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House of Commons Hansard
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Commons Chamber
11 June 2014
Volume 582

House of Commons

Wednesday 11 June 2014

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Business before Questions

Contingencies Fund 2013-14

Ordered,

That there be laid before this House an Account of the Contingencies Fund, 2013-14, showing:

(1) A Statement of Financial Position;

(2) A Statement of Cash Flows; and

(3) Notes to the Account; together with the Certificate and Report of the Comptroller and Auditor General thereon.— (Mr Robathan.)

Oral Answers to Questions

Northern Ireland

The Secretary of State was asked—

Shared Future

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1. What assessment she has made of progress made by the Northern Ireland Executive on building a shared future in Northern Ireland. [904128]

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In May 2013, the Northern Ireland Executive published their strategy, “Together: Building a United Community”, which contained a number of key actions to help build a shared future for Northern Ireland. The Government support efforts to embed the political settlement through the delivery of those commitments. Additional borrowing powers have been granted to the Northern Ireland Executive by the Government to support those programmes.

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Like my right hon. Friend, I welcome the publication last year of “Together: Building a United Community” by the Northern Ireland Executive. Does she agree that addressing community divisions is absolutely key if Northern Ireland is to gain the full benefits of the peace process?

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My hon. Friend is absolutely right. Apart from anything else, it is crucial to address those issues to embed political stability, because that is key in attracting inward investment and boosting Northern Ireland’s prosperity. The Government, including the Prime Minister, have pushed the Northern Ireland Executive on these matters and very much welcome the progress that is now being made.

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As we move into the parading season, I wonder whether the Secretary of State will comment on what she thinks the contribution of Sinn Fein is when it objects and protests, for instance, against a parade in Dungiven, where there are no flags, bands or anything of that sort that could cause offence to anyone, and against the sharing of a main arterial route in north Belfast? Where is the shared future in that?

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I believe that all parties who are involved in or affected by parading have a responsibility to engage constructively to find local solutions and build local relationships and trust, which are essential to a peaceful parading season. That goes for Sinn Fein, as it does for all other groupings that are involved in such matters.

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Will the Secretary of State also comment on what contribution is made to a shared future by people who go out, as Sinn Fein has done, to glorify and revel in the murderous past of the IRA and to cause great offence to victims—for instance, by refusing to go to the Northern Ireland Affairs Committee sitting on Monday and refusing to be open and transparent about the on-the-runs scheme? What sort of contribution is that to a shared future? Would the Secretary of State care to comment on that?

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As I have said many times, it is important for all political leaders in Northern Ireland to express themselves in temperate terms and to bear in mind the impact of their statements on members of the community who come from different traditions. The way forward for Northern Ireland is to build mutual respect, rather than to focus on division and disunity with inflammatory statements.

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Can my right hon. Friend explain how that division is to be addressed when the state continues to fund segregated education to the extent that it does?

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There is a live debate in Northern Ireland about such matters. I believe that it is possible to ensure that the education system plays its part in building a shared future, without undermining parental choice. That is why I welcome the proposals in “Together: Building a United Community” that provide for far more opportunities for children and young people to learn alongside others from different traditions through the promotion of shared education. In addition, much work is under way on integrated education.

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12. A shared future in Northern Ireland must be for everyone, regardless of race. I am sure that the Secretary of State will deplore the despicable attacks against Anna Lo, a Member of the Northern Ireland Assembly. What steps is the Secretary of State taking to address hate crime in Northern Ireland? [904139]

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I share the hon. Lady’s concern about hate crimes in Northern Ireland. There has been a distressing number of such incidents over recent months. I strongly condemned those incidents in a speech that I made to the Police Federation for Northern Ireland. I have, of course, discussed these matters with the Police Service of Northern Ireland, including with the Chief Constable and Assistant Chief Constable Finlay. Such attacks are unacceptable and incompatible with a civilised society, and I totally condemn the attacks that have taken place.

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Further to the last question, there is a small but significant number of ethnic minorities in Northern Ireland. What more needs to be done by the Northern Ireland Executive to ensure that those minorities can play a full part in a shared future for the Province?

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In reflecting on how to build a shared society, it is important for the Northern Ireland Executive to look not just at the traditional divisions in Northern Ireland’s society, but at how more can be done to integrate and support minority communities in Northern Ireland. One way in which they can do that is by providing leadership and condemning the attacks that have taken place.

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There has been a recent announcement about the resumption of inter-party talks, which will deal with issues that are a barrier to building a shared future: flags, parades and dealing with the past. Will the Secretary of State outline what she and the British Government will do to ensure that those talks are brought to a successful conclusion and what her exact role will be?

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I will continue to urge all the parties in Northern Ireland to engage in the discussions on flags, parading and the past. The Prime Minister is also taking a close interest in that, with his article in the Belfast Telegraph making a strong argument for pressing ahead with an agreement for the sake of the future of Northern Ireland. Both he and I have had several conversations with Northern Ireland’s leaders in recent days. We will continue to encourage, support and facilitate the discussions between party leaders and work in a co-ordinated way with colleagues in Dublin and Washington, who are of course also interested in these matters.

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The Secretary of State will agree that a successful shared future largely depends on the younger generation. A recent poll in the Belfast Telegraph suggested that two thirds of young people want to leave Northern Ireland for good, with many citing sectarianism as one of the reasons. Does she agree that a summit of politicians, business people, civil society and representatives of young people should be convened urgently to begin to address that crucial issue?

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I am sure that such a summit would be helpful in looking at those matters. It is key to make progress on addressing sectarianism, but rebuilding and rebalancing the economy is also crucial to addressing the grave concern that the hon. Gentleman raises. I hope that this morning’s positive announcement on jobs for Northern Ireland will start to resolve these matters, not least the news that the claimant count in Northern Ireland has fallen again today for the 17th month in succession.

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Now that the local and European elections are over, there is a window of opportunity for the Northern Ireland all-party talks to reach an agreement on parades and the past before the summer recess at Stormont. That is an important milestone on the way to achieving a shared future. Will the Secretary of State confirm that the Government are willing to play a far more proactive role than they have done in the past in facilitating the all-party talks? Will she clarify the level of financial support that the UK Government will make available to support any agreement?

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We are playing a proactive role and will continue to do so. I made the point strongly to party leaders over recent days that the process needs to be more intensive to take advantage of the coming weeks. I welcome the fact that the party leaders are now addressing the intensity of the process by setting up longer meetings, with a secretariat. The Prime Minister and I will continue to do all we can to support this process, but ultimately the answer has to come from Northern Ireland’s political leaders. It is not within our gift to impose a solution from outside and we will not do that.

National Crime Agency

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2. When she expects the National Crime Agency to be operating in Northern Ireland. [904129]

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Although the National Crime Agency currently operates in Northern Ireland in relation to non-devolved matters, and in support of the Police Service of Northern Ireland, its important work is restricted by the lack of agreement among the Northern Ireland parties on the agency’s remit there. Discussions between them are proceeding and very early resolution is essential.

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On 23 April 2013, Royal Assent was given to the Crime and Courts Act, which established the National Crime Agency. We spent many months in Committee discussing the agency. We were given assurances by Ministers that this matter would be resolved by last October or November. Will the Minister tell me, 14 months later, when he intends to ensure that the National Crime Agency operates in Northern Ireland?

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If I may digress slightly, I pay tribute to the retiring Chief Constable of the Police Service of Northern Ireland, Matt Baggott, who was previously chief constable of Leicestershire, and wish him well in his retirement. I also wish his successor, George Hamilton, well in his post.

As the right hon. Gentleman knows, the matter is complicated. I do not think that we disagree about it at all. There are political parties in Northern Ireland—Sinn Fein and the Social Democratic and Labour party—that refuse to sign up to the National Crime Agency. We want the National Crime Agency to move forward in Northern Ireland and the serious gaps that are emerging in crime prevention and pursuit to be closed, but he will understand from his past that we have devolved policing and justice and that, unless we wish to break the Sewel convention, we will have to work with the parties in Northern Ireland to get some agreement.

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The Minister will be aware that there have been numerous incidents in Northern Ireland in the past two or three years involving organised criminal gangs on the border, particularly fuel smuggling, fuel laundering, and money laundering, and that has escalated over the past two years. Will he outline the consequences of a failure to have the National Crime Agency fully operational in Northern Ireland?

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It has been said that serious gaps are emerging. As the hon. Gentleman will understand, these are devolved matters, but we are keen that the National Crime Agency should be able to pursue organised and serious crime in Northern Ireland, and there is no difference between us on that at all. Two parties in the Executive are holding things up, however, and I ask why they are doing that and why we do not all want to pursue serious criminality in the Province.

On-the-runs: Inquiry

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3. When she plans to report to the House on her Department’s inquiry into the administrative scheme for on-the-runs. [904130]

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While Lady Justice Hallett is making progress on her report, she has informed me that it will not be ready for publication until shortly after the 30 June deadline.

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The Secretary of State will be aware of deep concern in Northern Ireland about revelations that a number of terrorist suspects were granted the royal prerogative of mercy—in other words, pardons— for serious terrorist crimes. Will the report on the on-the-runs include information about those who have been granted such so-called pardons?

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It is an independent report so I do not know what it will contain, but given the concerns raised about the use of the royal prerogative of mercy, I expect that aspects of that issue will be covered in Lady Justice Hallett’s report. I emphasise that this Government have not used the RPM in Northern Ireland, and it was used by the previous Government on only 18 occasions. Sixteen of those involved terrorism, but in all cases it was used to shorten sentences, not to cancel the offence.

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The Northern Ireland Affairs Committee has spent two days in Belfast taking evidence for our on-the-runs inquiry, including from victims and relatives of victims who gave the most harrowing accounts of what had happened to their loved ones. Does the Secretary of State agree that whenever we decide about writing letters to suspects or issuing royal pardons, the views and needs of victims should be at the heart of those considerations? Does she further agree that that has not always been the case?

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I agree on both those points. I know that many victims of terrorism would have been deeply hurt by the OTR issue, which is why I apologise to them on behalf of the Government. Future reports and investigations on such matters should put victims at their centre, as should any broader solution looking at the legacy of Northern Ireland’s past.

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In the past, security forces have used informers to help defeat terrorists. Does my right hon. Friend agree that issuing royal pardons to on-the-runs is a world apart from using royal pardons as a way of encouraging and using informers? Will she give an undertaking that the Government will not do anything to put at risk the use of informers in Northern Ireland?

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It is not generally Government practice to comment on sensitive operational matters such as those, but I acknowledge that the use of informers is an important means of combating crime and terrorism.

Film Industry

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4. What steps she has taken in conjunction with the Northern Ireland Department of Enterprise, Trade and Investment to attract jobs to Northern Ireland by promoting its film industry. [904131]

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Economic rebalancing is essential and we fully support it through our economic pact with the Executive. Creative industries are an essential element worth half a billion pounds annually, and Invest NI and UKTI both strongly promote them. My right hon. Friend the Secretary of State has met HBO—Home Box Office—at Hillsborough and in America to promote Northern Ireland as a destination of choice.

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The popular TV series “Game of Thrones” was filmed in my constituency and is watched by more than 2 million people—there is no better place to have a film made than Strangford. The Northern Ireland screen budget has recently been raised by £43 million, which will raise a further £194 million for the local economy. What steps has the Minister taken to ensure that the local South Eastern Regional College, based in Newtownards, will have the skills and training to increase the economy even more?

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The skills are best dealt with by the people of Northern Ireland and the college. I visited “Game of Thrones” in Paint Hall in Belfast and was very impressed. Carla Stronge, of Extras NI, is quoted in the Belfast Telegraph today:

“When I started up in 2007 there were just two people working in my company. Since Game of Thrones started, I have had to take on more people and now there are 11 people working for me”.

We fully support that. I saw the castle in Strangford that is used in “Game of Thrones” only last week.

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I find myself, oddly enough, in complete agreement with the hon. Member for Strangford (Jim Shannon). That may disturb him more than it disturbs me. The Northern Irish film and television industry now has a global reputation for excellence. He referred to “Game of Thrones”. There is also Ridley Scott’s “Halo”, “The Fall” and many other productions. However, they tend to utilise talent from within the Belfast area. With youth unemployment still far higher outside Belfast than in the rest of Great Britain, what is the Minister doing to work with the Department of Enterprise, Trade and Investment and other agencies to extend the benefits throughout the north?

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I do not accept what the hon. Gentleman says. At its height, “Game of Thrones” has employed up to 800 people. As we heard from the hon. Member for Strangford (Jim Shannon), it employs people from around the Province—Antrim, Strangford and elsewhere. The Government have introduced high-end television tax relief that has brought very real benefits to the creative industries in Northern Ireland and elsewhere. We are bringing down unemployment and strengthening the economy. Frankly, the hon. Gentleman would be well advised to remember the state of the economy when he left office in 2010.

The Past

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5. What role she plans to play in advancing a comprehensive process for dealing with the past and its legacy. [904132]

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The Prime Minister and I have been engaged with Northern Ireland’s political leaders in recent weeks to urge them to make progress on finding an agreed way forward on the past. The Prime Minister’s article in the Belfast Telegraph made the case strongly for an agreement on all three Haass issues. We both welcome the fact that party leaders are meeting again and are planning to step up their engagement on these matters with a more intensive process. [Interruption.]

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Order. The House can scarcely hear the Secretary of State. That is not her fault, but the fault of Members. We are discussing extremely serious matters. Let us have a bit of order.

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At the evidence sessions for the Northern Ireland Affairs Committee, we heard directly from victims sector individuals who expressed their disappointment and distrust—indeed, their profound upset—at what had happened with the on-the-runs, and their need to see closure on this issue. What can the UK Government bring to the table as part of the talks that are about to start to ensure a fully comprehensive deal on the past that is transparent and respects the sensitivities of victims?

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As I have said already, I believe that a way forward on the past has to put victims at its heart. I also agree with the hon. Lady that a new process needs to be transparent, balanced and accountable. As the OTRs issue has demonstrated, it is vital that we put any side deals behind us and that the way we approach the legacy of Northern Ireland’s past is balanced, transparent and accountable. We have said that we will work with the kind of institutions set out in Haass 7 if they are formally agreed by the parties.

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11. The Secretary of State will be aware that many people in Northern Ireland are living in dread of the potential for another summer of disruption and distress. So that people are not held to ransom through another summer of protests, intimidation and violence, does the Secretary of State agree that there is now a compelling need for both the British and Irish Governments to become fully engaged in bringing the Haass discussions, and the discussions that have flowed from them, to a productive conclusion? [904138]

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Both the UK and Irish Governments will continue to support the efforts of party leaders to reach a conclusion on the Haass issues. Like the hon. Gentleman, I urge everyone, as we approach the height of the parading season, to comply with the rule of law to ensure that all protests and all parades are both peaceful and lawful, and that the Parades Commission’s determinations are complied with.

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Does the Secretary of State agree that getting Sinn Fein to tell the truth about the past is like hoping that Nick Clegg will be the Deputy Prime Minister after the 2015 election? Does she agree that the best way to deal with the past at this precise time is for her Government to annul the letters to the on-the-runs?

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As I have said many times in relation to those letters, they did not confer an amnesty; they were merely a statement of fact about an individual’s status with regard to the police and prosecuting authorities at a particular point in time, and that was confirmed by the Director of Public Prosecutions for Northern Ireland in the Northern Ireland Affairs Committee yesterday.

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There should be no amnesty or “get out of jail free” card for troubles-related crimes, but does the Secretary of State agree that in 90% of cases, according to experts, victims will not get justice by pursuing prosecutions alone, because the evidence is simply not available to bring those cases to trial and get a conclusion?

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What came across clearly was that many victims wanted the possibility of justice. I think they would accept that in many cases that is going to be difficult to achieve, but it would be unacceptable to introduce an amnesty and deprive victims of any hope of receiving justice.

Security Situation

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6. What assessment she has made of the current security situation in Northern Ireland; and if she will make a statement. [904133]

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The threat level in Northern Ireland remains severe, with persistent planning and targeting by terrorists. However, action by the PSNI and its partners continues to keep the pressure on these terrorist groups, greatly constraining their ability to carry out their lethal objectives.

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Will the Secretary of State confirm that those terrorists who received a royal pardon, including Liam Averill, did so as a reward for giving vital information to the security forces? As well as other, overt activity to defeat the threat of terrorism, will she confirm that the security services have infiltrated, and will infiltrate, dissident republican terrorist cells, as they successfully did to defeat the Provisional IRA, using high-profile informants without royal pardons?

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As I said in response to the earlier question on the use of agents and informants, it is not the Government’s practice to comment on such operational matters. However, I can give the hon. Gentleman the reassurance that the PSNI and its partners in the Security Service are working incredibly hard to do everything they can to combat these terrorists and have had a number of successes, not least with recent arrests of leading figures in the dissident republican groupings.

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Very briefly please, Mark Durkan.

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13. Does the Secretary of State recognise that the recent attack in the name of the IRA on a hotel in my constituency was an attack not just on that business, but on the city? Does she support the city in having a strong, resilient response that says, “We are not going to be a place of cold security; we are going to be a place of warmth, welcome and safety”? [904140]

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I can wholeheartedly agree with that statement.

Youth Unemployment

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7. What assessment she has made of the social and economic effects of youth unemployment in Northern Ireland. [904134]

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Youth unemployment is a critical issue. Specific measures to address it in Northern Ireland are the responsibility of the Executive, but the Government’s efforts to reduce the largest structural deficit in UK peacetime history are now bearing fruit. This, more than anything, will help to deliver a sustainable economic recovery and so directly assist young people to get into employment.

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Despite the 2.6% reduction in youth unemployment, it still stands at an alarming 18.6%. Can the Minister say what measures the Government are putting in place to allow young people to access and progress into employment?

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It is very kind of the hon. Gentleman to raise the matter of employment today of all days, as we bring the rate of unemployment across the UK down to 6.6%—which is pretty good, I would say—and in the 17th consecutive month in Northern Ireland when the claimant count has been down. Youth unemployment is down over the quarter by 2.4%. All youth unemployment is unfortunate, but we are working at it and achieving our aims, and I hope he would congratulate us on that.

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On Question 7, Neil Carmichael.

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8. Does the Minister of State agree that today’s employment figures prove that the long-term economic plan is working in Northern Ireland and the United Kingdom, demonstrating that the Conservative party has won the economic argument? [904135]

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My hon. Friend may not be surprised to know that I do agree with him that the long-term economic plan is indeed working. I hope that Opposition Members will congratulate the Government on reducing the unemployment rate both in Northern Ireland and across the country, to the benefit of all the people of this United Kingdom.

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On this question, Mr William Bain.

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9. Will the Minister update the House on what action UK Trade & Investment has taken with the participants in last year’s economic investment conference to increase much needed inward investment into Northern Ireland? [904136]

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The investment conference was a great success, as I am sure the hon. Gentleman would agree. Out of that came further inward investment through Fujitsu and others, and we reckon that some 300 jobs were created just from the investment conference.

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On this question, Jack Lopresti.

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10. Will my right hon. Friend join me in congratulating Invest NI on an excellent year for attracting investment into Northern Ireland, and does he agree that the Prime Minister’s decision to take the G8 to Northern Ireland in June and to attend the international investment conference in October has played a key role in helping that objective? [904137]

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I do of course. I welcome my hon. Friend back from his recent illness; I am delighted to see him and pay tribute to his work on the Select Committee on Northern Ireland Affairs. We can all see that the Government’s and the Prime Minister’s engagement in investment in Northern Ireland has been hugely successful. I hope that everyone in the House would congratulate us on that.

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Last but not least Sammy Wilson.

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Today’s unemployment statistics show that the work of the Northern Ireland Executive in reducing youth unemployment is succeeding, but what specific measures are there in the Queen’s Speech to indicate a way of reducing youth unemployment at a national level for all regions across the United Kingdom?

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As the hon. Gentleman will know, the Queen’s Speech is dedicated to pursuing this long-term economic plan, and it is working. There are no specific measures that immediately spring to mind for Northern Ireland, but we all wish to see the economy grow and people in Northern Ireland prospering as in the rest of the United Kingdom, and I think that is happening. I am currently visiting a lot of places in Northern Ireland and find people buoyant and optimistic about the future of Northern Ireland and its economy.

Prime Minister

The Prime Minister was asked—

Engagements

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Q1. If he will list his official engagements for Wednesday 11 June. [904143]

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I am sure the whole House will wish to join me in wishing the England football team the very best of British before their first World cup game this Saturday in Brazil.

This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.

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I wish good luck to every football team in the World cup.

Less than a quarter of people who have applied for the new personal independence payment have received a decision. If we continue at this rate, it will take more than 40 years to get to the point where everyone has been assessed. Does the Prime Minister think that that is acceptable, and what is he going to do about it?

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It is extremely important when we introduce these new benefits that we make sure it is done in a way that works well. I would say it is very important not to have an artificial deadline of replacing one benefit with another. The whole point about the personal independence payment is that it is more accurate and more targeted than disability living allowance. It will mean more help for those with the greatest disabilities, and I am determined we get it right.

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Will the Prime Minister join me in congratulating the Foreign Secretary on organising this week’s important global summit to end sexual violence, and does he agree that it is indeed time to act?

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I give huge credit to the Foreign Secretary for the work he has done, but I would also like to pay tribute to all the non-governmental organisations across various countries of the world, which have all come together for this extraordinary summit in London. It is absolutely vital that we never forget about the victims of sexual violence in conflict. This is something that is still far too prevalent in our world, but real advances have been made by having a declaration which countries are signing up to and, even more importantly, by having an action plan of how to gather evidence, prosecute the wrongdoers and make sure that they are properly punished, while helping the survivors. Listening to the testimony of survivors yesterday in Downing street was immensely powerful.

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Let me first join the Prime Minister in wishing the England team the best of luck in the World cup. The whole country will, I am sure, be behind it.

Everyone will have been concerned by what has been happening at certain schools in Birmingham—including girls being forced to sit at the back of the class and the forced removal of head teachers. At the heart of this story is a failure of accountability—locally and nationally—but the key question for parents is this: if there is a serious problem at their children’s school, where do they go to get it sorted out?

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Let me echo what the right hon. Gentleman said about how important it is to get a grip on this issue. The problem of Islamist extremism in our schools is serious—the situation, not just in Birmingham but elsewhere, is extremely serious—and I am absolutely determined, as are the Home Secretary, the Education Secretary and, indeed, the whole Government, to ensure that it is unacceptable in our country. People should be being taught in our schools in a way that ensures that they can play a full part in the life of our country. As for where people should go if they are concerned about what is happening in their schools, they should go first to the head teacher and the chair of governors.

While I hope that we can forge real unity across the House of Commons on the issue of combating Islamist extremism in our schools, I hope that that will not be used as an agenda to try to knock down successful school formats, whether they are academies created under the last Government or free schools created under this Government.

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There is certainly a degree of common ground on what our kids are taught in schools and on the need for a proper upholding of values, but the Prime Minister said that people should go to the head teacher or the chair of governors. In certain cases, the head teacher was removed and the governing body was part of the problem. The truth is that the question of who parents can go to is a very hard question to answer, because we have an incredibly fragmented school system in which no one is properly responsible. Some of the schools involved were local authority schools and some were academies, but what parents want is for someone who is responsible on a day-to-day basis to be able to intervene quickly when things go wrong. Does there not need to be one system of accountability for all schools to safeguard the education of our children?

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As I said, the first port of call is the head teacher and the chair of governors. However, if people believe that there is a real problem, there is one organisation that has responsibility for checking standards in all these schools, and that, of course, is Ofsted. That is why what the Education Secretary has said about no-notice inspections is so important. The Leader of the Opposition asked how intervention could happen quickly; well, it will happen quickly if we have the no-notice inspections.

What I would say to the Leader of the Opposition, because this is an important debate, is that if we are saying that there is only one model of accountability that will work—and some Members believe that the only model of accountability is local government accountability—it is worth making the point that Birmingham city council failed in its duty to these parents. Indeed, when we look at what caused action to happen, we see that it was only when the Department for Education was contacted that proper action was taken. So yes, let us learn the lessons, and let us listen to the permanent secretary to the Education Department when he reports, but let us learn the right lessons.

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It is definitely worth making the point about local authorities and academies, and that is why I made the point. Ofsted inspections may happen only once every five years, and that is not the kind of system of accountability that we need.

Here is the thing on which I think we should be able to agree. No one, surely, believes that the Department for Education can run 20,000 schools from Whitehall. Perhaps the Secretary of State believes that, but I do not think that anyone can possibly really believe it. However, no one is arguing that we should go back to the old local authority system either. Is it not time—[Interruption.] Will Government Members just listen to the question? Is it not time that we had a proper system of local oversight, separate from councils and responsible for standards in all schools, to prevent what happened in Birmingham from happening elsewhere?

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I always listen very carefully to the right hon. Gentleman’s proposals, but I have to say that that sounds like creating a new local bureaucracy at a time when we need to ensure that resources are going into schools for the teachers, the computers, the books and the equipment.

The right hon. Gentleman says that an Ofsted inspection can take place only every five years. The point about the no-notice inspections, if we are going to give this issue the attention that it deserves, is that a report and a suspicion expressed to Ofsted about these problems could result in an instant inspection and instant action.

Let me make just one more point. It is often said that some of the schools with new formats, namely free schools or academies, which I thought that Labour Members supported—well, they used to when they were still sensible—do not act as fast as local authority schools. In fact, completely the opposite is the case. When there has been a problem in free schools or converter academies, they have taken far faster action than many of the local authority schools that have been left in a state of failure for far too long.

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I have to say to the Prime Minister that he has no answer on the question of accountability because it is not realistic to do it centrally and Ofsted inspections are not going to do the job. Everyone knows that.

I want to turn from the failures in the Department for Education to the failures in the Home Office. Can the Prime Minister update the House on his latest estimate of the backlog of people waiting for their passport applications to be processed?

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It is extremely important that we get the situation with the passport agency right. I understand people are anxious. They want to get their passport. They want to be able to go on holiday. Let me give the right hon. Gentleman the facts. We have 300,000 more applications than is normal at this time of year. We have massively increased the staff. The level of applications outside the normal three-week limit is less than 10% of that 300,000.

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The truth is that tens of thousands of people are finding that their holidays are being cancelled because they are not getting a passport. The Prime Minister says that the Government have increased the resources of the passport agency. That is not the case. Since 2010, there have been greater responsibilities for the passport agency and fewer resources. When did the Government first know about the problem and how has it been allowed to develop?

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The Government have taken action to deal with this problem not today but in weeks gone past. We have 250 staff already redeployed to the front line, prioritising all outstanding applications. That will allow for an extra 25,000 examinations weekly. [Interruption.] The right hon. Gentleman asked the questions. People will be concerned about this. They will want to hear the answers. [Interruption.]

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Order. That is certainly true. Mr Robertson, you do have something of a lion’s roar and it rather lets you down because I can hear clearly that it is you. As for you, Mr Lucas, I have told you that you need to go on some sort of therapeutic training course if you are to attain the level of statesmanship to which you aspire. Let us hear the answer.

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The Government have made sure, as I said, that 250 extra staff have been deployed, that there are longer opening hours at the Passport Office—and it is now working seven days a week—and that there are 650 extra staff on the helplines to support customers. The Home Secretary has announced today that new offices will be opened in Liverpool next week, with an additional 100 staff. The Home Office has been on this from the very start, but it all begins with 300,000 extra people applying for passports compared with this time last year. Those are the actions that are being taken. I hope that the right hon. Gentleman will be careful not to try to frighten people in the way he did in his opening question.

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The Prime Minister says that the Government are sorting out the problem, but tens of thousands of people, we understand, are waiting for their applications to be processed and are finding that their holidays are being cancelled. The truth of the picture of this Government is that we have the Home Secretary fighting with the Education Secretary but not paying attention to the business of government. Here is the thing. To add insult to injury, people are being told that, if they want their applications to be processed within the three-week target, they will have to pay £55 extra. Can the Prime Minister get a grip on this situation and tell families when the backlog will be cleared?

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We will be clearing the backlog not least because we are not wasting time with the national identity card scheme that we inherited from the Labour party. Is it not interesting that there was not a word about the unemployment figures? The right hon. Gentleman simply cannot bear the fact that in our country we now have 2 million more people in work in the private sector. He cannot stand the fact that unemployment has fallen yet again. The claimant count has come down. He is absolutely allergic to good news because he knows that as our economy gets stronger he gets weaker.

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It is now 28 years since the devastating accident in Chernobyl and the effects are still being felt, particularly by children. Last year, while many were dying, we ceased to supply gratis visas to children from the affected regions to come to the UK for respite care. Will the Prime Minister look again at our policy because, since charging for those visas, we have seen a 50% reduction in the number of young people being able to come to the UK for respite?

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I am very happy to look at the case my hon. Friend raises—we all remember the appalling incident at Chernobyl and the long-term effects it had on people. We charge for visas because we have to cover the cost of visa operations to make sure we are protecting ourselves from people who should not come here but do come here, and that is important, but I will look carefully at what my hon. Friend said, and perhaps I will write to him.

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Q2. Does the Prime Minister agree that now more than ever we need to bend our efforts to build a strong, robust civil society? One hundred years ago this August a war broke out that killed 16 million people, mainly young men, and devastated communities. Active participation in politics is declining rapidly. Only 34% of people voted in the recent Euro elections. Will the Prime Minister agree to meet on a cross-party basis to look seriously at citizenship in this country and at how we build a society that encourages active citizenship? [904144]

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I agree with the hon. Gentleman: turnout at some of these elections is very depressing. I think people feel that the European institutions are rather distant from them and do not see the relevance of them. Of course I am happy to look at what he says about citizenship, but I would prefer that we put our resources and effort into practical programmes such as the National Citizen Service, which is now a superb service that many young people are taking part in, so they can see the importance of engaging in their communities and in the world. I think that will lead, among other things, to greater political participation.

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Q3. Will the Prime Minister join me in welcoming the 2 million new private sector jobs that have been created since 2010, and will he continue with the long-term economic plan, to make sure the figure goes up? [904145]

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This is an important milestone that we have reached: there are now 2 million more private sector jobs than when this Government came to office. That is 2 million reasons for sticking to the long-term economic plan we have set out. May I thank the hon. Gentleman particularly for the work he has done for his constituents in Weaver Vale, in running job club after job club, to help make sure the businesses that need more workers are put in touch with the people looking for a job? That is a vital service that Members of Parliament are delivering, and he is leading the way.

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Given the revelation that the royal prerogative of mercy was granted in at least 16 cases relating to terrorism in the days and weeks immediately following the Belfast agreement, and, indeed, in cases stretching back to the 1980s, will the Prime Minister agree, in the interests of openness, transparency and, not least, justice for the victims in Northern Ireland—and here in Britain itself—that he should be intervening to make sure the names and circumstances in these exercises of the royal prerogative of mercy are revealed, as happens in the rest of the United Kingdom, so people know the facts of these cases?

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I will look very carefully, as I always do, at what the right hon. Gentleman says about this, but what I would say is that the last Government had to make very difficult decisions to try to get the peace process started by John Major on track and working. I do not want to unpick all those difficult decisions or second-guess them, because, yes, we have frustrations and difficulties and many other issues that still need to be settled in Northern Ireland, but we have the basic architecture of devolution and parties working together across historical divides, and I do not want to put that at risk.

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Q4. Today’s employment figures show that unemployment in Kingswood is down by 37% since May 2010 and, as the MP for Kingswood, since 2012 I have held eight jobs fairs advertising hundreds of local jobs—just some of the 2 million private sector jobs created since this Government came to office—but there is still more to do. Together with the Kingswood job centre, I am launching the Kingswood challenge today, a mentoring or job fostering scheme where local business leaders will be paired with local people looking for work, helping to provide them with one-to-one support. [904146]

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I thank my hon. Friend for what he is doing with these job fairs to put people who want work in touch with businesses, and this is absolutely key, because there is no complacency on this side of the House about unemployment whatsoever. Youth unemployment, long-term unemployment: we still need to remove these scourges from our country. We have a goal of full employment and the way we will achieve that goal is not simply through a growing economy—now growing faster than those of other countries in the G7—but by making sure we help people and train people and give them all that is necessary to get on and get a job and have that security and stability in their lives.

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Q5. Shockingly, one in three children in the north-east are now living in poverty—the highest rate in the UK. Significantly, two out of three young people living in poverty are now from working households. Does the Prime Minister agree that something has gone badly wrong in regard to child poverty? Will he please, please tell me where it all went wrong in the first place? [904147]

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I say to the hon. Gentleman that the best route out of poverty is work. If we look at the north-east, we see that the number of people employed there is up by 47,000 over the last year. That is what is happening in the north-east. I know that Labour Members want to have this narrative in our country, but let me give them some facts. Inequality is at its lowest since 1986. There are 300,000 fewer children living in poverty than there were when I became Prime Minister, and there are 500,000 fewer people in relative poverty than at the election. Above all—[Interruption.]

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Order. Mr Campbell, when you are eating curry in the Kennington Tandoori, you do not yell across the restaurant: don’t yell across the Floor of this House.

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What we need to do is tackle the causes of poverty: underachievement at school, homelessness, lack of work, drug addiction. That is what drives this Government, and that is what we are dealing with. There are 250,000 fewer children in failing schools than when this Government took office.

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Atos is taking even longer to carry out medical assessments of applicants for disability benefits who live in Argyll and Bute than it is taking elsewhere, because it is reluctant to send assessors all the way to my constituency. I am sure that the Prime Minister will agree that that is unacceptable. Will he tell Atos that it must not discriminate against people living in Argyll and Bute in that way, and that people there should receive their assessments as quickly as people living in the rest of the country?

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Obviously there are challenges in particularly far-flung rural constituencies such as that of the hon. Gentleman, which has many islands in it, but we have to make sure that people’s assessments are properly carried out. Those assessments are important. The whole point about this Government’s programme is that we do not want to leave people on unemployment or other benefits year after year. We want these tests and assessments to be properly carried out so that we can see whether people are eligible for benefits and what help they need to get work.

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Q6. Did the Prime Minister’s intention to legislate to help people with the costs and insecurity of renting their homes lose its slot in a packed Queen’s Speech legislative programme to the plan to ban plastic bags, or did he perhaps not have any such proposals in the first place? [904148]

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What this Government are doing is ensuring that we build more houses. That is what we absolutely need to do to help those who are renting or buying. Yes, we need greater transparency in regard to what letting agencies do, and we are delivering that as part of our programme, but I do not believe that a policy of rent controls—which the Royal Institution of Chartered Surveyors and the letting agents themselves have said would put up rents—is the answer.

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Q7. Metal fabricators, hydraulic fitters, computer numerically controlled machine turners, mechanical engineers and vehicle maintenance apprenticeships are just some of the real jobs for local people that are on offer at my jobs fair in Holmfirth. Following the news that 2 million private sector jobs have been created since 2010, will the Prime Minister continue to support the small and medium-sized enterprises in Yorkshire that are creating real jobs and quality apprenticeships? [904149]

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Absolutely I will. My hon. Friend makes a good point; we are seeing a rebalancing of our economy. Just this week we have seen a growth in manufacturing and all the elements of GDP, such as construction and manufacturing, growing. We want to see a recovery that is broadly based across the different sectors and in every part of the country. When it comes to today’s figures, we can see that pay levels in industries such as manufacturing and services, rather than financial services, are on the rise.

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Q8. Last week, the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), said that people in the UK had“not yet felt any sense of recovery.”The Office for National Statistics has confirmed today that full-time workers in the north-east are £36 a week worse off than they were last year. Does the Prime Minister agree with his Cabinet colleague? [904150]

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The point I make to the hon. Lady is that, as I have just said, there are 47,000 more people in work in the north-east than there were a year ago. The best route out of poverty is work, and what that needs to be followed by are the tax reductions this Government are bringing in to make sure that people are in work and better off in work—that is going to make a difference.

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Q9. Pentland, a company based in my constituency, increased its turnover by 10% to more than £2 billion last year and increased its work force significantly, contributing to the 2 million private sector jobs created under this Government. In addition, the company has just been voted European family business of the year. Will my right hon. Friend join me in congratulating Pentland and agree to visit this British success story? [904151]

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I am sure I will be visiting my hon. Friend’s constituency before long, but I join him in congratulating this great British company. I believe it came with me on my visit to China, where we were pushing Speedos as hard as we could, including getting them on the vital Chinese equivalent to Amazon to make sure they could be sold. I am very happy to make such a visit; this is part of the economic success story and export success story of our country.

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On Monday, I am going to the United Nations to address a number of member states and to present a cross-party petition in support of the inclusion of the right to healthy early childhood in the new, post-2015 millennium development goals. The petition has been signed by people from 170 countries around the world. May I therefore ask the Prime Minister to support, with his advocacy and the support of his Government, this leadership by the United Nations to create benefit for at least 200 million of the world’s poorest children?

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I pay tribute to the right hon. Lady and what she is doing in this area. Britain has tried to play a leading role in making sure that the world has a good replacement for the millennium development goals; I co-authored a report about what should be put in their place. At the heart of that was the idea of better maternal health and better health services, particularly for women in childbirth. I am very happy to look at the proposal she makes and make sure that we put the full weight of the British Government behind it.

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Q10. Could I join my right hon. Friend in wishing the England football team every success in the World cup, but may I also raise one of the darker aspects of the beautiful game? Recently, my constituent Donald Distin was seriously assaulted by one of the players while refereeing a local football game and was very seriously injured. May I therefore ask the Prime Minister what steps the Government are taking to ensure that violence is treated with equal seriousness whether it occurs on the field or off it and is never tolerated? [904152]

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My hon. Friend makes an important point: of course we all support the England football team—it is good to say that again—but it is really important that we crack down on all forms of bad behaviour, whether on or off the football pitch. Referees should have the full protection of the law to ensure that community football is safe and enjoyable. I pay tribute to the Football Association for all the work it has done on not only training but explaining the importance of respect and good behaviour in our game—but we need more of that in the years to come.

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I am afraid I might have nightmares this evening about the Prime Minister modelling Speedos on his world tour—I thank him for sharing that image with us. On a much more serious note, since this Prime Minister took office the number of people in Scotland alone reporting to have been forced into using loan sharks has increased by 57%—it is estimated that a total of 85,000 people in Scotland are in this predicament. What are his Government going to do about this? Or does he think it is acceptable?

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First, let me reassure the hon. Lady that Speedo makes shorts as well as Speedos, so I hope I can clear that picture out of her mind. Hon. Members rightly raise a series of issues that we need properly to tackle to make sure that we help everyone in our country benefit from economic recovery. The minimum wage was declining when I became Prime Minister, but it is now increasing. Nothing was done under the last Government on zero-hours contracts, but now we have legislation to get rid of exclusivity. Nothing was done about payday lending in the last 13 years, but now it is being properly regulated, with a cap on payday lending. We have also made sure that the penalties for not paying the minimum wage have been quadrupled under this Government. I am absolutely determined to make sure that everyone who wants to work hard and do the right thing can benefit from the economic recovery now under way.

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Q11. The Prime Minister must know that every Member of this House shares a total and collective repugnance that a young woman has been sentenced to 100 lashes and the death penalty for simply wanting to practise her faith. Will my right hon. Friend request that the UK delegation to the UN Human Rights Council press the case that the concept of apostasy is in direct and total conflict with article 18 of the United Nations Convention on Human Rights, and will he reassure the House that the Sudanese Government will be left in no doubt of the abhorrence with which this sentence is held? [904153]

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My right hon. Friend speaks for the whole House on that issue. I completely share his abhorrence at the way in which this case has been treated; it has been absolutely barbaric, and it has no place in this world. I can confirm that we will be raising this case at the forthcoming UN Human Rights Council. Sudan is firmly on the agenda at that council, and we should bring the full weight of everything that Britain can do to make it clear to that country that the way this woman is being treated is totally unacceptable.

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Q12. It was good of the Prime Minister to wish the England team every success in the forthcoming World cup, but with his Cabinet split and his coalition fractured should he not be picking up the phone to Roy Hodgson and asking for some tips on team discipline? [904154]

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I would not want to offer Roy too much advice. What I say about this Government is that we have had the same Chancellor for four years and we have record growth in our country; we have had the same Home Secretary for four years and we have had record falls in crime; and we have had the same Education Secretary and we have 250,000 fewer children in failing schools. If you have a strong team with a strong plan, stick with them, and keep on putting it in the back of the net.

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The Prime Minister will have heard calls from all parts of this House for an independent inquiry on the Hillsborough model into organised child sexual abuse in this country. Can he truly be satisfied that current police investigations are sufficient for the public to have confidence that we are both willing and able to get to the truth?

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My hon. Friend makes an important point, and I have looked carefully at the matter with ministerial colleagues, because we have a series of inquiries taking place into what happened in various hospitals, care homes and media organisations. It is important that the Government keep a clear view about how those are being co-ordinated and how the lessons are being learned. If there is a need for any more overarching process to be put in place, I am happy to look at it. At the moment, thanks to the Home Secretary and her colleagues, we have a proper view of what is happening in all those organisations.

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Q13. Recent analysis has shown that Labour’s policy to allocate NHS funding based on health need actually reduced health inequalities by 85%. Why did the Government scrap it? [904155]

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This Government have ensured that public health budgets are properly ring-fenced and that money has been delivered, according to need, to the various areas of the country. I think the only part of the country in which Labour policy is put in place is Wales, which has not hit a health target since about 1989. It is also where experts say people are dying because of the length of time they spend on waiting lists, so if the hon. Lady is concerned about Labour health policy, Cardiff would be a good place to start.

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Q15. Youth unemployment in Harrogate and Knaresborough today stands at 50— that is not a percentage, but the total, and it is down 83% since 2010. That clearly reflects the 2 million new private sector jobs created since then. Will my right hon. Friend be building on that success by providing more opportunities and skills for the young people in our area through more traineeships and apprenticeships? [904157]

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My hon. Friend is absolutely right that even though 50 is a small number of young people to be unemployed in Harrogate, it is still 50 too many. Our ambition in the next Parliament should be to ensure that everybody has the chance either to go to university or to take on an apprenticeship and that we leave absolutely no one behind as they leave school and look for the stability and security that a future in work provides.

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Q14. This Government said they were going to recruit 11,000 new reserves, to make up for the cuts to the Regular Army. In fact, what has happened, according to today’s National Audit Office report, is that the number has actually declined since 2012. Is the Prime Minister content to continue to preside over not only a debacle in passports, but this further example of his Government’s incompetence and, frankly, buck-passing? [904156]

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I am afraid to tell the hon. Lady that what we inherited in defence was not only a £38 billion black hole, but a situation where the military reserves had been under-resourced and undervalued for years. We now have a five-year programme for building them up; that programme is under way and it is gathering pace. What we are going to see is the strongest possible professional Army, with all the best equipment it could have, and a very strong reserve force backing it up, making sure that we can meet all the obligations we set out in the strategic defence review.

New Member

The following Member took and subscribed the Oath required by law:

Robert Jenrick, for Newark.

G7

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With permission, Mr Speaker, I would like to make a statement on last week’s G7 summit in Brussels.

This was a G7 rather than a G8 because of Russia’s unacceptable actions in Ukraine. Right from the outset, the G7 nations have been united in support for Ukraine and its right to choose its own future, and we have sent a firm message that Russia’s actions have been totally at odds with the values of our group of democracies.

At the summit, we kept up the pressure on Russia. We agreed that the status quo is unacceptable and the continuing destabilisation of eastern Ukraine must stop. We insisted that Russia must recognise the legitimate election of President Poroshenko; it must stop arms crossing the border into Ukraine; and it must cease support for separatist groups. We agreed that wide-ranging economic sanctions should remain on the table if Russia did not follow this path of de-escalation, or if it launched a punitive trade war with Ukraine in response to Kiev proceeding with the trade aspects of its association agreement with the European Union.

I made those points directly to President Putin when I met him in Paris on the eve of the D-day commemorations. The inauguration of President Poroshenko has created a new opportunity for diplomacy to help to establish a proper relationship between Ukraine and Russia. I urged President Putin to ensure that this happens. It is welcome that he met President Poroshenko in Normandy and that Moscow and Kiev are now engaging each other again. It is important that we continue to do what we can to sustain the positive momentum. We also agreed to help Ukraine to achieve greater energy security by diversifying its supplies.

The G7 also continued the work we began last year at Lough Erne to deal with the cancer of corruption, with further agreements on what I call the three T’s of greater transparency, fairer taxes and freer trade. We made good progress in working towards common global standards of transparency in extractive industries, we agreed to push forwards with establishing new international rules to stop companies artificially shifting their profits across borders to avoid taxes and we agreed to make a concerted push on finalising bilateral trade deals as soon as possible. These included the EU-Canada and EU-Japan deals, but of course also the EU-US deal, which we launched at Lough Erne last summer. I believe this is one of the greatest opportunities to turbo-charge the global economy and could be worth up to £10 billion for Britain alone. With these agreements, the Lough Erne agenda on transparency, tax and trade has been hard-wired into these international summits for many years to come.

There was also a good discussion on climate change, where the recent announcements by the US make a potential agreement next year more achievable, and we should do what we can to make that happen.

In my bilateral meeting with President Obama, we discussed what I believe is the greatest threat to our security: how we counter extremism and the terrorist threat to our people at home and abroad. We agreed to intensify our efforts to address the threat of foreign fighters travelling to and from Syria, which is now the top destination in the world for jihadists. And here in Britain, my right hon. Friend the Home Secretary will be introducing a new measure to enable prosecution of those who plan and train for terrorism abroad. In Libya, we are fulfilling our commitment to train the Libyan security forces, with the first tranche of recruits arriving in the United Kingdom yesterday. On Nigeria, we reaffirmed our commitment to support President Jonathan’s Government and the wider region in confronting the evil of Boko Haram. We continue to help address the tragedy of the abducted schoolgirls.

Finally, in all my recent meetings with European leaders and again at the summit in Sweden yesterday, there was discussion about the top jobs in Europe. I believe the European elections sent a clear message right across the continent. The European Union needs to change. It is vital that politicians across Europe respond to the concerns of their people. That means having institutions in Europe that understand the need for reform and it means having people at the head of these institutions who understand that if things go on as they have done, the European Union is not going to work properly for its citizens.

Quite apart from the entirely valid concerns about the proposed people in question, there is a fundamental point of principle on which we must not budge. As laid down in EU law, it is for the European Council to make its own nomination for President. This is the body that is made up of the elected leaders of the European nations, and it is not for the European Parliament to try to impose its will on the democratically elected leaders of 28 member states.

Prime Minister Reinfeldt, Prime Minister Rutte of the Netherlands, Chancellor Merkel and I also agreed on the work programme for the new Commission: completing the single market; energising trade deals; and making further progress on deregulation—a clear focus on jobs and growth. We also agreed the Commission must work together to address the abuse of free movement, so that people move across Europe for work but not for welfare. These were important agreements from like-minded European leaders who share my determination to deliver a reformed European Union.

Finally, amidst the various meetings of the last week I was able to attend the very special commemorations for the 70th anniversary of D-day in Normandy. Attending the vigil at Pegasus bridge—marking the moment the first glider touched down on French soil—was a fitting moment to reflect on the importance of our collective defence, something that will be at the heart of the NATO summit in Wales this September. But above all, it was a moment to remember the sheer bravery and sacrifice of all those who gave their lives for our future.

The veterans who made it to Normandy are quite simply some of the most remarkable people I have ever had the privilege and pleasure of meeting. I will never forget the conversations that I had that night and indeed the next day. Our gratitude for their service and sacrifice must never wane, and neither should our resolve to protect the peace that they fought for. I commend this statement to the House.

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Let me begin where the Prime Minister ended by paying tribute to the commemorations of the 70th anniversary of D-day that we attended last week. They were a reminder of the incredible bravery that tens of thousands of our servicemen and women who left our shores 70 years ago showed, risking their lives to fight for the freedom that we so often take for granted today. I echo the words of the Prime Minister: it was deeply moving to hear the stories from the Normandy veterans we met and to hear about the sheer courage they showed for our country on that day. Our job is to ensure that those memories and stories continue to be told so that future generations know about the service and sacrifice of those who went before us.

Before turning to the G7, let me also take this opportunity to echo the Prime Minister’s comments about the European Commission President. The message from the European elections was clear: we need reform in Europe, and we need people in top jobs in Europe willing and able to pursue that agenda. The appointment of a new Commission and President provides a vital opportunity to pursue the much-needed European reform that we need, and it must be seized, not squandered.

Turning to the G7, we welcome the G7’s commitment to open trade. What discussions did the Prime Minister have with EU leaders and President Obama on whether the TTIP—transatlantic trade and investment partnership —negotiations for the free trade agreement are on track and when they are likely to be completed? Can he specifically reassure the House—this point has been raised by a number of people—that there will be no impact on our public services, particularly the NHS?

On tax and transparency, the Government must ensure that the bold promises made at Lough Erne are not watered down. In particular, last year we welcomed the OECD work on tackling tax avoidance, and it was promised that developing countries would be part of that process. Can the Prime Minister assure the House that that will be the case going forward?

We support the conclusions on international development. In the spirit of consensus, any time the Prime Minister wants to bring forward the promised law to enshrine the 0.7% aid target, the Opposition would of course offer him our support. It was promised in the coalition agreement, but it seems to have mysteriously disappeared.

The agreement of a new international framework for tackling climate change is very important, and the talks in Paris will be key to that, as will making good on the promise made in Copenhagen on climate finance for developing countries. Can the Prime Minister inform the House how the UK’s preparations for playing a part in that are going and assure us that he is working to secure timely contributions from the other G7 members, because we have tended to be at the front of the pack on this, while others have been less so.

Finally, let me turn to Ukraine. First, following Russia’s illegal annexation of Crimea, it was absolutely right for G7 countries to boycott this year’s G8 summit, which would have taken place in Sochi. The crisis has been the west’s most serious confrontation with Russia since the end of the cold war and there had to be consequences for Russia’s actions.

Secondly, we welcome the swearing in of President Poroshenko and his first act of offering talks with the Russian-speaking east. I join the Prime Minister in welcoming the initial engagement between President Putin and President Poroshenko. However, can the Prime Minister assure us that in his discussions with President Putin, and following the Ukrainian President’s commitment to signing an association agreement with the EU, there was an assurance that there will be no further Russian aggression in response to that action?

Thirdly, it is with growing concern that we see the volatile situation in eastern Ukraine continuing and rising violence in the south-east of the country. During the Prime Minister’s conversations at the summit, did he seek assurances from Russia that it will accelerate its withdrawal of troops from the border with Ukraine and stop the flow of weapons and pro-Russian insurgents into the country?

The G7 meeting was a demonstration of the unity of international action. It was right for the G7 to call for a de-escalation of the situation in Ukraine, the need to work towards a diplomatic solution and continuing to maintain the pressure on Russia. In taking that action, the Government have our full support.

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I thank the right hon. Gentleman for his response, particularly what he said about D-day, which I think for both of us, and indeed for the Deputy Prime Minister, was an extremely moving occasion. When it comes to the principle that the European Council should decide who is the leader of the Commission and that it should not be determined by some electoral process in the European Parliament that many people did not take part in, I am very grateful for the fact that this is a common British position that is held by the Labour party, the Liberal Democrats and the Conservative party. I also thank him for that. It is very important for others in Europe to know what an important issue of principle it is for all three parties.

On TTIP and the deal between the EU and the US, I can report that there have been five good meetings on progressing it. We are pushing very hard and trying to set some deadlines for the work. No specific deadline was agreed, but it was agreed at the G7 that further impetus needed to be given to the talks and, specifically, that domestic politicians needed to answer any specific questions or concerns from non-governmental organisations, or indeed public services, that can sometimes be raised and that do not always, when we look at the detail, bear up to examination. Perhaps I will do that with regard to the NHS and write to the right hon. Gentleman about that.

On tax and transparency, we want not only to make sure that countries sign up to the tax tool we have created so that we can see where profits are being earned—that is going very well, with a number of countries signing up—but to find the best way of sharing that information with developing countries so that they can make sure that they are not being ripped off by these companies.

On the 0.7% target, I would say that what matters more than legislation is doing it—actually showing the political will and making the arguments about protecting our promises to the poorest people in the world.

On climate change, the right hon. Gentleman is right that Britain and the EU can play a leading role in helping to achieve a deal. We need to make sure that the EU has the political will to get to the right position on this. That should happen in September, and there will be important discussions between now and then to make sure that it happens.

On Ukraine, the right hon. Gentleman asked about how we would respond to further aggression. The agreement at the G7 was, first, that the status quo in terms of aggression and destabilisation in eastern Ukraine is not acceptable. That has to be fixed, plus the fact that Russia must not respond to the trade elements of the agreement between Ukraine and the EU by taking unfair steps against Ukraine. If those things happen, that is how sanctions could be put back on the table.

The right hon. Gentleman talked about the withdrawal of Russian troops and the issue of weapons. I said to President Putin that it was welcome that a number of troops had been withdrawn from the borders and that we wanted to see more of that happen, but crucially we have got to see action to stop weapons getting into eastern Ukraine, because it is noticeable that the so-called rebels have, for instance, very technical, high-tech weapons such as MANPADs—man-portable air defence systems—and it is hard to believe that they could be coming from anywhere else.

I hope that that answers the right hon. Gentleman’s questions. I think that in a lot of these areas there is a good measure of cross-party agreement.

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In welcoming the full range of the Prime Minister’s statement, may I particularly congratulate him on showing how he was able to lock in so much of the success of the G8 at Lough Erne and on his references to the three T’s and Nigeria? Did he get any assurance that there is a continuing commitment that there should be no payments on kidnap for ransom, which was also a crucial element of his success at Lough Erne?

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I am grateful to my right hon. Friend for raising this issue. I raised it specifically at the G7 because I am very concerned that we signed the agreement at Lough Erne about not paying ransoms for terrorist kidnap, yet there are terrorist kidnaps taking place in our world and it is—how can I put it politely?—far from clear that some countries are not allowing, or even enabling, ransoms to be paid: ransoms that then go into the hands of very dangerous terrorist groups and fund weapons and explosives that could well be used in our countries back home. I raised this issue very forcefully, as did President Obama. It is very important that we do all we can to help to release those who are held, but paying ransoms for terrorist kidnaps is totally self-defeating—it makes the terrorists stronger and increases the chances of further kidnaps in future.

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May I first endorse what the Prime Minister and my right hon. Friend the Leader of the Opposition said about the presidency of the EU? I remind the House that it is not long since the German press themselves were very heavily critical of Mr Juncker for “running a tax haven” and, indeed, for his behaviour on some late evenings. OECD projections suggest that in 11 years the BRICs—Brazil, Russia, India and China—might overtake the G7 in terms of aggregate GDP, and we are already seeing a parting of the ways in terms of international cohesion. How far are the strategic implications of that change in economic power being considered by the G7?

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The right hon. Gentleman makes a very good point. The reason I believe the G7 is going to have continued relevance in the years ahead is that it is a chance for some of the world’s biggest democracies, and largest economies, who are like-minded to have a very frank and open conversation. It is much less about communiqués and reading out speeches and more about a discussion about how we approach really complicated and difficult issues, whether it is the rise of Islamist extremism or how to make sure that our relations with China work in our mutual interest, and so on. I hope that we can keep going with these meetings. The G20 is able to address the broader world economy and to bring together the BRIC countries with some of the older western democracies.

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My main objection to the nomination of Mr Juncker is that it is a stitch-up and a power grab by the European Parliament, and the Prime Minister is absolutely right to have no part of it.

In Syria, against a backdrop of indiscriminate killing, delays in removing chemical stockpiles, contempt for UN resolution 2118, and the ongoing use of chemicals such as chlorine, the United States is now arming the rebels. Is it not time that we reconsidered our position on this?

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First, on Syria, I think we are doing the right thing, which is that we are working with the legitimate opposition—we are giving them support and giving them help, but we draw up short of lethal equipment. But there is plenty we can do to help, to train, to advise and to assist, alongside the Americans, that will make a difference and bolster those voices of democracy and freedom for the Syrian people.

My right hon. Friend is absolutely right about the so-called power grab. It is the principle we should be focused on, because the rules are clear. Through the European Council, the nation states of Europe, democratically elected, come together and propose someone to head the Commission. That is how it is meant to work. If we were not to oppose what is happening, we would be accepting for ever in future that there was going to be some sort of elected president of the European Commission, even though many countries would not be taking part in that election. It is interesting that the European People’s party stood in Britain and—I checked the figures—got 0.18% of the vote. [Interruption.] I heard that—steady on! That is not a mandate. So it is a very important principle that Britain continues its opposition.

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I am sure that the Prime Minister will have agreed with President Obama’s comments when he said that he thought the UK worked “pretty well” and hoped that his ally would remain effective, robust and united. Is not the G7 a perfect example of the fact that when we—that is, England, Wales, Scotland and Northern Ireland—work together we all benefit from being at the top table and discussing the most important issues facing the world as we move forward?

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I think that the hon. Gentleman speaks for many in this House by making that point. Britain is fortunate that we are a member of so many important international organisations. Whether it is the permanent seat at the UN Security Council, the EU, NATO, the G7, the G20 or the Commonwealth, we are able to use these forums to make our points on behalf of the whole United Kingdom and to stand up for the whole United Kingdom when doing so. Being part of these organisations increases our influence in the world, and increases Scotland’s influence in the world.

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Does the Prime Minister agree that the whole House must remain firm in its message to President Putin that Russia’s actions are completely unacceptable and totally against the values of democracy and the principles of international law?

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My hon. Friend is absolutely right about that. What Russia has done is wrong—wrong in respect of the bogus referendum in Crimea and wrong in respect of the support that has been given to groups in eastern Ukraine. The only thing that it will respect is a very clear, very firm and very predictable response from the EU and the US. What has been noticeable is that while a lot of people have thought there would be great divisions opening up between the United States and the countries of the European Union, we have actually, I think, delivered a fairly joined-up and clear response to what is unacceptable.

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On the three T’s of tax, transparency and trade, what leadership is the Prime Minister giving and what progress has been made on establishing public registers of beneficial ownership in the overseas territories and Crown dependencies?

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I am delighted to be able to do that. The first thing was our putting the whole issue on the agenda at last year’s G8 and getting countries to sign up to the Lough Erne declaration, which specifically talked about registers of beneficial ownership. The second thing was our announcement in the Queen’s Speech of a world first, I think, in publishing, here in the United Kingdom, the open register of beneficial ownership. As for the overseas territories and Crown dependencies, we should commend them for the work that they have done to bring their arrangements up to date. I had this conversation with them almost exactly this time last year before the trooping of the colour. They have made huge steps forward, and we should commend them for that and encourage them to go further.

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I commend my right hon. Friend for having a discussion with President Obama about the serious terrorism threat posed by Boko Haram in north-east Nigeria. Does he agree that the tragedy of the kidnapped girls should be resolved and that the front-line states of the United States, France and ourselves should co-operate further, because the terrorism threat to Nigeria threatens the whole stability and economy of that most important economy in Africa?

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My hon. Friend is absolutely right that we need to give the issue further attention. At the G8 last year, we talked about encouraging leading countries such as France, Germany, Italy and Britain to partner up with nations and their security forces to try to strengthen their work in combating extremism. That is more urgent than ever, and there is a real opportunity at the NATO summit to put more flesh on the bones of that idea. As we do so, and as President Obama said in his West Point speech, we should not think that the only answer is a security and military one; we should be thinking about aid, development, advice and all the other things we can do to help the country.

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Like the Prime Minister, I had the great privilege to be invited to attend the D-day celebrations in Normandy. It made me reflect on the dangers of sitting on our hands when another country is re-arming and acting aggressively. In the past five years, Russia has increased its defence spending by more than 10% a year in real terms, while defence expenditure has been reduced in Europe by an average of 10% over the same period. The UK has cut its defence spending by 18% in real terms. Does the Prime Minister think that now is the time to reconsider those cuts, stop them and start rebuilding our defence forces?

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On the figures, this Government effectively froze defence spending in cash terms, which was an 8% real-terms cut. We are, of course, still meeting the 2% that NATO countries are meant to meet, and we are virtually the only country in Europe that is doing so, so I think we are in a strong position to say to others that they should do more.

Where I would perhaps part company with the hon. Gentleman is on the fact that our changes are about making sure that we have effective and deployable armed forces. Some countries might maintain spending or current patterns, but they do not actually have deployable armed forces for the things that are needed. That is what we need to get countries to focus on as they come to the NATO summit.

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May I echo the Prime Minister’s appropriate words about D-day? It is very welcome that President Poroshenko has committed to normalised relations with Russia and that Russia, in turn, has recognised his legitimacy as President of Ukraine. Does the Prime Minister agree that it is important that the European Union does not slip into complacency over Ukraine and that other, alternative options, such as the alternative long-term energy strategy, should still be pursued with vigour?

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My hon. Friend is entirely right. Europe has to do two things. First, it must make sure that the trade relationship with Ukraine works properly, that the implications are discussed with Russia and that a successful Ukrainian economy develops. The second and far more long-term issue is the changes to our energy markets in the European Union. We really have to set out a work programme for more investment in liquefied natural gas terminals, more reverse flows between different countries and more action on shale gas, which is an important natural resource that we ought to be making the most of. Europe will rue the day if it just puts out communiqués and talks about these things, rather than actually doing them.

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The humanitarian situation in Iraq is a calamity. What can the international community do to help the more than 500,000 people who have just fled Mosul? The Prime Minister, like David Miliband, voted in favour of the Iraq war. This morning, Mr Miliband said that if he had known then what he knows now, he would not have voted in favour of invading Iraq. Given what the Prime Minister knows now, would he again vote to invade Iraq?

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I have always made the point that I do not particularly see the point of going back over these issues. I voted and acted as I did, and I do not see the point of going over the history books. What we have to deal with now is the situation today. There is an extremely serious situation in Mosul. I agree with the United States that the threat posed by the Islamic State of Iraq and the Levant in Iraq and the region needs a strong and co-ordinated response. It needs Prime Minister Maliki to pursue inclusive policies that can unite his country, but it will also require a security response from the Iraqis. At the same time, as a generous country that supports humanitarian aid, we should look at what we can do for those people who are displaced.

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Although it is obviously desirable that the Germans seek an alternative nomination for President of the EU Commission, it is not entirely essential should Italy perhaps join Britain, Sweden, Holland and the Czech Republic. May I urge my right hon. Friend to seek wider support across Europe, including Italy, to try to back our position? As someone who wants to stay in the European Union, I think it is vital that Europe demonstrates that it gets the message of what the people want and picks a new, forward-looking generation of Commission.

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I am certainly doing everything I can to make a series of points, including that we need reform in Europe, which means a particular programme of reform, and people who are capable of carrying it out. I also keep coming back to an important point of principle: if Britain were to give way on this issue and say that we accepted it, we would effectively be saying that we accepted a change to the whole way in which Europe worked for ever into the future. I sometimes find it frustrating that many other European leaders agree with me completely about the need for reform and for people who can carry it through; we need to make sure that everybody works together to get the right outcome, but I am absolutely clear that this is a point of principle and one on which we should not budge.

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The Prime Minister referred to Syria. Was there any discussion with the other leaders about the terrorist threat from the Islamic State of Iraq and the Levant, both in Syria and in Iraq? This morning, there were reports of the imminent capture of the main oilfield, as well as of the events in Mosul. Does not that prove that the John Major and Labour Governments were right to give support to the Kurds to establish their autonomy and the protection and stability that exists in at least one part of Iraq at this time?

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First, there was a discussion about the current state of Syria and there was also, as I have said, a discussion, including my bilateral with President Obama, about the specific ISIL threat in Syria and Iraq. The threat is being played out in terms of terrorist kidnap and terrorist training. British people are going to Syria and being trained, with the risk that they will come back here or to other parts of Europe and carry out terrorist offences, so it is one of the most serious security challenges that we face.

I agree with what the hon. Gentleman says about the Kurds, but I also agree that there is no option for an international-facing, open-trading nation such as Britain to turn away from the world and say we will not have anything to do with these problems because they are all too difficult or complicated. Those problems will come back and bite us unless we act with allies not only to make ourselves secure here at home, but to try to help to deliver security there as well.

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Media reports indicate that Russia is being given one month to disengage from eastern Ukraine before facing further sanctions. Does my right hon. Friend agree with that, and, more particularly, what steps does he want to see taken within that month?

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The way I would put it is that the clear view of the G7 was that the status quo of the flow of arms and people across the border and the support being given to separatist groups is unacceptable and those things need to change. We also need a responsible response from Russia to the free trade agreement between Ukraine and the EU. Both of those things need to happen for further sanction actions to be comprehensively avoided.

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Does the Prime Minister recognise that the investor-state dispute settlement mechanism in the transatlantic trade and investment partnership agreement is deeply controversial, because essentially it allows private companies to sue democratic Governments? Given that sovereignty is an issue that the Prime Minister is obviously very fond of, will he explain why he is so relaxed about the potential very serious loss of sovereignty if TTIP goes ahead?

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The hon. Lady is right that this is a contentious and difficult issue, but I do not believe that it is one that cannot be solved through negotiation. After all, these sorts of issues come up in every bilateral trade deal. If we are going to get the full advantage of these trade deals, so that they include services and financial services as well as goods, we have to address those problems. If we made trade deals simply about reducing tariff barriers, most of that work has already been done though international agreements, so we have to do the difficult things to get the full benefit.

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As usual, the Prime Minister speaks with absolute sense on Europe, but if—despite his efforts—the next President of the European Commission is a federalist who wants even closer union, will we be one step closer to the Prime Minister leading the out campaign in 2017?

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As I said in Sweden yesterday, obviously it will be easier to persuade people to stay in a reformed European Union if we can demonstrate that reforms are being put in place. Where my hon. Friend and I perhaps part company a little bit is that I think we have seen some good steps forward in recent years. We have cut the EU budget, so this organisation has to focus and do less—that is a positive thing. We have brought in deregulation, so it has to start taking away European laws, rather than adding them—that is a good thing. But given the results of the European elections, we now need to take that further and achieve more full-throated reform. Obviously, the more of that we can have, the easier the task those of us who want Britain to stay in a reformed European Union will have.

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Many of my constituents, and no doubt many of the Prime Minister’s, are very worried about the possible impact of TTIP on public services. I heard what the Prime Minister said about the meetings taking place, but there is no timetable yet. Will he assure me that the impact on the NHS is at the forefront of his discussions?

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As I said to the Leader of the Opposition, I will write a letter to him—[Interruption.] No, I am sure that I have written to him about something before, if only to wish him a very happy birthday or something like that. I do think this is important because all of us in the House feel—I would say instinctively—that free trade agreements will help to boost growth, but we are all going to get a lot of letters from non-governmental organisations and others who have misgivings about particular parts of a free trade agreement. It is really important that we try to address these in detail, and I would rather do that than give an answer across the Dispatch Box.

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This summit should of course have been of the G8, not the G7. Do not events from Ukraine to Mosul show that we have entered a new chapter of instability at the very time when we are ever more dependent on overseas trade and resources, and does it not therefore make sense to bring forward the decision on the second aircraft carrier as a statement of maritime strength, intent and preparedness?

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That was an ingenious way of levering in a question on an aircraft carrier into a statement on the G7. The best thing is that the first aircraft carrier is soon to be launched—that will be a very exciting moment for the United Kingdom including, indeed, for Scotland—and, obviously, we can take into consideration how to handle the second carrier closer to the time.

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The Prime Minister must be concerned about the continuing remilitarisation of central Europe both by Russia and by NATO. Does he not think that we should pause for a moment and question the role of NATO and its continuous expansion eastwards, and start to put limits on what NATO does and what its ambitions are, as a way of de-escalating this crisis and demilitarising that region to avoid future conflict?

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I cannot see any sort of point in trying to draw some moral equivalence between Russia’s totally unacceptable action with respect to Ukraine and the fact that NATO, as a defensive legal alliance, has sent extra forces to the Baltic states or indeed Poland to demonstrate our belief in collective defence. If we do what the hon. Gentleman has just said in his question, we would actually let Russia off the hook for everything that it wanted to do anywhere, and that is a terrible basis on which to conduct foreign and security policy.

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I welcome my right hon. Friend’s statement and his tribute to the inspiring sacrifice of our forebears who gave their tomorrows for the freedoms that we enjoy. I particularly support the PM in his insistence that the EU Commission and President must support the case for reform. Is it not the case that Europe and the UK’s diplomatic and military strength is fundamentally linked to our economic strength and that we need to become more flexible, more entrepreneurial and more outward looking?

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My hon. Friend is absolutely right. We will only count for something in the world if we can demonstrate that our model of democracy and open markets can deliver a strong and growing economy, and stability and security. I agree of course with what he says about the top jobs, but we should beware that I am sure all the candidates will suddenly make absolutely loving declarations about deregulation, the importance of growth and the importance of jobs, and they will even use great words such as “subsidiarity”. The point that I would make to everyone on both sides of the House is that we should not get too excited about these declarations; we have to focus on the principle that it is very important that the European Council keeps its right to suggest who should run the European Commission. That is at the heart of our argument.

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In Prime Minister’s questions on 30 April, I raised the cases of Princesses Sahar and Jawaher, who are being starved by the Saudi regime. Since then, I have received a letter from the Foreign Office saying that it is a matter for the Saudi Arabian authorities and the family concerned. The Government are willing to take up human rights issues in relation to other countries; why are we not willing to take up cases in relation to Saudi Arabia?

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We do take up human rights cases when it comes to Saudi Arabia. When the hon. Lady raised this matter in April, I explained that we give proper priority to human rights and the rule of law, and we raise those issues with all countries, including Saudi Arabia. Our expectation of all states is that they uphold their international human rights obligations.

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I was really pleased to hear the Prime Minister’s continued commitment to finding a workable solution for Syria. Does he agree that there is more we can do in our own country to prosecute the people involved in the training and planning of terrorism abroad, including in Syria?

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My hon. Friend makes an important point, which is that we need to keep examining our own legal situation to make sure that where wrongdoing is being planned, we can prosecute. That is why I mentioned in my statement the change we are making through one of the Bills in the Queen’s Speech to ensure that we properly prosecute the planning of terrorist acts. This is now going to take far more resource by the intelligence and security services, the Foreign Office, the Ministry of Defence and No. 10 Downing street, and this is now really one of the biggest security challenges that we face—as big now, I am told, as the problem of terrorism coming from the Afghanistan-Pakistan region—so we need to make sure that the whole Government are focused on it.

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I thank the Prime Minister for his continued commitment to Nigeria. Last week, I met the Metropolitan police Nigerian police forum. There are now nearly 900 officers of Nigerian origin just in the Met alone. They are very keen to go and work with the police in Nigeria to try to tackle the human rights abuses that they perpetrate as well as the other challenges there. Does the Prime Minister agree that his Government should look into this and should tap the wonderful resource we have in human rights policing in the UK?

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The hon. Lady makes a very good point. There is expertise in how to police in a way that properly recognises human rights, and how to have other security and intelligence forces that do the same thing. Frankly, that has been one of our problems in relation to doing more with the Nigerians. She makes an excellent suggestion, and it is something that this Government are certainly keen to do.

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On the issue of freedom of movement, does the Prime Minister accept that many millions of Britons are extremely unhappy that citizens of the other 27 European Union states enjoy rights of access to this country that are denied to the rest of the world, and that unless this preferential treatment is removed, they will conclude that the only way to resolve the problem is for the United Kingdom to leave the European Union?

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What people want to know is that we have in place a robust set of border and immigration controls that is in our national interest. When we came to office, people wanted to see robust action to deal with bogus colleges, economic migrants from outside the EU who are often unskilled, and those often using the route of family reunion to bring in people who did not really have a proper right to be here. We have shut that down and sorted out those issues. We now need to demonstrate that the right of free movement is not an unqualified right. That is why it is very important to look at future transitional controls for new countries that join the EU. It is also important to look at benefit tourism and welfare tourism, and see what else can be done to reassure the public that we take our responsibilities for border and immigration control extremely seriously.

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I thank the Prime Minister for what he has said about Nigeria and the issue of tackling extremism more generally. He said in his statement:

“We continue to help address the tragedy of the abducted schoolgirls.”

Given the depth of interest in this country in that issue and the revelations just yesterday about more abductions, will the Prime Minister update us on where this particular action now lies and on what is happening?

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What I would say is that the British and Americans, principally, have put in some resources and help to Nigerian military and security forces—teams that can help them with their work. But we must be frank and say that this is not something we can lead or initiate ourselves; it has to be Nigerian-led and Nigerian-owned, and they will be thinking very carefully about what steps they can take. We have to be there to help and to advise, but we cannot take this over or lead it.

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I, too, urge the Prime Minister to continue his objection to Mr Juncker, who is, by nature, a federalist. What we want is a President of the Commission who will repatriate powers to Britain and other countries across Europe. Many people across Europe—not just in Britain—voted for more national control, not more control from Brussels and Strasbourg, which is what Mr Juncker would deliver.

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My hon. Friend makes some very good points. All I would add is that there are many good candidates on the left, right and centre of European politics who could play a role in the top jobs. Of course, there is not only the President of the Commission, but the President of the Council, the President of the European Parliament and the High Representative who speaks on foreign affairs. There are many good people who could do those jobs.

Let me make an additional point, and I absolutely promise that this is not a job application. Were we to follow the proposal that the Parliament should somehow choose the top candidates, as has happened in this election, we would shut off for ever the idea that we could find a serving Prime Minister, President or even Foreign Minister to run the European Commission. That would be a terrible step for Europe to take, because we need the widest possible pool of talent so that we can find people to do the things that my hon. Friend has suggested.

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I am sure that we are all reassured by the Prime Minister’s kind offer to write to my right hon. Friend the Leader of the Opposition about the TTIP. I urge him to go further and to commit today to using future G7 gatherings to convince his fellow EU leaders and President Obama of the case for safeguarding our national health service from the impact of the TTIP.

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I do not believe that our national health service is under threat in the way that the hon. Gentleman says. There are many parts of international co-operation and trade from which our national health service can be a huge beneficiary. For instance, we lead the world in sequencing people’s DNA and building up a vast databank, so that is a huge opportunity, and some of the leaders of our best hospitals are talking to new cities that are being built in China about how to establish health services. We should not be frightened of our NHS being a great British success story, parts of which can be exported to the rest of the world. We need to ensure that the TTIP and other such things make that possible.

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We have all seen that Russia uses her vast energy reserves as the provisional wing of her diplomatic policy. The Prime Minister is quite right to suggest that Europe needs to diversify its energy supply as a consequence. Will he encourage greater supply of gas and oil from the south Caucasus and, in particular, the extension of the Azeri-Chirag-Guneshli deal in Azerbaijan? That would help the economy of Europe and the development of civic society in Azerbaijan, the all-party parliamentary group on which I chair.

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My hon. Friend is absolutely right. We need to look at some of the energy proposals, such as piping gas directly from places such as Azerbaijan to southern Europe, so that it does not have to go through Russian pipelines, alongside the other things that I have mentioned. The key point is that unless those specific actions are taken, a lot of European countries will remain over-reliant on Russian gas. In Hungary and one or two other countries, a very high percentage of the gas comes directly from Russia. It will always be difficult for those countries to be part of a more unified approach in standing up to Russia on those or any other issues.

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The Prime Minister has rightly stressed the importance of the G7 behaving in a predictable manner. However, last week, under the heading “British troops in show of force on Russian border”, The Times reported that

“Ukraine…is regarded as a NATO partner.”

Surely such statements are a recipe for confusion, instability and miscalculation. The benefits and obligations of NATO membership are clear. We cannot have a penumbra of semi-NATO members. Please will the Prime Minister clarify the situation?

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We are very clear that our obligations relate to other members of the NATO alliance. Of course, that includes the Baltic states and Poland. I will apologise to nobody for sending additional British help to those countries for things such as air defence to reassure them at this time, because they contribute to the NATO alliance, they have Russian minorities, they are extremely worried by what they have seen happening in Ukraine and they want to know that NATO means something. I am happy to say that it does.

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On Europe, does my right hon. Friend agree that the agenda for the work programme on growth, jobs and reform has to come before the choice of which candidate will be European Commission President? The agreed agenda needs to be clear about the imperative for reform in the EU, because there is a broad consensus that what we need is real change in Europe, not simply more of the same.

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My right hon. Friend is absolutely right. Angela Merkel and I have been working very closely on that, because we should be using this moment, when Europe is considering who should be the next Commission President, to be very clear about what we want the Commission to do. If the European Council lays out a work programme that includes things such as trade deals, deregulation and reform and dealing with the abuse of freedom of movement, it will be much easier to say to whoever runs the Commission in the future, “This is the platform that we agreed on. Will you please stop interfering so much in the affairs of nation states and concentrate on the things that need to be fixed?”

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The G7 communiqué rightly stressed the importance of genuinely sustainable development. A key part of that is development assistance. Although it is really welcome that we are achieving the 0.7% target, should we take it from what the Prime Minister said that it is a forlorn hope that it will be enshrined in legislation, or would he support such a Bill if it came forward?

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I support meeting our pledge to the poorest people in the world, which is that we will achieve the 0.7% target. We have done that and we should go on doing it. I am very clear about that. On the G7/G8, what matters is having a proper accountability report so that everyone can see who has kept their promises and who has not. It is quite important that at the next G7, which will be held in Germany, we have a very clear list of who has done what. I am confident that, if I am still Prime Minister at that time, we will still be meeting our promises.

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Does the Prime Minister agree that, whether it is at home in Birmingham or abroad in Nigeria, it behoves all Members of this House to unite to tackle Islamic extremism, wherever it occurs and whatever form it takes?

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I very much agree with my hon. Friend. That is what the extremism taskforce, which I set up, is all about. We have a problem not with Islam, which is a religion of peace and one of the great world religions, but with a minority of Islamist extremists, who have a completely unacceptable world view. We need to deal with that on our campuses and in our colleges, our prisons, our schools and elsewhere. The extremism taskforce brings together the whole Government to ensure that we sweep away these problems in all those areas of our life.

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What discussions were there at the G7 on the post-2015 development framework? Will the UK Government give a commitment that they will ensure that tackling extreme economic inequality will be one of the commitments in that framework?

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There was a discussion about development. We agreed that the G7 next year in Germany should have a particular focus on what will replace the millennium development goals. The work that Britain did on those has been greatly welcomed. The hon. Gentleman used the words “extreme…inequality”. I think it is important that at the heart of the goals we have a vision of eradicating extreme poverty. That has to come before issues of inequality. Inequality is an important consideration, but we should not take our eyes off the prize, which is abolishing the idea that people should be living on less than a few dollars a day in our world. That should be the key focus.

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The fact that the EU single market in services remains incomplete after so many years represents one of the biggest failings of the EU, but also one of the greatest opportunities. Does the Prime Minister detect a real sense of change from his discussions with other leaders, including at this summit, and does he agree that reform at the top of the European Commission will ultimately drive the completion of that vital market?

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To answer my hon. Friend very directly, I do sense a change. When it comes to the single market in services, it is not always the newer and relatively poorer countries that are the problem; sometimes, it is the richer, longer-standing members that have rules on lawyers, architects, doctors, pharmacists and so on that go against the single market. I sense that people realise that we cannot go on talking about this issue and that things have to be done. That will not happen unless we have a reform-minded head of the Commission.

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I welcome the Prime Minister’s words on climate change, but he will know that there was considerable disappointment that not one G7 member managed to send a Minister to the Bonn United Nations framework convention on climate change meeting last week. Will the Prime Minister confirm that he intends to attend the Ban Ki-moon summit later in the year?

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I will be looking carefully at this. Obviously, we have the NATO summit and there are party conferences, the dates of which have been rather shuffled around this year because of the absolutely vital Scottish referendum. I will make sure that either I go or we send very senior ministerial representation because I think that it will be an important meeting. The key role for Britain is to make sure that the EU as a whole puts its best foot forward by agreeing a good deal in September.

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I welcome the Prime Minister’s and the G7’s tough stance on Russia’s unacceptable actions in Ukraine. With that in mind, will my right hon. Friend tell the House whether the G7 discussed the strategic implications of Russia’s recent deal on gas with China?

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We did discuss the recent deal. It is interesting that the Russians felt it necessary to do this deal, and perhaps at a price not quite as attractive as they might have hoped. It underlines the importance of energy policy to Russia, so the correct European response is to make ourselves more independent and less reliant on Russian gas. That is doable. Britain has very little reliance on Russian gas—just a few per cent.—but we need to help other European countries make sure that they can have a similarly open and competitive market.

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The Prime Minister’s answers to the Leader of the Opposition and others about the TTIP and its potential effect on the NHS seem to be that if he just explains it better, all will be fine. Many people do not want to wait until somebody makes a legal challenge at some point in the future, and it is too late to do anything about it. Would it not be easier to craft an exemption for the domestic operations of organisations such as the NHS so that we do not have to face that risk?

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Perhaps I will include the hon. Lady on the mailing list for the letter that I am going to write. Having looked briefly at this issue, my understanding is that the NHS is not at risk, but I understand that people believe it could be, so we need to set out why we do not think that that is the case and what the negotiations will consist of. We must ensure that hon. Members who want to support the TTIP have good answers to give the NGOs. Although some NGOs talk a good game on trade and its importance, when it comes to the crunch they often take quite an anti-trade position. I think that they are on the wrong side of history on this because trade has been a great way to lift people out of poverty, but I am happy to address these issues as fully as I can.

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When our all-party parliamentary group visited Brussels to support the TTIP, we found there was not one representative of small business on the advisory council that was looking at the deal. I thank the Prime Minister for his support of the TTIP and urge him to make the case that its benefits will be for our smallest businesses throughout Britain and the EU.

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It is very important that we listen to the voice of small business as we go about this. Sometimes these issues can be dominated by the big lobbies and it is important that we let small business speak clearly.

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The Prime Minister referred to energy security, which businesses, particularly those in light industry in Feltham and Heston, have raised with me. Will the Prime Minister confirm whether the UK, in line with other G7 nations, has started its energy security assessment? If so, when will the findings be made public?

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We address energy security all the time through the national security strategy and the National Security Council. It is one of our considerations. Perhaps I could let the hon. Lady know about the specific issue that she raised.

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On Iraq, does the Prime Minister agree that the near breakdown of governance is down to Prime Minister Maliki’s failure to form an inclusive Government rather than a sectarian Government, which is now leading to weapons that have been given to the Iraqi army ending up in sectarian and extremist hands in Syria?

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My hon. Friend makes a good point. Iraq has always faced the challenge of having Sunni, Shi’a and Kurdish populations. It requires politics and a political leader who can bring them together and make sure that everyone feels part of the whole. That has not always been the case with Maliki’s Government. It needs to be; otherwise, we will see more breakdowns such as the one that has happened in the last 24 hours.

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I thank the Prime Minister for his commitment especially to the new measure to enable prosecution of those who train for terrorism abroad. Dissident republicans have sourced explosives and weapons from terrorists in the middle east and they have also been trained in certain parts of the world, including the middle east. What actions will the Prime Minister, the Government and the G7 take to address this issue, given that there are pockets of support across the Republic of Ireland for dissident republicans?

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First, let me make it absolutely clear that laws that we pass in this House to combat terrorism apply to dissident republicans or people on the other side of the divide who take up arms for terror, just as they apply to anybody else. The actions that we are taking to try to stop the leakage of weapons, explosives and techniques from these broken countries into the UK apply just as much to the problems that we could have in Northern Ireland as to those that could occur anywhere else.

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I was privileged to observe the elections in Ukraine and I saw people queuing for two and a half hours outside polling stations. That underlined to me the importance that they accorded to the elections. There is no doubt that Mr Putin is fomenting violence in eastern Ukraine, and a cynic might say that that was to take attention away from Crimea. What conversations did the Prime Minister have specifically about Crimea? Are we still adamant that we will hold Russia to account for what was an illegal action in anybody’s terms?

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The British Government’s view, like that of the rest of the EU, the G7 and America, is that what happened in Crimea is illegal and wrong. One cannot individually and unilaterally redraw the boundaries of a nation state, and that needs to be properly addressed. As for my hon. Friend’s other remarks about ensuring that we stand up strongly for the Ukrainian people’s right to choose their future, I absolutely agree.

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I commend the Prime Minister for first putting and then keeping tax transparency at the heart of the G7/G8 agenda. The Business, Innovation and Skills Committee will soon conclude an inquiry into UK extractive industries and our position around the world. May I urge the Prime Minister to stress that it is in the interests of international NGOs based in this country and those of the UK’s extractive industries for the UK to keep playing a leading role on transparency?

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I absolutely agree with my hon. Friend. It is not only in our interests because we want a world where we do not have poor countries exploited by individuals or companies with corrupt payments, and it all being done in a totally shady and underhand way; it is also in our interests, as a country whose companies do not behave like that, to try to raise the level of every country and every company in the world. It is absolutely the right agenda and we should keep at it.

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I welcome the Prime Minister’s comments about new trade deals. Does he agree that they are a vital way of backing British business and of creating more secure manufacturing jobs in Britain?

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My hon. Friend is absolutely right about this. There are always sceptics about these deals, but the good thing about the current situation is that we can point to things such as the EU-Korea free trade deal, which has led to big benefits for the European Union and for Britain, and say that more deals like that mean more jobs, more exports and more wealth and prosperity in the United Kingdom. Particularly when we are dealing with countries such as Korea and Japan, which have not always had high tariff barriers, but have had several ways of trying to keep their markets locked up, if we can open up those markets, there are real opportunities for Britain.

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Having served in Operation Warden, the no-fly zone over northern Iraq in the 1990s, I join many colleagues in having deep concerns about the deteriorating security situation in northern Iraq. A constituent who is working there as an engineer contacted me last night, and dozens of Kurdish students attend my local Huddersfield university. Will the Prime Minister acknowledge the relative peace that there has been in the Kurdistan region for the past couple of decades and do all he can to ensure that that stability is spread to this troubled part of the world?

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My hon. Friend makes a very good point about the relative stability of the Kurdish part of Iraq. As we have said, we need an Iraqi Prime Minister who leads an inclusive Government, bringing together Sunni, Shi’a and Kurd for the future benefit of that country. There is no reason why Iraq cannot be a success story. It has the mineral and oil wealth and it needs to ensure that that wealth is properly put to the use of everyone in the country.

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However deeply flawed and imperfect the referendum in Crimea was, it is clear to all that a majority of Crimeans want to be part of Russia and not Ukraine. In his discussions with the new Ukrainian President, was it made clear to the Prime Minister how the Ukrainians see the situation being resolved? Do they want Crimea back, or what other solution are they offering?

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Obviously, the President of Ukraine wants the territorial integrity of his country to be respected. My hon. Friend might be right that, over time, it will be found that a majority of people in Crimea want to be part of Russia, or independent or whatever, but it must be for the Ukrainian Government, under the Ukrainian constitution, to set out how that should go ahead. It is rather like we have done by giving people in Scotland the right to choose their future—as I say, I hope they stick with the United Kingdom. That is the way things should happen, not an independent, artificial, unilateral move by Russia and holding a referendum when there were not even proper registers of electors.

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Remaining with trade, global markets are becoming ever more competitive as newer economies develop. Does the Prime Minister agree that despite the remarks of the Labour party, it is important to get on and achieve an early and successful outcome at the TTIP talks?

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My hon. Friend is right. There are always concerns from people who see free trade as a zero-sum game: there must be a loser, there must be a winner, and somehow there will be a hollowing out of middle-class, middle-income jobs in our world. I do not believe that is the case. Britain has a lot of goods and services that the world wants to buy, and arguably a lot of those—particularly things such as intellectual property, patent protected services, and financial, banking and insurance services—require a greater opening of other markets to get in there, perhaps more so than just manufacturing and selling a particular good. It is really important for our whole future and prosperity that those deals go ahead.

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The Prime Minister will know that manufacturing output, which he has just been talking about, is up 4.5% this month on the same time last year. He may not know, however, that the west midlands is the only region in the United Kingdom—and one of very few regions in Europe—that has a balance of payments surplus with China. My question follows that of the right hon. Member for Blackburn (Mr Straw) on the BRIC countries: what discussions did the Prime Minister have at the G7 to ensure that there will not be dumping of manufactured products from those countries, and that we continue to see long-term economic success?

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The hon. Gentleman has made his point, and at rather too great a length I am afraid.

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My hon. Friend is absolutely right, and if we look at where exports are growing fastest in the United Kingdom, it is not the City of London or the south-east—the west midlands is leading the way. Of course we must have proper rules on dumping, but we sometimes find people using accusations of dumping to oppose the loosening of trade, and I do not think we should see that. The manufactured goods being exported from the west midlands—things such as Jaguar Land Rover cars—are exported on the basis of quality. People want to buy those cars, and the faster we can open up markets and try to fight protectionism in countries such as Brazil or some of the other BRICs, the better for all concerned.

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I am grateful to the Prime Minister and colleagues.

Nominations for candidates for the post of Chair of the Backbench Business Committee closed at 5 o’clock yesterday afternoon. Only one nomination was received, and therefore a ballot will not take place. I congratulate Natascha Engel on her re-election as Chair of the Committee.

I remind Members that the book for entering the private Member’s Bill ballot is open for Members to sign in the No Lobby. It will be open until the House rises today, except during any Division.

Debate on the Address

[5th day]

Debate resumed (Order, 10 June).

Question again proposed,

That an Humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Jobs and Work

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I inform the House that I have selected amendment (b) in the name of the Leader of the Opposition.

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I beg to move an amendment, at the end of the Question to add:

“but regret that the measures in the Gracious Speech fail to ensure that those who put in a hard day’s work get a decent reward for doing so, or cut the costs to the social security system resulting from the current record 5.2 million workers on low pay and the rising tide of insecurity at work; and call on your Government to bring forward measures setting the Low Pay Commission a five year target to raise the National Minimum Wage faster than average earnings while retaining the capacity to take account of shocks to the economy.”.

We are here to debate the Queen’s Speech, and in particular its impact on jobs and work. Ultimately, to create jobs and work so that someone can raise a family we need sustainable and balanced growth. We cannot legislate our way to sustainable and balanced growth, but a Queen’s Speech and the proposed legislation therein has a role to play. Essentially, today we are debating the economic policies of this Government.

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Will the hon. Gentleman give way?

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Just one moment. I will give way in a bit.

When I first arrived in this House—together with the hon. Member for City of Chester (Stephen Mosley), I think—I remember that all Government Members wanted to do was talk about the previous Government. This is now their fourth Queen’s Speech and fifth year in office, and it simply will not do to drone on about the last lot. They are in government; they have a record and we will hold them to account for it.

When this Government entered office the country was recovering from a recession that was caused by a global financial crash and precipitated by irresponsible behaviour in the banking sector. When they took office, a recovery was under way, unemployment was falling, growth was rising and stability was beginning to settle in. Those are the facts. However, the extreme fiscal consolidation that they attempted to embark on choked off growth for the best part of three years, causing the Business Secretary, the Work and Pensions Secretary and their ministerial colleagues to fail completely to meet their deficit reduction targets. That led to a huge amount of misery for the British people as unemployment soared beyond 2.5 million. Consequently, they borrowed more in three years than the last Labour Government did in 13—again, the facts.

During those three wasted years, the eurozone slumped almost as badly as Britain. Indeed, the Government frequently pointed to the impact of the crisis in the eurozone on our economy. Of course, that crisis hit our exports, and the Business Secretary, like others, referred to that and its impact in this House during previous Queen’s Speech debates. There are, however, a couple of important points. As the economist Lord Skidelsky put so well in his essay on this subject in March, we should have done so much better than the eurozone, given that we retain the pound and control of our exchange rate. The eurozone slump arose in part because European Finance Ministers were pursuing exactly the same kind of failed policies as the Business Secretary and his colleagues.

Things have thankfully moved on. I know the Prime Minister and Chancellor like to take the credit for the return to growth that we are seeing, but let us be clear: the fact that the recovery has kicked in is down to two things. First is the utter determination and hard work of our businesses and firms in weathering the storm, as well as their ingenuity and continuing capacity to innovate, and second is the hard work and compromises made by their employees.

So often we have sat in this House and had to listen to Government Members, week after week, smearing and denigrating our trade unions. I will be most surprised if we get through this debate without that happening again. The agreements that so many workplace convenors reached with firms and businesses in this country—taking pay cuts; accepting reduced hours—helped keep those firms afloat during these difficult times. That is why I am proud to be a member of the GMB and Unite.

We are certainly not out of the woods. The fact that the Bank of England still has the pedal on the floor with a 0.5% interest rate illustrates how fragile the economy still is, and how far the recovery has to go. More than three quarters of a million young people are still out of work. On average, people are still earning £1,600 a year less than they were when this Government came to office. In fact, just before I came into the Chamber, I was speaking to my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) who told me that she has a 42% rate of poverty among the children in her constituency, so we still have a lot more to do.

The 2008-09 crash exposed long-standing, big structural problems in our economy that go back decades, admittedly under Governments of different persuasions, and have to be dealt with. This is in spite of the progress made by the previous Government and the stronger supply-side conditions we achieved. What we have now is an economy unbalanced by sector and region, short-termism in our corporate culture leading to low levels of business investment and low productivity, a dysfunctional finance system, and a stubborn and increasing trade deficit.

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Does the hon. Gentleman think it was a measure of the success of the previous Labour Government when our country lost 1.7 million manufacturing jobs?

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I absolutely agree with the hon. Gentleman that we need to diversify our economy and grow our manufacturing base, but, as I have just said, these structural issues have grown up over a number of decades under Governments of different persuasions.

At the same time as we are dealing with these structural issues, we face more competition from emerging markets and others than we have ever experienced before, with technological advance and automation creating new jobs but destroying old ones too. That has left our economy failing to meet the material needs of too many families. The problems of these imbalances have resulted in our country having one of the highest incidences of low-paid work in the OECD.

I, of course, accept that any job is better than no job. I note that the Chancellor gave a speech earlier this year committing his party to full employment. They say imitation is the sincerest form of flattery. The only problem with what the Chancellor said is that it is almost 70 years late. It was, of course, the great reforming Attlee Government who first committed to full employment, in our manifesto “Let us Face the Future” in 1945. Unlike the Chancellor, however, we have long sought to build on that commitment. What we want is for everyone in this country to be able to access good work that affords them a level of dignity and respect, and, importantly, that is secure and pays a wage that they can live off. That is simply not the reality for far too many people in Britain in 2014.

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There are now 1 million people on zero-hours contracts. Does my hon. Friend accept that their lives consist of moving in and out of benefits? When there is discontinuity in benefits, people have to go to food banks. That is not the way to build a strong economy. Surely, we need infrastructure in city regions and to move forward with export-driven growth, rather than having people living in poverty on zero-hours contracts.

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I completely agree with my hon. Friend.

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A few moments ago, the hon. Gentleman talked about a wage that people can live on. Will a future Labour Government commit to having a living wage in place of the minimum wage, or will his speech be more about rhetoric than firm commitments and pledges to the British people?

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The hon. Gentleman raises a good point, because 22% of employees in his constituency under this Government are paid less than a living wage. I will come on to what we intend to do and what is so sorely lacking in the Queen’s Speech.

We do not want to wait until a Conservative Chancellor sees the light and matches our ambition in 2084. What we are hoping is that in the Queen’s Speech, and the Bills that follow, he will match our commitment and ensure that we have a better-waged economy. There are two parts to this challenge: first, action to tackle low pay and insecurity at work—I will come on to what the hon. Member for Dover (Charlie Elphicke) talked about—and, secondly, the implementation across Government of an industrial strategy to nurture and grow the sectors that produce the better-paid jobs we want to see across the country.

On low pay, we make no apologies for reminding the House at every opportunity that it was this party, in the face of strong opposition, that introduced the national minimum wage. When we entered office, some people were earning as little as £1 an hour, a practice I am proud to say we outlawed. To give just one of the many examples of the opposition we faced, when we introduced the national minimum wage into this House 17 years ago, a member of the then shadow Cabinet said:

“If, as I and all my Conservative colleagues believe, the DTI’s minimum wage comes into effect, it will negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 297, c. 526.]

That shadow Cabinet member is now the Work and Pensions Secretary. We had the good sense to ignore him.

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On low pay, is my hon. Friend aware of allegations that several UK parcel carriers, namely Hermes and Yodel, are using so-called lifestyle couriers and effectively paying less than the minimum wage to the staff they use?

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I thank my hon. Friend for that intervention. I was not aware of that, but I am sure the Business Secretary has heard what he said and will no doubt ensure that his Department looks into those two firms.

We have to build on the national minimum wage. Many Members, for example my hon. Friend the Member for Wansbeck (Ian Lavery), have argued for us to do so. It is currently £6.31 and is due to increase to £6.50 in October, but that is just 53% of median hourly earnings. We want to set—this in part relates to the point raised by the hon. Member for Dover—a more stretching target for the minimum wage for each Parliament, within the Low Pay Commission framework, to increase it faster than average earnings, while retaining capacity to take account of shocks to the economy. We would also give local authorities new powers of inspection and enforcement of the minimum wage, alongside central Government, to ensure it is enforced properly. We would also increase fines for non-payment to £50,000.

A number of measures are contained in the small business, enterprise and employment Bill. We are told, among other things, that the Bill will strengthen UK employment law by tackling national minimum wage abuses. It does not appear, however, that the Government will come close to matching our commitments to strengthen the national minimum wage. There will be no stretching target, no enhanced role for local authorities and much lower fines than we envisage. We will be pushing the Government to adopt our package during the passage of the Bill.

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I am glad to hear that the hon. Gentleman is talking about moving towards something that might eventually look like a national living wage. He will recall that it was the Greens on the London Assembly who made the Living Wage Commission a possibility. Will he also consider, as inequality is such a major issue, maximum pay ratios between the highest and lowest paid in companies?

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I have to say to the hon. Lady that I thought it was the excellent Mayor of London, Ken Livingstone, who introduced the London living wage.

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May we add to our consideration of people who end up not being paid the minimum wage the scandal of workers in the care sector? A constituent told me recently that although she is contracted to work 40 hours, she is lucky if she is paid for 15 to 20 hours. She is not paid travel time, is paid in dribs and drabs, and short-notice cancellations are the norm. In many weeks she has ended up being paid for only 15 to 20 hours, yet these are the people we are trusting to provide care for our most vulnerable people.

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I think my hon. Friend is referring to somebody who is on an outrageous and exploitative zero-hours contract that is not reflective of her working conditions. I will come on to that shortly.

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Will the hon. Gentleman give way?

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I will just make a little progress and I will give way in a bit.

As my right hon. Friend the Leader of the Opposition said last week, under this Government the shocking fact is that for the first time on record more people who are in poverty are now in work than ever before. The minimum wage is important. It is set with an eye to the impact on jobs, but we want employers to pay a living wage. Record numbers are currently paid less than the living wage—I have talked about the 22% in Dover, for example. It is estimated that we have 5.2 million people earning less than the living wage, which is costing the Treasury, at the very least, £750 million in tax credits and £370 million in means-tested benefits. We want to do all we can to ensure that anyone who puts in a hard day’s work gets a decent reward for doing so. That is why it is disappointing to see nothing, not just in this Queen’s Speech but in all four to date, to incentivise employers to pay a living wage.

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The proposals to increase the national minimum wage are welcome, but they are no use if the Government then increase taxes and take more money out of people’s pockets. Will the hon. Gentleman do what his leader failed to do last week and rule out any increases in national insurance contributions if Labour were to win the next election?

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I note that 18.2% of employees in the hon. Gentleman’s constituency are paid less than the living wage. I hope he will be encouraging Ministers in his Government to adopt our proposals to incentivise people to pay it, so that he can reduce that percentage in his constituency.

As for the tax and spending policies of any Government in a future Parliament, these will be set out in a Budget at the time. One of the questions that the hon. Gentleman and others will have to answer is whether they envisage making further reductions in the top rate of tax, giving people earning millions of pounds an even bigger tax cut than they have already.

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rose—

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rose—

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I thought that would rile them. I am going to get on, because I want to ensure that we get other people into this debate.

If elected next year, we would introduce “make work pay” contracts to encourage employers to pay a living wage and help businesses to raise the wages of millions of low-paid workers. This is fully costed and will be entirely funded from the increased tax and national insurance revenue that the Treasury would receive. Again, I encourage the hon. Member for City of Chester to encourage those on his Front Bench to adopt that proposal. If they do, we will support it. However, the silence we have heard from those on the Government Benches when it comes to doing anything on the living wage is quite extraordinary. People will remember the Prime Minister’s speech to London citizens back in 2010. In the last week of that campaign, he said he would do all these things to promote the payment of the living wage and he has done next to nothing—nothing—in office.

However, wages are one thing; insecurity at work is another, and never in recent times has it been so resonant an issue, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said. I am not at all surprised by that, because since they came to office this Government have mounted a full-frontal attack on people’s rights at work. This is often talked about by Government Members as though it were a trade union issue, but it is an every person issue. Every single person in this country who works has had their rights at work attacked by this Government. They have increased the service requirement to claim for unfair dismissal from one to two years, depriving people of the right to seek justice when they have been wronged in the workplace; they have reduced compensatory awards for unfair dismissal; they have reduced the consultation period for collective redundancy; and they have watered down TUPE protections for people. I could go on. Most starkly, this Government have erected a barrier in the way of those seeking redress with the introduction of tribunal fees.

But perhaps the biggest symbol of insecurity is the extensive use of zero-hours contracts in 2014. The Office for National Statistics estimates that there are 1.4 million zero-hours contracts in use right now.

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I am obliged to the hon. Gentleman for giving way. Just in case his Front-Bench team want to prompt him with statistics, my constituency is Tamworth.

The hon. Gentleman talked about the importance of having a job instead of no job. Has he had correspondence with Labour-run Liverpool council or Labour-run Newham council, which make extensive use of zero-hours contracts?

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What I have said time and time again in this House when we have debated zero-hours contracts—I will come to this point in a moment—is that the Opposition are not opposed in principle to any use of zero-hours contracts. The question is: what are the Government going to do about their exploitative use? What they have announced so far comes nowhere near close to what we have proposed to deal with the exploitative use of such contracts.

Zero-hours contracts do not oblige employers to offer guaranteed hours of work to their workers. Sure, some workers—it is for this reason that we do not oppose zero-hours contracts in principle—choose the arrangement because they like the flexibility, but for many it leaves them subject to the whim and demands of their employer to work at short notice, promoting insecurity. These arrangements make it almost impossible to own a home, save for a pension or plan family life.

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My hon. Friend is making a powerful speech and rightly highlights the difference between the use and abuse of zero-hours contracts. We have seen high levels of youth unemployment in this country. Does he agree that the use of zero-hours contracts sometimes hides a problem that exists for young people getting on to the work ladder? A constituent of mine talked to me about the insecurity he feels. He cannot plan ahead and does not even know whether he can accompany his mum to a hospital appointment, because he has no idea what will come his way in the week.

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That is a perfect example of the egregious and exploitative use of such arrangements. We are told that the employment Bill will help hard-working people to have confidence in the terms of their contracts and that it will crack down on the abuse of zero-hours contracts, such as the example my hon. Friend mentions. However, the details that we know of suggest that the Government are simply not going far enough. On its own, banning exclusivity clauses in such arrangements will not do the job. We need, among other things, to give workers the right to a fixed-hours contract when they have regularly worked hours with the same employer for a period of time—such as the constituent of my hon. Friend the Member for Worsley and Eccles South—and to protect them from having their shifts cancelled at short notice without compensation. Above all, we must ensure that people know that they are on a zero-hours arrangement.

I have talked about jobs, wages and security at work. The other part of reforming the jobs market is the implementation across Government of a proper industrial strategy, both to create the right conditions for businesses to thrive in all regions of the country and to put the full weight of Government behind those sectors that can win gold medals in the global marketplace for the UK, creating more of the middle-income jobs we want to see.

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rose—

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I will just make a bit more progress.

Part of that involves ensuring the right environment across the country in all regions for our businesses to grow, and part of it involves a sector-led approach, looking at where we have a competitive edge and comparative advantage relative to our international competitors. I am very supportive of the sectoral approach. It was of course the Labour Government who led the way in that by setting up the Automotive Council.

When it comes to creating the right environment, ensuring that people have the skills our businesses need is crucial. Increasing the quantity and quality of apprenticeships is a must. We have a record to be proud of. In government, we rescued apprenticeships from the scrap heap. We more than quadrupled starts—[Interruption.] Government Members do not want to hear it, but let me give them the facts. We more than quadrupled apprenticeship starts, from a woeful 65,000 under the Major Government to 280,000 in our final year in office.

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Is it still the Opposition’s policy to get rid of the intermediate apprenticeship?

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No, it is not, and I should say that the Deputy Prime Minister’s intervention on this subject while standing in for the Prime Minister at PMQs was deeply embarrassing, given that he was attacking an independent report that was produced by a group of experts for us which said exactly the same as his own Secretary of State’s report for his Department on the same subject.

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Does my hon. Friend agree that one of the best ways of increasing the numbers of advanced and higher-level apprenticeships would have been to implement my Apprenticeships and Skills (Public Procurement Contracts) Bill? It would have meant that the billions of pounds of investment that we spend as taxpayers in public procurement could lever in extra apprenticeships at the higher and advanced level.

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I am very grateful to my hon. Friend for drawing attention to his excellent Bill, which I and many of my hon. Friends were here to support, but which was disappointingly ignored by the Government.

What is happening to apprenticeships now? This issue, frequently raised here by my hon. Friend the Member for Blackpool South (Mr Marsden) and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), is worrying.

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Will the hon. Gentleman give way?

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No, I want to make some more progress—[Interruption.] I have been quite generous in giving way.

Countless other colleagues have talked about opportunities for young people. My hon. Friend the Member for Rotherham (Sarah Champion) has drawn attention to the lack of apprenticeship opportunities for people in her constituency. Under-19 apprenticeship starts have fallen by 17,000 over the last academic year, and there are now 2,000 fewer under-19s starting apprenticeships than in 2009-10, and less than 2% of apprenticeship starts last year were at level 4 or above. Where was the Bill in this Queen’s Speech to require all large companies taking on large Government contracts to provide apprenticeships, as we called for? It was not there. Where was the requirement for all apprenticeships to last at least two years and to be at level 3 or above to ensure we maintain their quality? It was not there. We need to see more done on that.

It is important to help those who want to get into work through jobs and training, but it is also important to help those who want to create their own jobs, and they will not be able to do that without the finance. We are told that the small business Bill will make it easier for small businesses to access finance. I really hope so, because in the last year, net lending to small and medium-sized businesses fell by £3.2 billion. Scheme after scheme after scheme—from Project Merlin to funding for lending—has simply failed to resolve these problems. In the last quarter, net lending to businesses by funding for lending participants actually fell by £700 million—an issue on which I know my hon. Friends the Members for Rochdale (Simon Danczuk) and for Feltham and Heston (Seema Malhotra) have been campaigning.

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Let me inform my hon. Friend that what I hear in my Blackpool surgeries, particularly from small businesses and hoteliers, about the continued failure of a number of banks, including those still supported by this Government, underlines what he is saying. Does that not also underline the fact that we should be looking at the regional initiatives on banks that he and his colleagues have brought forward rather than having the long-standing dithering from the Secretary of State on the whole question of the investment bank?

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I agree with my hon. Friend. The problem with the Government’s scheme is that, to date, the main transmission mechanism to our small businesses has been the very high street banks that have been the problem. That is why we want to set up not only a British investment bank, but a network of regional banks like the Sparkassen in Germany, to ensure that we get the money to our small businesses.

Finance is one thing, but cash flow is an issue too. If, as we are told, the Government are to extend the obligation for public sector bodies to pay small businesses as their suppliers within 30 days and to apply it all the way down the supply chain, that would be welcome, but on its own it will not be sufficient. We will press Ministers to introduce—I think this will be in the small business Bill—more stringent reporting requirements for customers of small businesses to crack down on those who do not pay on time. I think that the practice of late payment is an absolute national scandal that needs to be dealt with.

I saw the Business Secretary and the Deputy Prime Minister make their trip to the pub the other week. On the one hand, I suppose this was a “kiss and make up” event after the activities of a certain rogue pollster—perhaps the Liberal Democrats’ equivalent of Lord Ashcroft; and on the other hand, it was to draw attention to the measures in the Queen’s Speech on a new statutory code and independent adjudicator to ensure that the sole traders and small businesses that run our 20,000 or so tied pubs are treated fairly. To be honest, after the dither and delay we have seen from this Government and the numerous debates we have had to force on the issue, any action from this Government is welcome, but my fear is that the real reforms that we and others across the House have campaigned for will be watered down. We will scrutinise the detail when the provisions are introduced.

I want to say a word about rebalancing, particularly between regions and within regions. It has simply not happened, and I see nothing in this Queen’s Speech to change that.

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My hon. Friend is making a really strong point about the need to get additional help to the regions. Does he agree that it is unacceptable that start-up businesses in Durham have reduced by 14% over the last year? It is clear that the Government’s policies are not addressing the issues facing the north-east.

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This is an important issue. Since the recovery kicked in, we have seen around 54% of GDP growth coming in London and the south-east, and around 75% of new jobs created in the same region. It is essential that we see more of that happening in my hon. Friend’s constituency and others around the country.

Let us be honest about it, the Government’s flagship scheme that was supposed to address this problem—the regional growth fund—has become a bit of a joke. More than a third of winning bidders under that scheme’s first round have now withdrawn entirely, while others have been left waiting almost two years to receive their money. Hundreds of millions of pounds of growth fund moneys across the regions are gathering dust in Government coffers and have not yet reached the winning bidders.

Of course, having scrapped our regional development agencies, which I am sure the Business Secretary privately feels was a big mistake, the Government replaced them with local enterprise partnerships, which have simply not been given appropriate budgets or powers to do what was asked of them. In fact, the vast majority of bids made by LEPs to the regional growth fund have been rejected in some regions. Many colleagues across the House—my hon. Friend the Member for Telford (David Wright) has spoken of his area’s desire for a city deal—will tell us, as my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) has just done, that a lot more needs to be done to rebalance our economy geographically.

On sectors, the Business Secretary’s predecessor, the noble Lord Mandelson, started pursuing a course of industrial activism, which, in the main, the Business Secretary has continued in his overall approach. There is a degree of consensus on the principles—that is a good thing—and industrial strategy is part of agenda 2030, our plan for better balanced sustainable growth, which is winning support from businesses across the country. But unless we get the overall environment right—on skills and finance, as I have discussed—across the whole country, delivery on these sectoral strategies will be compromised.

Let me finish by saying a few words about our export position. The Government promised an export-led recovery in their plan for growth. That has simply not materialised, and the measures that the Business Secretary and the Chancellor have introduced to date seem to have made no impact on that. In fact, the Office for Budget Responsibility said that the Budget would have no impact on our net trade position.

The promise to increase exports to £1 trillion by 2020 is disappearing out of reach. It has been reported that civil servants have privately conceded that the Government’s promise to get 100,000 new companies exporting by the end of the decade is “not going to happen”. This is hardly surprising when the Government have not done enough to ensure that small firms are made aware of the support that is out there. Half the members of the Federation of Small Businesses do not even know that UK Trade & Investment exists. They need to be given much more information and to be made more aware of what help is available. But then the performance of some of these schemes has been totally lamentable. The £5 billion export refinancing scheme, which was launched in July 2012 as part of the Government’s UK Guarantees scheme, and the £1.5 billion direct lending scheme, launched to great fanfare several months ago, have not helped a single firm. We need to see much more competent delivery of these schemes.

It is clear that our country has huge potential, and there is a huge amount of talent waiting to be unlocked, but people need a Government to empower them to realise their dreams and aspirations. That is not happening under this Government. [Interruption.] The hon. Member for Worcester (Mr Walker) talks about the long-term economic plan. The fact is that for many people—including people in my constituency, where, on average, people are earning £2,300 a year less than they were when the Government came to office—this “long-term economic plan” is a long-term economic sham. That is why we aim to ensure that we can allow and empower people to meet their aspirations by making certain that, this time next year, we are sitting on the other side of the House.

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It is a pleasure to respond to the Opposition amendment, and to introduce a debate on the general topic of jobs and the world of work on what is a very good day for jobs. I was struck by the fact that, in something over half an hour, the shadow Secretary of State—the hon. Member for Streatham (Mr Umunna)—did not make even a passing reference to today’s unemployment figures.

I shall take a three-pronged approach to this debate. I shall deal first with the creation of jobs. Job creation depends on enterprise and business, and a key element of the Queen’s Speech is support for business through the small business Bill, which covers issues such as access to finance, Government procurement, prompt payment and, of course, pubs.

Secondly, I shall make it clear that as our economy recovers—and the recovery is now very firmly embedded —we want to ensure that that recovery is translated into higher-paid jobs and more secure employment. The small business Bill contains measures relating to zero-hours contracts and the minimum wage. It will also ensure that people have decent pensions when they retire, which is another thing that the shadow Secretary of State did not mention. Over a long period, for demographic and economic reasons and as a result of policy failures, there has been a gradual decline in the defined-benefit system, but my right hon. Friend the Secretary of State for Work and Pensions and my hon. Friend the Member for Thornbury and Yate (Steve Webb), the Pensions Minister, are reconstructing a sensible, durable environment for pensioners.

Thirdly, I shall talk about the issue of trust in business. One of the blows to our economy, and many other western economies, during the financial crisis has been a loss of trust. The Bill contains a serious of measures—to which the shadow Secretary of State did not refer—relating to transparency of ownership and the duty of directors, which will be important to the reconstruction of that trust.

Let me begin, however, by commenting on the Opposition amendment. I try to be polite, but the amendment is not exactly bulging with creative policy initiatives. It contains only one recommendation, which relates to a

“target to raise the National Minimum Wage faster than average earnings”.

The shadow Secretary of State seems to be telling me to do what I am already doing, which is giving guidance to the Low Pay Commission so that it can do exactly that; but I am not entirely sure what the Opposition’s policy is. Is the target to be mandated? If so, that undermines the autonomy of the Low Pay Commission. If not, what the shadow Secretary of State recommends is exactly what we are doing at present, which is giving forward guidance.

I should like to clarify another point. Two or three weeks ago, the Opposition had another policy on the national minimum wage, namely that it should be indexed to earnings. There is no reference to that in the amendment. Is it still the Opposition’s policy? I suspect that, when they did the sums, they discovered that indexing the minimum wage in that way would make it lower than it is now, and quietly dropped it, but may I ask what is the current status of the proposal?

In the amendment, the shadow Secretary of State sensibly acknowledges that the Low Pay Commission must

“take account of shocks to the economy.”

However, he does not mention whether the commission should take account of the impact on employment. That has been at the heart of its work. If it is indeed to take account of the impact on employment, why—as my hon. Friend the Member for City of Chester (Stephen Mosley) asked earlier—are the shadow Secretary of State and his colleagues now promoting the idea of higher taxes on employers through national insurance? If this is to be the major theme of the Opposition’s attack on the Queen’s Speech, their approach will require a great deal more clarity and a great deal more consistency.

Let me now say something about today’s figures, because they are important, even if the shadow Secretary of State did not think it worth his while to talk about them.

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Will the Secretary of State give way?

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May I finish this point first? As the hon. Lady knows, I am happy to take interventions.

In the last quarter, 340,000 new jobs have been created; 780,000 have been created in the last year, and 2 million have been created since the Government came to office. The level of unemployment is now 6.6%, and is one of the lowest in the developed world. We are approaching German levels, and our figure is significantly better than those in almost all the other European countries. We have 600,000 job vacancies, and if the shadow Secretary of State goes around the country talking to businesses, as I do, he will know that the talk is increasingly of job shortages rather than unemployment. In many key categories— those aged 65 and over, women, disabled people, and lone parents—more people are in work than before the recession began. Of course there are serious unemployment problems among young people —we acknowledge that—but youth unemployment is 100,000 down over the year, while long-term unemployment is down by 108,000.

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Does the Secretary of State share my concern about the growing gap between the unemployment figures and the claimant count? More than 2 million people are still unemployed. It is clear that many of those people are not receiving benefits of any kind, and they seem to have disappeared from the statistics. Is the Secretary of State, perhaps in partnership with his colleagues, trying to find out why that is and what we can do to help those people?

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I have been quoting the figures from the International Labour Organisation, which provides the international accepted definition, and they include the people whom the hon. Lady has described. Of course, many people are self-employed, and many of those are potential entrepreneurs. I am sure that she would not want to diminish their contribution.

Opposition Members often say “The job figures are fine as far as they go, but are those jobs full time?” As a result of the strengthening of the labour market within the last year, three quarters of all new jobs have been full-time. Moreover, some interesting information has emerged during the last few weeks. People who are doing part-time work, which is often criticised, have been questioned to establish how many of them wish to do full-time work. The current figure is about 20%, and it is useful to compare that with the figures for the European Union as a whole, for France and for southern Europe, which are 30%, 40% and 60% respectively. The underlying trends in the labour market—not just the top-line figures—are significantly healthier in this country than they are in almost every other part of the European Union.

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The Secretary of State has not yet mentioned young unemployed people. I know that he is always keen to look for ways in which the Liberal Democrats are making a difference in government. Will he tell us about his leader’s youth contract, which, it was claimed, would help 160,000 young people into work by incentivising employers? How many young people have benefited so far?

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The fact that youth unemployment has fallen by 100,000 in the last year is significantly owing to the youth contract, as is the advance in apprenticeships—and the shadow Secretary of State’s comments on apprenticeships were an absolute travesty. We know that there has been a big increase in terms of both quantity and quality, and, of course, the support given to employers so that they can take on young people has been an important and extremely positive element of the youth contract.

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One of the problems is that all too often under this Government work simply does not pay enough. Does the Secretary of State accept any responsibility for the fact that since the Government came to power, the number of working people claiming housing benefit in Croydon has increased by 1,100%?

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Quite a lot of those people have moved from unemployment to work, which explains the change in the definition. However, we want to ensure that people are in work and are properly paid in work, rather than being dependent on benefits.

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What are the Government doing to deal with the fact that people under 25 are four times more likely to be unemployed than those over 25? He has talked about youth unemployment, but that group really is not benefiting from any of the Government’s policies.

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The hon. Lady makes a valid point. I know that in her constituency there is a particular problem with graduate unemployment, which we have discussed. Youth unemployment is a long-standing problem. It was very substantial even before we got into this major recession and financial crisis. We need to deal with it in a variety of ways: job training, apprenticeships and by providing a better-working market.

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I ran a business before coming into this place and the Secretary of State will know that what businesses need is confidence that they will be rewarded for making the right decisions. That will encourage businesses to take on more people and deal with many of the issues raised by the Labour party. This Government have given businesses confidence and that is why we are seeing significant reductions in unemployment.

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That is why I started my speech by saying that the most important thing we are doing is encouraging small businesses to grow. That is where the jobs come from. That is what I am keen to get to, but as the Opposition amendment was couched solely in terms of the second element of the Bill, that is what I am now trying to address.

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rose

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I will take two more interventions and then move on.

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Does my right hon. Friend agree that the Opposition’s stance, which is to pick out any poor statistic or position, highlights that they are completely in denial about the recovery’s strength? It exposes their lack of any vision to secure economic growth for this country.

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I was going to go on shortly to what is underpinning labour market growth, which is strong and balanced economic growth. I will come back to that.

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Is the Secretary of State as disappointed as I am by the constant deriding of manufacturing and the growth in the economy by the shadow Secretary of State, who, every time he gets up, runs the economy down? Is that the right way to give confidence to businesses to drag us out of the recession that Labour left behind?

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rose

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I will take more interventions later, if hon. Members will let me make a little progress. That intervention prompts me to remind the House where we are with the economy. We are the strongest growing of the major G7 countries. Major forecasts by the IMF and the OECD suggest that this year growth will be between 2.7% and 3.5%, which is quite exceptional in current circumstances, with the trend continuing in 2015.

What is more important is the fact that that has been achieved in a balanced way. In the last three quarters, manufacturing has been growing faster than the economy as a whole. Business investment, which was seriously depressed through the recession, is now experiencing double-digit growth on an annualised basis. I was taken aback when the hon. Member for Streatham started to tell me about the industrial strategy. I was in the House for the 13 years of the last Labour Government. Throughout that period, any suggestion that we have the kind of industrial strategy that we are now leading was regarded with utter ridicule by—

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Will the Secretary of State give way?

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I will in a moment. The hon. Gentleman has reminded us of some genuinely useful things that were left by my predecessor, including the Automotive Council. Of course no money or long-term investment was attached. We are now doing work with the high-value manufacturing sector through the Catapult centres. There has been a billion-pound co-investment in new automotive propulsion systems. That did not exist. However, some things left by my predecessor were useful. They were small, but they did contribute to what is now a valued industrial strategy supported on both sides of industry. I am glad that the Opposition have bought into it, albeit rather belatedly.

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I am sorry, but that is rather ridiculous coming from a BIS Secretary who in opposition argued for the abolition of his own Department. Now he is trying to pose as a great industrial activist.

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My Department is now very different. It now includes universities, science and many other things. In one period during the last Labour Government—the hon. Gentleman may remember it; I think that the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) was the Minister who started the change—there were about 186 different systems of industrial support, the cumulative effect of which was largely negative because we had large-scale deindustrialisation. We are pursuing the strategy in a much more concerted way, in partnership with business and on a long-term basis. That is what we are achieving.

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The right hon. Gentleman talks about how the policy is seeking to grow the economy in a balanced way, but does he accept that many regions of the UK are not growing at the same rate as the south-east of England, for example? Places such as Northern Ireland are suffering from that. Why in the Queen’s Speech is there no reference, for example, to the devolution of corporation tax to the Northern Ireland Executive, which would help them to grow the economy in Northern Ireland by more than is happening at present?

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I accept the point that there are regional differences in the pace at which the recovery is happening. As it happens, of the four nations in the UK, Scotland and Wales are growing more rapidly than the UK average. However, Northern Ireland is not. I know that there is a debate about corporation tax. I do not think that is the central issue. The problem in Northern Ireland, as the hon. Gentleman well knows, is that two major banks are bad banks and are seriously contracting lending to small business. I am trying to work with the Northern Ireland authorities to assist with that.

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The right hon. Gentleman has not so far given the figures on zero-hours contracts. He will know that the Office for National Statistics has said that 1.4 million people are on those contracts, but the Government say that only 250,000 are. What is the reason for the difference?

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I was going to talk about zero-hours contracts later, but since the right hon. Gentleman has asked me the question, I will try to explain. There are very different estimates of zero-hours contracts. The ONS gives very different figures from other surveys. They range from roughly 2% to 4% of all jobs. It is worth mentioning this in passing. The shadow Secretary of State has been quite modest about his own contribution. He has been in correspondence with the statistical authority, which rebuked him for being misleading in terms of the trend in zero-hours contracts. It is a significant problem, and in a few moments, I will come to how we want to address it.

Let me move on to the underlying question in relation to zero-hours contracts and to what the Opposition are trying to say about living standards. What has always surprised me in these debates is that people are surprised that living standards fell in the wake of the financial crisis. Let me rehearse some basic facts. In the 2008-09 crisis, the British economy contracted by over 7%—more than any other major economy. It was the worst shock to our country—worse than in the 1930s. It was only after the first world war that we had a comparable hit to our economy. It was an enormous disruption, with massive implications for people’s jobs and living standards. It did happen under the last Government. It was not entirely their mistake, but it was on their watch and they had a substantial responsibility for it.

That contraction of output inevitably translated into people’s living standards, and median wages in real terms contracted by about 7% as a result of the crisis. That has been the impact on living standards. It is clear. What is different from previous recessions is that the people at the bottom end of the scale have been protected by two things: first, the minimum wage—there is cross-party consensus on that, which I welcome—and, secondly, tax policies that led us to lift large numbers of low earners out of tax altogether.

Let us look at what the combination of those factors has meant and the work of the Institute for Fiscal Studies. It makes the point that the contraction in real take-home pay for people in the bottom 10% was 2.5%. For the people in the middle, it was 6% and for the people in the top 10%, it was 8.7%. That was an essentially progressive response to a major economic crisis. Of course there are still major inequalities of income and wealth. We acknowledge that, but that relates to the top 1%, rather than the top 10%.

How do we strengthen the minimum wage system, which my colleagues and I fully buy into? We decided earlier this year to increase the minimum wage faster than inflation—a 3% increase, the biggest cash increase since before the recession. The Low Pay Commission has issued guidance to secure improvements to the real minimum wage. We accept that one of the main challenges—which the last Government did absolutely nothing about—was enforcement. We inherited a system in which the maximum fine per company was £5,000. Under this legislation, we will strengthen it to £20,000 per worker—a big step up in taking seriously sanctions in respect of the minimum wage. We now have a naming and shaming regime in place, and 30 companies have been named since it was initiated a few months ago, and as a result of much more active intervention by Her Majesty’s Revenue and Customs, we have increased by a factor of 38% the amount of arrears identified and paid to employees. All the things that the shadow Secretary of State is calling for are now being done.

Let me address the specific issue of zero-hours contacts. It is a problem, but let us get it into perspective. Although there are wide variations in the estimated number of zero-hours contracts, we are talking probably about between 2% and 4% of jobs. Of course we do not want people in that type of employment to be disadvantaged, but many take up such employment voluntarily, and particularly for students and older workers, it is an attractive system. For some, however, it is exploitative and as a result of our consultation—one of the biggest that the Government have undertaken, with over 36,000 people responding—it was very clear that there were some points on which action needed to be taken, and we are going to take action on exclusivity.

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Does the Secretary of State accept in principle that if the Government converted a £20,000 a year job into two £10,000 a year jobs, with the higher tax threshold, he would be moving from tax payment to zero tax payment, and that this inflexibility and zero-hours and part-time work are contributing massively towards the increasing debt we face under his Government?

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That is attributing a slightly sinister train of argument to employers, which is not the case. There are many industries that have flexible working arrangements—and zero-hours contracts are only one form of flexible working—which the work force accept. The shadow Secretary of State talked proudly about his membership of Unite. I engage with the car trade unions, which accept that zero-hours contracts have quite an important part to play in the flexible working in the automobile industry.

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In the Government’s response to the debate that we held on zero-hours contracts last October, the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), said that it was perfectly reasonable for Opposition Members to ask whether the consultation would also address problems with short-time working and agency working. What conclusions did the consultation come to on those aspects of employment practice?

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I am not sure precisely what the hon. Gentleman is driving at. As he knows, there is an agency workers directive, which we have transposed into British law. It is not terribly popular with many parts of business, but it was agreed between employers and employees. I am not sure what else he is referring to.

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I want to refer back to the points made about the quality of jobs and whether jobs are full time or part time, and how people feel about that. Will the Secretary of State comment on a recruitment exercise that an agency has just done in my constituency for jobs in a warehouse that start at 3 in the morning, when there is no public transport? A very large number of people were put through a week-long recruitment exercise for that, and only a very small number were offered jobs. They were offered four hours of work a day, starting at 3 or 4 in the morning at a warehouse. People were mandated to attend that training. This is the kind of thing that is happening. Does the Secretary of State think that my constituents want to be offered jobs picking in a warehouse at 3 in the morning when there is no transport and where, instead of offering full-time jobs to fewer people, a larger number of people are being offered four or five hours of work a day? How can people live with that kind of casualisation?

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Obviously, I do not know all the details of that case, but it seems a very bad one. It is not clear to me whether it is to do with the employer or the way that the benefits system has impacted on people, but if the hon. Lady writes to me we will get it investigated.

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I am a passionate believer in reform of zero-hours contracts, but does the Secretary of State agree that Opposition Members’ comments sit ill with the White Paper that the Labour Government issued that said that Labour

“wishes to retain the flexibility these contracts offer business”?

They then proceeded to do nothing about it for the rest of their time in office.

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I thank the hon. Gentleman for reminding us of that. Two of my Labour predecessors investigated this problem and neither of them felt there was sufficient cause to change the legislation.

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The figures show that 580 more people are employed in my constituency now than this time last year, which is positive news for the area. However, what conversations is the Secretary of State having with the devolved Administrations to ensure unemployment continues to be tackled, especially for low-wage earners?

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Although the situation is improving in Northern Ireland, there are significant unemployment black spots. I want to work with the Northern Ireland devolved authorities to make sure that we deal with them systematically. As the hon. Gentleman knows, this is a long-standing problem in Northern Ireland that goes back long before the recession.

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I raised previously allegations concerning a number of UK parcel carriers and minimum wage enforcement. Will the Secretary of State undertake to look at whether the minimum wage is being properly enforced by UK parcel carriers? Apart from the justice issues for the individuals concerned, there is the potential to affect the sustainability of the universal service obligation that Royal Mail is under.

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Certainly, if there is abuse of the minimum wage, we will want to know about it and we will investigate it. Liberalisation and the opening of the market was mandated by the European Commission some years ago, and it was implemented by the last Government, and we are now seeing the consequences in terms of pay and conditions.

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Will the Secretary of State remind me—and the Secretary of State for Work and Pensions, while he is sitting at his side—whether he still believes that any of my constituents on jobseeker’s allowance who turn down a zero-hours contract job offer should then be subject to sanctions?

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The same sanctions apply to all forms of employment.

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My right hon. Friend has taken several questions on zero-hours contracts, but may I ask him a slightly different question? One of the most interesting statistics that has come out today is from the south-west Manufacturing Advisory Service, which serves as a leading indicator: 49% of all small and medium-sized enterprises manufacturing in the south-west have said they expect to employ more people over the next six months. Does my right hon. Friend agree that when we look at the forward leading indicators—whether for zero-hours or full-time employment in a great industry like aerospace in the corridor between Bristol and Cheltenham or other manufacturing industries around my constituency of Gloucester—we see there are huge indications of really positive jobs growth in really good growth industries?

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Yes, there are, and that is a very good example. We had an earlier exchange on the aerospace industry. One of the major accomplishments of the industrial strategy is that we now have a partnership stretching between Parliaments, guaranteeing large-scale investment by the Government as well by industry, and that is one of the factors contributing to the confidence that my hon. Friend described.

In my concluding remarks, I want to refer to the specific measures introduced in the small business Bill, which will support small business. Let me say at the outset that I fully accept the shadow Secretary of State’s point that one of the central issues affecting small business is access to bank credit. It remains a very big issue, and it is not difficult to understand why. We had the biggest banking crisis in our history going all the way back to the beginning of the 19th century. We have never had anything on this scale, and Britain was uniquely affected because of the scale of banks in the UK relative to GDP—it is higher, I think, than in any other country except Iceland—and, again, the Labour Government had responsibility at the time. The effect of the bank collapse and the subsequent deleveraging that has taken place, particularly in RBS, have been deeply damaging to business. We understand that and are taking steps to deal with it.

The British Business bank is now playing a significant part. Over the past year, I think there have been net flows of £660 million into the small business sector. That is a mixture of new flows to organisations such as Funding Circle and to the challenger banks, together with the guarantee schemes, which have increased by a factor of 75% since they came under the Business bank.

We are running up a downward-moving escalator, but the Government accept that we have a responsibility to intervene heavily to support like lending in the wake of an extremely damaging banking crisis. That is the context in which we are operating. The Bill will contain a series of measures that will help further. Late payment is a massive issue for small businesses, with something in the order of £30 billion in outstanding payments. The legislation will introduce a requirement on companies to be much more transparent in how they deal with late payments.

We also want to introduce much more competition in banking, to ensure that banks will come forward and lend to small businesses. Within the last year, we have seen the creation of a whole set of new banks, supported by the Business bank. The big obstacle—which I recall describing in the House 15 years ago at the time of the Cruickshank report—is the fact that the four leading banks had a stranglehold over the process through the payments system. We have introduced a new form of regulation of the payments system, opening it up to competition and preventing the kind of stranglehold that the existing banks have. The Bill will enable that to happen. In addition, we want to ensure that we have a proper system of data sharing. The lack of such a system is one of the obstacles to new banks coming in and competing. There are also problems with export finance, but the new Bill will enable us to extend export finance into new areas.

The shadow Secretary of State talked about the small business measures having taken a long time, and we accept that. There has been a massive consultation on pubs, for example. It has gone on for many years—indeed, it started long before this Government came into office—but we are now taking action. There will be a statutory code and an arbitration body. There will also be an option for an independent, market-based rent review. I am sure that we will discuss this legislation extensively, but it does represent action after many years of pressure from the Select Committee and from other Members.

Other business measures will include those relating to public procurement. This Government have opened up public procurement in central Government to small business in a way that has never happened before, but that has not always happened throughout the wider public sector, including local government. The measures that we are introducing in this big Bill will considerably improve practice in public procurement, opening up the rest of the public sector.

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The Secretary of State might have had representations from local opticians who had previously provided a service to the Driver and Vehicle Licensing Agency. All their contracts have been taken away from them, bundled up and handed to one big national company, Specsavers. Does not that show that, although the rhetoric might be fine, many Departments are still letting the system down?

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When the right hon. Gentleman looks at the figures, I think that he will find that there has been a substantial increase in the share of small businesses in central Government procurement. I am not a customer of Specsavers, but I will happily investigate the case that he raises.

The criticism from the Opposition and certain outside commentators has been that the legislative programme is light, and that there will not be a great deal for the House to do. In relation to the small business, enterprise and employment Bill, I would simply say be careful what you wish for. It will be one of the major pieces of legislation, and it will get to grips with many detailed, complex issues. It will make a significant difference. We are introducing it against the background of a real, balanced recovery that is having a major effect on employment, and it will reflect the substantial achievements of this Government.

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rose

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