues. As the Prime Minister said to the House last week, we should do all we can to challenge poisonous ideologies. It is right that we look at all options, including whether it is possible to limit the right of individuals of concern to access straight benefits. We robustly challenge behaviours and views that run counter to our shared values, such as democracy, the rule of law, individual liberty and mutual respect, and the tolerance of different faiths and beliefs. When appropriate, we will use the full force of the law to challenge extremist activity.

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The issue of legal highs is difficult, because if we just ban them, another substance quickly springs up. Have the Government given any consideration to following the example of New Zealand and legislating to put the onus on the sellers of legal highs to prove they are safe?

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Those who study these matters closely, such as the hon. Gentleman and me, will be familiar with the New Zealand model. It raises some interesting questions, which we are considering as part of our international case study. It is not without practical problems, however, and I do not think that it would provide an instant solution to our woes, but it is worthy of further consideration.

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Returning to Operation Alice, restoring public trust in the police and maintaining public trust in senior police officers is vital. Does the Minister therefore agree that there should be full disclosure of all the meetings between the Metropolitan Police Commissioner and the press relating to the operation?

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As my hon. Friend might know, the Metropolitan Police Commissioner has just responded to a freedom of information request on this matter. I can only repeat that the course of justice is not served by my giving the House a running commentary on an ongoing criminal investigation.

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The Home Secretary’s earlier response to my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) showed that she was completely oblivious to the steep increase in the use of community resolutions for ever more serious crimes, including domestic violence and knife crime. Does she not understand that the overuse of this simplistic measure gives rise to an issue of justice for the victims?

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What I said to the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), and what I say to the hon. Member for Denton and Reddish (Andrew Gwynne), is that we are looking at the use of community resolutions of various sorts to ensure that their use is proportionate and that there is consistency across the country. We are discussing the use of cautions with the police, and the Minister for Policing and Criminal Justice, in his capacity as a Minister in the Ministry of Justice, has launched a review of their use.

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Will the Minister meet the Attorney-General to discuss the issuing of strict instructions on the extent to which senior police officers may discuss active cases with journalists, so as to prevent prejudicial outcomes?

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I am happy to confirm to my hon. Friend that I meet the Attorney-General on a regular basis to discuss a number of matters. I will of course continue to do so.

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I am grateful to the Minister for completing the mop-up on Question 5.

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On 6,000 occasions in the last year, the Met police used cautions for serious violent and sexual offences, including seven cases of rape. A caution obviously involves an admission of guilt, and there is huge concern about this. I have to say that the Secretary of State’s answer to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) seemed slightly flippant. She did not seem to understand the seriousness of the concerns. No one seems to understand why this is happening. What is the Home Secretary going to do to ensure that cautions are used only in appropriate circumstances?

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I have not given any flippant response. What I said was that the Government were reviewing the issue. The Ministry of Justice has launched a consultation on cautions, and it is absolutely right that we should look not only at the numbers but at the evidence behind the way in which the cautions are being used and at the circumstances in which they are being used. That is what the review is about.

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Will my right hon. Friend confirm that, while net immigration quadrupled during the first 11 years of the previous Government, it has been brought down by 72,000 in just two years under this Government, despite the fact that the Opposition have fought us every step of the way?

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I can absolutely confirm that. I am pleased to say that net migration has gone down by more than a third since this Government came to power. That is a result of our relentless work to deal with the lack of control in the immigration system under Labour, and it is a great pity that Labour Members have not been willing to support any of the measures that we have taken to ensure that immigration can come down.

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Following today’s report from the Home Affairs Committee on child sexual exploitation and the response to localised grooming, will the Minister for Policing and Criminal Justice set out what joint working will take place with colleagues in the Department for Education to ensure that we can prevent other young women from suffering the same horrific ordeal?

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Yes; I have already read the report. It makes a number of important recommendations, which we will respond to fully in due course; and yes, joint working is happening between the Home Office and the Department for Education, the Department of Health and the Department for Communities and Local Government, as there are clearly a number of problems that need to be solved and they cross the governmental spectrum. We need to solve all of them before we can get a full grip on this issue.

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The fee for a firearms or shotgun certificate for a new applicant is £50. That has not changed since 2001, but research shows that the cost to the taxpayer of granting such a licence is £189. Does the Minister agree that there is absolutely no case for subsidising those who wish to obtain those licences for recreation and leisure purposes, and that they should be charged more?

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I am conscious that the Association of Chief Police Officers has made representations about the cost of gun licences, and the Government are looking at the issue very carefully.

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Last but not least, I call Grahame M. Morris.

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I welcome reports that the Government intend to introduce stronger and clearer guidance on how the police should issue firearms licences, but may I point out to the Minister that following the multiple fatal shootings in my constituency on new year’s day 2010, ACPO, the coroner and the Independent Police Complaints Commission found that the police had not looked at the guidance?

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I am sure they do. As the hon. Gentleman will know, I have met his constituent, Bobby Turnbull, and will do so again shortly. As the hon. Gentleman says, apart from the issue of the cost of licences, we are issuing completely new guidance, which we will do by the end of this year.

Bilderberg Conference

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(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the Bilderberg conference, which he attended.

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This is a first occasion for me, as I have never previously answered a question in the House of Commons on behalf of a private organisation for which the Government have no responsibility. I have been a member of the steering committee of Bilderberg for many years now—about 10 years, I think—and by chance this will be my last year, as we have a rule against being on the committee for too long, so I am on the point of stepping down. [Interruption.] Other roles are timeless, with no rules at all, but in this role I have now reached the end of my allotted span.

The Bilderberg organisation exists for the purpose of holding meetings once a year in various countries; it exists for no other purpose. This year, the meeting was held at a large hotel near Watford in Hertfordshire. I did not receive adequate notice of the right hon. Gentleman’s question—because I was not found in time—to put to hand the list of those who participated and the agenda we discussed. We always circulate those before the meeting, and they are readily available. I can certainly put any hon. Member in touch with a source of the list of those who took part.

Each year, we invite over 100 people—it was about 140 this year—drawn from both sides of the Atlantic; from Europe including Turkey; and from the United States and Canada. The people who attend are drawn from the worlds of government, politics, academia, defence and journalism. The people who attend change slightly each year. There is a core of those who attend regularly; different people come—[Interruption.] Well, I am trying to guess why on earth a parliamentary question has been asked about this and in what people are interested.

All the people who attend do so as individuals; we invite people as individuals. Nobody attends representing any particular organisation to which they might belong. A very interesting two or three days take place in which we have discussions on matters of public affairs. A very wide range of experience and a very wide range of political opinion is represented. I always find that it greatly adds to the depth of my understanding of what is being talked about and contemplated in many parts of the United States and in Europe as well. It is one of the many political gatherings I attend from time to time as part of the background to my activities.

If the right hon. Member for Oldham West and Royton (Mr Meacher) finds something deeply disturbing in all this, I can advise only that he finds different people on the internet with whom to exchange tweets, and perhaps the House might be allowed to return to some matter of rather more real public interest in which this House of Commons has a role to play.

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I thank the right hon. and learned Gentleman for that filibuster. The Bilderberg conference involves about 130 of the western world’s top decision makers from the banks, the multinational companies, the European Commission—[Interruption.] I am coming to the politicians. It also involves representatives of the World Trade Organisation, the International Monetary Fund and the World Bank, and, of course, leading politicians from the United States, Canada, the eurozone and the United Kingdom. Given that those people were clearly discussing some of the biggest issues confronting the western economies at this time, why have we heard no statement from the Prime Minister, the Chancellor or, indeed, the Minister without Portfolio, all of whom attended in an official capacity? Why did none of them offer a statement, although decisions of this kind may well have a significant effect on UK Government policy or the livelihood of future UK citizens?

It is said by some, including the right hon. and learned Gentleman, that Bilderberg is a conspiracy. Of course it is not a conspiracy. Nevertheless, 130 of the world’s top decision makers do not travel thousands of miles simply for a cosy chat. Those people came here in order to concert their plans to deal with a particularly awkward stage in western capitalism, and in view of that we, the public, are entitled to ask some questions and to hold them to account. The Prime Minister said in 2010:

“For too long those in power made decisions behind closed doors…and denied people the power to hold them to account. This coalition is driving a wrecking ball through that culture—and it’s called transparency.”

In the same year, the Chancellor himself announced his commitment to

“the most radical transparency agenda that the country has ever seen.”—[Official Report, 8 June 2010; Vol. 511, c. 206.]

So why is there no transparency about a very crucial meeting that could affect us all?

Finally, can the right hon. and learned Gentleman explain how at the start of last week the Prime Minister could announce a crackdown on corruption and lack of transparency among lobbyists, and by the end of the week he and the Chancellor could be insisting that the largest and most powerful lobbyists’ group in the western hemisphere—an anti-democratic cabal if ever there was one—should operate in conditions of utter blackout and complete secrecy?

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The Bilderberg meeting does not make any decisions. It does not have any resolutions. We could not possibly reach decisions, because of the range of opinions represented there. It is purely a Chatham House rules discussion between the people to whom the right hon. Gentleman referred. The shadow Chancellor was there, Peter Mandelson was there, the Prime Minister was there, the Chancellor of the Exchequer was there, and most of us said things during the discussion that would not have come as a surprise to any of us, because we knew what our opinions were. We go there for the chance of having an off-the-record, informal discussion with the range of people described by the right hon. Gentleman, who are indeed distinguished, but who are not remotely interested in getting together to decide or organise anything.

If the right hon. Gentleman would like an invitation—if that is what really lies behind his question—I will take his own distinguished claims to participation in the group carefully into account, although I will of course consult the shadow Chancellor before taking that a step further.

Let me say with the greatest respect that this is total, utter nonsense. I would normally regard the right hon. Gentleman as not the sort of person to be taken in by this sort of rubbish. We all take part in lots of political and other discussions as private individuals, under Chatham House rules, and we do not expect everyone to go out giving a version of what we have just said. No one alters their opinions when we are there. As for transparency, this Government are by a street the most transparent Government I have ever been in, but we can only be transparent in regard to things for which the Government have responsibility, and for what we are doing as a Government.

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Order. The Minister without Portfolio said, rather prosaically I thought, that Peter Mandelson was there. I assume he was referring to no less a figure than Lord Mandelson of Foy. I think that is the person he had in mind.

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No, we all attend extremely informally; we are not there in any capacity.

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Order. The Minister can resume his seat. No one in the House has a better sense of humour than the Minister, but I thought that he realised that I was gently teasing him.

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Is it not rather cruel to oblige the Prime Minister to spend a weekend with Lord Mandelson of Foy and the shadow Chancellor? Did anyone at the Bilderberg conference go away any the wiser as to how the Labour party, if it were to win the next general election, would square the circle and manage to tackle the deficit?

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I can only hope that some people did, but Chatham House rules prevent me from offering any further opinion on that question.

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The idea of Lord Mandelson attending any meeting informally is not something I have ever experienced.

As one of the British parliamentarians who attended the weekend meeting in Watford, alongside the Prime Minister, the Chancellor, Lord Mandelson, Baroness Williams and the Minister without Portfolio himself, may I ask the right hon. and learned Gentleman whether he agrees that it is important that Ministers and shadow Ministers meet regularly to discuss important issues with fellow Ministers and Opposition politicians, academics, journalists and business leaders from around the world? Can he confirm that over the past 60 years the annual Bilderberg meeting has properly been attended by Prime Ministers, Chancellors and shadow Ministers from all parties, including Lord Healey, Lord Ashdown and the late John Smith?

Does the Minister without Portfolio agree that it is welcome that the Bilderberg group now publishes a list of all those who attend the meeting and the topics that are discussed? Does he agree that the list of topics on this weekend's agenda, including “Can the US and Europe grow faster and create jobs?”, “Africa's challenges”, “Trends in medical research” and “Developments in the middle east” are vital issues with which every Government and Opposition must grapple for the benefit of all citizens?

We fully understand that it is because the Minister without Portfolio is a member of the Bilderberg steering group that he is well qualified today to answer the urgent question that was addressed to the Chancellor; he is not doing so because of his economic expertise. If on the other hand the Minister without Portfolio were to stand in at the next Treasury questions, we and all conspiracy theorists would rightly be concerned.

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I am grateful to the right hon. Gentleman for perhaps addressing the question more straightforwardly than I did. He is obviously feeling a little defensive. He is dealing with it a little more seriously and probably much more wisely than I did. Everything he said is entirely right. I have attended Bilderberg meetings for many years. The only reason I attend is that my own understanding of political and economic problems in various parts of the world is improved by the opportunity to have an informal weekend with the kind of people who go to the conference. Discussing things with, among others, the shadow Chancellor in a completely informal way, off the record, is also of considerable value. I am sure that he agrees that we derive a great deal from the meeting and we hope that it improves our contribution to debates here, too.

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Our hon. Friend the Member for Penrith and The Border (Rory Stewart) was invited to a previous Bilderberg conference, and I wonder whether the Minister, as a member of the steering committee, could tell us why he has been dropped. Has he done something wrong?

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Every year, about half those participating have never been before. Quite a lot of people come only for one meeting. The number of people who come every year is comparatively small—there is a kind of core and for some extraordinary reason I have been a part of that core over the past decade. My hon. Friend the Member for Penrith and The Border (Rory Stewart) made a most distinguished contribution but he should not be disappointed that he was not invited again. The British committee was trying to bring in a rising star of a younger generation, because we do not want the whole thing to become an ageing establishment of people who used to be something important in government. I have no doubt that one day my hon. Friend will be implored to attend again, but I cannot guarantee when that will be.

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I call Mr Dennis Skinner.

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Have you been there, Dennis?

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I wouldn’t be seen dead with them.

How come when all those media moguls, the bankers and politicians have been meeting together since 1954, not one of them was able to spot the recession coming—or maybe they caused it?

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We have had trade unions there sometimes, and there are plenty of social democrats. I do not think anybody as left wing as the hon. Gentleman has ever attended, but if I scratch my memory I will probably remember somebody. Obviously, the hon. Gentleman forecast with absolute precision the collapse of capitalism in 2007. In that respect, I agree that his foresight was rather better than that of most pundits. We continue to meet, in the hope that next time we will see it coming with slightly more clarity.

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As many UKIP voters fear that the Bilderberg group is a plot to promote more unaccountable European government, can my right hon. and learned Friend give them any reassurance or suggest why they might be wrong in that thought?

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Nowadays we get accused of plots to establish a Government of the world, to poison the local watercourses, and to plan an invasion of the United States of America. Ten years ago, I was told I was attending a plot to hand over Britain to Brussels and to subordinate us to a “United States of Europe”, and the next instalment of the plot will come later. I cite that example in order to point out that a fellow member of the steering committee was Mr Conrad Black, and in private, as in public, Mr Conrad Black was not in favour of handing anything over to Brussels and was not in any way furthering that cause. I regret to say that Mr Black is, as I recall, the only member who ever attended who has since had the misfortune to be sentenced to a term of imprisonment, whereupon he withdrew from the Bilderberg meetings.

Seriously, however, I assure my right hon. Friend that the full range of opinion from left to right from across western Europe is pretty well represented at Bilderberg. That in itself shows that the idea that we are furthering any kind of agenda is absolute nonsense. If I were plotting to do anything, I would not assemble that particular group of people, because we would never agree on an objective.

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Can the Minister confirm that he declared his trusteeship of the body that funds the conference to his permanent secretary when he was appointed by the Prime Minister?

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I congratulate the hon. Gentleman. I am looking that up, because I had forgotten. Actually, I am a member of the steering committee. When we were hosting at Watford, I discovered that I am, among other things, a trustee of the British steering group, so I am checking, with the aid of my constituency office, whether I ever put that in. I assure the hon. Gentleman that I had completely forgotten that it was set up on that basis, long before the rules were established. The trustees have never met as trustees. All I actually do is sit as a member of a committee and play my part in helping with the organisation of a meeting, and that is all I have ever done.

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We have had a bit of fun today—indeed, who would want to spend a weekend of irredeemable tedium discussing world economics with a bunch of establishment toffs? Surely the serious point is this, however: why on earth does the House of Commons think it is necessary to discuss what was said in a private meeting?

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Perhaps my hon. Friend was not here when I started answering this question and said that this is the first time I have ever risen in the House of Commons to answer questions on behalf of a private organisation for which the British Government have absolutely no responsibility.

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I know I cannot be described as a rising star, so should I not presume that my invitation was lost in the post? Can the Minister say whether or not, either formally or informally, he took the opportunity while at the conference to discuss his campaign to keep the UK within the European Union, and which members of the EU were there?

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My hon. Friend will not be surprised to learn that I do not think I am being too indiscreet when I say that the subject of the future of the European Union and Britain’s participation in it did come up from time to time over the weekend. People from many countries have quite a strong interest in that subject, so it was discussed, but under Chatham House rules, and I can assure him that no conclusions of any kind were reached.

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Is my right hon. and learned Friend the only British citizen on the steering committee, and who does he think his replacement will be?

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The other members at the moment are John Kerr and Marcus Agius, and I do not know who my successor will be. We are slightly overrepresented on the steering committee, which is probably a reflection of the quality of debate in this place and elsewhere in the United Kingdom.

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Order. I think the matters have been fairly fully explored.

GCHQ

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With permission, Mr Speaker, I shall make a statement on the work of the Government Communications Headquarters—GCHQ—its legal framework and recent publicity about it. As Foreign Secretary, I am responsible for the work of GCHQ and the Secret Intelligence Service—MI6—under the overall authority of the Prime Minister. My right hon. Friend the Home Secretary is responsible for the work of the Security Service, MI5.

Over the past few days, there have been a series of media disclosures of classified US documents relating to the collection of intelligence by US agencies, and questions about the role of GCHQ. The US Administration have begun a review into the circumstances of these leaks in conjunction with the Justice Department and the US intelligence community. President Obama has been clear that US work in this area is fully overseen and authorised by Congress and relevant judicial bodies, and that his Administration are committed to respecting the civil liberties and privacy of their citizens.

The Government deplore the leaking of any classified information, wherever it occurs. Such leaks can make the work of maintaining the security of our own country and that of our allies more difficult, and by providing a partial and potentially misleading picture they give rise to public concerns. It has been the policy of successive British Governments not to comment on the detail of intelligence operations. The House will therefore understand that I will not be drawn into confirming or denying any aspect of leaked information. I will be as informative as possible, to give reassurance to the public and Parliament. We want the British people to have confidence in the work of our intelligence agencies, and in their adherence to the law and democratic values, but I also wish to be very clear that I will take great care in this statement and in answering questions to say nothing that gives any clue or comfort to terrorists, criminals and foreign intelligence services as they seek to do harm to this country and its people.

Three issues have arisen in recent days that I wish to address. First, I will describe the action that the Government are taking in response to recent events. Secondly, I will set out how our intelligence agencies work in accordance with UK law and subject to democratic oversight. Thirdly, I will describe how the law is upheld with respect to intelligence co-operation with the United States, and deal with specific questions that have been raised about the work of GCHQ.

First, in respect of the action we have taken, the Intelligence and Security Committee has already received some information from GCHQ and will receive a full report tomorrow. My right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind), who chairs the Intelligence and Security Committee, is travelling to the United States on a long-planned visit with the rest of the Committee. As he has said, the Committee will be free to decide what, if any, further action it should take in the light of that report. The Government and the agencies will co-operate fully with the Committee, and I pay tribute to its members and their predecessors from all parties.

Secondly, the ISC’s work is one part of the strong framework of democratic accountability and oversight that governs the use of secret intelligence in the United Kingdom, which successive Governments have worked to strengthen. At its heart are two Acts of Parliament: the Intelligence Services Act 1994 and the Regulation of Investigatory Powers Act 2000.

The Acts require GCHQ and the other agencies to seek authorisation for their operations from a Secretary of State, normally the Foreign Secretary or Home Secretary. As Foreign Secretary, I receive hundreds of operational proposals from the SIS and GCHQ every year. The proposals are detailed: they set out the planned operation, the potential risks and the intended benefits of the intelligence. They include comprehensive legal advice describing the basis for the operation, and comments from senior Foreign Office officials and lawyers. To intercept the content of any individual’s communications in the UK requires a warrant signed personally by me, the Home Secretary, or by another Secretary of State. This is no casual process. Every decision is based on extensive legal and policy advice. Warrants are legally required to be necessary, proportionate and carefully targeted, and we judge them on that basis.

Considerations of privacy are also at the forefront of our minds, as I believe they will have been in the minds of our predecessors. We take great care to balance individual privacy with our duty to safeguard the public and the UK’s national security. These are often difficult and finely judged decisions, and we do not approve every proposal put before us by the agencies. All the authorisations that the Home Secretary and I give are subject to independent review by an Intelligence Services Commissioner and an Interception of Communications Commissioner, both of whom must have held high judicial office and report directly to the Prime Minister. They review the way these decisions are made to ensure that they are fully compliant with the law. They have full access to all the information that they need to carry out their responsibilities, and their reports are publicly available. It is vital that we have that framework of democratic accountability and scrutiny.

I have nothing but praise for the professionalism, dedication and integrity of the men and women of GCHQ. I know from my work with them how seriously they take their obligations under UK and international law. Indeed, in his most recent report, the Interception of Communications Commissioner said:

“it is my belief…that GCHQ staff conduct themselves with the highest levels of integrity and legal compliance.”

This combination of needing a warrant from one of the most senior members of the Government, decided on the basis of detailed legal advice, and such decisions being reviewed by independent commissioners and implemented by agencies with strong legal and ethical frameworks, with the addition of parliamentary scrutiny by the ISC, whose powers are being increased, provides one of the strongest systems of checks and balances and democratic accountability for secret intelligence anywhere in the world.

Thirdly, I want to set out how UK law is upheld in respect of information received from the United States, and to address the specific questions about the role of GCHQ. Since the 1940s, GCHQ and its American equivalents—now the National Security Agency—have had a relationship that is unique in the world. This relationship has been and remains essential to the security of both nations, has stopped many terrorist and espionage plots against this country, and has saved many lives. The basic principles by which that co-operation operates have not changed over time. Indeed, I wish to emphasise to the House that although we have experienced an extremely busy period in intelligence and diplomacy in the past three years, the arrangements for oversight, and the general framework for exchanging information with the United States, are the same as under previous Governments. The growing and diffuse nature of threats from terrorists, criminals or espionage has only increased the importance of our intelligence relationship with the United States. That was particularly the case in the run-up to the Olympics. The House will not be surprised to hear that our activity to counter terrorism intensified and rose to a peak in the summer of last year.

It has been suggested that GCHQ uses our partnership with the United States to get around UK law, obtaining information that it cannot legally obtain in the United Kingdom. I wish to be absolutely clear that that accusation is baseless. Any data obtained by us from the United States involving UK nationals are subject to proper UK statutory controls and safeguards, including the relevant sections of the Intelligence Services Act, the Human Rights Act 1998, and the Regulation of Investigatory Powers Act.

Our intelligence-sharing work with the United States is subject to ministerial and independent oversight, and to scrutiny by the Intelligence and Security Committee. Our agencies practise and uphold UK law at all times, even when dealing with information from outside the United Kingdom. The combination of a robust legal framework, ministerial responsibility, scrutiny by the intelligence services commissioners, and parliamentary accountability through the Intelligence and Security Committee should give a high level of confidence that the system works as intended.

That does not mean that we do not have to work to strengthen public confidence whenever we can, while maintaining the secrecy necessary to intelligence work. We have strengthened the role of the ISC through the Justice and Security Act 2013, to include oversight of the agencies’ operations as well as their policy, administration and finances. We have introduced the National Security Council so that intelligence is weighed and assessed alongside all other sources of information available to the Government, including diplomatic reporting and the insights of other Government Departments, and all that information is judged carefully in deciding the Government’s overall strategy and objectives.

There is no doubt that secret intelligence, including the work of GCHQ, is vital to our country. It enables us to detect threats against our country ranging from nuclear proliferation to cyber attack. Our agencies work to prevent serious and organised crime, and to protect our economy against those trying to steal our intellectual property. They disrupt complex plots against our country, such as when individuals travel abroad to gain terrorist training and prepare attacks. They support the work of our armed forces overseas and help to protect the lives of our men and women in uniform, and they work to help other countries lawfully to build the capacity and willingness to investigate and disrupt terrorists in their countries, before threats reach us in the United Kingdom.

We should never forget that threats are launched at us secretly, new weapons systems and tactics are developed secretly, and countries or terrorist groups that plan attacks or operations against us do so in secrecy. So the methods we use to combat these threats must be secret, just as they must always be lawful. If the citizens of this country could see the time and care taken in making these decisions, the carefully targeted nature of all our interventions, and the strict controls in place to ensure that the law and our democratic values are upheld, and if they could witness, as I do, the integrity and professionalism of the men and women of our intelligence agencies, who are among our nation’s very finest public servants, I believe they would be reassured by how we go about this essential work.

The British people can be confident in the way our agencies work to keep them safe. Would-be terrorists, those seeking to spy against this country or those who are the centre of organised crime should be aware that this country has the capability and partnerships to protect its citizens against the full range of threats in the 21st century, and that we will always do so in accordance with our laws and values, but with constant resolve and determination.

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I thank the Foreign Secretary for his statement and for advance sight of it this afternoon. The House will be aware that on Saturday the Opposition, along with other Members of this House, called for the Foreign Secretary to address Parliament today, and we welcome his decision to do so in recognition of the depth of public concern that has arisen in recent days.

I begin my remarks by echoing the words of the Foreign Secretary and put on record the support and admiration of the whole House for the important—indeed, vital—work that is done by our country’s intelligence and security services. Theirs is some of the most important but inevitably least recognised work undertaken to protect the security of our nation, and it is right that we take the opportunity to offer our thanks and praise for their efforts. Our intelligence agencies’ work would be made more difficult if levels of concern about the framework under which they operate were to compromise the active support of the public for their efforts. In the light of that, I shall quote back to the Foreign Secretary his words in a BBC interview yesterday:

“if you are a law abiding citizen of this country going about your business and your personal life, you have nothing to fear—nothing to fear about the British state or intelligence agencies listening to the contents of your phone calls or anything like that.”

This assertion, however, assumes that the state is either incapable of error or incapable of advertent or inadvertent wrongdoing.

Surely, on reflection, the Foreign Secretary will accept that law-abiding citizens of this country also want to know and be assured of the fact that the agencies of government are themselves law-abiding. Back in 2011, the Foreign Secretary seemed to recognise the importance of this point when in a speech on the role of the Security Services he said that

“the need for secrecy places additional importance on the Foreign Secretary’s accountability to Parliament for GCHQ and SIS. This is one of the indispensable foundations of public confidence, and one that I will personally strive to strengthen.”

Today presents him with a clear opportunity to deliver on that pledge, and I hope that in his answers to my specific questions he will be able to do so.

The Foreign Secretary is right to assume that lawyers, some law-makers and the members of the ISC may be very familiar with the framework of legality and accountability, but the general public, for understandable reasons, are not. In the light of that, will he take the opportunity of his response to remind the House of the steps we in Parliament have taken to preserve privacy, and set out whether all steps taken by our agencies are, to the best of his knowledge, compliant with those laws? It is in this spirit, not of condemnation but of concern, that I would like to ask the Foreign Secretary some questions about the recent allegations first revealed by The Guardian on Friday of last week about the existence and operation of the so-called Prism programme administered by the NSA.

Let me first make it clear that the Opposition support the principle of information sharing across international borders with allies. Indeed, the people who want to do harm to the UK work across international borders, and those people working to keep us safe have to be able to work with allies across international borders if they are to tackle these threats effectively. But that needs to be within that established framework of both law and accountability. The Foreign Secretary is right to say that full disclosure on this issue is not possible nor appropriate, so let me focus my questions not on the specific operational aspect of the allegations, but on the broader legal and policy frameworks that would apply in these circumstances.

Earlier this morning, the Chair of the Intelligence and Security Committee, the right hon. and learned Member for Kensington (Sir Malcolm Rifkind), gave his account of the legal framework that would govern British intelligence agencies’ use of intercept data. He said:

“If the British intelligence agencies are seeking to know the content of emails about people living in the UK then they actually have to get lawful authority. Normally that means ministerial authority. That applies equally whether they are going to do the intercept themselves or whether they are going to ask somebody else to do it on their behalf.”

Will the Foreign Secretary confirm whether that account of the current legal framework is both complete and accurate?

In his statement, the Foreign Secretary has just stated: “Any data obtained by us from the United States involving UK nationals are subject to proper UK statutory controls and safeguards, including the relevant sections of the Intelligence Services Act 1994, the Human Rights Act 1998 and the Regulation of Investigatory Powers Act 2000.” Will he now set out the relevant sections of those Acts, and confirm whether this explanation means that any data obtained by us from the US, involving UK nationals, are authorised by ministerial warrants and overseen by the intercept commissioner, as set out by RIPA?

Specifically, what legal framework applies in the following two cases? First, when a request is made by the UK to an intelligence agency of an international ally for the interception of the content of private communications, will he confirm whether this process is governed by individual warrants signed by the relevant Secretary of State and approved by the intercept commissioner as set out in part I of RIPA? Secondly, will he address the specific issue of when a request is made by the UK to an intelligence agency of an international ally, not to seek intercept, but instead to search existing data held by that agency on the contents of private communications, and, in particular, the legal process that will be adopted in such an instance? In that circumstance, will he confirm whether this process is also governed by individual warrants signed by the relevant Secretary of State and approved by the intercept commissioner as set out in part I of RIPA?

Will the Foreign Secretary confirm that, with respect to intelligence sharing with allies, the UK Government operate on the basis of the assumption that information held by, for example, the US Government, has been obtained in accordance with the law of that country? If that is the case, what steps has he taken, or will take, to confirm that any processes currently in use by the NSA continue to adhere to this legal safeguard?

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Order. The shadow Foreign Secretary has now exceeded his allotted time, so I feel sure that he is in his last sentence.

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Thank you, Mr Speaker.

To conclude, all of us in this House have an interest in sustaining public confidence in the work of the intelligence agencies. Those agencies, each and every day, do outstanding work on behalf of and for the sake of us all. That is why Ministers and the ISC now have a heavy burden of responsibility to oversee and scrutinise their work, so as to reassure the public.

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I am grateful to the right hon. Gentleman and pleased that he began his remarks by expressing the support and admiration across the House for the work of the intelligence agencies. Many former Ministers from the previous Government—indeed, there are some specific ones here today—know that well. He was right to say that the work of those agencies is among the most important and least recognised that goes into protecting this country, so there is strong common ground across the House on that.

The right hon. Gentleman said that we should be able, now and in future, to give people assurances about the law-abiding nature of the work of the agencies, which of course is a large part of the purpose of what I have just explained to the House. I am not saying that the agencies, anyone who works in them or, indeed, Ministers are incapable of error—that can happen in any organisation—but I am arguing that there is a strong system of checks and balances. A combination of ministerial oversight, independent scrutiny, parliamentary oversight, the legal framework and the strong ethical framework of the agencies themselves minimises the chance of errors happening in any sinister way.

Sometimes people can get the impression, when reading discussions in the media about this, that there is a danger of a “deep state” that is in some way out of control. There is not that danger in the United Kingdom. Of course everyone is capable of error, but the protection of this country’s citizens from such error is very strong indeed. I must stress that there will always be ways of improving procedures—many improvements have been made in recent years, under successive Administrations—and there are always new situations that arise in intelligence gathering that require additions to or the refinement of the legal basis of what we do and the practices and procedures by which we do that work. I do not argue at all that everything is definitely perfect, and certainly not for all time, with regard to whether in future there could be any improvements in procedures in some areas, because I am sure that there could be. The Intelligence and Security Committee will be able to look at that and make recommendations if it so wishes, and of course within the Government that is something that is constantly looked at and subject to change.

The right hon. Gentleman is right that there is no reason why the general public would be familiar with the framework I have set out for the House. I was the first Foreign Secretary to make a speech, in November 2011—it might have been widely unnoticed in the House—about the role of secret intelligence in foreign policy, in which I set out for the public what the guarantees are and what the legal framework is. This, in a way, is an opportunity to set that out clearly to the country.

The right hon. Gentleman was right to say that he supports information sharing with our allies. The position on the legal framework is exactly as I set out in my statement: any data obtained by us from the United States about UK nationals are subject to the full range of Acts, including section 3 of the Intelligence Services Act 1994 and the RIPA provisions, set out in sections 15 and 16, which regulate that information gathering must be necessary and proportionate and regulate how the agencies must handle information when they obtain it.

On the right hon. Gentleman’s further questions about how authority is given, I cannot give him, for reasons that I cannot explain in public, as detailed an answer as he would like. I would love to give him what could actually be a very helpful answer, but because circumstances and procedures vary according to the situation, I do not want to give a categorical answer—in a small respect circumstances might differ occasionally. But I can say that ministerial oversight and independent scrutiny is there, and there is scrutiny of the ISC in all these situations, so, again, the idea that operations are carried out without ministerial oversight, somehow getting around UK law, is mistaken. I am afraid that I cannot be more specific than that.

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Nobody in this House, and certainly not me, would dispute the value of well-targeted intelligence. Central to this issue are the US FISA—Foreign Intelligence Surveillance Act—laws, which distinguish between American citizens, who receive rigorous protection of their privacy, and all other foreigners, including British citizens, who receive, in essence, no protection. When the Americans are concerned about assaults on their citizens, they pursue this with an aggression that would make Lord Palmerston proud, most obviously through the extradition arrangements, for example. Has the Foreign Secretary made any representations to the American authorities about the protection of innocent British citizens’ privacy under their FISA laws?

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We apply our own laws. The United States decides its own laws and applies its own laws in the United States. We do so in the United Kingdom as well. That is the central point that I am making about this. All the Acts that we have passed in this Parliament relating to the gathering of intelligence are applied to data supplied from other countries. While I cannot give my right hon. Friend a specific answer about specific discussions, of course we regularly discuss with the United States the framework for these things to make sure, as best we can, that our values and our legal frameworks are upheld and that the strong emphasis on the privacy of the citizen is always there. As he will have seen in the statements of President Obama, the United States is very, very tough about that as well. When the UK and US both work together, each with a strong legal framework, the combined effect is a very strong and protective one.

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Does the Secretary of State accept that many of our allies, leaving aside the United States, are astonished by the degree of control and supervision of our system of ministerial oversight, oversight by judicially qualified commissioners and oversight by the ISC, which surpasses that of most other western democracies?

Does Secretary of State also accept that those in the agencies face an impossible dilemma? When things are relatively calm, suspicions, fantasies and sometimes paranoia can take off about the so-called secret state, but the moment there is a serious threat or actual terrorist outrage, often the very same people and newspapers turn on a sixpence and demand to know not whether the safeguards were operated but why there has been a failure by the agencies to track, through intelligence of all kinds, the miscreants involved.

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The right hon. Gentleman is absolutely right; as a former Foreign Secretary he is very experienced in these matters. I argued in my statement that, as he knows very well, the system of checks and balances and scrutiny that we have is among the strongest in the world; it could be the strongest in the world. Yes, he is right that the agencies easily come in for criticism when anything goes wrong and yet have to ensure at all times that they are gathering all the information they ought to be obtaining. They undertake a task for which they are not thanked and recognised often enough. They have achieved a great deal in frustrating attacks on this country, including, in recent years, planned terrorist attacks on this country, some of which we cannot talk about as they are not known to the public. It is therefore difficult to give them the recognition that they deserve. That is the scale and the importance of this crucial work.

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I declare a strong constituency interest.

Veterans of Bletchley Park, such as my own parents, were and are widely described as heroes for the secret victories that we can now talk about, they having kept their secrets for many decades. Does the Foreign Secretary agree that GCHQ, as Bletchley’s successor, does equally vital but equally secret work, and that hon. Members might have to exercise just a fraction of that kind of self-restraint in allowing some of the perfectly legitimate questions about Prism to be answered in private to elected members of the Intelligence and Security Committee, which we have set up for precisely this purpose?

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My hon. Friend has spoken well about GCHQ and the work of his constituents, which he and I both greatly admire. Of course, the Intelligence and Security Committee is able to look at any aspects, including secret and top secret ones, of this discussion. The ISC, for those outside the House who may not be aware of it, is a cross-party Committee of Members who are already very familiar with so many of the issues surrounding secret intelligence. That is the proper place for these issues to be gone into in detail. I am sure this House will show the necessary restraint in its questions and comments, and that they will be fitting for today’s discussion about secret intelligence.

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May I reinforce what my right hon. Friend the Member for Blackburn (Mr Straw) has said and confirm from my own experience what the Foreign Secretary has said about the legal and ethical framework and the safeguards? I know that to be true, and it is from that background that I ask this simple question. Yes, we need to dampen down fear and reinforce the fact that we are engaging with international cyber-attack and the dangers of international global terrorism; but, in reassuring people about how we handle their data, could we take a closer look at how other agencies, including the NSA and our friends and colleagues in the United States, use material gathered from network and service providers and offer it, rather than having it sought from them, in a way that makes authorisation extremely difficult?

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Like the right hon. Member for Blackburn, the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) speaks from his own experience of the highly professional work of the agencies. The point he raises reinforces the importance of our agencies applying and upholding the laws of the United Kingdom regarding the data they obtain from other intelligence agencies around the world. As I said earlier to the shadow Foreign Secretary, the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), there may well be occasions over the coming years when we will need to update and improve those procedures, to take account of changes in technology. I do not exclude that at all, but it re-emphasises the importance of applying our law in our country, which the agencies can be relied on to do.

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People will have great confidence in hearing what my right hon. Friend has said about requests for intercept and operations in this country having to be so very rigorous. Does he also agree that the highly complex nature of modern communications inevitably means that, from time to time, privacy may have to be breached in the interests of the security of our country and its people?

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Yes, of course: a would-be terrorist cannot rely on their privacy and nor can someone at the centre of organised crime. It is these decisions that my right hon. Friend the Home Secretary and I and, sometimes, other colleagues have to make. We take extra steps and extra care on privacy. The law explicitly requires us to make sure that our actions are necessary, proportionate and targeted, but we go beyond those requirements in assessing the impact on the privacy of individuals in order to try to make sure that it is only when absolutely necessary that we invade that privacy.

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One of the key motivations for the reform of the Intelligence and Security Committee was to help with transparency and to engage with the public and give confidence. Can the Foreign Secretary say whether any ISC report on Prism will be published, containing redactions that are as limited as possible?

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I cannot give an assurance that reports on these issues will be public because, as I argued in my statement, there is an important role for secret intelligence. Our deliberations about that must therefore be secret. The ISC makes a variety of reports, some of which are published and redacted, as the hon. Lady says. The ISC will have to consider the format of its report, but I cannot guarantee that its findings will be public.

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I congratulate my right hon. Friend on an excellent statement to the House in which the British people should have every confidence. Does he agree that, notwithstanding the reservations of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), the protection of the British people relies hugely on co-operation between the United Kingdom and the United States? Both countries face threats from China. In that regard, I wonder whether my right hon. Friend has any comments to make to the House about the illuminating report by the Intelligence and Security Committee last week?

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I am largely grateful to my hon. Friend for his question and for his strong support for the Government’s position. He is right to underline the extreme importance to our national security of our close and unique co-operation with the United States. It has been my general approach, as he knows, not to publicly point fingers or fling accusations at other countries about intelligence activities. Despite his tempting invitation, I will not do so today.

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As a former chair of the ISC, I have nothing but admiration for the work of GCHQ. The Foreign Secretary agrees that the ISC should investigate the allegations. Will he encourage the ISC to report swiftly to the Prime Minister, as is its custom, and then, if it is possible within the constraints of national security, to report to the House of Commons?

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The ISC should of course report to the Prime Minister. I do not want to pre-empt any decision that the Committee or the Prime Minister may make about the nature of any reporting to the public or to Parliament. I reiterate the cautionary words that I issued a moment ago. I am sure that the Committee will want to undertake its work swiftly, but only as swiftly as proper consideration of all the issues allows. We all want it to consider such questions thoroughly. That is the most important requirement.

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I very much welcome the statement by the Foreign Secretary. On the sharing of intelligence by GCHQ, will he clarify whether the United Kingdom provides location intelligence to the United States in relation to drone strikes in Afghanistan and Pakistan?

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As I explained in my statement, successive Governments have not commented on the details of how we use intelligence information. My statement was about the legal framework that governs such matters and the values that we uphold. I cannot and will not comment on what intelligence we share with other countries.

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Given the rather different approaches to privacy and data protection in Europe and the United States, what assessment has the Foreign Secretary made of the potential for this controversy to impact on the successful outcome of the EU-America free trade deal, and what are the Government doing to prevent it from having such an impact?

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I have no evidence of any such impact. Over the coming days, the Government and our European partners will be putting great effort into ensuring that rapid progress is made on a transatlantic trade and investment partnership. I see no reason why the questions raised in the media over the past few days should have a significant impact on that.

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The Foreign Secretary was right to say that in democracies it is important that some things are kept secret. However, it is equally important that Members of this House are free to have discussions without fear of interception by the Government. Will the Foreign Secretary confirm that no Member is having his phone tapped or his e-mails intercepted?

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There is a long-standing convention, named after a former Labour Prime Minister, which has always been upheld, so my hon. Friend and Mrs Bone can be assured of that.

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Can the Foreign Secretary assure the House that the Security Services have all the necessary tools to keep our citizens safe, even though at times that may mean the sacrifice of personal freedoms?

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They do have the tools. I said earlier that those tools need updating over time. I did not refer in my statement to the discussions on a communications data Bill, but there is a strong case for updating the tools we have at our disposal. Means of communication are changing more rapidly than at any time in the history of the world, which means that the range and nature of threats change. We must be careful to do that work, and the whole House should give fair consideration to such proposals.

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My right hon. Friend has confirmed that the Government and the intelligence services have no interest in random snooping into the private affairs of British citizens, but can he confirm to the House that, when well-founded security risks are identified, sufficient powers and freedoms are in place to undertake the investigations that may be necessary, or is it his opinion that enhanced freedoms and powers are now required?

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In my experience, we are well-equipped to conduct necessary investigations, but I return to the answer I gave to the previous question. There will be a constant need to update what we are able to do, without being diverted from the basic principle of ensuring that our intelligence gathering is on what is necessary, and that it is proportionate, targeted and always legal. Our laws do not provide for indiscriminate trawling for information through the contents of people’s communications. We do not need to change those basic principles, but we sometimes need to change aspects of the legal framework and where we are able to get information from. That work must go on in the coming years.

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Considering all the dangers for the individual concerned, why should we believe that the American whistleblower is telling a pack of lies? If a lot of what he is saying is true, then surely law-abiding citizens who are a million miles from any threat involved with terrorism should indeed be fearful.

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As you will have noticed, Mr Speaker, I have not commented on the individual concerned. I am not going to get into a running commentary on this or any other leak. It is not possible for any Government to do that while respecting the need to maintain the secrecy of our intelligence work. I do not want to get into that now, but I stress again the very strong legal framework in this country. I believe people can have confidence in that.

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All our constituents should be grateful for the work of the Security Services, and some will owe their lives to their professionalism. Can the Foreign Secretary confirm that one of the biggest threats to our national security is stolen identities? Surely GCHQ has to be ever more innovative to stay one step in front.

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My hon. Friend is right to draw attention to that. Part of the work of GCHQ is to make it easier for us to combat serious and organised crime. In many ways, the privacy of the citizens of this country benefits substantially from the work of our agencies, because of what they are doing to protect the country. There is a strong argument to be made about that, rather than that their privacy is invaded. So that is a growing threat, and in many cases it is up to the private sector, working with GCHQ, to ensure that we are well equipped to defeat it.

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As one who continues to campaign for the young US-British soldier Bradley Manning, and exchanges e-mails and telephone calls with his defence counsel, can I assume that I am free from any surveillance, either from the United States or Britain?

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I can only reiterate what I said to my hon. Friend the Member for Wellingborough (Mr Bone) about the Wilson doctrine, and I believe that the right hon. Lady can be confident in that.

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rose—

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Time for a dose from the doctor.

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Many British people use the online tools affected by Prism and many British companies will have commercially sensitive data on there—many people in government as well. The Americans are partly protected, but what rules are there on the collection of British data by the NSA or the uses that those data can be put to after they have been collected?

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The House will understand that I cannot speculate about the content of any leak or what has been argued in newspapers over the past few days, but we do have our own clear legal framework—the Regulation of Investigatory Powers Act 2000, the Intelligence Services Act 1994 and the Human Rights Act 1998, all of which apply to data obtained by this country through co-operation with the US, just as they apply to any data we obtain ourselves. I think that people can be confident about that.

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Given that EU data protection laws currently offer no protection against backdoor US surveillance of this sort, will the Foreign Secretary commit to pushing for stronger measures in the current EU proposals, or does he agree with the Justice Secretary, who is reported to have said that plans to strengthen protections for UK citizens and businesses from such unwarranted spying are “mad”?

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I think that the hon. Lady might be quoting the Justice Secretary slightly out of context, in that he will have been referring to other aspects of the proposals. I cannot give her any guarantee that these controversies make it easier to agree proposals for EU directives, but I will go with my right hon. Friend the Justice Secretary on these matters.

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Could the Guardian’s non-story be summed up as: foreign Government monitor international terrorists and share intelligence with their allies? Will the Foreign Secretary join me in paying tribute to our allies, who share intelligence so that British citizens remain safe, both here and abroad?

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I absolutely join in the tributes to our allies. We depend on the United States a great deal for our national security, particularly in intelligence matters, and they also depend on us. This is an important two-way relationship, greatly assisting the security of both nations, and reaffirms what an indispensible relationship this is for the UK.

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I think that 99% of the British public would agree that this is not about gathering information on terrorists. It is about the little fella—the fella who might be organising a demonstration against a rotten Government policy, or a trade unionist such as Len McCluskey or even Bob Crow organising a strike. I was involved in the 1984 miners’ strike, mind, and there was some funny intelligence work done then.

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I can only speak about the legal framework operating now on the basis of two Acts of Parliament, in 1994 and 2000, and I can assure the hon. Gentleman that if the Home Secretary and I were signing off interception warrants on political grounds, we would be in a great deal of trouble with the intercept commissioner and the ISC. The hon. Gentleman can be reassured about that.

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Does my right hon. Friend agree that our relationship with the US is a cornerstone of our national security infrastructure; that the exchange of material works both ways, aiding the US as well as the UK; that those who work on the paranoid assumption that this or some other programme is there to spy on UK and US citizens are wrong; and that a large proportion of the data collected is against third-party citizens in third-party countries?

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My hon. Friend is absolutely right, including about the importance of the relationship and about how inevitably the vast majority of work done together by the UK and US intelligence agencies is to guard against threats from elsewhere in the world.

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Following on from what my hon. Friend the Member for Blyth Valley (Mr Campbell) said, and the fact that GCHQ has been involved in trade union disputes for a long time, can the Foreign Secretary give me an assurance? He will not explain precisely how this interception takes place on the advice of a Minister; but surely, if the Prime Minister of the day in 1984 said that the miners and the NUM were the “enemy within”, would that not give the green light to GCHQ to intervene in every single coalfield? Because that is what we believed.

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We are in a different century now—we are 13 years into the 21st century. The challenges are different and the focus of the intelligence agencies is different from decades in the past and very different, of course, from during the cold war. It is important for Opposition Members below the Gangway to start to move with the times.

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Has not our national security relied for centuries on the effective intercept of communications? The Spanish armada was said to have been averted as much by the pen of Francis Walsingham as by the Royal Navy. Surely what has changed is the nature of those communications. The threat to the public comes not from the intelligence agencies, which have no interest at all in the communications of members of the public; but they will not be able to intercept communications if those data are not retained by providers.

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Since I refused to go back into the miners’ strike, I am reluctant to go into the Spanish armada, but the wider point that my right hon. Friend makes is of course absolutely correct. Two cross-party Committees in this House have looked at proposals for a communications data Bill, for instance, and said that changes are necessary, and he is adding to that point.

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Can the Secretary of State spell out to the House the precise difference between the legal framework applicable to the obtaining of intercept data by our intelligence services and that which applies to the use by our intelligence services of information obtained by their counterparts overseas?

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The legal framework is the one I have set out. The Acts that I have referred to, passed by Parliament, apply to all the intelligence gathered by the agencies. The hon. Gentleman will know that, for instance, section 3 of the Intelligence Services Act 1994 confers particular powers and roles on GCHQ, so these things are governed by the same Acts of Parliament. Procedures differ, of course, in many different situations. It is because I cannot describe all those situations in public that I cannot go into exactly what that means for procedures in every case. I therefore cannot go as far in reassuring the hon. Gentleman or the shadow Foreign Secretary as they would like, but if they could see the full details of what happens, I think they would take an enormous measure of reassurance from it.

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Given the comments of the right hon. Member for Blackburn (Mr Straw) and other former Cabinet Ministers on the Opposition Benches, can the House reasonably infer that there has been no change in policy with regard to GCHQ and information sharing from the last Government—in other words, that the system that prevails at present is identical to that pertained when Labour was in government?

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The challenges of gathering intelligence change over time, so I would not want to give the House the impression that all practices and techniques are exactly the same or used in the same way. I can say, as I said in my statement, that the general framework remains the same—the principles of our intelligence sharing with the United States and the general framework for it certainly remain the same. The values on which it is based also remain the same, as under successive Governments.

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We know that the Foreign Secretary, the Home Secretary and all his right hon. Friends in the Conservative party Cabinet want the retention of large swathes of personal data, and he is prepared to compromise our civil liberties to obtain that, but does this episode not demonstrate what could go wrong if we had a home-grown snooper’s charter?

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I think the hon. Gentleman is referring to the draft Communications Data Bill, which I have already mentioned in earlier answers. Two parliamentary Committees have considered the draft Bill and concluded that there is a need for legislation in this area, and the Government are committed to bringing forward proposals on that in the near future.

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We are actually at cyber-war at the moment. Since 2000, the cyber-attacks on this country have multiplied some twentyfold. The Chinese held an exercise last week that they called a digital technology exercise at divisional level, involving men in uniform who are designed specifically to attack the west. Hacking can be far more deadly than a gun. May I encourage the Foreign Secretary and all his colleagues to ensure that GCHQ is as close to the National Security Agency as possible in the future?

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As I have said, GCHQ has a unique relationship with the National Security Agency. My hon. Friend is right to say that cyber-attack is an increasing threat in many different areas of government and of life in general. That is why the Government decided, in the strategic defence and security review three years ago, to invest an additional £650 million in our cyber-capabilities over a four-year period. The United Kingdom is one of the world leaders in cyber-defence and cyber-capabilities, and we are determined that we will remain in that position.

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For clarity, will the Foreign Secretary tell us whether he was told how the NSA collects this information, and on what date he was made aware of the Prism project?

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I go back to what I have said about being unable to confirm or deny leaked information. I am not commenting at all on information that has appeared in the newspapers. There might be leaks in the future from who knows what agency, and I would take the same view in such circumstances. We cannot conduct ourselves in these matters by commenting on every leak that takes place. The Intelligence and Security Committee will be able to look at these questions, but I cannot tell the hon. Gentleman in public the answers to the questions that he is raising.

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Because this type of secret operation involves not just a legal problem but a difficult balancing of security and liberty, we should do more to explain what we are doing. An American citizen would have the right to an answer to the question that my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) asked about location information being offered for American drone strikes. Unless we begin to explain more to the public, secret operations will not be sustainable in the long term. The public must understand and, through understanding, consent.

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I go a certain way with my hon. Friend on this. There is a need to explain to the public in this country more than we have done for decades about the role of secret intelligence, its purpose and what it achieves. However, I do not think that will mean that we are able to describe in detail how our co-operation with other countries works on operational matters, for many obvious reasons. It would make it more difficult for us to protect this country if other people knew the exact techniques that we used. Also, other countries would be less willing to share their intelligence with the UK if they thought that we were not good at keeping it to ourselves. But we certainly need to raise public awareness of the need for what we do, and I started to do that in my speech on this subject in 2011. Perhaps today’s statement will also have that effect.

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The Cathy Massiter case proved that, 50 years after the last war, intensive surveillance of peace activists, trade unionists and left-wing parties had failed to turn up a single spy, but it was discovered that in that same period, more than 20 members of the Secret Intelligence Service were spying for the Soviet Union. Since then, we have had untruths on weapons of mass destruction and a Government cover-up to this House on the handing over of prisoners to oppressive regimes to be tortured. Is the Foreign Secretary telling us today that the only people now under surveillance are the guilty? How does he manage that?

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I am telling the hon. Gentleman and the House about the many checks and balances and the strong legal framework. On all the controversies that he lists about the past—and they are controversies rather than necessarily facts—it would be fair to point out that there has been a constant process under successive Governments of improving how the intelligence agencies work. After the controversies over the use of intelligence in the Iraq war, for instance, we saw the Butler report, which has substantially changed the way intelligence is presented to Ministers and the way that Ministers decide. I referred in my statement to the creation of the National Security Council and to intelligence being given its due but proper weight alongside other information and considered in the round. The hon. Gentleman should take heart from the fact that such improvements take place.

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It is good to know that our legal framework is not lost on the Foreign Secretary. He tells us that there are no grounds for suggesting that GCHQ obtained information from the United States that it could not obtain legally in the UK. Is it also the case that there are standard procedures in place sufficient to prevent that from happening?

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What I have argued is that the idea of GCHQ setting out to circumvent UK law by co-operation with other countries is baseless. UK law is applied to the data it receives, even if it is received from the United States, because ministerial oversight and independent oversight is all there. Part of the purpose of that oversight is to ensure that the misuse of the powers and the role of GCHQ does not take place.

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The term is always used that the intelligence services always operate within a “legal framework”. Is the Foreign Secretary certain that “legal framework” always means ethically and within the law, and that peaceful democratically elected political parties in the UK are not involved?

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Well, yes, it does mean those things. It means that the legal framework is properly applied and what the agencies do has to be targeted, necessary, proportionate and authorised. It also has to be for the purposes set out in the relevant Acts of Parliament in the interests of national security, the country’s economic well-being or the prevention of serious crime and the protection of the country from it. These are the purposes of our intelligence agencies—and they stick to them.

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Is the Foreign Secretary absolutely confident that, if a member of staff working at GCHQ had real concerns about wrongdoing among colleagues, the channels exist for that member of staff to have their concerns heard without needing to go to the media?

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Yes, absolutely. In such a case, concerns can be raised through the management structure. There is also the Investigatory Powers Tribunal, to which members of the intelligence services can take complaints or concerns without having to do so in public.

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rose

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I call Margot James.

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I am so sorry, Mr Speaker, but I was just getting up to leave the Chamber.

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We are sorry the hon. Lady is taking her leave, but we will hear from her on other occasions. [Interruption.] She has nothing for which to apologise. I mistakenly thought she was trying to contribute. She should take her leave; we will give her a cheer [Hon. Members: “Hurray.]We will hear from her again soon. She is a very regular contributor.

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May I commend my right hon. Friend for his statement, for his personal grip and command over this issue and for the work that the security services do? I imagine that from the nature of the work they do and the people they are, our security services people are reticent about talking of their successes. At a time of heightened tension over international and domestic terrorism, will the Foreign Secretary encourage our security services wherever possible to put into the public domain the success stories in countering threats to our national security?

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My hon. Friend is right to suggest that we should be able to celebrate the successes of our security services. Unfortunately, however, we shall have to continue to celebrate those successes in fairly general terms. As my hon. Friend will understand, if we proclaimed some of our most successful intelligence operations in public, it would be very difficult to repeat them. Unfortunately, we have to protect this country against the same type of threat again and again, and from terrorism in particular. I therefore cannot, at the moment, offer a more specific statement about what the security services have succeeded in doing, but my hon. Friend can take it from me that there is much that is not known in relation to the protection of this country from terrorism in particular, but also from organised crime, that the country would truly celebrate if it knew about it.

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I join the Foreign Secretary in praising the professionalism and dedication of the staff of both the SIS and GCHQ. Edward Snowden, the CIA official who leaked the information, said that had he leaked it because he wanted to stand up against oppression and stand up for liberty. Is there not a perverse paradox that that gentleman made those claims not from Washington or London, but from the People’s Republic of China?

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Having earlier set myself the rule of not attacking the conduct of other nations, I am not going to break that rule now, but other people will be able to comment on this particular individual and his role. It is, of course, important for everyone who works for the agencies to remember that part of their responsibility is to uphold the laws of their country, and that in the case of the United States and the United Kingdom, those laws are designed to protect the lives and liberty of the citizens of those countries. That seems to have been too easily forgotten over the last few days.

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NATO suffered a suspected 2,500 cyber-attacks on its network last year. Can my right hon. Friend tell us whether there is a similar level of suspected cyber-attacks on GCHQ ?

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There are undoubtedly cyber-attacks against all western intelligence agencies, including GCHQ, but GCHQ is particularly well adapted to defend itself against such attacks, and to have some idea of where they are coming from and when they are coming. I will not go into any more detail than that, but people would be quite fortunate to mount a successful cyber-attack against GCHQ itself.

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As we have heard, the rigour, quality and sheer scale of American intelligence is second to none. Given the threats that the UK currently faces, may I urge the Foreign Secretary to continue his robust public defence of the UK-US intelligence relationship?

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I feel suitably earthed by my hon. Friend, and by many other Members. It is always worth reminding ourselves again of the indispensable nature of that relationship, although we cannot give many of the details about it. It is a fundamental part—a cornerstone, as one of our hon. Friends said earlier—of maintaining the security of this country.

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I welcome the reassurances given by the Foreign Secretary. I merely seek clarification of one point. If the UK is intercepting e-mails of British citizens, it requires a warrant from the Secretary of State, but that vital check is not in place when communications are received under Prism. Does the Foreign Secretary accept that Prism can be used quite legally to sidestep the level of safeguards that apply to UK-sourced intercept? How do we mitigate that risk?

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Again, I do not want anything that I say to be taken as a comment on information that has been leaked over the last few days, but the Intelligence and Security Committee will be able to study the issues raised by it, including the issues raised by my hon. Friend. That is the proper forum. I have already stressed the way in which ministerial and independent oversight applies to our relations with other intelligence agencies, including those in the United States, and my hon. Friend should therefore not jump to any conclusions about the absence of such oversight and authority.

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Does my right hon. Friend agree that the concerns raised by some Members of this House demonstrate the limitations of the current RIPA system, which has failed to keep up with modern technological trends, and that there is a need for new measures, such as the draft Communications Data Bill, as amended by a Joint Committee of the Lords and the Commons, to ensure that our legislation is up to date, has parliamentary oversight and covers all the concerns raised?

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The case for the draft Communications Data Bill rests on its own merits. My hon. Friend refers to some of those merits and the Government will bring forward proposals in the near future on that subject.

Better Defence Acquisition

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The defence of UK national interests is a priority for this Government. To secure that defence, we must provide our armed forces with the equipment and capabilities they need to operate in a rapidly changing security environment. Without the right equipment, delivered on time, properly maintained and available for use, our armed forces cannot function effectively and our national interests are put at risk. Effective procurement and support of defence equipment is therefore not just desirable, but an essential part of maintaining flexible and effective armed forces.

For decades, there has been an acknowledgement that defence acquisition in this country can, and should, be done better. Despite numerous reviews and reorganisations, successive Governments have failed to embed the systemic changes necessary to achieve that objective. We owe it to the men and women of our armed forces, and to the long-suffering taxpayer, to do better.

Two separate independent studies carried out for the Ministry of Defence have suggested that the costs arising from inefficiency in the procurement process are between £1.3 billion and £2.2 billion per annum. Waste on that scale is unacceptable at any time; more so at a time of acute pressure on the public finances. I am determined to drive a step change in the way we do our defence procurement business.

In April, I announced to the House that we had launched the assessment phase for the Department's matériel strategy programme, considering two options for the future of the Defence Equipment and Support organisation: the first, a public sector benchmark, which we call “DE&S+”; and the second a Government-owned, contractor-operated entity, a “GoCo”.

Today, I am publishing a White Paper that sets out the matériel strategy proposals in more detail, and provides more information about our intention to create a new statutory framework to drive better value in single-source procurement contracts, protecting the taxpayer in this significant area of MOD business. We believe that a GoCo-operating model is the solution that is most likely effectively to embed and sustain the significant change that is required to reform defence acquisition, but the decision will be based on an objective value-for-money comparison between the GoCo and DE&S+ options. The assessment phase is designed to deliver specific, costed, contract-quality proposals from GoCo bidders and test them against the DE&S+ benchmark.

There has been considerable speculation in the media and elsewhere about the scope of a GoCo. At the most extreme, I have seen it suggested that the proposal is simply to hand over £15 billion a year of taxpayers' money to a private company and leave it to decide what kit to buy for our armed forces. Let me reassure the House that that is emphatically not the proposition. If GoCo is the selected option, the GoCo partner will manage DE&S on behalf of the Secretary of State. It will act as his agent. All contracts will continue to be entered into in the name of the Secretary of State. Strategic direction will be provided by a governance function that will remain within the MOD. The GoCo’s customers will be the front-line commands and the MOD itself. The DE&S work force will be transferred to the GoCo-operating company under standard TUPE arrangements and we will expect the GoCo partner to inject a small number of senior managers, and possibly some key technical staff.

Crucially, the GoCo is assumed to be able to recruit and reward its staff at market rates—a critical freedom in a business that is required to deal with the private commercial sector on a daily basis. The proposal set out in the White Paper is for a phased transfer of DE&S to a GoCo, with checks and break points to allow us to halt the process if it is not delivering the results we require. The legislation and the contract will include a transfer regime that will allow the Secretary of State to transfer the business to another contractor, or back to the MOD, in extremis. If, at the end of the assessment phase, a GoCo operating model is selected, we will need to be able to move quickly to conclude a contract with the successful bidder. The Government therefore intend to provide in the Defence Reform Bill the necessary authorities to let a GoCo contract in 2014, together with measures required to allow a GoCo to operate effectively.

There are finely balanced arguments about whether primary legislation is strictly required to allow the establishment of a GoCo. The Government have, however, decided that it is right that we should legislate in this instance because of the importance of DE&S+ to our armed forces and in order to ensure that Members of both Houses, many of whom take a keen interest in defence matters, have a proper opportunity to explore and debate the issues.

The White Paper sets out the proposed model for a GoCo, its key features and our expectations with regard to the control that the Department will continue to exercise and the freedoms that the GoCo will enjoy. Its purpose is to set in context the legislation that we are bringing forward in the Defence Reform Bill, including provisions to ensure that the Ministry of Defence police have the appropriate jurisdiction to be able to operate within the GoCo environment, to extend certain statutory immunities and exemptions enjoyed by the Crown—for example, in relation to the Health and Safety at Work etc. Act 1974 and the Nuclear Installations Act 1965—to the new body, and to allow the transfer of shares in the operating company and/or property, rights and liabilities in the operating company or contracting entity at the direction of the Secretary of State.

The White Paper also sets out reforms to how the MOD undertakes single-source procurement of defence equipment. Open competition is our preferred approach for getting value for money, but sometimes there is only a single provider of a capability we require, and the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes sometimes requires us to place contracts with UK companies without a competitive process.

Single-source procurement accounts for about 45% of the total the MOD spends on defence equipment and support, or about £6 billion per year, and is likely to remain at those levels for the next decade or so. Without competition, suppliers can price and perform without being constrained by the disciplines of the marketplace. There is a clear risk to defence and the taxpayer, and ensuring that we get good value for money in single-source procurement is a key part of my programme to reform defence acquisition.

The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the last 45 years, despite the far-reaching changes to the industrial landscape and to commercial procurement practices that have occurred in that time. Under this system, the profit contractors can earn is fixed, but there are few incentives for them to reduce costs. Such a system does not serve the best interests either of defence or of a competitive, export-focused defence industry.

In 2011, the MOD commissioned Lord Currie of Marylebone to undertake an independent review of our existing approach and to make recommendations. He recommended a new framework based on transparency of contractor cost data, with much stronger supplier efficiency incentives, underpinned by stronger governance arrangements. Based on his recommendations and extensive consultations with our major single-source suppliers, we have developed the new framework I am proposing, details of which are set out in the White Paper. At its heart is the principle that industry gets a fair profit in exchange for providing the MOD with the transparency and protections we need to assure value for money.

A statutory basis will ensure widespread coverage across our single-source suppliers and application of the regime throughout the single-source supply chain. The system will be policed by a stronger, independent, single source regulations office to monitor adherence and to ensure the regime is kept up to date. These changes will incentivise efficiency in operating costs and minimisation of overheads, supporting UK defence sector competitiveness both at home and in export markets.

The proposals set out in this White Paper will deliver the real reform our acquisition system needs to provide the support our front-line forces deserve, to maximise the benefit of our £160 billion 10-year defence equipment programme, and to deliver value for money for the taxpayer. I commend this statement to the House.

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I start by thanking the Secretary of State for his statement and for advance sight of it. Reform of defence procurement is one of the major challenges facing UK defence. Those on both sides of the House will want to see reforms that deal with overspends and overruns, and ensure that world-class equipment is delivered when and where our forces need it. For too long, the good intentions of successive Administrations have not delivered sufficient reform in defence procurement. However, just as some of the responsibility can be shared, our resolve to learn the right lessons and deliver far-reaching reform must also be collective. We therefore welcome much of today’s statement.

Future procurement systems must provide value for money within financial constraints. Better performance will come from greater professional project management, faster decision making, fuller accountability for outcomes and a more considered use of military expertise. Labour supports reforms—the Bernard Gray report, on which today’s White Paper is based, was commissioned by the previous Government. We have proposed a new budgetary discipline, whereby deferred decisions that increase cost are accounted for within a rolling 10-year cycle, and increased certainty for industry over sovereign and off-the-shelf capabilities.

Labour Members are open-minded about how that is achieved, but I wish to be clear that welcoming this process today is not the same thing as supporting a GoCo in principle. There needs to be rigorous examination of all the possible options and a robust comparison between the two options of a GoCo model and DE&S+. That comparison should rest on the principles of ensuring value for money within programmes; industry adhering to new targets on time and cost; maintaining parliamentary accountability; enhancing a culture of consequence for decision makers; and military involvement being based on tri-service working, not on single-service rivalry. So reform must extend across the Ministry of Defence. Too often, scope creep has led to systems exceeding identified need, and major decisions have been pushed to the right to save in the short term at the expense of longer-term budgetary bow wave. Today’s challenge for Ministers is not just to determine a management model, but to demonstrate that decades-long entrenched behaviours are being corrected.

Let me deal with the specifics of today’s announcement. On the assessment phase, will the Secretary of State pledge to publish the findings of the two value-for-money studies and allow for a consideration by this House prior to a final decision being taken in the legislation? It is essential that Parliament, industry and our armed forces have full confidence that strategic affordability is the determining factor in this process. On costs, will the Secretary of State say whether the new management team of either model would re-cost the baseline of the core equipment programme, or would the figures published earlier this year remain? Furthermore, in the light of the National Audit Office’s observation that the MOD’s assessment of risk is “not statistically viable”, would the new management be able to reform the current method of risk assessment? On staffing, the MOD has said that current reductions will not affect outputs. Would either management model be able to make decisions over staffing independently from the Secretary of State? Will he confirm that trade unions will be consulted throughout the assessment phase?

It is essential to maximise military expertise, so will the Secretary of State say whether he considers it preferable to change the current ratio of military to civilian numbers in procurement within the MOD? Specifically on the GoCo, will he pledge that senior officials currently working on this process within the MOD will not be able to work for the GoCo consortium without a prolonged period of purdah? Many in the country will have a concern about the extent of a private entity’s potential reach over public policy. So, under these plans would a GoCo model cover the whole equipment programme, including the nuclear deterrent? What is the time scale for the implementation of a GoCo? That will enable us to judge when efficiencies may begin to accrue.

One of the biggest uncertainties around GoCo has to do with the ownership of risk and whether contractors could generate private profit while financial risk remained in public hands. For example, can the Secretary of State say whether liability for the £468 million cost overrun noted in the National Audit Office’s “Major Projects Report 2012” would have rested with the taxpayer or the GoCo, had it been established?

On the single source regulations office, we welcome the proposal in principle and will examine it closely. It is essential to drive down cost where possible in single sourcing, as the Secretary of State said. Will he say a little more about who would appoint the members, and whether regulations would be subject to the one-in, one-out rule?

In conclusion, we will support what we hope is a genuine competition. We will scrutinise the processes carefully, because efficient and effective defence procurement is essential, not just for the Ministry of Defence bottom line, but for the remarkable men and women of our armed forces, whom we place in harm’s way to serve on the front line.

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I am grateful to the right hon. Gentleman for his welcome of this announcement. Of course I completely accept that the Opposition’s willingness to look at the issues with an open mind is not the same as an uncritical endorsement of the GoCo concept, and just in case I did not make this clear in my opening remarks, we have not yet accepted the GoCo concept as the chosen outcome; we are conducting an assessment. However, I think we agree across the House—Opposition Members who have, in office, experienced the challenge of trying to make the defence budget add up will certainly agree—on the need for change. The intentions are very clear.

The process that we are talking about was kicked off by the Gray report, published in 2009. I note that the then Secretary of State has strongly endorsed the GoCo model, which he feels is the way forward. We are examining the case for GoCo against the baseline of DE&S+. We have two separate teams, working with Chinese walls between them, that are equally resourced. One is trying to build the maximum fully-public-sector case that it can, taking advantage of all freedoms and flexibilities available. The other is working with potential GoCo bidders to look at the value that they can deliver. At the end of the process, we will make a comparison.

The right hon. Gentleman talked about the cost drivers from past scope creep. One of the clear advantages of changing the way that DE&S works is creating a harder boundary between the customer and the company supplying the requirements, making it less easy for scope to creep without a proper change process and proper recognition of the costs involved. He asked me whether the baseline would be re-costed. We do not anticipate a re-costing of the programme baseline. If we go down the GoCo route, we will negotiate with GoCo bidders for an incentivised fee structure, based on the existing costed programme. He will know that an independent cost advisory service sits alongside DE&S, and will play a continuing role in independently assessing the costs of projects and the appropriate level of risk to be attached to them.

Unsurprisingly, the right hon. Gentleman asked me about staffing levels in a post-GoCo DE&S, if GoCo is the selected solution. The staffing transfer would be made under the TUPE regulations. We anticipate about 8,000 of DE&S’s projected 14,500 2015 staff numbers transferring to the new entity, with the remainder—in naval dockyards, logistics, communications, and information services—remaining in other parts of Government, or being outsourced.

There is no reason to suppose that the GoCo route is more likely to deliver further staffing reductions than any other route. Clearly, the new management team, whether it is a GoCo or DE&S+, will seek to run the business efficiently, and to use the freedoms and flexibilities available to it to deliver outputs as effectively as possible.

The right hon. Gentleman asked me about the ratio of military to civilian personnel in DE&S. At present about 25% of the personnel in DE&S are military. We expect the military role, which will be performed by secondees in the future, to focus on providing specifically military advice to the DE&S organisation, rather than filling line management and project management roles, so I do not expect the military proportion of staff to increase, and it may decrease under a future model.

The right hon. Gentleman asked me a question, the motivation for which I entirely understand, about senior officials. Nobody wants to see such exercises becoming a gilded exit route for senior officials, and I am pleased to be able to tell him that the Chief of Defence Matériel, the most senior official in DE&S, will transfer to the MOD side—the customer side—of the equation and will be responsible for designing and managing the customer side. I cannot, as the right hon. Gentleman knows, give him an absolute assurance that other officials in the Department, should they choose to leave the Department, would not at some point in the future be able to join a GoCo, but of course there are rules and restrictions in place—a Cabinet Office regime which has been reinforced following revelations in The Sunday Times last year—and we will make sure that nobody is able to abuse this process.

The right hon. Gentleman asked me whether the GoCo would cover the nuclear deterrent. It will certainly cover the procurement of Vanguard replacement submarines. The management of our nuclear warheads is carried out by the Atomic Weapons Establishment, itself already a GoCo. We have not yet finally decided whether the new GoCo, if there is one, will be responsible for managing the MOD’s relationship with AWE or whether that will be managed directly. That will be one of the issues dealt with in negotiation with potential GoCo bidders.

On timescale, I can tell the right hon. Gentleman that we expect to reach a decision in the summer of next year, with a view to the new arrangements, whether GoCo or DE&S, being stood up before the end of 2014.

Finally, I turn to the question of risk ownership. This is an important point which has been somewhat misunderstood by some commentators. Clearly, it would be very attractive to think that we could transfer the programme risk in the defence equipment programme—£160 billion of it—to somebody in the private sector, but the reality is that there is nobody who has a balance sheet big enough, probably anywhere in the world, and the taxpayer would not be prepared to accept the price for taking on that risk, so the risk ownership in the programme will remain with the Government and the taxpayer. What the private sector partner will be at risk for is his fee, which will be structured in such a way as to incentivise the delivery of the key performance indicators that will be agreed with the partner during the negotiation process. That will be designed to align the GoCo partner’s incentives with the interests and priorities of the Department. That is where a great deal of our time and energy is being invested at present.

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What discussions has my right hon. Friend had with key allies, notably the United States and France, about this proposal and what has been their response?

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I thank my right hon. Friend for a very important question. We have had discussions with key allies, notably the United States and France. The United States, contrary to some media reporting, is relaxed about this process. It recognises that there will be some technical issues that we need to resolve, but I am glad to be able to tell him that the Chief of Defence Matériel received this morning, by coincidence, a letter from his counterpart, the Under-Secretary for defence procurement, in the Pentagon confirming that the United States is confident that it will be possible to make these arrangements work. We have set up a joint working group to work through the issues that will need to be addressed before a decision is made.

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What powers will Defence Ministers and Select Committees have to intervene and examine contracts, negotiations and procurements if the GoCo goes ahead? What powers of oversight will Parliament retain?

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As I said earlier, the procurement contracts will still be entered into in the name of the Secretary of State. The Secretary of State and Ministers will remain accountable to Parliament and to the Select Committee. The permanent secretary at the Ministry of Defence will remain accountable to the Public Accounts Committee, and access to and scrutiny and oversight of those contracts will be exactly the same as they are now.

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Will the proposed GoCo have the power to negotiate independently of the Ministry of Defence to try to get a really good deal out of a foreign defence contractor in, for example, the United States?

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If doing so was within the remit given it by the Secretary of State, it would have that power. I need to be very clear about this. The point of hiring a commercial partner is to deploy its commercial expertise. There is no point hiring it and then constraining it so tightly that we do not get any benefit from it. On the other hand, it will be very clear, and I am very clear, that it will always operate within the framework of strategic direction that has been given by the Secretary of State, and the Secretary of State will retain a power to intervene and specifically direct it on a specific point within its management of a programme if necessary.

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I thank the Secretary of State for advance sight of his statement. Will he clarify that should one go down the GoCo route he has no objection in principle to the winner of a GoCo contract, should that be the preferred outcome, being headquartered in the United States, Europe or further afield?

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The hon. Gentleman and the House might be interested to know that of the 21 expressions of interest that we have received in response to the issue of the pre-qualification questionnaire, a third have been UK-headquartered companies, but it is likely that the winner of a competition for a GoCo will be a consortium and it is highly likely that some members of that consortium will be non-UK companies. In fact, to be frank, it is highly likely that it will include US-headquartered companies, but the entity with which we contract will be UK-registered and domiciled, and will pay its tax in the UK.

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I congratulate the ministerial team on its progress on this important matter. DE&S covers Her Majesty’s Navy bases. Will the Secretary of State reassure me that his announcement today will not affect the proposal to transfer them to the Royal Navy?

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I can assure my hon. Friend that the plan to transfer the Royal Navy dockyards out of DE&S, along with the plan to transfer the logistics and commodities supply service out of DE&S to an outsource contractor, will continue on track. That is why there is a gap between the projected 2015 total numbers of DE&S on a steady state basis, and the 8,000 that we are expecting to transfer under a TUPE transfer if we go down this route.

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How much does the Secretary of State think that the new arrangement will save each year? Will those savings be used to buy additional equipment for our armed forces, or simply returned to the Treasury, leaving our servicemen with less?

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The latter part of the hon. Gentleman’s question is clearly one that I cannot answer on a unilateral basis, but I suspect that, in the way that generally happens, there is a potential win-win situation here—a win for the taxpayer in terms of lower public expenditure and a win for the armed forces in terms of greater capabilities being able to be purchased. I think I included these figures in my statement, but the independent estimates are that somewhere between £1.3 billion and £2.2 billion of frictional costs generated by inefficiencies in the procurement system are incurred every year. It would be a very rash man who suggested that we can squeeze out every last pound of those, but I would expect us to be able to achieve net gains after taking account of the cost of the arrangements—the GoCo fee and the cost of the governance function on the MOD side—in the hundreds of millions of pounds.

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I welcome my right hon. Friend’s thoughtful statement. Will he confirm not only that Aldermaston is a GoCo, but that in fact most of the American nuclear programme has historically been run by university-led GoCos? I urge him to look carefully at the issue of military project managers and at the experience from abroad. In land systems, in particular, we can end up with a project manager and an expensive military adviser, rather than one uniformed officer driving it forward. It is worth looking at the Swedish experience, for example, which is of a very effective and tight ship with mostly military project managers.

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I hear my hon. Friend’s point but, to be blunt, I think that we have to be realistic about this and acknowledge that military personnel are not necessarily trained to be best equipped to deal with world-class industrial project managers employed on eye-wateringly large salaries by the defence contractors we have to negotiate with. It is to try to allow DE&S to engage with those multinational corporations and world-class project managers on a level playing field that we are considering these changes. There will be a role for the military in this organisation, but it will not generally be as lead project mangers.

On my hon. Friend’s other point, I am grateful to him for drawing the House’s attention to the fact that the majority of the US nuclear programme is in the hands of non-public sector organisations—federally funded research and development corporations—which look very much like GoCos.

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The strategic defence and security review in October 2010 resulted in a four-year delay to the in-service date for the Vanguard class replacement submarines. It was by no means the first project that has been shifted to the right with increased costs, but it caused particular disappointment because it was done by an Administration who, when in opposition, criticised the former Administration for doing similar things. If a GoCo is in place when such decisions are considered in future, on submarines or anything else, will it be taken out of Ministers’ hands?

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As I have already said, Ministers will retain the ability to provide strategic direction. If the hon. Gentleman does not mind, I will take no lectures from the Opposition on shifting projects to the right at huge cost, because the previous Government shifted the carrier project two years to the right at a cost of £1.6 billion. What was actually done in 2010, in relation to the submarine enterprise, was a reconfiguration of the programme between the Astute class submarines and work on the Vanguard class replacement submarines, which resulted in a delay to the introduction into service of the Vanguard class, but within the overall constraint that we have in this country of needing to sustain a submarine yard at Barrow, and the minimum level at which we can sustain a submarine yard is building one submarine at a time. However we configure them—Vanguard class first or Astute class first—we have to provide that work flow if we are to keep that sovereign capability. That is the kind of single-source procurement that we are targeting in the announcement I made today on the single-source procurement rules.

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I commend the Secretary of State for getting to grips with defence procurement, which is long overdue, but does he recognise that there is nervousness in some quarters about the complexity of the emerging process, which will involve the MOD, the armed forces, NATO, the private supplier, the GoCo and the independent cost advisory service? Can he give the House any reassurance that new inefficiencies will not creep into the system as a result of that complexity?

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I will be very frank with the hon. Gentleman: one of the things I have learnt over the past three years is that new inefficiencies creep in all the time if one is not continually vigilant. That, incidentally, is why, however much one thinks one has squeezed out all the inefficiencies, when one goes back around the loop and looks again one finds more that were not noticed the last time or that have crept in since. He is absolutely right to say that it is a complex enterprise, but within the overall portfolio of defence transformation—we are carrying out many hugely complex projects simultaneously —it is just one of many, and I am confident that we can manage it.

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Will the Secretary of State assure the House that the interests of national security and the safety of our armed forces, to whom we owe a great debt of gratitude, as well as value for taxpayers’ money, will be at the heart of the changes in defence procurement? Will he also assure us that all essential defence equipment will be made available to our front-line forces in the defence of the nation?

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I can of course give the hon. Gentleman that assurance. We are trying to do two things: to ensure that the £160 billion defence equipment and support programme is delivered effectively to our armed forces and that it is delivered efficiently and in a value-for-money way to the taxpayer. In the end, this allows us better, more reliably and more sustainably to support our armed forces while ensuring that this is done in an appropriate way during a period of public financial austerity.

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I was a fan of Mr Bernard Gray’s report in 2009 when I was shadow defence procurement Minister, but I was a bit nervous about his proposals for a GoCo, so I welcome my right hon. Friend’s caution; he has taken the right attitude. Will he set out the mechanism by which he hopes to be able to maintain the crucial industrial capabilities that this nation needs, because that is an extremely important part of his statement? Will he also set out how the new proposals might avoid the mistakes of the £800 million cost overrun on the disastrous Nimrod programme?

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I am grateful to my hon. Friend. He knows me and he knows that I am a cautious person. This is a big and complicated project, and we are approaching it carefully. We are weighing up the options and taking the appropriate length of time to make the decisions, and I am confident that they will deliver the result that we require. He asks about our national sovereign capabilities. We have set out our approach to the defence industry in the White Paper “National Security Through Technology”. We have also set out today, in this White Paper, the proposed changes to single-source pricing regulation and how we expect to drive greater efficiency into the single-source part of the defence industry that delivers about half our requirements. Only by making those in that sector focus on reducing costs, which they currently have very little incentive to do, will we make them not only efficient providers to us but efficient and competitive players in the international defence export market. That is in the interests of the industry, the UK’s armed forces and UK plc.

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The Secretary of State referred to the freedom to recruit and reward staff with market rates as, I think, a “critical” freedom in the potential move to a GoCo. In that phased transfer, would any increased remuneration in bonus packages still come from the MOD baseline?

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That depends. We would expect a GoCo contractor to inject a certain number of senior staff who would be part of its package and who would be remunerated through its incentivised fee. Within the overall DE&S work force, getting the right skills in the right places will be part of the task for the management contractor. In some cases, that will mean recruiting at market rates, because at the moment we are haemorrhaging talent. The Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), has just given me an example where we had nine applicants for 70 commercial posts that have recently been advertised. We have to address the haemorrhage of talent from DE&S by offering market rates if we are to support our armed forces as we need to.

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The Secretary of State will understand how pleased I am that he has announced the implementation of the major elements of the report that I commissioned from Lord Currie on single-source pricing regulations—a highly technical but really important subject. On DE&S, does he share my concern that there may be forces even in his own Department, and certainly elsewhere in Government, that may wish to frustrate the progress towards a GoCo? May I encourage him to reassure me that he will work enthusiastically and energetically, notwithstanding his caution, to overcome unreasonable, opportunistic or bureaucratic obstacles put in his way on the path to a GoCo?

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I am grateful to my hon. Friend and happy to acknowledge the crucial part that he has played in the process that has led us to this announcement. I can safely say that yes, there will always be forces that resist any change that I look to make. We have to carry the case by making the argument, building it during the assessment phase and then presenting the value-for money case for the Go-Co against the DE&S+ benchmark comparator. I am absolutely clear that we have to make that case: there is no pre-judgment that a GoCo is the route we will follow. We have to prove that it provides value for money, and do so to some of the institutionally most sceptical forces—no names, no pack drill—in Government.

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Has the Secretary of State noticed the extraordinarily high number of former Ministers, civil servants, admirals and generals who awarded contracts to companies when in office and then ended up working for the self same companies in retirement? Would not it be a good idea to ban these senior people from working in companies to which they have awarded contracts, in order to ensure that contracts are awarded in office on the basis of the needs of the public purse and not on people’s hopes to gain a hacienda in Spain from their retirement earnings?

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The hon. Gentleman is being a little harsh: most if not all of the elected and appointed people with whom I have come into contact do their very best to deliver in the public interest. We have a rigorous set of rules in place to deal with the cross-boundary issues between the public and private sectors. We must never get into a situation where we prevent or discourage all transfer between the public and private sectors. That would be a disaster. We need that flow of lifeblood between the two, but we need it to be done properly: it has to be properly regulated and transparent.

To answer the hon. Gentleman’s specific question, when The Sunday Times published revelations last year about people who had gone from senior military roles into defence industries, I asked the same question as he has and the advice I received was that it would not be lawful to issue an unlimited ban preventing people from taking up one career once they had left another.

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For decades, much of the defence budget has been spent in the interests of defence contractors: by constraining the range of suppliers, the seller gets to set the terms of trade. How will these reforms ensure more choice and competition in defence procurement?

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I am sorry to say that where there is a single supplier or a national security reason for our having to procure in the UK, we cannot magic up a competitive marketplace. What we can do in such circumstances is control the pricing of those contracts. At the moment, under the current regime, profit is clearly controlled but costs are not, and there is no incentive for contractors to control and manage their costs. What we are proposing is a regime where, as now, profit is controlled but where there are clear financial incentives for contractors to control their costs and get them down. By working in this way—by aligning the interests of defence with those of the contractors—we will drive out cost and increase the amount of deliverable military capability to our armed forces.

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What implications will this announcement have on complex weapons systems and in particular on establishments such as Defence Munitions Beith in my own constituency, which houses and services such weapons systems?

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In terms of our procurement of weapons systems and of contractor support for weapons systems, the DE&S will work as the agent of the Secretary of State. I am not sure that I can put my finger on the precise function of the establishment mentioned by the hon. Lady, but we have a separate programme to outsource some of the defence logistics and commodity procurement activities, which I mentioned earlier. None of theses plans will be changed by whether DE&S is run in future as a GoCo or as a fully public sector DE&S+ model.

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Several thousands of my constituents are employed at BAE Systems in Warton, which is involved in advanced manufacturing of military aircraft. What benefits are they likely to see as a result of today’s announcement?

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They will see benefits at two levels and a healthier BAES as a result of this announcement. First, large defence contractors, perhaps counter-intuitively, do not relish the lack of a capable interlocutor in their trading partners. They would welcome our beefing up our capability and having higher-skilled, better-paid project managers on our side of the table, because that would drive genuine efficiencies into the process. At that level, we know that the companies will welcome this announcement. Secondly, on single-source procurement, I am confident that over time by incentivising cost-efficiency we will increase the exportability of British defence products, which are an incredibly important part of our high-tech manufacturing industries and help us to sustain jobs at the very top of the curve.

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These are early days and final decisions are yet to be made, but what indication can the Secretary of State give about the impact of this announcement on jobs at MOD Abbey Wood? Will he ensure that suitable provisions are in place for the employees who may be affected?

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As my hon. Friend knows, the TUPE transfer of an enterprise does not imply any reduction in job numbers at the outset. It is true that a private sector partner taking on a work force of this nature will, over time, look to reconfigure the shape of the work force to make the business as efficient as possible. However, it will have to do that within the constraints of the TUPE regulations, normal employment law and the arrangements that are in place for negotiation with the trade unions.

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I thank my right hon. Friend for his statement and for the White Paper, which will be of great interest to the Public Administration Committee because it is conducting an inquiry into procurement across Government, including defence procurement. I remain to be convinced that a GoCo is the right idea. If, as he says, the objective is to be able to recruit and reward staff at market rates, why can we not legislate to do that in the Ministry of Defence, instead of contracting it out? After all, is not the acquisition of defence matériel and equipment a core function of the Ministry of Defence? We must have those skills in-house, because we cannot expect to manage them in some arm’s length contractor.

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My hon. Friend says that he remains to be convinced; I am glad to confirm that I remain to be convinced. It is exactly the point of the assessment phase to convince us collectively that this is the right way to go. This proposal is about being able to employ staff at market rates, but that is only a small part of the total challenge. There are many other cultural and behavioural changes that need to be delivered to make it work. He is right that defence procurement is a core function. That is why we will maintain a competent customer function in the MOD, led by the Chief of Defence Matériel and supported by an external private sector consultant to build the intelligent customer function, to ensure that we are in a robust position to manage the GoCo contractor, if that is the route that we choose, not just now but through future evolutions of the GoCo and future appointments of GoCo contractors.

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I thank my right hon. Friend for his statement and for the grip that he has on his Department’s budget. Clearly, the first priority of defence procurement is value for money for the taxpayer, but does the procurement system also take into account the export potential of UK-based companies when making its assessments?

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I am grateful to my hon. Friend. Export potential is an important consideration and one of the Department’s stated priorities. As I have said, I believe that what we are doing, particularly with regard to the single-source procurement regulations, will drive export competitiveness into defence contractors. If a GoCo is appointed, one of its required tasks will be the support of UK defence exports, which is a UKTI lead.

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What implications, if any, will these long overdue reforms have for small and medium-sized enterprises in my constituency that are already employed in the defence procurement supply chain?

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We have an active policy of encouraging the engagement of SMEs in the defence supply chain and it includes many thousands of SMEs. The single-source pricing regulations will apply throughout the supply chain, but will have a price threshold. We expect almost all SMEs not to be directly affected because their level of transactions with the MOD will fall below the price threshold. The threshold is yet to be determined, but it is likely to be about £5 million.

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I thank the excellent Secretary of State for coming to the House and making this statement. One problem that I have seen with defence procurement is not the way in which equipment has been procured, but the decision by the Ministry of Defence at the beginning of the process to have something more than the standard package. There was the nonsense with the Chinook aircraft, which were bought but never flew because the Department wanted to add to them. Will there be more emphasis on buying standard packages?

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That depends on what we are buying. Clearly, there are things that we can buy off the shelf or from competitive international providers. We recently ordered the new fleet of MARS—military afloat reach and sustainability—refuelling tankers from a South Korean shipyard. That decision did not go down well with everybody, but it was sensible procurement. At the same time, we have to maintain important capabilities that are essential to our national sovereignty here in the UK. In those cases, we have to support the indigenous industry. One purpose of the changes is to make transparent the costs that are driven into a project by the specification of bespoke requirements and to force the customers to recognise those costs.

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I welcome the statement, but will the Secretary of State say more about the timescale over which he expects the reforms to deliver tangible savings to the taxpayer?

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As I said to the shadow Secretary of State, if we went down this route, we would expect to award a contract next year and for it to be effective by the last quarter of 2014. We would then expect there to be a two-stage process towards the full GoCo-isation—if I may use that term—of DE&S. We would expect savings and efficiencies to be generated from the very beginning, and from the second year of operation we would expect there to be cashable benefits.

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I congratulate my right hon. Friend on his statement. Were he to save the full £1.3 billion to £2.2 billion of waste that he has identified, he would be able to buy an extra one or two Type 45 destroyers a year and to start to rebuild the Royal Navy back to its proper size. Will he confirm that this is the biggest waste black hole in the MOD budget and that no other hole in the budget has a bigger annual cost?

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It is certainly our assessment that the frictional costs of inefficiencies within defence procurement are the biggest single challenge that we face and our biggest single opportunity. I was at Portsmouth the week before last and talked to the commander of the dockyard. He told me that once the Queen Elizabeth carriers are berthed there, he will be making provision for some 200,000 tonnes of fighting ships to be tied up in the harbour. That will be largest tonnage that he or his predecessors have had to make provision for since the 1960s.

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I understood from my right hon. Friend’s thoughtful statement that the organisational merits underpinning the GoCo would be cultural change and skills enhancements to deliver efficiencies. Will he tell the House in more detail what missing skills he hopes to attract? Will he also reassure us by saying what steps he will take in the incentives scheme for the management company of the GoCo to avoid the perverse incentives that led to so many financial messes in public-private contracting under the last Government?

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My hon. Friend is right in setting out the changes that are required. One he did not mention, but which is important, is creating a hard boundary between the customer and the provider organisation. At the moment, responsibilities across that boundary are not as clear cut as they should be, and that allows specification scope to drift on occasions. Let me give him a couple of examples. We currently spend in DE&S £400 million a year on external technical support because we cannot hire the people we need. Being unable to hire somebody at £50,000 a year means that we are paying a contractor £1,000 a day to do the work. We expect the GoCo contractor, if we go down that route, to make substantial early savings by hiring key technical capabilities into the organisation, rather than by bringing them in as technical contractors. He is absolutely right about perverse incentives. Our big challenge now in the assessment phase is to negotiate a set of key performance indicators and incentive payment structures that align a GoCo contractor with the priorities of the Ministry of Defence.