House of Commons
Tuesday 6 May 2014
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Business before questions
Transport for London Bill [Lords]
Second Reading opposed and deferred until Tuesday 13 May.
That the promoters of the Transport for London Bill [Lords], which was originally introduced in the House of Lords in Session 2010–11 on 24 January 2011, should have leave to suspend any further proceedings on the Bill in order to proceed with it, if they think fit, in the next Session of Parliament according to the provisions of Standing Order 188A (Suspension of Bills). —(Second Deputy Chairman of Ways and Means.)
Oral Answers to Questions
The Secretary of State was asked—
Online Pornography (Sentencing)
Offenders convicted of possession of extreme pornographic images, including violent pornographic images, face a custodial sentence of up to three years. Sentencing in individual cases is at the discretion of the courts. Although there are only a small number of convictions for that offence each year, I believe that it is effective in tackling the proliferation of these images.
Is not the problem that existing legislation on violent pornography has been too narrowly interpreted, with only 310 prosecutions in the past three years? Rape Crisis South London has said that there is evidence of the easy availability of serious sexual violence on rape porn sites. I know that the Government are about to ban realistic rape porn online, but not staged child rape scenes. Why not, as the Prime Minister promised, bring online and offline in line?
We agree with the hon. Lady’s underlying point that the current offence is too narrow. That is why we are legislating to extend the terms of the existing offence to criminalise the possession of images depicting rape and other non-consensual penetrative sexual activity. As she knows, we introduced provisions in the Criminal Justice and Courts Bill to criminalise the possession of such images, and those provisions received broad cross-party support at the Commons Committee stage. I hope that she and those on the Opposition Front Bench will continue to welcome that.
When considering sentencing policy for those guilty of observing or engaging in violent behaviour, will the Minister reconsider the Department’s policy of moving violent offenders such as Michael Wheatley to open prisons like Standford Hill in Kent? He will be aware of a pattern of absconding that has taken place in Ford open prison in my constituency, including by Derek Passmore and Paul Flint, both of whom were convicted of murder, and one of whom had already absconded from an open prison.
I am sure that many Members across the House will share my hon. Friend’s concern about people absconding. As we have heard, the number of people absconding from open prisons has, of course, gone down, but I hope he is reassured that we are in the process of making the conditions for those sent to open prison tougher, both in qualifying to go to open prisons, and in the punishments received for breaking the terms.
Single Family Court
The family justice review produced recommendations that were implemented on 22 April, producing the largest ever change in the family justice system in our lifetime, and I pay tribute to all those from the president of the family division downwards who delivered that. The purpose was to have a single united family court that can sit anywhere with any level of judge, to ensure that cases are dealt with more quickly in the interests of children and families, and that children’s needs are always put first in all family proceedings.
I thank my right hon. Friend for that answer. Will he explain how the reforms that he is taking through at the moment will ensure that cases, particularly those involving the most vulnerable children, will be dealt with efficiently, quickly and justly?
There are two major changes that will lead to a speedier and more just outcome, particularly for children. The first is a requirement that all cases involving care proceedings will be dealt with in 26 weeks, or half a year—only a couple of years ago, it was double that—and if there has to be an exception in the interests of justice, that will be made. Secondly, experts’ reports will not be commissioned and take up a huge amount of time unless that is necessary in the interests of the child. The process will be speedier, and children will have certainty much more quickly, as will their families and local authorities.
But is not the Minister aware that the withdrawal of legal aid in family cases has caused a massive increase in litigants in person, which will undercut and undermine any move towards shorter times for dealing with these cases? The Government have undercut and undermined their own policy, and strangled it at birth.
That is very easy rhetoric from the hon. Gentleman, but the evidence does not support it. The evidence is that there were always litigants in person in the family courts, and the time it is taking for cases outside the public system to be dealt with has not fundamentally changed. They take on average between 16 and 18 weeks now, as they did before. In addition, legal aid has been retained for most of the important issues. In particular, legal aid is available for people to be assessed for mediation, and for mediation. For those who go to mediation, seven out of 10 have a successful outcome, which means that they do not need to contest their matrimonial matters in the court.
The single court is a good idea, and I am pleased that the Government are taking it forward, but a considerable body of evidence from solicitors who specialise in family law suggests that judges are under huge pressure to allow contact too early in cases, even in those with safeguarding issues such as alcohol abuse and violence. How will the Minister make sure that family courts are closely monitored to ensure that vulnerable children are not put at unnecessary risk?
I respect the right hon. Gentleman’s expertise in this area. I was speaking to the court in Cardiff about these issues only on Thursday last week. One protection is that the 26-week norm can be extended in the interests of justice in every case. Secondly, from the president downwards, there is a regular review of exactly what is happening. There will be report backs, as well as a public report back to Parliament on a regular basis, and regular reviews to make sure that vulnerable children in the sort of families he describes are not put at risk. The whole purpose is to ensure that fewer children are at risk and more children are protected and cared for better.
Richard III (Reburial)
3. With reference to the statement by the Under-Secretary of State for Justice in Westminster Hall on 12 March 2013, Official Report, column 30WH, that his Department would facilitate a meeting between people from York and others with the university of Leicester to discuss the arrangements for reburial of the mortal remains of King Richard III, when that meeting will take place and which Minister or official from his Department will attend it. (903841)
As the hon. Gentleman will be aware, arrangements for the meeting were put on hold in the light of litigation brought by the Plantagenet Alliance Ltd. The judicial review was heard by the Administrative Court on 13 and 14 March, and I look forward to receiving its judgment.
I understand the reason for the delay, but it is self-evident to me that a decision about the burial of a former Head of State of this country should be taken by the Government of the day, not delegated—as in the case of King Richard III—to archaeologists at Leicester university. Will the Secretary of State give the House an assurance that when the sub judice rule has passed, he will consult widely—including with those from the north of England who believe that King Richard should be reburied in York—before taking a final decision on the basis of advice about where the burial should take place?
Order. The issue is not sub judice. There are ministerial decisions involved, but there is no question of sub judice. I also appeal to the House for a degree of calm and restraint. We are discussing the burial of the mortal remains of a former monarch, to which fact, Mr Brennan, you should pay obeisance.
You are quite right, Mr Speaker, that these issues are not sub judice. Of course, it is hardly surprising that the hon. Member for York Central (Hugh Bayley) is a keen advocate for the city he represents, but I shall not pass further comment on this matter before the court judgment is reached.
I am the hon. Member for Leicester, and I am a keen advocate for my city. Will the Secretary of State confirm that the dig for Richard III was well advertised, and the relevant licence granted by the Ministry of Justice was very specific that, should Richard be found, his remains should be buried in Leicester?
Legal Aid (Vulnerable People)
One of the key objectives of the reform of legal aid is to improve its sustainability to make sure it remains available to protect vulnerable people. Legal aid continues to be available in cases where people’s life or liberty are at stake; where they are at risk of serious physical harm, or immediate loss of home; or where their children may be removed.
The pursuit of justice can be an extremely expensive matter. Everyone understands that the economic times we live in mean that there have to be constraints on legal aid, but will my right hon. Friend assure me that he is engaging with the legal profession on the implementation of the reforms?
I give my hon. Friend that assurance. We shall continue to look at the impact of the changes we have put in place. It is not our intention to disadvantage the most vulnerable in our society. We have taken a number of steps in the reforms to protect them and we will continue to review the changes we have made to understand their impact.
Now that a Cameron appears to have woken up to the impact of legal aid cuts and refused to take part in a trial last week because of a lack of defence, will the Secretary of State review that case and that judgment and tell the House how many cases he expects to be stayed as a result of legal aid cuts? What conditions does he have in place to ensure that those whose cases are stayed have a proper trial?
The Secretary of State will be aware of the recent case of a triple murderer who sued the Ministry of Justice for more than £800 because of alleged damage to his personal effects, including a nose hair clipper that went missing. Was legal aid allowed for the prisoner to bring that case? If so, was it a good use of taxpayers’ money?
I can reassure my hon. Friend that while I share his revulsion, the availability of legal aid was not a part of that case. The reforms we have put in place mean that prisoners cannot access legal aid for such cases, or indeed for a wide range of cases relating to conditions in the prisons they are kept in. I do not believe the taxpayer should be funding such court cases.
In Northern Ireland, leading lawyers and the Law Society have stated that the cuts handed down by Westminster and implemented by the Justice Minister will severely hinder the public’s ability to access the justice system. What discussions has the Secretary of State had with his ministerial counterpart in Northern Ireland on the impact of this policy?
I have indeed discussed legal aid funding pressures with my counterpart in Northern Ireland, who said to me that he faces similar challenges in balancing a tough budget. The reality is that we all face difficult financial challenges and we sometimes have to take difficult decisions to meet them.
The Secretary of State is taking legal aid from vulnerable people and imposing a residence test that would not have been met by the women at Yarl’s Wood detention centre sexually assaulted by guards, the family of Jean Charles de Menezes, the Gurkhas refused entry to the UK, or care home residents such as those in Winterbourne View or on the recent “Panorama” programme. Which of those would he be most proud to leave without help or representation?
Of course, these changes do not affect the support we provide at inquests. My challenge to the Opposition is this: they have yet to give us any clear answers on how they would bring down the cost of legal aid. They campaigned at the previous general election for reductions in legal aid costs. They continue to oppose the difficult changes we have made, but offer no alternative suggestions.
Employment and Support Allowance Tribunals
5. What assessment he has made of the consequences for future decisions by employment and support allowance tribunals of the provision by the judiciary to the Department for Work and Pensions and appellants of reasons for their decisions in appeals. (903843)
I appreciate the hon. Lady’s interest in this subject. Last year, a pilot scheme was introduced in four places around the country where employment and support allowance appeals had the summary reasons issued at the time of the appeal judgment. This was extended in March across the country in relation to all ESA and personal independence payment appeals. There is no current plan to make a further assessment, but the Ministry of Justice supports fully what is a Department for Work and Pensions initiative.
I thank the Minister for that answer, but this is a hugely important issue for many individuals who face great stress and anxiety in going through the appeal processes. Will the Minister not commit to evaluating both the pilots and the ongoing process properly, so we can understand fully whether they are working and whether further improvements are needed?
We shall of course watch what happens. We expect the process to be extended this year to many other forms of appeal in the social security system. The evidence will show whether it informs people and we do not have as many appeals in the future because the decisions will have been got right in the first place. The level of appeals that she highlighted in a question on a previous occasion—nearly 45%—will then disappear. My objective is to get decisions right in the first place. The stress to which she refers should be removed from many people. They should not need to have to go to appeal to get the right decision.
One of the biggest problems that I face as a constituency Member of Parliament is the time that it takes for ESA appeals to go ahead. It is good news that the delay has been reduced from an average of 23 weeks to 18, but what is the Minister doing to ensure that appeals speed up even more in the future?
Members on both sides of the House will have shared my hon. Friend’s experience, which is principally a matter for my colleagues in the Department for Work and Pensions. It will certainly be helpful if the right decisions are made more often in the first place, but we must ensure that tribunals, particularly the Social Security Appeals Tribunal, have enough resources to be able to deal with cases as soon as possible after receiving the information that they require. Often the problem is collecting the data that will enable an appeal to be heard. The present situation is not acceptable, and we need to reduce the delay between initial decisions and appeals.
The Ministry of Justice faces large costs as a result of appeals against decisions made but by not just the DWP but the Home Office. Ensuring that the right decisions were made would save the MOJ a huge amount of money. Will my right hon. Friend consider applying the “polluter pays” principle, so that the Department that has caused an excessive number of appeals pays some of the MOJ’s costs? That would give Departments an incentive to make the right decisions.
My hon. Friend has mentioned that idea to me before, and I find it attractive. I have not had a formal discussion about it with the Secretary of State, but I imagine that he may instinctively find it attractive as well. We certainly expect our colleagues in other Departments to make decisions correctly, and not to incur costs that will be borne by our Department, and hence by the taxpayer, by getting those decisions wrong. I shall willingly engage in discussions with my right hon. Friend the Secretary of State, and with other Departments that ought to be bearing the burden of decisions that they got wrong in the first place.
The Government believe that individuals should have a strong connection with the UK in order to benefit from the civil legal aid scheme, and we consider the residence test that we propose to be a fair and appropriate way in which to demonstrate that connection.
I very much agree with my hon. Friend, although I do not think that Labour Members do, judging by the noises that they have been making. I think that the position is very simple. Our taxpayers pay the costs of civil legal aid, and I do not believe that people should be able to come to this country and have immediate access to our civil legal aid system. The test that we propose is designed to change that. I find it interesting that it is being challenged in court, but I am determined that British taxpayers should not be required to pay for legal aid for people who have no right to it because they have not earned it.
According to a written answer that I was given recently, two firms of lawyers that specialise in suing active servicemen, Public Interest Lawyers and Leigh Day, have received £10 million in legal aid in the last three years, and the Ministry of Defence has subsequently spent many more millions on defending those cases. No other country in the world would pay lawyers to sue its own army. When we will stop doing so?
My proposed residence test would mean that such cases were no longer possible. I think it important for there to be restraints on our legal aid system. I personally find some of the things that we have read about the inquiry into the cases brought as a result of action in Iraq extremely disturbing. I have asked my officials to examine in great detail what has happened, and to consider whether there are appropriate actions for us to take.
Will the Lord Chancellor think for a moment about the logic of his case? Surely all those who come before the courts have a right of representation, a right of access, and a right to have their cases heard. If the Lord Chancellor’s logic had been applied in the past, the Mau Mau people, who suffered the most grievous maltreatment by British armed forces in the 1950s, would never have had a chance to bring their case before the courts in this country, and would never have had any hope of securing justice.
The hon. Gentleman and I have always differed on these matters. It is important to deal with historical wrongs, but I do not believe that we should encourage British law firms to deal with cases from other parts of the world, at enormous cost to the taxpayer, when in the end—as in the case of the Iraqi situation—there are serious question marks over those cases. I think we need a system that makes our legal aid available to British people, but not to people in the rest of the world.
Many people with a strong connection to the UK face homelessness which is prevented only by the threat of launching judicial review proceedings. Does the Secretary of State accept that, as Shelter and other housing groups say, his changes to legal aid will make that much more difficult? Will he publish data to show the impact of the changes?
I guess it comes down to whether we believe that somebody should come to this country and make a contribution first. Our proposals exclude those who are refugees who are seeking refuge in this country, but they are set out in that way because, I think, people who come to this country should make a contribution before they can start taking money out of the state system for other means of support.
18. Does my right hon. Friend agree that, as well as targeting legal aid on those with a strong tie to the UK, we should not make it available to those fighting weak cases that they would not pursue if they were spending their own money but will pursue if they are spending taxpayers’ money? (903860)
That issue applies particularly to judicial review. The proposals set out in the Bill currently before the House would set an appropriately high bar that will do precisely what my hon. Friend says. There must be a bona fide strong case that goes forward to the courts before the taxpayer will pay the bill.
I welcome the Justice Secretary’s reassurance, in answer to the question of my hon. Friend the Member for Hammersmith (Mr Slaughter), that families like those of Jean Charles de Menezes and Jimmy Mubenga would get legal aid at inquests even though they are not British citizens. But can he explain to the House how it is in the public interest, and somehow good, for the women at Yarl’s Wood detention centre who were sexually assaulted by guards, for the Gurkhas refused entry to the UK or for care home residents like those at Winterbourne View to be denied legal aid?
What divides us is the fact that the Government must take hard decisions. The Labour party has argued for reductions in legal aid; it had plans for reductions in legal aid in its manifesto but now, in opposition, it is trying to prevent reductions in legal aid. That is, I am afraid, another example of the Labour party saying one thing and doing another.
May I draw my right hon. Friend’s attention to the Select Committee report on the impact on our armed forces of this deluge of cases? May I urge him to look again at the £10 million that went to those law firms who deliberately suppressed evidence that their clients were part of a terrorist organisation?
Let us be absolutely clear: in relation to the inquiry to which my hon. Friend refers, what has happened in those cases appears to have been untoward to say the least. If the taxpayer has ended up paying a large amount of money for a case brought on a false premise, I will want to take the strongest possible action, including looking at taking financial measures against the firms involved.
Criminal Legal Aid
Recent changes have been made to criminal legal aid because of the imperative to make savings across the Department. We are committed to ensuring the sustainability of the changes that we are making, and to reviewing them a year after implementation of the respective new arrangements.
I recently met solicitors from a couple of small firms based in Bristol that deliver criminal legal aid work, and they told me that not only the 17% cut in fees over two years, but in particular the changes to the duty solicitor contract, will put them out of business. May I urge the Secretary of State to look at the smaller firms who will not be likely to win such contracts, and at the impact that will have on the representation of people who live in places such as Bristol?
We looked at these issues carefully and took two steps that I hope will help on this front. The most important step was that we are allowing those small firms to bid as consortia so that they can share contracts as long as they cover for each other to ensure the duty work is provided. We also did detailed work with external consultants to ensure that we identified how big a contract needed to be to be sustainable, so that we have sustainable contract size and the option for small firms to bid in consortia. That is the best way of delivering changes that I know are painful but, of course, were in the hon. Lady’s party’s manifesto.
When my right hon. Friend is drawing comparisons about the costs of cases, will he try to make sure that the income that will be expected to accrue to the various barristers taking part in those cases is considered, rather than the totality of costs, as it can be difficult to make a sensible judgment about what is fair and unfair?
My hon. Friend is right to say that we have to be very careful. Of course the gross fees that are cited include VAT and chambers’ fees, but those barristers also derive benefits from being self-employed that counteract some of the reductions they experience, because they can offset many other parts of their expenditure and overheads against tax in a way that employed people would not be able to do.
How many more serious fraud trials in the pipeline are struggling to secure legal representation for the defence, in a way similar to the case that collapsed last week, where the judge was forced, in effect, to abandon the trial because of Government legal aid changes?
What is the Lord Chancellor going to do about the fact that senior counsel are not prepared to take on the defence roles in very complex cases, given that he has a case to put about cost saving and they have points to put about complexity? Talks will surely have to take place, and brinkmanship on either side will not serve the interests of justice.
We are taking the financial decisions we are taking for a simple imperative: we have to make an extremely difficult budget add up. We are applying the changes we are applying to those at the higher end of the income scale. I am confident that through the public defender service and other routes we will be able to meet the needs of cases, as and when they arise, and of course PDS advocates were available for these cases.
Will my right hon. Friend also look at the impact on the criminal legal aid budget and access to local justice of decisions such as that made by the judicial business group in Bedfordshire to move criminal cases from Bedford magistrates courts to Luton, thus, in effect, closing the magistrates courts? The move was opposed by local lawyers, local law firms and magistrates; it was an administrative decision designed to skirt democratic accountability. Does he agree that it could have an impact on costs, which should be part of the decision-making process?
I am aware that a number of decisions of this kind are being taken by local committees. Of course such decisions can also mean civil cases moving into those same court buildings, which brings justice closer to communities in matters such as tribunal cases. I am aware of the issues in Bedfordshire to which my right hon. Friend refers. Where changes of this kind occur I have asked my Department to examine possible uses of technology, for example giving access to courts for witnesses. I know he is discussing this matter with the Minister who has responsibility for courts and will continue to do so.
Judicial Conduct Investigations Office
The Judicial Conduct Investigations Office is an independent office that supports both me and the Lord Chief Justice with our joint responsibility for judicial discipline. Following public consultation, the JCIO introduced new rules and regulations governing judicial discipline on 1 October 2013. I am satisfied that it has the appropriate powers to carry out its function effectively.
I thank the Secretary of State for that answer. The judicial conduct cases the JCIO has examined are there for all to see, but does he share the concern of some of my constituents that where judicial misconduct has been proven there is no direct mechanism to challenge decisions made as a result of it in a court?
Clearly I would have to know about the individual cases in order to give a detailed answer to that question, but where a judge is found to have committed an act of misconduct in relation to a case, I would, of course, expect the person involved to take appropriate legal advice. My experience so far is that we have a good process that deals with these issues promptly and sensitively, and the work of the office is handled pretty well.
Literacy in Prisons
12. What steps he is taking to promote literacy in prisons; and if he will make a statement. (903850)
Improving prisoners’ literacy is a key objective of education in custody. Where literacy needs are identified, prisoners are offered teaching and support as a priority. That can take place in classrooms, through peer mentoring, in libraries, at work and during other prison activities.
New Government rules limit the number of books a prisoner is allowed to have at any one time to 12, which means that prisoners studying for Open university courses or other qualifications will not get hold of the required study material. Prisoners are much less likely to reoffend when they have taken educational courses, especially when they have completed them. What contingencies has the Secretary of State put in place to ensure that his rules do not undermine the educational outcomes of prisoners?
Let me start with where I agree with the hon. Gentleman: it is undoubtedly the case that education aids rehabilitation, and where people want to engage in education we support them wherever we can. However, I should point out to him that the changes to the incentives and earned privileges scheme do not affect the number of books prisoners are allowed to have in their cells—that remains 12. Prisoners also have unrestricted access, within sensible safeguards which he would understand on the nature of books it is right to have in prisons, to the library as and when they need it. There is, therefore, no difficulty with prisoners having access to books, and where there is a specific requirement for a particular book that is not in the library, every effort is made to get the prisoner that book.
As ever, the Minister is being infuriatingly reasonable, but we do know that opportunities for purposeful activity are plummeting owing to overcrowding and falling staff numbers. That makes the ban on having books sent in to inmates all the more senseless, and the Labour party has already committed to reverse the ban. Will the Minister explain why having a ban on books being sent in to prison in any way aids rehabilitation?
The hon. Lady is being uncharacteristically unreasonable. We are not banning prisoners having access to books. As I have just explained to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), there really is no difficulty with prisoners having access to books. If only that were the biggest problem we face in connection with literacy in prisons, but it is not. What she must consider is whether she is really going to allow people to send into prison unrestricted packages, which, as long as they say “Books” on the outside, she will be prepared to accept at face value. If that is the case, she will have a rude awakening. This is a sensible restriction on packages coming into prison, but it is no restriction on prisoners being able to read or to study, which they can do now and will continue to be able to do.
Foreign Nationals in Prison
13. How many foreign nationals are in prison in England and Wales; and how many such people come from (a) non-EU countries with which the UK has compulsory prisoner transfer agreements and (b) EU member states which are signatories to the EU prisoner transfer agreement? (903853)
As of 2 May, there were 10,516 foreign national offenders in custody. There are 798 prisoners from non-EU countries with whom we have compulsory prisoner transfer arrangements, and 4,162 from EU member states. All EU member states will be subject to the EUPTA, but 10 countries have not yet implemented it.
All those people should be serving out their sentences in their home countries, and it is costing British taxpayers just south of £400 million a year to pay for their board and lodging. Yet in a written answer I received on 7 April, the Ministry of Justice confirmed that in the past five years, only five individuals have been compulsorily transferred to prisons in their own countries.
My hon. Friend is absolutely right that, wherever possible, these people should be serving their sentences in their own countries. He knows, from conversations on this subject that he and I have had, that huge effort is put into ensuring that they do so, but he knows too that this is not a straightforward matter. Many of those whom we would wish to transfer back to their own countries seek to resist that transfer. That is precisely why he and I are in favour of changes in the Immigration Bill, which will make it much more difficult for prisoners repeatedly to appeal their deportation, so that they can be transferred back to their own country. He will support it, I will support it, and I hope it will shortly become law.
Victims of Crime
The Government are committed to providing timely and effective support to help victims of crime to cope and recover. We have implemented a new victims code that tells people what to expect at every stage of the criminal justice process. More money than ever before—up to £100 million—will be made available to provide victims with the support they need, with the majority of services commissioned locally by police and crime commissioners. We are also piloting pre-trial cross-examination to help vulnerable victims and witnesses give their best possible evidence, without subjecting them to the full atmosphere of the courtroom. The first cross-examinations were recorded last week.
I thank the Minister for his response. He has just reiterated what he said in March, which was that the Government plans for victim support and for supporting families of pre-2010 homicide victims will be dealt with by PCCs. However, I am a little confused because in a recent letter to me, the Minister seems to suggest that that will no longer be the case. Will the Minister please clarify his new position and explain what has changed his mind?
Most services will be commissioned by PCCs, but I am absolutely determined that the families of pre-2010 homicide victims should not be disadvantaged in any way, which is why I have made the decision that, if necessary, there will be back-up from a national fund so that no victims will lose out.
Victims of crime, the families of Ross and Clare Simons who were tragically killed by a disqualified dangerous driver with a raft of previous convictions, would like to thank the Secretary of State for his support for their campaign, Justice for Ross and Clare—as well as Members of this House who took part in a Backbench Business debate on dangerous driving in January—as shown by his significantly increasing sentences for those who kill or maim while driving dangerously while disqualified. What will be the legislative timetable for putting those sentences into law?
We all want a criminal justice system with victims at its heart, but will the Minister confirm that although police reports of child abuse, domestic violence and sexual offences are all rising, the number of cases going to court is falling, that rape cases last year were up but rape convictions were down, and that some victims, including a 24-year-old woman who was sexually assaulted in Hull last March, are having to endure the agony of waiting more than a year for justice? What action will the Minister take to ensure that victims feel that the system is working for them rather than against them?
The Government have taken a significant number of actions. The hon. Gentleman asked about domestic violence. The Home Secretary has commissioned Her Majesty’s inspectorate of constabulary to conduct a comprehensive review, and as result of that review, she has written to every police force to seek their support for the Home Office’s strategy to address HMIC’s findings. He talks about rape victims, and he will know that the 2014 to 2016 rape support fund has provided funding to 80 rape support centres across England and Wales, and that this year the Ministry of Justice is providing funding for two extra rape support centres on top of the 13 set up since 2010.
In relation to supporting victims of crime and their families, I am delighted that the Secretary of State has now increased the sentence for those who cause death on the road while disqualified from two years to 10 years, which formed part of my Driving Whilst Disqualified (Repeat Offenders) Bill. Linked to that, the Secretary of State said that he would review sentencing for other road traffic matters. When is that likely to start, when will it be complete and will victims be able to have a say?
Child cruelty is an abhorrent crime which should be punished severely. Every child should be able to grow up in a safe environment. We are considering ways in which the criminal law can most effectively support that, and we will set out our conclusions and next steps in due course.
I thank my right hon. Friend for that answer. May I urge him to introduce proposals in the next Session of Parliament that will bring the criminal law of England and Wales into line with the family law of England and Wales and recognise all types of significant abuse, including emotional abuse, which is, I am afraid, all too prevalent in the lives of many of our young children?
I am grateful for the information and campaigning verve that my hon. Friend has brought to this issue. As he knows, I have been speaking to Action for Children and other bodies that are campaigning on the issue and, as I said, he will have our conclusions in due course.
We strongly support a vibrant and flourishing prison chaplaincy. Chaplaincy teams facilitate religious practice across the faith traditions, providing pastoral care to prisoners and staff, religious teaching and courses. Chaplaincy contributes to the deradicalisation, resettlement and rehabilitation agendas.
Will the Minister join me in thanking all prison chaplains for the important work they do in restorative and rehabilitative justice? Will he also commit today to write to all prison governors in both the private and public sectors to remind them that the Government are committed to the chaplaincy service and that chaplains should have unfettered access to prisoners?
I am grateful to my hon. Friend for that question and I know that he takes a considerable interest in this matter. I shall certainly consider including a reference to the chaplaincy in one of our regular communications to governors. He will know that there are in the order of 350 employed prison chaplains and many hundreds more who attend on a sessional basis. I know that they will appreciate his support and that of many other Members of this House.
I know that the Minister understands the important part that chaplaincies play in the provision of music education in prisons. I thank him for undertaking to meet Billy Bragg and me to talk about some of the unintended consequences, perhaps, of the new restrictions that are being put in place. Has he had a chance to look at the recent Westminster Hall debate on this subject?
I have, and I apologise again to the hon. Gentleman that I was not able to attend the debate myself. I look forward to meeting him. He, of course, is concerned about a specific issue with regard to the types of instrument that can be kept in a prisoner’s cell, but he is right to refer to the music that is made in communal settings, including as part of religious services, which—and I entirely agree with him—contributes to rehabilitation.
Legal Aid (Non-EU Citizens)
We do not, as I discovered when I took the job, rather to my surprise, currently have data on the nationality or residence status of legal aid recipients. I think that in the future, individuals should in principle have a strong connection to the UK in order to benefit from civil legal aid.
I am grateful to my right hon. Friend for his answer. It is quite a surprise, perhaps, that we have not kept a record of that in the past, but I am very grateful to him for the changes that he has made to the residence test, which should mean that whatever figure we spent on non-nationals last year, it will be saved for the British taxpayer looking forward. My constituents will welcome that.
We hear the chuckles from the Labour party, but let us face it: I had the same experience at the Department for Work and Pensions. The reality is that, Labour opened the door to immigration on a scale we had not seen before in this country. They kept absolutely no record of where state money was going. The reality is that they mismanaged things; we are picking up the pieces.
T1. If he will make a statement on his departmental responsibilities. (903863)
Although it has been mentioned a couple of times, I should like to confirm to the House that we have announced today that disqualified drivers who cause death or serious injuries on the roads will face tougher sentences. Those who cause death will face up to 10 years in prison rather than the current maximum of two years, and we will also take action to address the current gap in the law for disqualified drivers who cause serious injury, by introducing a new offence that will carry a penalty of up to four years’ imprisonment. These much tougher sentences reflect the impact of these very serious offences on victims and their families. We will bring forward legislative proposals to give effect to these important changes as soon as possible. We will also launch a full review of all driving offences and penalties, to ensure that people who endanger lives and public safety are properly punished.
The majority of Members of the House will support the changes. I pay tribute to the determined work of Mandy Stock and her local MP, my hon. Friend the Member for Gloucester (Richard Graham), in bringing this important matter to the public’s attention.
Mr Speaker, you probably noticed that the Secretary of State did not answer the question, which was about the responsibilities of his Department. It was a statement. If he had outlined his responsibilities, I might have asked him, as I will anyway, why, when I ask him and his Department what his priorities are for provisions to contribute to the Modern Slavery Bill, which is under scrutiny in draft in this House, he transfers the question to the Home Office. When are we going to get an answer from his Department about its responsibilities and its contribution to dealing with the experience of victims of trafficking and abuse and of slavery in this country?
The reason that the hon. Gentleman’s question was transferred to the Home Office is that the Modern Slavery Bill is a Home Office responsibility. But I would say to him that, in terms of the support that we provide through victims’ finances, we are spending more on support for victims of modern slavery than this country has ever done before.
T4. I refer the House to my declaration in the Register of Members’ Financial Interests. I welcome the decision of my right hon. Friend the Lord Chancellor, in agreement with the Criminal Bar Association, to postpone the latest round of cuts to criminal legal aid fees. I urge him to use the opportunity granted for a thoroughgoing review of the system of graduated fees and very high-cost cases, to eliminate bureaucracy and restore greater fairness to the system. (903866)
I expressed a willingness to work with the criminal Bar to try to create a more streamlined, more efficient, less expensive system. It is a matter of regret to me that the criminal Bar continues to decline to take important cases, and that is a matter that we are addressing hard at the moment.
The hon. Member for Ribble Valley (Mr Evans), whom I have notified of this question, had private means so he could afford the best defence, and justice, in his case, was done; but he finds himself more than £100,000 out of pocket. That has caused him publicly to question his support for the Government’s legal aid plans, which have led to a two-tier justice system. What advice does the Lord Chancellor give to anyone charged with a serious criminal offence who is not fortunate enough to have their own private means, to help them get a fair trial?
That is not the experience. The CPS has a QC and two barristers, but all people get on legal aid is a junior barrister. That leads to a two-tier criminal justice system. In answer to a previous question the Justice Secretary said that he could not answer questions about Operation Cotton because it is sub judice. I understand what sub judice is. My question is simple. How many other cases are similarly affected by applications to stay the trial because a fair trial cannot take place? The answer is not sub judice.
These are matters for the courts. I have no idea how many cases are subject to a request for a stay because those requests do not come to me personally. Two years ago Labour attacked our changes to civil legal aid. The hon. Member for Hammersmith (Mr Slaughter) attacked our changes to civil legal aid, saying that we should be looking for reductions in criminal legal aid instead. Two years later the Opposition have conveniently forgotten that and have changed their position totally. That is a party that says one thing and does another.
T5. Further to the answer that my right hon. Friend gave to the first topical question, I know that he is committed to ensuring the end of modern-day slavery, but will he update the House on the progress of his Department in ensuring that victims get access to the justice system and to legal aid? (903867)
Victims funding is enormously important. Through the various changes that we have made to the levy on those who are convicted of offences, we have provided far more funding for the support of victims than we ever had before. A couple of weeks ago we announced an additional £13 million worth of funding to ensure what my hon. Friend talked about a moment ago—that we could provide support to those families who are victims of pre-2010 homicides. I have made it clear to the Home Secretary that from the victims funding that I have available, I am also prepared to make additional support available if it is necessary to support victims of modern slavery and human trafficking.
T2. I am pleased to see that the Government are planning to do more about banned driving, but when will they do anything about the travesty of many thousands of people driving legally with more than 12 points on their licence, including a person in Liverpool driving with 47 points and a woman in Bolton with 27 points? (903864)
The whole House will share the hon. Lady’s concern about these cases, where a large number of points are accumulated by someone who does not end up being disqualified. She will know that courts have discretion not to disqualify in those cases and we cannot affect individual decisions in individual cases. However, as she knows, we will conduct a review of driving offences ranging more widely than the changes that we have announced today, and I think what she has described is a good candidate for inclusion in that review.
T7. Will the Secretary of State consider following the example of Conservatives in the Canadian Parliament in putting forward a victims Bill of Rights in order to put the rights of victims ahead of the rights of criminals and put on a statutory basis a right to information, a right to protection, a right to participation and a right to restitution? (903871)
I am grateful to my hon. Friend for his suggestion. He will know that we now have a more all-embracing victims code than ever before. Also, with reference to getting the views of victims, tomorrow sees the first meeting of the victims panel so that the Secretary of State and I can hear face to face the experience of those who are victims and what they want to happen to future victims in the system.
The hon. Gentleman will not be shocked to learn that I do not have that figure in front of me. As I said to his hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), the Opposition need to think carefully about what they are really worried about. If they are worried about prisoners having access to books, I have reassured them that they do not need to worry about that. If, however, they are worried, as the shadow Secretary of State told us he was, about the influx of drugs and other contraband substances into prisons, they might want to reflect on the sense of restricting packages as they come into prisons. That is what we are proposing to do. What are they going to do?
What progress have the Government made towards their aim of greater honesty in sentencing so that the public at large and victims of crime in particular know that when a sentence is handed out, the time served will correspond to a greater degree to the sentence handed out?
As you know, Mr Speaker, I believe that in an ideal world 10 years would mean 10 years. I do not have the resource to deliver that immediately because of the financial constraints upon us, but I have started by ending automatic early release for the most violent and unpleasant offenders in our society so that they can no longer expect to be released automatically halfway through their sentence, and have a possibility of release ahead of time only if they are demonstrably no longer a threat to the public as assessed by the Parole Board.
T8. A number of solicitors in Coventry have written to me to protest about the cuts to legal aid there and the effects that they will have on justice. What representations has the Minister received regarding the effect of legal aid reform on victims of trafficking and domestic violence? (903872)
The Government were due to publish before March their response to the public consultation on their proposed changes to the Office of the Public Guardian and supervision of deputies. When will this happen so that we can better protect the vulnerable people whose best interests are meant to be served by them?
I am grateful for my hon. Friend’s continuing interest in this issue. I hope that we will be able to publish something before we break for the summer and elicit responses after that.
I regarded that as wholly unacceptable. It is a case that we defended in court, but, unfortunately, the judge reached a different view. I can assure the hon. Gentleman that I have made sure that there is no possibility of somebody in that position receiving legal aid to pursue such a case. I have also asked my officials to look at any other ways we have to make it more difficult for prisoners to pursue such a case.
The Government have rightly said that they wish to speed up the placing of children in adoption, but will they confirm that that will not be at the expense of proper legal representation on legal aid for natural mothers who do not wish to give up their children for adoption?
The reforms are absolutely clear in wanting to do two things. The first is to ensure that cases are considered properly and in a timely way, and that is the joint concern of the Department for Education and the Ministry of Justice. The second is to ensure that all those who need to be represented in child-related cases have the adequate resources. I hope that that will give my hon. Friend the reassurance that she needs.
Will the Minister join me in congratulating Superintendent Derek Lockie on and, especially thanking him for, his outstanding work for victims and victims’ organisations during his time leading the Victims’ Commissioner’s office? But does the Minister agree that the loss of such a talented and fiercely independent lead in that office is a matter of great concern?
I am happy to share the hon. Gentleman’s tribute to, I assume, his constituent, Mr. Lockie, but I do not share his worries because I know that independence and feistiness are still more than fully available in the Victims’ Commissioner’s office in the form of the Victims’ Commissioner, whom I look forward to both working with and being held to account by in the coming years.
Does the Minister accept that most of the public think that open prisons are for people such as Lester Piggott rather than people serving 13 life sentences? Given that in a recent parliamentary answer that I received it emerged that 643 people are serving life sentences in open prisons, will he go back and assess each and every one of those cases to ensure that the open prison is the appropriate place for those prisoners, because I do not believe it is?
I assure my hon. Friend that proper reviews of each of those people are carried out, not just by us but, on a great many occasions, by the Parole Board too, to ensure that people are suited for open prisons. For those offenders who will be released one day, we have a choice to release them either straight from the closed estate or from the open estate. The objective here, which he and I will both agree on, is to ensure that when someone is released from custody the risk to the public is as low as it can possibly be. In each and every case, that is what we seek to do. In the particular case that has been raised already this afternoon, as he knows we will look very carefully at the circumstances of this temporary release.
My constituent Dr Heather Peto had her whistleblowing and discrimination case struck out by an employment tribunal judge because, she contends, the respondents’ lawyers deliberately withheld documents adverse to their case. Will the Minister advise me on how my constituent can request a police investigation, given that employment tribunal rules do not permit their judges to refer such matters to the police and the police will investigate only on the basis of just such a referral?
Does the Secretary of State agree that now is the time to introduce a mandatory prison sentence for those caught in possession of a knife so that we can send the strongest signal that carrying knives is unacceptable and will be punished?
The Justice Secretary will want to see all court buildings used to their fullest and most efficient extent, so will he permit social security appeals to be heard in the Rotherham court buildings so that people no longer have to travel to Sheffield, Barnsley or Doncaster to seek justice?
The essence of the court reforms we announced six weeks ago is that we should have more flexible court buildings, using technology and new ways of working. I obviously cannot comment on the specific situation the right hon. Gentleman describes, but if he writes to me, I will happily look into the matter.
The Secretary of State has long been aware of the campaign run by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) and me on mandatory sentencing for knife crime possession. He has had the privilege of meeting Yvonne Lawson, whose son Godwin Lawson was tragically killed in 2010, and who has now devoted much of her life to mentoring and educating young children away from knife crime. Does the Secretary of State understand that she believes that mandatory sentencing for second offences would be a significant deterrent?
I, too, warmly welcome the announcement on increased sentences for disqualified drivers. Will the Secretary of State seriously consider another common-sense move as part of the review: making it a presumption that licences will be taken away as a condition of bail for anyone charged with killing as a result of criminal driving?
AstraZeneca (Pfizer Bid)
(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the bid from Pfizer for AstraZeneca and the resulting effect on the economy, employment and skills in the United Kingdom.
The life sciences industry is of paramount importance to the UK as part of the Government’s industrial strategy, which is securing long-term investment in key sectors where we are global leaders. We are committed to ensuring that we are at the forefront of life sciences research and development, with high-quality jobs, manufacturing and decision making in the UK.
There has been much comment and debate in the press recently on this important issue. I stress, however, that Pfizer has not yet made a formal bid to take over AstraZeneca. The Government must, and will, approach it from the position of even-handed neutrality and recognise that it is ultimately a matter for the shareholders of both companies. I assure the House that I and my colleagues across Government engaged early with both companies to ensure that the outcome is positive for the UK, precisely to avoid the failures of previous Governments in such situations.
The Opposition are calling for changes to the law, but we are operating within the framework that they introduced in 2002, when they removed Ministers from decision making about mergers, apart from in a few specified public interest areas. I note that they chose not to reform the regime in response to the Cadbury-Kraft merger. One of the Government’s options would be to consider using our public interest test powers. That would be a serious step, and not one that should be taken lightly. I am open-minded about that, while stressing that we are operating within serious European legal constraints.
In conclusion, I want to assure the House that we are alive to the national interest considerations in this regard. We see the future of the UK as a knowledge economy, not a tax haven. Our focus is on what is best for the UK: securing great British science, research and manufacturing jobs and decision making in the life sciences sector.
I thank my right hon. Friend for his response. This would be the biggest ever takeover of a British firm and deserves careful scrutiny. Will he tell us what has been learned from the failures of the Kraft-Cadbury takeover, which did not safeguard UK jobs? What powers does he have under current legislation to intervene in this area?
The Pfizer proposals are driven largely by tax law. What certainty does my right hon. Friend have that the USA would not simply change its tax code and that Pfizer would return to the US, jeopardising any benefit to the UK? Has Pfizer asked for any changes to our tax laws, including the patent box? What representations have the Government received from other countries, such as China, the US and Sweden? What international hurdles does he anticipate for a deal such as this, including at European Union and global level?
Pfizer’s board has given a written assurance that it will keep some research and development and advanced manufacturing in the UK, with an opt-out should circumstances significantly change. How broad is that opt-out and what consequences would Pfizer face if it broke its assurances? Given Pfizer’s history in Sandwich, what confidence does my right hon. Friend have in its commitment to the UK?
Both Pfizer and AstraZeneca currently have sites in the Cambridge cluster owing to our excellent research environment. AstraZeneca has announced plans to concentrate its R and D in Cambridge and to move its global headquarters to our successful cluster, bringing 2,000 jobs. People are already transferring to a site in the constituency of the Leader of the House of Commons, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley). What does the Secretary of State think would happen to those proposals if the takeover happened? Many other parts of the country would also be affected. I have been contacted by my hon. Friends the Members for Cheadle (Mark Hunter) and for Macclesfield (David Rutley), and the right hon. Member for Leicester East (Keith Vaz), among others. What does the Secretary of State think will be the consequences of these proposals for the UK’s science and skill base? Does he share my concern about the uncertainty for the industry and people’s jobs? What assessment has he made of Pfizer’s and AstraZeneca’s relative investment in R and D?
What assessment has my right hon. Friend made of the increased risk to the UK of there being fewer pharmaceutical companies here? What discussions has he had with the Secretary of State for Health about the medical consequences of the merger and potential delays in life-saving drugs? Finally, does he agree that companies can become too big to innovate?
I congratulate my colleague, who is representing Cambridge very effectively on this issue, as indeed is the Leader of the House of Commons, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley). I recognise my hon. Friend’s expertise and his pioneering work on cancer drugs in the life sciences industry. I will deal specifically with the Cambridge question because it has obviously been at the centre of the discussion.
It may be useful to read the relevant sentence from the open letter that Pfizer sent to the Prime Minister, bearing in mind that this is a proposal and has not been agreed with the Government—we have not accepted the terms of the letter. The issue of binding obligations remains to be addressed. The letter states:
“Pfizer commits to complete the construction of the currently planned AstraZeneca Cambridge campus, creating a substantial R&D innovation hub in Cambridge and the wider scientific community, which will include core research units, laboratory based scientific support lines and European clinical development and regulatory functions.”
My hon. Friend is concerned about decision making, not just research, and the letter continued:
“Pfizer will base key scientific leadership in the UK who will lead all European and certain global R&D functions based in Cambridge.”
We have had similar conversations with AstraZeneca to ensure that it is similarly committed.
On my hon. Friend’s wider concerns, he made a perfectly valid point about the United States tax regime. Of course, we have no certainty about how the US would respond, which is why I stressed in my introduction that we must view the issue from the point of view of industry strategy rather than tax. Having said that, the fact that Britain has a competitive and attractive tax environment is a positive good, and we should celebrate that.
My hon. Friend mentioned three anti-trust jurisdictions, but there are almost certainly others. This proposal involves two big, complex international companies and a variety of jurisdictions will have to assess it.
On the relative merits of the two companies, I do not propose to treat this as a beauty parade, but it is fair to say that there have been very substantial redundancies from both companies in recent years, of roughly the same order of magnitude. On the positive side, they are very considerable investors and collaborators.
On the NHS points, I have established from the Health Secretary that there are no urgent life-threatening issues in relation to drugs. On competition, there is potentially an issue for the new Competition and Markets Authority and the European competition authorities, and that is where plurality would need to be addressed.
Let us be clear: the issue is not whether this prospective takeover is a foreign one but whether the transaction will be good for jobs and growth in the UK; will protect Britain’s knowledge, research and skills base; and represents a long-term investment in the UK. With that in mind, may I ask the Secretary of State four questions?
First, Pfizer has said that it is committed to making a long-term investment in the UK through this purchase. Similar assurances were given to other companies acquired by Pfizer in the US and Sweden, yet subsequently research facilities were shut down and thousands of high-skilled jobs lost. Why should we believe that the same fate will not befall AstraZeneca?
Secondly, Pfizer says it is committed to investing in R and D, but John LaMattina, who served for over 30 years as Pfizer’s president of global R and D, is clear: this transaction will lead to “dramatic cuts” in R and D. Surely this supports the case for the immediate independent assessment of the deal that the Leader of the Opposition has called for.
Thirdly, the main rationale for this transaction appears to be tax. Sir David Barnes, former chief executive officer of AstraZeneca, wrote to us both—the Secretary of State and me—last night. He said that while companies should manage their tax affairs efficiently, the use of tax inversion proposed by Pfizer is a
“narrow basis on which to build an enduring and constructive business partnership.”
What guarantees has the Secretary of State received that if the tax position changes in the US, investment here will not be withdrawn?
Fourthly, the Secretary of State said that the Government have a neutral view. Why, then, on Friday, just hours after the AstraZeneca board rejected Pfizer’s advances for a third time, was he going round saying that Pfizer’s commitments were “welcome and encouraging”? Why was the Conservative party chairman talking of the deal being a
“great Anglo-American tie-up”?
The fact is that over the past week the Government have compromised the AstraZeneca board, leading the chairman to urge the Prime Minister to adopt a neutral position.
The bottom line is this: the assurances the Government have extracted from Pfizer are simply not worth the paper they are written on, are they? If I am wrong, why, less than three days after giving them, did Pfizer’s CEO say yesterday that following the completion of the AstraZeneca takeover, the company could be split into three parts, all of which could subsequently be flogged off?
I have already dealt with some of the hon. Gentleman’s points, particularly in relation to the tax regime.
Specifically on neutrality, I made it very clear in any comments I made to the media that of course, as a result of conversations that we had with both companies, assurances given in writing were welcome. It would have been absurd to reject them; of course they were welcome. However, I also made it very clear that we needed to study the small print and that there was an issue about how these obligations were made binding. Of course, those issues now need very clearly to be addressed.
I am perfectly happy to take advice and lectures from anybody about how to handle this very difficult and sensitive issue, but the one example that we have in front of us of what to avoid is what happened in the Kraft-Cadbury merger. First, the then Government made no attempt at neutrality and said from the outset that there was going to be huge opposition to the takeover. Secondly, they failed to stop it, having said they were going to do so, and they sought no assurances of any kind, in writing or verbal; indeed, my predecessor has acknowledged that. We are trying to learn from their experiences.
We have taken up a position of neutrality. We acknowledge that there are very serious legal constraints, but I am keeping all options open on that front. We are seeking to locate this whole debate within our industrial future rather than in terms of tax advantage, and I made that very clear in my introduction.
I am well aware of the very constructive role the hon. Lady played when the original redundancies were announced. Indeed, despite the very large job losses, there is still a significant presence on the site to which she refers. The securing of that continued presence, which is substantial, and decision making would be a key part of any future discussion we have with the company.
I agree with the Secretary of State that we must learn the lessons of the Kraft-Cadbury takeover. Does he agree that one of those lessons is that we cannot necessarily take the assurances of the takeover company literally? If the evidence from the Select Committee investigations demonstrates that we may not be able to do that, will the Secretary of State undertake to ensure that the Government will intervene?
I am not making any assurances at this stage; I am merely keeping the options open. I am surprised to hear the hon. Gentleman say that the Government received assurances on Kraft-Cadbury, because our study of the record suggests that the then Secretary of State acknowledged that no such assurances were ever given.
I am grateful to my right hon. Friend the Secretary of State for his statement, for which I also called. AstraZeneca is Macclesfield’s largest employer, with 2,000 highly skilled workers based at the site, so I recognise the concerns of local residents about the potential implications of Pfizer’s bid. With that in mind, what steps are being taken fully to determine the impact the bid could have on the UK’s life sciences sector? In particular, what steps are being taken to safeguard those highly skilled advanced manufacturing and packaging jobs in Macclesfield?
I acknowledge the strong representation the hon. Gentleman has made to me before today, and that of my hon. Friend the Member for Cheadle (Mark Hunter) on the exact same issue. I will quote again from Pfizer’s letter to the Prime Minister, with all the provisos and conditions I suggested before. It says:
“Pfizer will actively look to locate manufacturing operations of the combined company in the UK, subject to the timing of the UK Patent Box proposals, and will retain substantial commercial manufacturing facilities in Macclesfield.”
I will not say anything to prejudge the inquiries the Science and Technology Committee intends to make on this matter, but may I tell the Secretary of State that that quote from the letter to the Prime Minister differs from what the chairman said to me over the telephone? I do not doubt the Secretary of State’s word, but the situation is moving very fast and we need to recognise that. In the light of that, does he agree with me and the noble Lord Heseltine that he ought to apply a national interest test?
I have tried to answer that question already. There is a public interest test. The hon. Gentleman uses the phrase “national interest test,” but the Opposition spokesman, the hon. Member for Streatham (Mr Umunna), was quite right to stress in his introduction that this is not a nationalism issue. I think we are all agreed on that. There are some excellent overseas companies in this country, such as Tata, Nissan and BMW, and they make a massive contribution. It is not an issue of nationality. Of course, both the companies under discussion are international companies in their different ways.
On applying the test, there is a question about whether it would be desirable to extend a public interest test in that way. My predecessor made it very clear in his comments to the Business, Innovation and Skills Committee that he rejected it on principle. I am not doing that, but it is worth recalling the practical problems involved, as set out by the hon. Member for Wrexham (Ian Lucas) when he held the key post in the Department. He said that
“it would need clearance by the European Commission. They would have to be satisfied that the consideration was legitimate and compatible with the objectives of the European Treaty, in particular in relation to the free movement of capital.”
We have to bear that in mind.
I would like the Secretary of State to clarify the legal position, because it seems to me that, under the law the previous Government introduced, Ministers were going to stay out of all these decisions, which would be trusted to an independent body; and that, under the 2004 European Union merger regulation that they signed up to, this is clearly a concentration that falls to be determined by Brussels regulation, not by this elected House of Commons. I therefore find it very surprising that the Opposition are demanding the Secretary of State intervene, when he might end up in an illegal position if he tried to do so.
It is precisely because of the legal position that I have been studiously neutral on this matter. It is fair to say that there are elements of ambiguity—it is not absolutely clear—but the main position is exactly as the right hon. Gentleman described it: under the legislation we inherited from the Labour party, Ministers do not engage with decisions except in three very specific areas of public interest.
May I first say to the Secretary of State that whatever the defects of the 2002 legislation, which we have learned from experience, this Government have done absolutely nothing in four years to change that legislation, so I assume that they consent to it? Secondly, there is nothing in the legislation that, in the words of the Daily Mail today, requires the British Government or certainly the Prime Minister to go
“grovelling to an overseas corporation”.
Does the Secretary of State not accept that there has been a very sharp contrast between the neutral stand that he has tried to take and that of his fellow Ministers, including the Prime Minister, who have been supine in their approach to Pfizer?
They have not been supine at all. My senior colleagues in government have been engaged in discussions with both companies, making the points about the national interest that I have stressed today.
I want to counter the point that the Government did absolutely nothing in response to the history of Kraft-Cadbury. One of the first things I did when I came into this job was to initiate a process that led the Takeover Panel to introduce very substantial reforms—the put up, shut up provision, which is the reason why we now have a 26 May deadline; the requirements for consultation; the requirements that directors have to take a long-term view in making decisions of this kind; and, crucially, the requirements of transparency. My opposite number has called in the press for transparency to be introduced, but it is already there: it was one of the changes introduced when this Government came into power.
I am sure that my right hon. Friend the Secretary of State is aware that, in 2013, British companies were the second largest foreign investor in the US, with $36.5 billion of institutional investment. What message would it send to institutional investors from all over the world if, despite appropriate assurances from a company, the UK Government found a way to scupper a deal of this magnitude against the wishes of the shareholders?
That is why I have stressed—it is fair to say that the Opposition spokesman has also stressed it—that we must not approach this matter in a nationalistic way, let alone in an anti-American way. One of the most difficult tasks I have undertaken in this Government was talking to General Motors to try to persuade it to invest heavily in the British car industry. We have no wish whatever to compromise our reputation for being open to good foreign investors.
The Secretary of State may not have concerns about the impact of the proposed takeover on Britain’s science base, but many others do, including the chancellor of Cambridge university, Lord Sainsbury, and some prominent AstraZeneca investors. Will the Secretary of State say a bit more about why he does not agree with them?
I do not know the basis on which the hon. Lady invented that question. From the outset of my statement and in all my subsequent comments, I have made it very clear that the interests of British science—R and D and the jobs associated with it—are absolutely at the centre of our concerns. As it happens, I have spoken to Lord Sainsbury, and I am aware of his concerns. I have spoken to other leading members of the scientific community—we are also aware of their concerns—and they acknowledge that we are working as best we can within the constraints we have to secure a good outcome for British science.
The life sciences and biopharma industry is in a period of transformation or restructuring worldwide, which is why there has been such strong support for the UK’s life science strategy and its groundbreaking steps to invest in genomics, the patent box, the catalyst fund and early access to innovative medicines. All those measures helped to ensure that Pfizer and AstraZeneca, when they closed their old plants, moved to Cambridge, England, not Cambridge, Massachusetts. May I suggest that rather than embrace the Opposition’s opportunistic calls for protectionist emergency legislation—the shadow Business Secretary dismissed such a step in 2012—we should instead seek to enter into a long-term, 10-year, R and D agreement with Pfizer-AstraZeneca based on accelerating the measures that we have put in place, which will show that we are in favour of business coming to the UK through incentives, not penal legislation?
I think that is a very good statement of where we are. We are indeed trying to encourage business. We are looking 10 years ahead—that is the whole point of the industrial strategy and indeed why it is successful and why business welcomes it. To use my hon. Friend’s word, there is no question of protectionism in this area.
Will the Secretary of State emphasise that the Government can and should intervene under the Enterprise Act 2002 in order to protect the public interest, given that AstraZeneca is a key national champion in the key pharmaceutical sector in which Britain is a world leader? Does he accept that this issue should be settled not on the basis of the tax inversion interests of a US multinational or an indiscriminate open market ideology, but solely on the basis of preserving and strengthening the UK’s scientific base and highly skilled British jobs—promises to preserve which have often been dishonoured by previous predators?
There is nothing in the Enterprise Act 2002 —in retrospect, this is probably regrettable—that refers in any way to the issues that the right hon. Gentleman has described. I was part of those debates; I think he probably was, too. The only areas in which a public interest intervention is allowed under that legislation relate to national security and media plurality. Subsequently, banks were added; as they were overwhelmingly domiciled in the UK, that fell outside European legislation. Those are the very narrow grounds on which the existing legislation allows intervention.
Does my right hon. Friend agree that Britain benefits enormously from the free movement of investment and ideas? It is why all that R and D is happening in Cambridge and elsewhere in the first place. Will he therefore rule out any of the economic nativism being called for by some in this House and rule out any attempt to frustrate this deal on protectionist grounds?
I agree with the Secretary of State when he says that this issue should not be decided on the basis of whether the proposed takeover comes from a foreign company. There is enough narrow nationalism in British politics without our adding to it here. However, there is a question of whether companies keep their promises. The right hon. Gentleman has referred several times to Kraft and Cadbury. Kraft broke its word when it said that it would keep open the Somerdale factory and then announced, after the bid had gone through, that it was going to close it. The question now is how does the right hon. Gentleman know and how can he ensure that, if the takeover goes through, Pfizer will keep its promises on R and D and the British science base?
Should this proceed—as I said at the outset, we have not yet had a formal bid—it will obviously be a matter for negotiation. I am sure that the right hon. Gentleman would not want me to go into exactly what is being said in the discussions at the moment. Negotiations will clearly happen to make sure that any obligation is binding. I am sure that Pfizer itself would want to ensure that any obligations are clear and binding. Just to reinforce the point about nationality, which the right hon. Gentleman rightly stressed at the outset, we are talking about two international companies. I think we all acknowledge that AstraZeneca is an admirable company. It is Anglo-Swedish, with a Swedish chairman, a French chief executive and an international shareholder base. Pfizer is predominantly an American company and has a British chief executive. We are talking about international companies.
The Secretary of State is absolutely right to keep his options open—certainly at this stage. He is right, too, to learn the lessons from the appalling way in which the Kraft-Cadbury deal was handled. Following on from the remarks of my hon. Friend the Member for Mid Norfolk (George Freeman) about research and development, will my right hon. Friend give us some assurance that using purchasing power as part of a long-term industrial strategy is the intelligent way not to pick winners but to make sure that we have the key base of skills that we need for the future?
That is an interesting new angle. I believe my hon. Friend is talking about NHS purchasing, which we have not considered in this context. We have always made it very clear—there are, of course, European rules on this matter—that public procurement cannot be used in a protectionist manner. We need to be very careful of that, but we are aware that public procurement can be used to secure strategic long-term investment. We are already seeing that on the railways, for example.
If the Secretary of State reaches the view that it is not in the strategic and economic interests of the UK for the takeover to go ahead, but he believes the existing legislation to be inadequate, will he bring forward legislation to stop the takeover taking place?
My constituents’ experience of Pfizer from hosting the development and occupation of its award-winning headquarters at Walton Oaks is that it is a model corporate citizen. What is energising some people in the House is that this is a fantastic vote of confidence in the United Kingdom, which gives us the possibility of hosting the world’s leading research-based pharmaceutical company.
The Secretary of State refers to Pfizer’s assurances, but he must remember that Pfizer has pulled jobs and investment out of Sandwich not once, but twice: first in manufacturing and now in R and D. The chief executive of Pfizer has said on the record that he views the UK as
“an attractive place to do science and manufacturing.”
However, after the way that it has treated the workers in Sandwich, is that not a bit like Dracula saying, “I like the look of that blood bank”?
I am aware that there were very sore feelings about the redundancies at Sandwich. The Government had to mobilise a taskforce to rescue the situation on the ground and it is now quite a successful part of the UK. We accept that there was hurt, but that is not unique to Pfizer. As I said in an earlier answer, a roughly equal number of redundancies has been made by both companies. That is not because of their corporate philosophies, but because their patents have run out and they have not developed the pipeline of new projects that is necessary to sustain growing employment.
I was interviewed on “The World at One” this afternoon and was asked whether there would be a political gain for the Chairs of the Select Committees. I said that I serve on two Select Committees, both of which have Labour Chairs who are excellent. What disturbs me is that the Leader of the Opposition has gone on the record to say that we must look into the matter. Why has he suddenly said that about this particular company, when takeovers happen all the time in the City?
I was slightly puzzled as to why the Leader of the Opposition made it a party political point that there would be a Select Committee inquiry. As I understand it, Select Committees are the property of the House. I am very happy to engage with either or both of the Committees. Indeed, we have already had extensive discussions with the Business, Innovation and Skills Committee about the legacies of Kraft-Cadbury and the takeover legislation. Those matters were thoroughly inquired into.
That is a bizarre criticism. We have talked to Pfizer and AstraZeneca on a neutral basis. Those conversations have been conducted by Ministers. The Prime Minister, the Deputy Prime Minister, the Chancellor, the Minister for Universities and Science and I have all been involved. Of course the Government have civil servants to carry out their instructions. I am baffled as to why the hon. Lady regards that as a problem.
I commend the Secretary of State for his level-headed scrutiny of the proposed takeover. The Opposition lose their credibility when they play politics with such matters. May I ask him about his conversations with AstraZeneca? It claims that there are a number of gems in the company, which might mean that the business has been undervalued. Valuations are, of course, up to the shareholders, but those gems in the portfolio hold the prospect of R and D and jobs. What conversations has he had about those new products and what would happen to them?
If the bid proceeds, I guess that we will need to have detailed discussions with both companies about the specifics, which would go beyond the broad commitments that Pfizer has offered in its open letter. I recognise that there is an awful lot more detail to be confronted.
I know it is not a matter of nationality, but I remind the Secretary of State of the adage, “Beware of a Scotsman on the make”—even if Ian Read left Scotland in 1978. Pfizer is in trouble. Its profits have dropped by 15% to £1.3 billion, and every time it takes over a company it is to seize a product. It was Lipitor—an anti-cholesterol drug—from Warner-Lambert; with Wyeth it was Enbrel, an arthritis drug, and then it shut Wyeth’s research. It shut its own research. There can be no guarantees that this company is after anything other than a tax haven. What can and will the Secretary of State do to stop that?
I am obviously not going to give a running commentary on share prices today and tomorrow, but I repeat that throughout the industry, the big pharmaceutical companies have all been retrenching and creating redundancies because of the way technology has evolved. In fact, much of the dynamism in that industry—which I see frequently on my visits to universities—is through small spin-out companies. The nature of the industry is changing, and it is not just Pfizer that has been responsible for redundancies.
Will the Business Secretary confirm that both European competition authorities and the British authority will test this process against the consumer interest? It cannot be in the consumer interest for research to be limited or for existing production lines in this country to be closed down.
I am always happy to meet trade union representatives. I have already made this point briefly, but changes introduced to the takeover panel operations in 2010, when I came into the Government, include additional provision for consultation with the work force. I hope that the parties concerned recognise and act on that.
If this takeover were to go ahead, what steps can and will my right hon. Friend take with his colleagues to ensure that members of AstraZeneca pension funds and their entitlements are properly protected?
That is a new one and I will reflect on it. It is probably an issue for my colleagues in the Department for Work and Pensions and for the Pension Protection Fund, but I thank my hon. and learned Friend for raising the issue and I will certainly follow it up.
AstraZeneca has pointed out today that its profits could double over the next decade as a result of new drugs resulting from its investment in research and development. In contrast, Pfizer has a strategy of cutting dramatically its investment in research and development. What impact does the Secretary of State think that the takeover could have on UK research capacity?
The hon. Gentleman is making an exaggerated contrast between the two companies, but he is right to say that AstraZeneca has an ambitious and attractive long-term investment plan. We have encouraged that as part of the industrial strategy, and we want to see it fulfilled.
My constituents may be a bit perplexed at the inability of people to move on. The Cadbury parent company, Mondelez, has a pretty good track record in investment in R and D, and it will probably not thank us for dragging it into a debate four years later. Surely the real question about the Cadbury takeover is whether, if the price hits the right level, shareholders will sell. There is little any Government can do about that.
Of course, that is the mechanics of a takeover in the market, and I acknowledge that, at the end of the day, shareholders have to make that choice. It is also fair to point out to the hon. Gentleman, as a Birmingham MP, that I think the Kraft-Cadbury story as it has evolved is not as simple as has often been portrayed. Kraft has committed itself to R and D work, although the takeover itself was not very satisfactory from a national interest point of view.
Two years ago, the incoming management of AstraZeneca announced the closure of the science park in Cheshire with the loss of 2,000 science-based jobs. The majority of those jobs will not transfer to Cambridge, resulting in a reduction in the UK’s capability. Can the Secretary of State confirm that he does not consider the completion of the botched move to Cambridge to be a prerequisite for this deal?
My hon. Friend is right that among the redundancies that had been announced in AstraZeneca a substantial number were from the Cheshire site, with more from the campus in Loughborough. As I understand it, a substantial number of staff are moving to Cambridge as part of the commitment made to the Cambridge development, and everybody concerned sees the success of the Cambridge campus as critical to the future of that company.
Since Pfizer took over rival company Wyeth in 2009, investment in research and development has halved. Without credible assurances from the Secretary of State, what will prevent the same from happening here, weakening our science base and putting at risk the long-term future of the British economy?
As I have said many times before, we are primarily concerned about the need to protect jobs, investment and the life sciences sector, and we will do everything we can to make sure that happens, within the constraints under which I operate. We are well aware of the history of that company, but not only of that company.
The public interest in the potential AstraZeneca takeover is rightly being looked at by my right hon. Friend, as one of the parties is a UK entity. Will the Government take a similar interest in the potential takeover of a multinational such as Alstom, which has substantial operations of vital public interest in the UK, but neither the bidder nor the multinational target is based in the UK?
I have asked about the potential implications of the General Electric takeover for Alstom in the west midlands and—as far as we can establish—it has no negative implications. The GE-Alstom takeover is an interesting example. My French opposite number took strong exception to it, but has accepted that in reality the French Government had no alternative but to go along with it.
In answer to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), the Secretary of State said that any assurances given by Pfizer, were this deal to go ahead, would have to be binding. Can he clarify for the House in exactly what way he would be able to make them legally binding?
I am a small, but long-term shareholder in AstraZeneca. Today’s questions have been focused on the effects on AstraZeneca and Pfizer itself. What has not been considered is that the takeover represents a £60 billion investment in the UK economy, and that money will then be reused to create new companies, jobs, investment and growth. Has my right hon. Friend made any assessment of the overall effect on the economy of this big cash injection?
Of course, we will take that into account as part of our assessment in the national interest. Our starting point is the strength of the UK science base and our manufacturing industry, but there are positive potential implications for tax and for the flow of capital.
I understand the constraints on the Secretary of State, but is he not concerned about the track record of Pfizer in this area—significantly less research and development than AstraZeneca, recent cuts and the closure of the Sandwich plant, with all the broken promises that that entailed? Does that not lead him to think that the Government should have a role in this matter, and will he invoke a public interest test to achieve that?