House of Commons
Monday 12 January 2015
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
1. What steps he is taking to increase the number of cadet units in schools. (906893)
We are on track to achieve our target of 100 new combined cadet forces in state schools by September 2015. That will ensure that, whatever their background or school, children will have a great opportunity to enjoy all the benefits of being in the cadets.
I am proud to have 1104 Pendle squadron air cadets in Nelson and Army cadet force units in Briarfield and Barnoldswick in my constituency, but we are yet to have any cadet units in schools. Will my hon. Friend update the House on the funding model for all combined cadet forces?
We decided that we would look at the current funding so that we could make sure that we were in a position to expand. We consulted people and I am grateful that they responded in the way that they did. We listened to what was said and as a result we will not change the funding model. We are confident about the expansion plan, which I hope will go into my hon. Friend’s constituency. I look forward to discussing that, and how we can assist further, with him. It is a good idea.
18. Will the Minister proactively promote youth cadets, particularly in our state schools, for which it is not such a natural course to follow? Will she also talk to her Cabinet Office colleagues responsible for the National Citizen Service as a way of getting more recruits into the uniformed youth services and of recruiting more youth leaders to help run them? (906913)
I absolutely endorse everything my hon. Friend has said. So far, there are 64 new cadet units of which 47 are up and running. I agree with my hon. Friend that this is a wonderful opportunity. It is particularly important that we expand the cadet experience into state schools, because it should not just be the domain of the private sector.
Tower Hamlets is the lead borough for police cadets. We also have fire cadets, a sea cadet unit is being set up on the Isle of Dogs, and I am president of the 31 Tower Hamlets air cadet training corps at Mile End. How much support will be given to cadet units that are not associated with schools, but that are based in the community?
We know that there are more community cadets. They are all equally important and we are determined to do everything we can not just to support them, but, as we have heard from Members on both sides of the House, to encourage more young people to take advantage of the benefits, opportunities and the fantastic experience that the cadets offer.
I strongly support the Government’s initiative for 100 new CCFs in schools across the land. It is a great idea, but the Minister mumbled over the question of the funding formula—[Interruption.] I apologise: she most certainly did not mumble. To put it a different way, I am a little unclear as to what she meant about the funding formula. Will she guarantee that she will not do what she originally planned, namely fund the CCFs by charging existing cadets up to £500 a year for membership?
That was a gracious withdrawal. I have periodically accused the Minister of things, fairly or unfairly, but I have never, ever accused her of mumbling and I cannot imagine ever doing so.
Some people wish I would mumble a bit more, Mr Speaker. Let me make the situation very clear, in case my hon. Friend the Member for North Wiltshire (Mr Gray) did not hear me, which I find astonishing. There will be no changes. We are determined to support all our cadet units, wherever they are, but we are particularly keen to see growth into the state sector. Everybody should welcome that, especially Government Members because we are the first lot to actually achieve it.
The House will know from the previous Question Time that I was in the combined cadet force when I was at Hampton school many years ago, but I understand that I will never be gallant. May I draw the Minister’s attention to the concerns of the recently retired children’s commissioner that people as young as 17 could serve in combat duties on the front line?
As a comprehensive schoolchild I never had the benefits of the CCF, which is why I am such a keen supporter of the scheme. I did not have the benefit of going to the independent school that perhaps the hon. Gentleman went to.
It was a grammar school.
It was a grammar school. I will move swiftly on to answer his question. [Interruption.] The Hartland was a very good school—I think the hon. Member for North Durham (Mr Jones) and I both went to it. [Interruption.] Oh no, he went to another one. Anyway, the important point is that I do not share the view of the hon. Member for Huddersfield (Mr Sheerman). This is not about children being put on the front line. I am confident that our duty of care and the way in which we train everybody who joins our armed forces are absolutely right. We take our responsibilities very seriously. Nobody under the age of 18 goes on to the front line—we need to make that very clear.
I thank the Minister and the Secretary of State for listening during the consultation. The proposal was very nearly a disaster for the existing CCFs and they rescued it. I thank them very much indeed. Although I understand the desire to have CCFs in state schools, I ask the Minister not to lose focus on the Army cadet force as the policy continues.
I absolutely will not lose focus. It is worth saying that we listened to all the representations that were made. We also know and understand that we have a duty to live within our means as a nation and to keep within the Defence budget. That is why we always look at such matters with great care. We looked at the matter, we listened and, in this instance, we did not act. The policy will therefore continue and I am confident that it will do so with success.
UK Military Personnel (Afghanistan)
2. How many UK military personnel are currently serving in Afghanistan. (906894)
Let me start by passing on our congratulations to the hon. Gentleman on his well-deserved knighthood. Our commitment to the current NATO Resolute Support mission in Afghanistan, the UK element of which is known as Operation Toral, amounts to about 470 UK military personnel. They work in support of the democratically elected Afghan Government, who have just announced their new Cabinet.
I thank the Minister for his kind remarks. The benefits that our service personnel, as well as our diplomats and development workers, have brought to Afghanistan at such cost over the past 13 years could be swept away in part or all of that country, as has happened in Iraq, if the new Resolute Support mission to support the Afghan national security forces does not provide the support that is necessary. Can he reassure the House that Resolute Support will be maintained for as long as is necessary to guarantee the gains that have been made over the past decade?
Along with our NATO allies in Resolute Support, we are committed to the long-term security of Afghanistan. On the UK contribution, we continue to lead mentoring at the Afghan national army officer academy and to provide mentors in the Afghan security institutions. We are also taking the lead on the Kabul security force, which is a key enabler for managing and assuring the protection of UK and NATO personnel in Kabul. The hon. Gentleman mentioned sacrifice. We lost 453 personnel who died in the line of duty in Afghanistan. They made a great sacrifice to give the people of Afghanistan a future and we will never forget them.
Will the Minister outline for the House what role he sees for the Army Reserve in contributing to Operation Resolute Support?
As a former reservist, I am delighted to do so. Army reservists have served in Iraq and Afghanistan, and they will continue to serve in Operation Toral. I believe that some elements of 3PWRR—a regiment close to the heart of the Under-Secretary of State for Defence, my hon. Friend the Member for Canterbury (Mr Brazier)—will deploy to Afghanistan shortly as part of the security force. Reservists will be an important and integral part of our commitment under Operation Toral.
3. What assessment he has made of recent trends in recruitment to the Army Reserve; and if he will make a statement. (906896)
The trained strength of the Army Reserve at 1 October 2014 was 19,310 and we expect it to exceed our end of year target of 19,900. Enlistments in the first two quarters of the year were 62% above the equivalent period in the previous year and we expect the latest quarter to show a further increase, owing to the removal of delays in the recruitment process, the restoration to units of the key role of mentoring recruits and the new marketing campaign.
Ministers raised the age limit for Army reservists from 43 to 52 after recruiting, as I understand it, only 20 new reservists—somewhat short of the 30,000 they were aiming for to cover the cutting of 20,000 personnel from the Regular Army. Recently in east Yorkshire, there has been filming for the new “Dad’s Army”, so I wondered whether Ministers thought it might be appropriate for the cast to keep their uniforms on.
In the latest six months, 2,130 recruits were enlisted into the Army Reserve. I ask the hon. Lady to think very carefully before making jokes about the Army Reserve. Whatever policy differences there are, 30 members of the reserve forces—24 of them from the Territorial Army—have died on operations in Afghanistan and Iraq.
21. Could the Minister also give us a short update on his progress on the cyber-reserves? (906916)
Recruiting for the cyber-reserves is on course in all three services, but I am afraid that I am not allowed to give any details of the planned structure, for obvious security reasons.
Reservists in the Royal Army Nursing Corps are putting themselves in significant danger as they are called up to serve in Sierra Leone to help combat Ebola. Why is the Ministry of Defence refusing to pay those brave people their operational allowance?
I share the hon. Gentleman’s admiration of those people, and I was privileged to see them off just before Christmas. I note that the senior nursing officer in the rotation—effectively the commander in the red zone on the current operation—is herself a reservist.
To answer the hon. Gentleman’s question directly, those people are entitled to a number of other allowances, and we are looking at the moment at the issue that he mentions. My right hon. Friend the Minister for the Armed Forces will write to him when it has been determined.
The latest MOD figures show that the trained strength of the Army Reserve has actually fallen over the past 18 months. Can the Minister inform the House of the extra cost that has been incurred, over and above the original estimates, to encourage recruitment? The MOD’s continued silence on that suggests either embarrassment or ignorance.
On my hon. and gallant Friend’s first question, by looking back 18 months he is looking back past the bottom of the trough. The past six to nine months have been much more encouraging, and the next quarter is expected to be even better.
My hon. and gallant Friend has asked his second question again and again, and we have explained that, although we acknowledge that there are some extra costs, there is no way that we can separate them from the whole picture. Some of them are one-off costs, and some of them are connected with regular recruiting as well—we have to remind people, post-Afghanistan and so on, that we are recruiting.
The original plan to reform the reserve force stated that a force of 30,000 would be required by 2018. That was pushed back to April 2019, and last week in The Times, well informed sources in the MOD suggested that the date may well be pushed back even further. Can the Minister confirm exactly when the 30,000 strength will actually be met?
We are still firmly committed to April 2019 as the target date. As I have mentioned, recruiting has increased substantially. If we look at the latest quarter as opposed to the latest six months, we see that it has roughly doubled. Over the past six months it is up 62%, but over the second half of that period it has gone up even faster, and we expect a further continuation of that positive trend. We are firmly committed to April 2019.
4. If he will publish research held by the Government on the global atmospheric consequences of nuclear war. (906897)
Classified studies conducted by the Ministry of Defence focus on the effects of UK nuclear weapons and the potential impact, including on critical national infrastructure, of a nuclear attack on the United Kingdom.
Under the 30-year rule, Cabinet papers for 1984 have now been published. They show that the Government at that time refused to undertake any study of the atmospheric effects of a nuclear weapon explosion or nuclear testing. As I understand it, no other study has been undertaken since then. At the conference on the humanitarian effects of nuclear weapons in Vienna, there were some disturbing—no, frightening—reports of what would happen to the world’s climate if any nuclear explosion took place anywhere. Does the Minister not think it is incumbent on the Government to tell the British people exactly what the consequences of a nuclear explosion are, not just for them but for the whole planet?
I think the hon. Gentleman is referring to some declassified Home Office documents, which as Minister of State at the Ministry of Defence I confess I have not read. I believe that nuclear deterrence contributes materially to our national security. If the hon. Gentleman wants to read a really good study on nuclear deterrence, I recommend “On Nuclear Deterrence: The Correspondence of Sir Michael Quinlan”, published by the Royal United Services Institute in 2011. It is a ripping good read about how to keep a country safe and free.
Does the Minister understand that at a time when we are rightly outraged and mourning the deaths of 17 people at the hands of terrorists, it is a terrible paradox that every hour of every day this nation deploys a nuclear weapons system that will kill directly millions of people, and due to its climate effects could kill up to 2 billion? Does he think it is time to engage with a new Austrian initiative that could ultimately lead to a ban on all nuclear weapons and is, I stress, a multilateral initiative?
I respect the position from which the right hon. Lady approaches this issue, but as I have said, I believe that maintaining continuous at-sea deterrence is the best way to deter nuclear exchanges, rather than lead to them. In fairness, she has been absolutely consistent and long standing in her views about nuclear weapons, which is more than we can say this week for her party leader.
I am sure my right hon. Friend agrees that we would all like nuclear weapons not to exist, but sadly they do. Given that, is it not rather strange to hear cries for disarmament on the very day we read that former President Gorbachev has said that the likelihood of a nuclear conflict around Ukraine is much greater than it has been since the end of the cold war?
The Conservative party remains firmly committed to continuous at-sea deterrence to provide the ultimate guarantee of our nation’s security, and as a former Armed Forces Minister, I know my right hon. Friend shares that view. Conservative Members also share that view; what is the view of the leader of the Labour party?
A recent report suggested that the long-term climatic effects of nuclear war could include low light levels, sub-freezing temperatures and heavy air pollution that could place the global ecosystem in serious jeopardy. If nuclear weapons had existed since Roman times, statistically all that may have come to pass by now. Does not that show the danger to the planet of the madness that is nuclear weapons?
A nuclear war would be a tremendous danger to the planet. That is why it is better to deter it.
Defence Capability (Conventional Weapons)
5. What plans he has to consider delivery of UK defence capability through conventional rather than nuclear weapons as part of the 2015 strategic defence and security review. (906898)
The next strategic defence and security review is a matter for after the general election. My Department is preparing for the review, but our focus remains the delivery of the 2010 review.
In a period of changing security threat, and as the national security strategy noted in 2010, is it not sensible to consider how ending the Trident replacement programme would release resources that could be spent more effectively on other security measures, as well as on a range of other public spending priorities, not least our national health service?
Successive Governments, Labour and Conservative, have been committed to our continuous at-sea deterrent for more than 45 years, and I hope that the Labour party in Scotland will not waiver from that. It would be extremely dangerous to move to any kind of part-time or lesser deterrent, and the Conservative party will not gamble with Britain’s national security.
My right hon. Friend has just made that commitment to continuous at-sea deterrence and, as I understand, it is the position of both main parties that the successor submarines for Trident should go ahead. Will he therefore guarantee to me that there will be no question of any delay in signing the main-gate contracts if we end up with another hung Parliament and the Liberal Democrats or Scottish nationalists seek to exact that as a price for their participation and support?
I confirm to my hon. Friend and to the House that the main-gate decision is scheduled for 2016. I will not speculate on the possibility of a hung Parliament, except to note that I know the Liberal Democrats would favour some kind of part-time deterrent, although it is pretty obvious to me that our enemies are not part time.
Given that RUSI is predicting that by the early 2020s the replacement of the nuclear deterrent will account for some 35% of the defence procurement budget, and given that this summer, whatever the outcome of the election, Ministers at the Ministry of Defence will be struggling to make limited resources pay for a long list of major procurements, could it possibly make sense to exclude from a comprehensive review the biggest single procurement?
I am sorry that my hon. Friend, who has some experience of these matters, does not attach the importance to continuing the deterrent that we do. Of course, the costs of the deterrent are spread over a number of years. As I have said, successive Governments in office have, every time they have re-examined the need for the deterrent, committed to continuing it.
Defence Equipment Plan
6. What progress his Department has made on delivering the defence equipment plan. (906899)
Under this Government, the Ministry of Defence was one of the first Departments to publish a long-term plan: our 10-year equipment plan. The third annual iteration of the equipment plan will be published shortly. I expect it to show that, in the vital area of defence equipment, we have a plan and that we are delivering against it in each domain. New investment committed last year includes: three offshore patrol vessels, four new F-35s, and 589 new Scout armoured vehicles under the largest land equipment contract the British Army has seen for 30 years.
What changes have been made to the way the plan is being delivered?
As my hon. Friend will recall, the previous Labour Administration had no plan and compounded one procurement incompetence with another. Consequently, the wrong equipment was often delivered, years late and billions over budget. By contrast, since balancing the defence budget and establishing an equipment plan, where there was chaos now there is competence; where there were cost overruns now there are cost savings; and where equipment deliveries were years late now they are on time, or, in far fewer cases, a few months behind.
In recent weeks, maritime patrol aircraft have been seen in the skies above Moray, operating from RAF Lossiemouth and plugging a capability cap, because the RAF has precisely no maritime patrol aircraft. All of our neighbours have them: the Irish air corps, the Royal Danish air force and the Royal Norwegian air force. In the plan the Minister has just mentioned, when can we expect to have maritime patrol aircraft?
As the hon. Gentleman knows full well, there was a recognised capability gap when maritime aircraft were taken out of service in SDSR 2010. The Government, as with previous Governments, operate in conjunction with our allies around the world. We provide aircraft to Baltic patrol and transport lift aircraft to the French. On occasion, our allies provide us with maritime patrol aircraft.
I was glad to hear the Minister’s answer to the question regarding Russian submarines infiltrating our waters.
Why, after the major equipment programme has been let, are his Department and UK Trade & Investment still scurrying around trying to hold the manufacturer to a pre-contract offer of safeguarding or creating 10,000 jobs in the UK? We now know that the Scout programme he mentioned will be built in Spain, Germany and the Netherlands, and that the core jobs in the UK are fewer than 400. That has happened on his watch. Why was the economic case for bringing the work to the UK not done before the contract was finalised? The Secretary of State spent all that time trumpeting what seemed to be a huge success when, in fact, it is not.
As the hon. Lady may recall, the original proposed contract, which was considered under her Administration, was for more than double the number of vehicles for which we have contracted. Consequently, the number of people potentially employed is significantly lower. However, the contract for the Scout vehicle, at £3.5 billion, is the largest contract that the British Army has received, and involves some 160 companies, predominantly in the UK. It will sustain 1,400 jobs in the UK, and we are currently actively exploring the opportunity for the onshore assembly of vehicles, from 101 to 589.
National Defence Medal
7. What his policy is on the creation of a national defence medal. (906900)
There is a long-standing and widely understood military tradition that medals are not awarded as a record of service but in recognition of specific campaigns or operations, acts of gallantry or outstanding service. We set up an independent review into medals and decorations, and its chair, Sir John Holmes, specifically considered this matter and decided against such a medal. That decision received royal approval.
MOD tradition and protocol have an important role, but would it not just be the decent thing to recognise our veterans in this way simply because they have served their country? Would it not be wonderful to have cross-party agreement to recognise them, as happens in many other English-speaking countries around the world?
We absolutely recognise and pay handsome tribute to our veterans. There is no better example of that than the military covenant and all that it stands for. The fact that so many people are signing up to it—businesses, all our local authorities and so on—demonstrates that the understanding of the great sacrifices made by our veterans in their service and by their families has never been higher in the public’s imagination.
I support the comments of my fellow Essex MP, the hon. Member for Clacton (Douglas Carswell). The last Government quite rightly introduced the national service badge, which has been greatly appreciated. The medal would do no harm, but it would do a lot of good.
I do not agree with my hon. Friend. Medals are for specific campaigns and acts of gallantry, and rightly so. In this instance, therefore, we will have to disagree.
8. What plans he has to visit Albemarle barracks to review handover arrangements. (906901)
I fear I might let down my hon. Friend because we have no plans—unfortunately—to visit his barracks, unless he makes me an offer I cannot refuse. However, we all look forward to the moment when 3 Regiment Royal Horse Artillery replaces 39 Regiment Royal Artillery later this year. I know of the great work he does in supporting his barracks, and of course he will welcome 3 Regiment Royal Horse Artillery when it moves in.
No pressure there! All I can say is that the Minister would be warmly welcomed in Northumberland, where we are transitioning from 39th Royal Artillery and welcoming 3rd Royal Horse Artillery. We are also looking at the base improvements that have happened already and the ongoing case we are making in respect of these troops.
I pay tribute to the work that my hon. Friend and others have done, and I will look at all our diaries to see whether we can come up; we would like to if we can. I promise I will look at my diary, and at the diaries of other Ministers as well.
9. What assessment he has made of the level of the cyber-security threat to the UK. (906902)
Maintaining robust cyber-security is a priority for the UK and of particular importance to the MOD. The threat is continually changing in scope and complexity. All public and private sector organisations have a stake in addressing the cyber threat, and the MOD is one element of the national cyber-security programme, which is co-ordinated by the Cabinet Office.
We know that cyber attacks are often targeted at defence companies themselves. What steps have the Government taken to ensure that security within the UK defence sector is strengthened?
We have taken very specific steps. With the Office of Cyber Security and Information Assurance, the Centre for the Protection of National Infrastructure and GCHQ, we are working closely with industry to ensure it is aware of the changing nature of the threat and has effective counters in place. The defence cyber protection partnership aims to meet the emerging threat specifically to the UK defence supply chain by increasing awareness of cyber risks, sharing threat intelligence and defining risk-driven approaches to applying cyber-security standards. We are already doing it.
To what extent have NATO and our NATO allies prioritised the development of cyber capabilities?
For obvious reasons, NATO takes this threat very seriously. For instance, I believe it has a centre of excellence based in Estonia helping to provide advice to other NATO countries. We in the UK also take the threat very seriously and have invested heavily to counter it.
In response to the hon. Member for Norwich North (Chloe Smith), the Minister said that the recruitment for cyber-reserves was on track, but he could not give us precise details because it would breach confidentiality. I have always subscribed to the notion of “trust but verify”. Will he indicate by what means—numbers or some other means—we can ensure that the information is accurate and correct?
I went and verified. I visited the joint forces cyber-group at Imjin barracks in Innsworth in November, and I was able to meet a number of reservists, one of whom was from the Bank of England, who had recently signed up to help provide for the defence of our country. We do not give out publicly the number of people recruited for the cyber-reserves, and I hope the House will realise that there is a logical reason for that. The recruitment is, however, on track, and the quality of the individuals I met at Innsworth were, I have to say, extremely impressive.
President Obama has openly stressed the importance of establishing rules for the road on cyber-security, but what capacity has the UK developed to respond to a cyber-attack?
I remind the House that the strategic defence and security review announced a £650 million budget for the national cyber-security programme. Moreover, in June 2013, my right hon. Friend the Chancellor of the Exchequer went further by stating that investment in this area will continue to grow in 2015-16 and will include a further £210 million. An announcement by the Ministry of Defence last July showed that we are going even further than that.
ISIL (Iraqi Forces)
10. What steps he is taking to assist Iraqi forces in countering ISIL. (906903)
12. What steps he is taking to assist Iraqi forces in countering ISIL. (906906)
14. What steps he is taking to assist Iraqi forces in countering ISIL. (906908)
We are making a major contribution to the coalition, having deployed sophisticated surveillance, strike and transport aircraft to the region. As of yesterday, we have carried out 99 air strikes in Iraq, second only to the United States. We have also provided training and equipment to Kurdish forces, including infantry, combat first aid, sharpshooting and counter-IED training.
Given reports at the weekend that ISIL fighters killed another 24 people in the security forces in northern Iraq, will the Secretary of State provide more details of the equipment that his Department might be supplying to Iraqi forces to help them counter this threat?
Yes. The National Security Council has asked us to do further work to scope the additional assistance we can offer to the Iraqi military. We plan to gift counter-IED equipment to the Iraqi security forces in the near future, subject to the approval of this House. All our support is part of the developing coalition and Iraqi plan to ensure that Iraqi forces are coherently supported.
To what extent are British personnel in Iraq liaising with the Shi’a militias? Given the recent deaths in Iraq, apparently in action, of the Iranian General Taqavi, what assessment has my right hon. Friend made of the extent of the Iranian influence over those militias?
Our training has been focused in Kurdistan through the Ministry of Peshmerga, and our other embedded personnel work only with the security forces of the Government of Iraq, not with any of the Shi’a militia. Iranian influence over the Shi’a militia is well known, and Iran can certainly play a positive role in helping to bring about better government in Iraq.
In combating ISIL jihadists, our armed forces might be at greater threat in the UK than in Iraq. After last week’s atrocities, France has, I understand, allocated 10,000 troops for sensitive sites. What steps is my right hon. Friend considering armed forces in the UK should take for their own and our constituents’ safety?
We take our personnel—both military and civilian—extremely seriously. We have reviewed our protective security measures and the advice to personnel in the light of the recent tragic events in France. My hon. Friend will appreciate that, for obvious reasons, I cannot discuss details of the security arrangements that are in place.
Given that the Kurds still face attacks by ISIS forces using sophisticated captured American arms, is the Secretary of State satisfied that our allies have enough heavy weapons, including tanks and helicopters, to counter those attacks?
We are looking at the gaps in the capability of the Kurdish and Iraqi forces, and if we can help with additional equipment, we are ready to do so, and we have already played a very active part in transporting to those forces equipment that has been gifted or sold from other nations.
The House stands united with the people of France, and, indeed, with all who support the principles of freedom of speech, tolerance and democracy in the face of the barbarity that the world witnessed last week on the streets of Paris. This morning the Defence Secretary attended high-level meetings in Whitehall to discuss the United Kingdom’s response to those tragic events. Given that one of the terrorists said that he was acting on behalf of ISIL, will the right hon. Gentleman update the House on what further steps the Government are taking to combat this threat in Iraq and beyond?
I am grateful to the shadow Defence Secretary for, in particular, the tone that he has struck in the light of the tragic events in France. We all have sympathy with those involved.
I think that the hon. Gentleman and I are clear about the fact that if we are to reduce the threat from ISIL in France and the United Kingdom, ISIL must be defeated in both Iraq and Syria. This morning, under the Prime Minister’s direction, we again reviewed our standing preparations for a terrorist attack, including the number and readiness of troops available to assist the police, and we are keeping the security situation under continuous review.
I think that the whole House will be grateful to the Defence Secretary for his response. Does he agree that following those recent events the need to tackle the threat is even more urgent, and that we must work ever more closely with our allies in Europe—such as France—and with our partners in the region, including Turkey? Will he update us on the progress that has been made by United Kingdom forces in their crucial work of training Iraqi and peshmerga troops in Iraq to combat the ISIL threat there, and also, importantly, preventing future acts of terrorism here in the United Kingdom?
We are already co-operating closely with France in particular, and we have reinforced our offer of assistance to France over the last few days. If ISIL is to be defeated and the threat to our own country and other European countries reduced, we will of course depend on the co-operation of the entire international community, but especially on the co-operation of partners in the region. The hon. Gentleman is right to draw attention to the role that Turkey and other regional partners can play.
We have been training Iraqi and Kurdish forces, and are doing so at the moment. Training courses in Kurdistan are being managed and led by British troops, and I hope that they will help the peshmerga, in particular, in their fight against ISIL.
Setting aside the fact that there will be no foreign combat troops on the ground, will the Secretary of State tell us what is the difference between the 2007 strategy in Iraq and the strategy today? In particular, have we a new counter-insurgency doctrine, is there a new Sunni outreach strategy, and have we adopted a new approach to building the capacity of the Iraqi Government and army, or are we fighting the same target with the same strategy and fewer resources?
I can tell my hon. Friend—who, I know, brings a great deal of experience from Iraq to the House—that the biggest difference between now and 2007 is that we now have a genuinely inclusive Government in Iraq, who represent both Shia and Sunni, and, indeed, Kurdish elements in Iraq. The new Defence Minister, Minister Obeidi, is himself a Sunni. It is important for that Government to concentrate on precisely the kind of Sunni outreach that the hon. Gentleman has mentioned, so that their forces can enjoy the support of the tribes in the Anbar region, where ground must be recaptured from ISIS.
UK Military Base (Bahrain)
11. What the strategic rationale is for the opening of a UK military base in Bahrain. (906905)
The Ministry of Defence has had a naval base in Bahrain since the 1950s, providing naval and logistics facilities in support of our operations in the Gulf. The agreement that was signed last month reaffirms the joint determination of the United Kingdom and Bahrain to maintain security and stability in the region.
How long does the Secretary of State expect the military personnel who have been sent to train the Kurds in Iraq to remain there? Can he give us a time frame?
Our training effort, our troops and our air contribution to the fight against ISIL will remain in Iraq for as long as is necessary, which may well be a very long time. As for our presence in the Gulf, I hope that the House will welcome the recommitment that we have made to security and stability through the new naval base agreement, which will enable us to deploy larger ships and to provide better facilities for those who are deployed in or are passing through the Gulf.
I congratulate my right hon. Friend and salute the work carried out by Lieutenant General Sir Simon Mayall in re-establishing an east of Suez policy with our very close and reliable ally the Kingdom of Bahrain. Is this not a good example of the role defence diplomacy can play, and, in that context, may I invite the Secretary of State to reaffirm our commitment to the five power defence agreement in the far east, which reassures our allies and gives Britain an influence in the region?
My hon. Friend, one of my predecessors as a Minister in the Department, is right to pay proper tribute to Lieutenant General Sir Simon Mayall, who was responsible for negotiating this agreement, which will put our naval presence in the Gulf on a more permanent footing. My hon. Friend is also right to say that we should continue to examine our defence engagement policy in the far east as well as in the middle east.
It has been estimated that a three-day closure of the strait of Hormuz, perhaps by a terrorist attack, could lead to a four-year negative impact on the world economy. Has that influenced our decision to increase our capability in the Gulf?
Yes, the hon. Lady is absolutely right to draw attention to the economic and strategic importance of the strait of Hormuz. Our mine counter-measure vessels are playing a major part in ensuring that the strait always remains open, and I was privileged to visit two of those vessels and meet their crews. I put on record our appreciation of them for the very difficult and challenging work they do, particularly their divers, in making sure the strait remains open.
13. What recent investment he has made in (a) cyber-security and (b) unmanned aerial vehicles for the armed forces. (906907)
In addition to the sums identified by my right hon. Friend the Armed Forces Minister, in July of last year the Prime Minister announced a further investment in equipment for our armed forces, which included £75 million specifically for cyber-defence. The total recent investment in unmanned aerial vehicles for the armed forces in the current year is £233.5 million.
On unmanned aerial vehicles, will my hon. Friend provide more information about the Watchkeeper tactical remotely piloted air system and when it will be available to our British Army units?
I am pleased to be able to tell my hon. and learned Friend that the Watchkeeper achieved its first initial operating capability last summer and was deployed with the Royal Artillery to Afghanistan between August and October last year. It immediately demonstrated its excellent, and potentially game-changing, tactical capability over Helmand. We expect Watchkeeper to be at full operating capability in April 2016.
As well as investing in unmanned aerial vehicles, is the Department responding to reports that al-Qaeda in the Arabian Peninsula is developing counter-measures designed to diminish the effectiveness of these drones in current operations?
We are always alert to intelligence reports of evolving threats, from wherever they emerge. We take a very keen interest in the development of unmanned systems across the armed forces and will continue to do so.
T1. If he will make a statement on his departmental responsibilities. (906933)
Our immediate priorities remain our current operations in Afghanistan and against ISIL and Ebola as well as the commitments reached at the NATO summit and the delivery of Future Force 2020. I want to build up our reserve forces and invest in the equipment that our armed forces need to keep Britain safe.
Will my right hon. Friend tell me whether there will be opportunities for reserve units, such as 4th Battalion The Duke of Lancaster’s Regiment, to serve as units in operations and major exercises?
Reserve service offers exciting opportunities to serve overseas in formed units. For example, a platoon from 3 Princess of Wales’s Royal Regiment will be supporting 1 Royal Anglian in Kabul from February onwards, and 4 Mercian, based in Wolverhampton, recently deployed two platoons to Cyprus. This is exactly what Future Force 2020 was intended to do—making the most of reservists’ skills by integrating them with our regulars.
In the recent armed forces covenant report, the three service families federations state:
“We remain disappointed that a sizeable proportion of our people continue to say that they have little or no knowledge of the AF Covenant and the principles that underpin it.”
Three years after Conservative and Lib Dem MPs were initially whipped by the current Armed Forces Minister to vote against enshrining the principles of the armed forces covenant in law, this Government have failed to test their own policies against the covenant, failed to support local authorities to implement it and, we now know, even failed to ensure that forces families know about it. When are they going to get a grip?
May I say how very disappointed I am at such an appallingly negative question that achieves absolutely diddly-squat? With the introduction of the covenant enshrined in law, this Government, more than any other, have ensured that our veterans, serving members of our armed forces and their families get the sort of recognition that they need. It is not disputed that we can do more, especially at local level. That is why, by the end of the day, I shall personally have topped and tailed a letter to every chief executive and every leader of every council in Great Britain. My next task is to write to every clinical commissioning group and hospital trust to ensure that we deliver on the covenant in the NHS as much as we are doing in government, and we now want to do it at local level.
T2. The closure of RAF Mildenhall in Suffolk represents a staggering £0.2 billion loss to the Suffolk economy, including the loss of more than 700 civilian jobs. I know that the Minister for Business and Enterprise, my right hon. Friend the Member for West Suffolk (Matthew Hancock) is chairing the taskforce on trying to continue economic activity in some form at RAF Mildenhall, but will the Minister tell me what steps he will be taking to help fill the massive economic void that will result from this regrettable closure? (906934)
This is the first opportunity I have had to put on record at the Dispatch Box how pleased the UK is with the decision by the United States air force to base its first two F-35 squadrons at RAF Lakenheath, which is adjacent to Mildenhall. We think that a number of jobs will transfer from Mildenhall to Lakenheath. The base closure at Mildenhall is regrettable, but it will not happen for a number of years. We in the Ministry of Defence will engage with the working group being led by my right hon. Friend the Minister for Business and Enterprise, and we will be looking to see whether there is a future military use for the facility; if not, we will work to find an alternative.
T9. According to recent reports in The Times, Ministers are presiding over not only a stalling reserves recruitment programme but a crisis in recruitment to the regular forces. Can any of the Ministers reassure the House that the targets for recruitment to the regular Army forces will be met this year? (906941)
The hon. Lady is correct to say that, in recruiting year 2013-14, we were running at 66% of the annual regular soldier target. That represents roughly 6,200 soldiers, against a target of 9,300. However, the numbers are increasing and we are looking at a range of measures to increase them further, including a marketing campaign that is to be launched shortly.
T3. Returning to the question of the issuing of a national defence medal, will the Minister join me in paying tribute to my constituent, Mr Martin Halligan, who has done an inestimable and unstinting job on promoting the campaign for the medal nationally? Despite the review that has taken place, will she take on board the feeling expressed by many current and former service personnel that the issuing of such a medal would not undermine previous protocols and conventions or take away from specific acts of courage, leadership and honour, which are rightly recognised at present? (906935)
I certainly pay tribute to the work that has been done by my right hon. Friend’s constituent. I am sure that it is helpful in any event. There has been an independent review, however. Sir John Holmes has made his recommendation, and I am bound by the arguments that he has advanced against what my right hon. Friend is suggesting. I am not actually sure that the veteran community would agree with my right hon. Friend, but I am always willing to listen and if he wants to come and have a chat with me, I would welcome that.
At this weekend’s Cardiff City game, I saw not only a welcome return to blue, but, intriguingly, that substitutions in the game were being sponsored by the Royal Naval Reserve recruitment programme, no doubt at considerable expense. Will a Minister tell me what the cost of that programme was and how many reserves have been recruited? Given the low levels of reserve recruitment across the UK, what assessment has been made of the efficacy of such expensive advertising programmes?
I cannot give the hon. Gentleman the exact answer he requests, but I can say that the maritime reserves have been consistently ahead of their recruiting and manning targets from the beginning.
T4. Will the Minister provide an update on the Future Force 2020 programme? (906936)
Progress towards the implementation of Future Force 2020 is on track. Taking the Army as an example, the transition towards Army 2020 structures and locations is well under way. For instance, Force Troops Command reached full operational capability in April, and I was there to mark that. In November, I visited the newly formed 1 Artillery Brigade and Headquarters South West in Larkhill, which has taken responsibility for the regional point of contact in the south-west. On Wednesday, I will visit 11 Infantry Brigade in Aldershot before it deploys to Sierra Leone to help to fight Ebola. I am sure the whole House will join us in wishing them God speed and good luck in that task.
The Minister said earlier that the Cabinet Office has a role to play in cyber-policy. If that is to be a strong and robust policy, will he tell the House when a ministerial representative from the MOD last met the Home Office, Foreign and Commonwealth Office and Department for Business, Innovation and Skills to discuss the issue? What was the outcome of the meeting?
I can assure the hon. Gentleman that within government we take this issue extremely seriously, and we had meetings with representatives from other Departments and with members of the House of Commons Defence Committee. We are dealing with a diverse and complicated threat, and I have already explained to the House how much we have invested to meet it. We are in no way complacent, nor will we be.
T5. Pupils from Corbridge middle school in my constituency are shortly to go to the world war one sites, under the battlefield tours programme. What support is the MOD giving to schools, charities and families whose ancestors were involved as we go forward with future commemorations? (906937)
Of course there are a number of schemes run and encouragements given, not just through the MOD, but through the Department for Culture, Media and Sport, which has been the main Department leading on all this. My hon. Friend makes a good and important point: the commemorations of the first world war continue right up until 2018. Let me just mention that this March we have the commemoration of the battle of Neuve Chapelle, which holds huge significance in both India and Britain. Later in the year, notably in April, we will remember all the events at Gallipoli, and we will be marking Anzac day on 25 April at the Cenotaph.
At today’s high level meetings was any additional help offered to Yemeni defence forces, who are under sustained attack from extremist groups?
That has not specifically been discussed, but, obviously, we continue to see what further help we can give to countries in the region which are under pressure from ISIL. The right hon. Gentleman is right to remind the House that this is not simply a challenge to Iraq.
T6. Boko Haram slaughter the innocent, sell girls into slavery and impose mediaeval government and fear in wide areas of Nigeria. The local military are seen in many cases as being corrupt and perhaps to have involved themselves in human rights abuses. What role is the MOD carrying out to support Nigeria in tackling Boko Haram? (906938)
We unequivocally condemn the awful atrocities committed by Boko Haram in Nigeria. In June 2014, at the London ministerial meeting, the former Foreign Secretary announced that the UK will significantly increase the training and capacity-building assistance we offer to the Nigerian armed forces. We have since expanded our resident training and advisory team, and deployed increased numbers of short-term training teams to help prepare Nigerian troops for deployment against Boko Haram.
Last year, the number of Britain’s reservists rose by just 20. Given the millions thrown at the recruitment campaign, how is that a triumph?
The tri-service numbers of reservists over the past six months were up 400. The fact is that after 15 years of continuous quarter-on-quarter decline, they are now going up again. As I mentioned earlier, in the last quarter announced, recruiting was running at double the rate that it was in the equivalent period last year. [Official Report, 14 January 2015, Vol. 590, c. 7-8MC.]
T7. May I put on record my thanks to the Minister for the Armed Forces for his visit to BAE systems in Warton and Salmesbury aerodromes, which are key employers in Lancashire? Will he update the House on defence export prospects for the Hawk trainer aircraft, as its production line has recently opened in my Fylde constituency? (906939)
As my hon. Friend knows, BAE systems is pursuing a number of significant export prospects for the Hawk, with active support from the Ministry of Defence and UK Trade and Investment Defence and Security Organisation. As international air forces modernise their front-line aircraft, we anticipate that there will be significant further interest in the next generation of Hawk aircraft, the Hawk T2, which is already in service to train our Typhoon pilots and will do so for the F-35 pilots in due course.
Next month, the Government will be hosting a meeting of the five declared nuclear weapons states ahead of the non-proliferation treaty review in May. Will the Minister tell the House what he intends to achieve from that meeting, whether there will be an agreed position put and whether the P5 will adhere to the basic principles of the non-proliferation treaty and take steps towards nuclear disarmament?
As the hon. Gentleman knows, we take the nuclear non-proliferation treaty extremely seriously. We uphold that treaty and it is vital that we persuade other nations around the world that may be in breach of that treaty to abide by its conventions as well. The hon. Gentleman and I take a different view on these matters. I spent many years at university debating against the Campaign for Nuclear Disarmament, and I still seem to be doing it now.
Will the Government reassure me that they, apparently unlike some parties opposite, will not allow even the distant prospect of coalition negotiations to soften their commitment to continuous-at-sea nuclear deterrence?
Absolutely. Successive Governments have maintained that commitment to a continuous-at-sea deterrent and this Government are also determined to do so.
I am puzzled by the attempts of the Minister for the Armed Forces to goad the Opposition on the issue of the nuclear deterrent. Let us be clear: we are committed to a minimum strategic nuclear deterrent delivered by submarines that are continuously at sea. We continue to support the programme that we started in Government, which his Government have delayed. In what way is that different from his policy?
What is different is that the Leader of the Opposition, who was challenged on this just a week ago, spoke only about the need for the least-cost deterrent, without repeating—[Interruption.]
Order. I know that the Secretary of State can generally look after himself, but Members must not seek to shout him down. I always facilitate full exchanges on all these important matters, but the Secretary of State must be heard.
Thank you, Mr Speaker. This is a very important matter. The Leader of the Opposition did not repeat Labour’s previous commitment to what matters, which is a continuous-at-sea deterrent. What we cannot have is any kind of part-time deterrent, which would rely on our enemies being part-time as well.
I have the great pleasure of announcing to the House that I have just been made president of the (Mercian) Squadron Air Training Corps in Lichfield, which is one of the biggest Air Training Corps in the midlands. Will my right hon. Friend maintain his commitment to the Air Training Corps?
I congratulate my hon. Friend on that great distinction. Air cadets offer a huge opportunity to young people from a whole range of different backgrounds. The Ministry of Defence provides, and will continue to provide, support to both the Air Training Corps and the university air squadrons through the provision of high quality flying training and other supporting activities, including access to defence training areas and ranges.
May I try to goad the Secretary of State so that he stops trying to bamboozle us all about the real deterrent we need, which is a properly armed, conventional group of 100,000 men and women to defend this country? Is it not about time that he took our mind off reservists and talked about how many men and women we have under arms in this country?
In stark contrast to the previous Government, our defence budget has been properly managed and has enabled us to keep this country safe. We are determined to support Future Force 2020. The hon. Gentleman’s question might be better directed to the shadow Defence Secretary, who last week told The Times:
“Army 2020 isn’t working and Labour will not take it forward”,
although last year he said that
“we support the rationale behind…Future Force 2020”.
Last but not least, I call Mr Duncan Hames.
Allied warplanes cross the skies above Syria while Assad’s helicopters drop barrel bombs on the civilian population. How can this apparent indifference help us to prevent the civilian population of Syria from turning to the ISIL militia?
The Prime Minister has made it clear to the House that ISIL can only be defeated in both Iraq and Syria. We are making a major contribution to the campaign in Iraq, which itself of course allows others to contribute to the campaign against ISIL in Syria. ISIL has to be defeated in both countries.
(Urgent Question): To ask the Secretary of State for International Development if she will make a statement on the current situation in Nigeria.
The Boko Haram terrorist group continues to wreak havoc across north-east Nigeria. Many colleagues will have seen the press reports over the past week highlighting its latest sickening attacks. Hundreds of people are believed to have been killed in the town of Baga in Borno state last week as Boko Haram continued its bloody insurgency campaign. Suicide bombings in urban areas are also a common feature of Boko Haram’s tactics. This weekend, we saw another heinous example in the Yobe state town of Potiskum.
These attacks are just the latest example of the insurgents’ reign of terror. We believe that more than 4,000 people were killed by the group last year in north-east Nigeria. The United Nations estimates that more than 1.5 million people have been displaced by terrorist activities, and that at least 3 million have been affected by the insurgency.
The abductions of the Chibok schoolgirls on 14 April last year shocked the world and highlighted the mindless cruelty of Boko Haram. The group deliberately targets the weak and vulnerable, causing suffering in communities of different faiths and ethnicities. It is almost certainly the case that attacks by Boko Haram have killed more Muslims than Christians.
The year 2015 is an important one for Nigeria’s future. Presidential and state elections will take place in February. It is crucial that they are free, fair and credible and that all Nigerians are able to exercise their vote without fear and intimidation.
As Minister with responsibility for the Commonwealth, I responded to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister, on behalf of the Government in the last debate in the House on this subject. I am grateful to the hon. Member for Brent Central (Sarah Teather) for asking this timely question, which will allow Members from across the House to give this important issue the attention it surely deserves.
This weekend saw an inspiring and moving display of international solidarity in the wake of the Paris shootings, but while we were watching the horror unfold in Paris, hundreds or possibly thousands of civilians were slaughtered by Boko Haram in northern Nigeria, with very little international attention. While millions poured on to the streets in Europe in a hopeful, defiant march for peace, thousands of Nigerians fled across the border into Chad in fear of further violence, adding to the tens of thousands who have already fled to Chad, Cameroon and Niger and the 1 million or so people displaced internally.
I visited northern Nigeria with Voluntary Service Overseas in 2008, as recorded in my entry in the Register of Members’ Financial Interests, to see projects working to improve access to and the quality of primary education. Will the Minister tell the House how UK Government-funded programmes for education in northern Nigeria are responding to the escalating security situation and to the mass displacement of people? What are the Government doing to ensure a rapid humanitarian response for refugees, who are mostly fleeing to countries that are already resource-poor and insecure? Looking ahead to the world humanitarian summit next year, are there measures that can be put in place now for the co-ordination of aid and support for local non-governmental organisations? Does the Minister recognise that the international NGOs are already hugely overstretched in the region, responding to multiple conflicts and Ebola?
What are the Government doing to bring pressure to bear on the Nigerian Government to tackle Boko Haram and to prioritise protection of humanitarian workers? What are we doing to encourage the Nigerian Government to stamp out corruption, which is such a breeding ground for loss of confidence in the state? Finally, looking ahead to the Nigerian elections, how will the Minister ensure that we can capitalise diplomatically on the window of opportunity provided by a newly elected Nigerian Government to tackle such issues, however discredited those elections might turn out to be, when we will be in the middle of our own election campaign?
I thank the hon. Lady again for asking this urgent question, which gives us the time to return to these matters. There is a problem in that when something crops up elsewhere in the world, we are easily diverted and we forget the appalling suffering that continues in other parts of the world. I pay tribute to the world leaders who gathered in Paris at the weekend, including my right hon. Friend the Prime Minister, and the “Je suis Charlie” campaign. I know we would all have liked to be there to show our solidarity.
To return to the question of Nigeria and managing the humanitarian crisis, we are working closely with our international partners to react to the large numbers of people who have now been displaced by the conflict in the north-east, an issue that affects not just Nigeria but its close neighbours. The UK’s contribution to the UN’s central emergency response fund and the European Commission’s humanitarian aid and civil protection department programmes in 2014 was £1.7 million and, of course, DFID’s total budget for Nigeria is one of the biggest in the world at some £250 million, which includes funding for the safe schools initiative and promoting women’s and girls’ rights in northern Nigeria. British aid will help 800,000 more children to go to school in Nigeria, including 600,000 girls.
Corruption is worth highlighting, and it is worth remembering as we discuss these matters that Nigeria has the largest economy in Africa. It spends 20% of its national budget on security, so, properly run, Nigeria should be able to do a lot of this work itself. Our money from DFID does not just alleviate poverty, although there is a disparity in the economies of the north and the south, but helps build robust institutions so that Nigeria can take on some of the problems itself.
The hon. Lady refers to the forthcoming election in February. We have concerns about violence during the election and about the feasibility of running a nationwide election when an area the size of Belgium is now under Boko Haram.
I thank the hon. Member for Brent Central (Sarah Teather) for asking this question and you, Mr Speaker, for granting it.
The whole House will be shocked and outraged by reports that up to 2,000 people were killed in northern Nigeria last week following a series of brutal and deadly attacks by Boko Haram extremists. Most recently, we have heard reports of 23 people killed in a bomb attack involving three young girls, one of whom is reported to have been just 10 years old. Eyewitness reports suggest that after one such murderous attack hundreds of their victims’ bodies were left strewn across the town of Baga, including those of children, women and the elderly.
As the Minister highlighted, that follows months of violence across northern Nigeria with killings, mass abductions and attacks on innocent civilians. These attacks and brutality have been rightly condemned around the world, and although many people have rightly praised the moving solidarity seen across Europe this week, there can be no doubt about the need for solidarity across continents in the wake of such appalling attacks. That includes the atrocity in the school in Peshawar; we welcome its reopening today, striking a blow against terrorism everywhere. The world must not simply stand back and tolerate Boko Haram’s brutal campaign of violence.
Here in the UK there is cross-party support for Britain to continue to provide support alongside our allies to the Nigerian authorities in their efforts to tackle Boko Haram. Will the Minister update the House on the level of that support and say whether there have been any additional requests for British advice and expertise from the Nigerian Government? The Minister rightly reminded us of the appalling kidnappings in Chibok, which brought much needed global attention to the security situation in northern Nigeria and the vulnerability of civilians, in particular women and girls, at the hands of Boko Haram.
The recent testimonies collected by Human Rights Watch from victims who escaped or who were released show the appalling extent of the violent and brutal conditions in the Boko Haram camps where women and girls are held. In October the Nigerian authorities announced that they had agreed a ceasefire with Boko Haram, which was supposed to see the schoolgirls safely returned, but this agreement was shattered by the horrific news of the suicide bomber wearing a school uniform who set off a backpack full of explosives in the middle of a school assembly. Can the Minister provide the House with an assessment of the current plight of the girls who have been kidnapped by Boko Haram? What discussions has his Department held with the Nigerian authorities on working together to secure their release?
I stand alongside the shadow Minister in welcoming the reopening of the school in Peshawar. We should all stand together against violence and terrorism around the world. By doing that, we can face it down.
The shadow Minister asked about UK support. I imagine he was referring to the package of support announced on 12 June 2014 by my right hon. Friend the Leader of the House, then the Foreign Secretary, who is in his place now. Since then we have enlarged our programme of capacity-building support for the Nigerian armed forces to provide direct tactical training and advice to the Nigerian forces engaged in this fight against terrorism. With France and the United States we are supporting regional intelligence-sharing arrangements between Nigeria and its neighbours. As I said to the hon. Member for Brent Central (Sarah Teather), a DFID-US aid partnership will draw 1 million more school children into education by 2020, which includes increased support for girls’ education in particular. This is in addition to the £1 million which we committed in May to the UN safe schools initiative, which I alluded to earlier. DFID is providing advice and assistance to Nigeria for a more strategic approach to economic development in the north.
The right hon. Gentleman referred to the brutality of Boko Haram. There is no other word that better describes their actions. They are extraordinarily brutal to their own Muslim brothers, as well as to Christians—indeed, to any one who seems to get in their way. The tales of what they leave behind when they move into these areas are too ghastly to rehearse here this afternoon. They are one of the most brutal organisations known to man.
The issue that caught the attention of this House and of the world was the abduction of the Chibok girls. We are still supporting the Nigerian authorities in trying to establish the girls’ location through the provision of surveillance assets and intelligence expertise. Information generated by these assets has been provided to an intelligence fusion cell in Abuja, where British personnel are working alongside Nigerian, American and French colleagues. We are clearly unable to comment on the results of ongoing intelligence operations, as the House will accept, but while the girls are still missing our resolve and that of the international community to continue the search remain strong. I remind the House that we are dealing with an area the size of Belgium under the control of Boko Haram, and intelligence is difficult, but we are not giving up at this point.
What is happening in northern Nigeria with Boko Haram is grotesque and it is important that the House and everyone else should demonstrate that all human life is equally valid and equally sacred. My right hon. Friend made it clear that he is the Minister with responsibility for relations with the Commonwealth, and as the right hon. Member for Warley (Mr Spellar), who spoke for the Opposition, made clear, this is not just about northern Nigeria; it equally applies to the north-west frontier province in Pakistan. What is the potential for the Commonwealth as an institution to show solidarity by ensuring that Commonwealth countries act collectively to support Commonwealth members that are seeking to resist terrorism and fundamentalism?
My right hon. Friend raises an extremely good point. I am the Minister with responsibility for the Commonwealth, although I do not have direct responsibility for Nigeria, and I have been asking officials about this matter this afternoon. I think that there is a role for the Commonwealth. Particularly in Nigeria, more work could be done locally through organisations such as the African Union, but the Nigerian Government have to want other countries to come in and do that. It is worth looking at a pan-Commonwealth approach to dealing with terrorism of this nature, from which few countries currently seem to be immune, and I shall raise it with the secretary-general.
The vast demonstrations in Paris and in other French cities against murderous religious fascism were among the most impressive in my lifetime. Is there not genuine concern that the authorities in Nigeria are simply inadequate to deal with this terrible threat? Time and again when the Nigerian President has been under a good deal of international pressure, and rightly so, his response has been such that one can conclude only that the commitment to fight the terrorism and atrocities in that country is not as it should be.
No one living outside the affected areas in Nigeria should believe for one minute that they are immune to the possible terrorist activities of Boko Haram. As I said, there is an election in February, and presumably there are those who wish to campaign in this large chunk of the country in the north. It is a problem for Nigeria. Yes, we certainly wish that its institutions were stronger, but I think that both the Nigerian Government and the international community are absolutely certain that Boko Haram needs to be routed out, and quickly, before it does further damage within the country and to its vulnerable neighbours.
I agree entirely with what the Minister and the shadow Minister have said. I particularly agree with the Government’s decision not to intervene in Nigeria directly with military force. Will the Minister explain, though, why the west is right to try to use military force in Syria and Iraq, in rather similar situations, but not in Nigeria?
We have deployed assistance to Nigeria and we will continue to do so, particularly on the intelligence side. I repeat that Nigeria is one of the richest countries in Africa and it spends 20% of its own budget on defence expenditure. In the normal course of events, it should be able to handle these things itself, but it cannot, and that is why we are providing assistance to enable it to do so. Drawing any parallel between what is going on in Syria and Iraq is not useful, if I may say so. This is something localised to Nigeria, and we want to prevent it from spreading across other parts of Africa.
I draw the House’s attention to the Register of Members’ Financial Interests, where I have registered visits to Nigeria over the years. The Minister will be aware that the situation in Nigeria is a matter of great concern to the British people. It is also of concern to the tens of thousands of our constituents with strong family connections in Nigeria who want to know what the British Government are doing for their friends and family. As he pointed out, Nigeria has the capacity to deal with Boko Haram if it so chose. After all, it has the largest GDP on the continent and spends huge amounts of money on arms and weaponry, and it was very effective in relation to Ebola. Does he agree that people want to know what the British Government are doing to put maximum political pressure on the Nigerian Government to make them aware that people all over the world are watching them and want them to step up to this crisis?
We are more than stepping up to the crisis. I have said that we have one of the biggest bilateral aid budgets to Nigeria in the world—it is approximately £250 million a year—as well as the additional packages I have just announced. For the diaspora here, that is something of which we can be proud. The hon. Lady said that, given the wealth in Nigeria, Nigerians have the capacity to handle these things, but I disagree. I would say that they should have the capacity to deal with them, but the reality is that they do not. That is why a lot of UK support is going towards helping to build the capacity they need, with direct tactical training and advice to the Nigerian forces. I agree that they should have it, but currently I do not believe that they do.
Does the Minister agree that the answers to violent extremism lie in inclusion and reconciliation, and development and good governance—all of which the Department for International Development will continue to support in Nigeria, even after the cameras have moved on? Does he also agree that effective evaluation of Government-to-Government aid must accompany that work?
The first thing to point out is that no UK aid goes directly to the Government of Nigeria; it goes to other organisations within Nigeria. Yes, we should continue to help build. As I have said, I believe that we have to justify overseas aid because it is a contentious issue and people do not want to see it going to countries that squander it in some way. That is why we do not on the whole give Government-to-Government overseas aid. Given Nigeria’s huge wealth and its huge divisions of wealth, particularly between the north and south, we think there is a role—in the British interest, apart from anything else—to help build capacity and strengthen institutions in that country so that it can handle these issues itself. We will continue to do that, whether the cameras are on us or not.
I think the whole House appreciates what the Government have done to support the Government of Nigeria. In my view, we have the best counter-terrorism operation in the world. Has the Minister had a specific discussion with the Home Secretary about any counter-terrorism support we can give the Nigerian authorities? They may be very rich, but they lack our expertise.
The best thing we can do is what we have done, which is provide satellite imagery, training, and surveillance and intelligence assistance to the Nigerian authorities. In an earlier search, we deployed Sentinel and Tornado GR4 aircraft with surveillance capabilities. I have not had a discussion with the Home Secretary; these things have been handled to date by the Ministry of Defence, the Department for International Development and the Foreign and Commonwealth Office.
The problem with trying to gain intelligence is that the only way to get really good intelligence is to put troops into the area where it can be gathered. The Nigerian Government already spend 20% of their gross national income on security. Will the Minister consider the possibility of putting on the ground some kind of coalition—under the United Nations and paid for, at least in part, by the Nigerian Government—so that effective troops could go into this area the size of Belgium to get decent intelligence and give some reassurance to the people there?
No British troops will be deployed in that role in Nigeria.
I should declare that I chair the all-party group on Nigeria. Although I do not want to play down the evils of Boko Haram, we know that the security forces and the Nigerian police have themselves caused problems while tackling its actions. I know that the Foreign Office has met the Metropolitan police’s Nigerian police forum—there are nearly 900 Nigerian-origin police officers in the Met. Will the Minister update the House on those discussions and on whether there is a role for the Metropolitan police and other police in the UK to help embed human rights policing in Nigeria?
There are human rights issues in not only the police in Nigeria, but in the armed forces there as well, and those very serious concerns have to be balanced against any assistance we provide. That applies to us, France and, of course, the United States. The hon. Lady’s question about any assistance that the Metropolitan police might be able to offer would be best answered by the Home Office, and I shall make sure that my right hon. Friend the Home Secretary answers it fully.
As the appalling violence spreads, will the Minister outline what specific measures the UK has taken to help the Nigerian authorities protect civilians in the more isolated and rural areas? Given the targeting of so many women and girls, what steps are being taken to share our technical expertise in preventing and prosecuting sexual violence in conflict?
I will not rehearse again all the assistance that we have given to Nigeria, particularly since June. It is extraordinarily difficult to have a conversation at the moment about the prevention of sexual violence in conflict, to which my hon. Friend alludes. We could have it with the Nigerian military. However, given that across great swathes of the country vast numbers of girls are being abducted, made to convert from their religion and married off, it is a bit premature to start talking about the prevention of sexual violence. This is an endemic problem right across the struggle between the Nigerian authorities and Boko Haram.
It is a sobering thought that the deaths of so many hundreds and thousands of Nigerians last week warranted so little attention in this country. My right hon. Friend the Member for Warley (Mr Spellar) spoke of the need for solidarity across continents. In the discussions that will undoubtedly happen in the wake of yesterday’s moving show of solidarity across the channel, will the Minister see how the UK and France can work together to provide security assistance—particularly at the porous border between Nigeria and Niger, which enables Boko Haram to melt back after its atrocious crimes?
There have been a number of ministerial meetings around the world to look at the security situation in Nigeria and the UK will attend the next follow-up meeting on 20 January in Niamey, the capital of Niger. Co-ordinating the regional approach to Boko Haram’s violent campaign is vital, as the hon. Lady suggested. The terrorists do not respect national borders. The recent attacks on Cameroon have also been extremely bloody. The House should be in no doubt that this will be a long and difficult task, but we are totally committed to standing by Nigeria in its fight against terrorism.
As the hon. Member for Hackney North and Stoke Newington (Ms Abbott) said, the Nigerian state showed a strong response to Ebola, yet its response to terrorism in the north has been extraordinarily weak, with soldiers reportedly not even having bullets for their weapons. How does the Minister of State account for that enormous discrepancy in competence?
We would like to have seen a more robust attitude from the army and the military to what is going on in the northern states. However, it is an extraordinarily complicated question and it is extraordinarily difficult to find out what is going on. We read lots of stories about people changing sides and equipment being seized. The Nigerian army certainly needs better training to combat the incredibly violent terrorist organisation that is Boko Haram. It needs more assistance and training, but, as I have said, that cannot be done overnight.
The House owes a debt of thanks to the hon. Member for Brent Central (Sarah Teather) for ensuring that this question was asked today. Millions turned out across Europe yesterday, particularly in France, because of the atrocious killings in Paris; millions more need to turn out all over the world over the deaths of innocent people in Nigeria. Does the Minister not think that it is important for all Governments—and all Parliaments, for that matter—to send the message that a human life lost because of such atrocities is equally awful in France, Nigeria or anywhere else, and that every human life is a human life that should not be taken?
Hear, hear to that! We estimate that in 2014, at least 4,000 people were killed in Boko Haram attacks. The insurgency is growing and it is a growing humanitarian issue. The UN estimates that more than 1.5 million people have been displaced and at least 3 million affected by the insurgency.
The hon. Gentleman will have noted the recent words of the Catholic Archbishop of Jos in Nigeria, who claimed that the west is not doing enough to support Nigeria in tackling Boko Haram and drew an unfavourable comparison with the international community’s response to the Paris terrorist attacks. I think that the United Kingdom is showing the way through leadership, financial assistance and training. Perhaps other countries should look at themselves and see what more they can do to join in with the attack on terrorists.
Members of the Nigerian armed forces have complained that one reason why they cannot defeat Boko Haram militarily is that money destined for equipment has been siphoned off by senior officials. To go back to a question that my hon. Friend the Member for Brent Central (Sarah Teather) asked, what specific action is my right hon. Friend the Minister taking to tackle corruption in Nigeria?
There are allegations of equipment going missing and money not reaching the right place, and unfortunately I believe that all those allegations are founded on truth. That is why we have training teams in Nigeria—to try to build better institutional capacity for a better, more accountable and more transparent military, so that such things do not go on happening.
It has been reported that the French have an initiative whereby they are trying to create a multinational taskforce comprising Nigeria, Niger, Cameroon and Chad, but so far none of those countries has been prepared to provide the troops required. Is the United Kingdom supporting the French Government in that initiative, which must surely be the way forward?
I think I said earlier that the solution should be regional. Some of those countries, such as Niger and Cameroon, are on the borders of Nigeria and are already affected. However, we cannot offer help if the country we are offering it to does not want it, so we have to hear more from the Nigerian Government about how the international community can assist, particularly locally. Hopefully, a force such as the hon. Lady suggests can come from that.
No one can have a sensible discussion about Nigeria unless they consider its exponential population growth. In 1950 there were 33 million Nigerians, and there are now 175 million. The UN’s central estimate for 2100 is that there will be 730 million. One in five Africans is Nigerian, and half the population is under the age of 14. Against the background of that huge demographic instability, is the Minister satisfied that the Foreign Office understands the potential catastrophe for Africa of a successful Islamic insurgency in that country?
We are extremely concerned about the problem spreading—I have already said that—but let me look at the glass as being half-full, rather than half-empty as my hon. Friend sees it. Nigeria is the richest economy in Africa, and it has huge talent—we have only to look at the Nigerian diaspora in this country to recognise that. It is rich in resources, so there are huge opportunities for it. However, it has endemic problems, such as a disparity of wealth, including a north-south geographical disparity, that is far too great.
I believe that if an incoming Nigerian Government of whatever persuasion in February are determined to invite in the international community in a more open way to help rebuild a modern Nigeria, they can become a shining beacon on the African continent of what such a country can achieve.
I fear that many people listening to this exchange, perhaps including the 1 million or more British citizens of Nigerian origin, will see the Minister’s response as inadequate: first, because he has framed the problem as being smaller than they perceive it to be; secondly, because his response that we are at the behest of the Nigerian Government, rather than actively pushing them for change, is too weak; and thirdly, because he has not outlined one measure that will give the thousands of people who are running for their lives right now any hope for any change in the near future.
With the greatest respect to those who took part, our response to Boko Haram needs more than a hashtag and a photo opportunity. It needs an active response from the British Government, who believe in the freedom of the individual wherever they are in the world. May I ask the Minister to reflect on that and perhaps come back to the House with a more substantive response?
I simply do not recognise any of that. My hon. Friend talks about photo opportunities and Boko Haram, but there have not been any that I am aware of. We have one of the biggest bilateral aid budgets at £250 million, and we are doing a lot on education and safety in schools in Nigeria. However, Nigeria is a rich country and it needs to be taught to do those things itself. I believe that the UK is at the forefront of trying to assist Nigeria, but we cannot impose assistance if it is not asked for. There is something called sovereignty, which may have escaped my hon. Friend’s notice, and the Nigerian Government are perhaps, as I have said, too slow to ask the international community for help. The United Kingdom should be proud of its record at the forefront of attempts to right some horrible wrongs going on in that country.
Stamp Duty Land Tax Bill
Considered in Committee
[Mrs Linda Riordan in the Chair]
Change in method of calculating tax on residential property transactions
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss schedule 1.
It is a great pleasure to serve under your Chairmanship, Mrs Riordan, and to debate the Bill.
Clause 1 amends section 55 of the Finance Act 2003 to change the basis of calculation for stamp duty land tax on residential property transactions, and provide a new table of rates and thresholds that apply to those transactions. It also introduces the schedule that makes the consequential changes to SDLT, and to the method of calculating the amount of tax due when certain reliefs are claimed. As right hon. and hon. Members will be aware, the measure came into force through a resolution under the Provisional Collection of Taxes Act 1968 for transactions whose effective date—usually the date on which the purchase contract is completed—is on or after 4 December 2014.
Let me briefly remind the House why we have introduced this important and comprehensive reform to SDLT on residential property. In essence, the stamp duty system on residential property as it previously stood was flawed and widely criticised, and it created an enormous hike in taxes at certain thresholds. Someone paying £250,000 for a house would pay £2,500 in stamp duty, but if they paid £250,001, they would pay £7,500—three times as much. Inevitably that created peaks in transactions at those thresholds and dead zones above them, and that big distortion affected a significant number of properties. We have got rid of the inefficient and distorted old system and replaced it with a fairer new system that cuts SDLT for 98% of those who pay it. No buyer of a property under £937,500 will pay more SDLT than they would have done before 4 December. We have provided a calculator on the HMRC website so that people can work out how much tax they will pay, and I am happy to confirm that to date it has been used more than 1.25 million times.
As the Minister points out, this change will result in savings for the vast majority of people purchasing a home. What assessment has he made of the impact on house price inflation as a result of the changes?
There may be a slight impact on house prices, but we must put that in context. Many factors determine house prices, and on the evidence before us our view is that the changes will not have a significant impact on the overall level of house prices. They are likely to have a bigger impact on removing some of those dead zones and distortions in the housing market, which is beneficial in creating a more efficient and effective housing market.
The reform has been welcomed by right hon. and hon. Members in all parts of the House and by outside bodies, including the Council of Mortgage Lenders, the Institute of Directors and the Institute for Fiscal Studies. Jonathan Isaby, from the TaxPayers Alliance, called it:
“an early Christmas present for young people looking to get on the housing ladder.”
Will the Minister comment on the impact on revenue? He may collect more revenue where rates have been cut, but lose revenue at the top end.
That is not our assessment. My right hon. Friend is an eloquent and distinguished advocate of the argument that it is possible to raise more revenue by reducing rates, and he has over many years demonstrated cases where that would apply. I do not believe that we will quite see that dynamic effect to that extent in this case. I think more revenue, and certainly a greater proportion of it, will be raised from properties above £2 million. Undoubtedly, we will see a few more transactions, which will mean additional revenue that would otherwise not come in. On balance, we will see a reduction overall in revenue across the SDLT regime, but we believe that that is none the less the right thing to do to ensure that we deliver a reform that benefits the vast majority of people who pay SDLT.
Under the rules as they applied on 3 December, the amount of tax payable was a percentage of the chargeable consideration—the purchase price—for the acquisition of the property. Different scales of percentages, table A and table B, applied respectively to transactions consisting wholly of residential property and to transactions that consisted of, or included, non-residential property. The clause substitutes a new table A, setting out the new tax rates and bands that apply to a transaction consisting wholly of residential property. It also amends the calculation rules for those transactions, so that each rate of tax applies only to that part of the consideration that falls within the relevant band. The total tax due is then the sum of the amounts of each band.
I stress again how welcome the change has been for residents in St Albans, particularly at the lower end of the market where there have been big savings. Has consideration been given to expanding the scheme to commercial properties, and not just keeping it to wholly or partly residential properties?
All these matters are kept under review. My hon. Friend has been a consistent and doughty campaigner for reform in this area. If we had exactly the same system in place for commercial property, with the same thresholds and so on, we would be imposing a much greater burden on commercial property transactions, because by their nature they tend to be of a more substantial size. There is a higher level of consideration in place than for most residential property transactions. The argument for reform for residential property was particularly strong, which is why we took these steps. Consideration of whether there is a strong and persuasive case for reform for commercial property is perhaps a matter for another day.
I join my hon. Friend the Member for St Albans (Mrs Main) in welcoming the provisions, which will provide a great deal of assistance to the housing market.
The Minister knows that for some time I have been pursuing stamp duty land tax for all those affected by the notorious HS2 infrastructure project. Is the Minister willing, while he is looking into this matter, to review those provisions? The SDLT relief applies to only a very narrow number of properties. To keep the property market operating normally, it should be possible to extend it to properties up and down the line that are being so adversely affected by the project.
I am grateful for that observation from my right hon. Friend and constituency neighbour. I know well how the issue of SDLT in general must be relevant to many of her constituents. On the specific point about HS2, the Government remain to be persuaded that SDLT is necessarily the right measure for addressing the concerns that she identifies and on which she provides an articulate voice in defence of her constituents and others affected by the project. We remain to be convinced, but I know that she will continue to make her argument, and we will continue to look at it carefully. As I said, however, we are not yet convinced that reform of SDLT, or an exemption or relief, would necessarily provide the right support for those with properties affected by HS2.
Clause 1 substitutes a new table A setting out the new tax rates and bands applying to a transaction consisting wholly of residential property and amends the calculation rules for these transactions so that each rate of tax applies only to that part of the consideration that falls within the relevant band. The total tax due is then the sum of the amounts for each band. The new calculation rules extend to linked transactions—those that form part of a scheme arrangement or a series of transactions between the same buyer and seller. In this case, SDLT applies to the aggregate consideration for all the linked transactions.
The new rules do not apply to transactions to which table B in section 55 of the 2003 Act applies—transactions or linked transactions consisting wholly of non-residential or a mixture of residential and non-residential property. The clause introduces the schedule, which makes consequential amendments to SDLT legislation to take account of the reform. The main changes are to the method of calculating the tax due under certain SDLT reliefs. The first relief is for statutory leasehold enfranchisement, where leaseholders of flats club together to buy the freehold of their block. This relief formerly operated by setting the rate of SDLT according to the amount paid for the freehold, divided by the number of qualifying flats. Under the new arrangements, first we divide the amount paid for the freehold by the number of qualifying flats and calculate the amount of tax due on that sum. We then multiply that amount of tax by the number of qualifying flats in order to arrive at the total tax due.
Secondly, a similar change is made to relief for purchasers of multiple crofts from a landlord by a crofting community body under the crofting community right to buy scheme. This relief only applies in Scotland so will only be relevant until 1 April 2015, when SDLT in Scotland is replaced by the devolved land and buildings transaction tax.
Finally, a similar change is made to multiple dwellings relief, which applies to purchasers of more than one dwelling in either a single transaction or linked transactions. This relief was previously subject to a minimum rate of 1%. Under the new rules, the amount will be equivalent to 1% of the chargeable consideration given for the dwellings, which in practice gives the same result.
Right hon. and hon. Members raised several important points on Second Reading. I would like to take this opportunity to explain in a little more detail the Government’s position on some of those issues. First, it has been asked why we have chosen not to apply the new rules to non-residential—commercial and agricultural —property as well as to residential property. That point was raised just now by my hon. Friend the Member for St Albans (Mrs Main). As I said, the market for non-residential property is very different from the market for residential property. For example, non-residential properties have a higher value on average and many are held on market rent leases granted for a small or no premium. At this time, the Government do not feel it appropriate to make changes to non-residential SDLT, although all taxes are kept under review as part of the policy making process. Any change to non-residential SDLT would have to be considered very carefully.
Some concern has been expressed about the possibility of purchasers avoiding SDLT by designating the property as either residential or non-residential in order to obtain a more favourable result. What constitutes residential property is set out in the legislation. Property can be either residential or non-residential, which is a matter of fact. There is no option, as it is has been suggested there is, to flip property between one and the other. I can reassure the Committee on that.
Finally, it has been suggested that the highest rate of tax payable under the new rules might reduce the disincentive to envelope residential property provided by the 15% higher rate SDLT charge, which applies to purchasers of residential property by a company or other non-natural person. The highest marginal rate of SDLT for the purchase of residential properties above £1.5 million is now 12%. However, SDLT is charged at 15% on the whole value for residential properties bought through corporate envelopes for more than £500,000. We are not proposing to make any changes to the 15% higher rate charge. However, in the autumn statement, we announced that the annual charges of the annual tax on envelope dwellings—ATED—would increase by 50% above inflation for the chargeable period 1 April 2015 to 31 March 2016 in order further to discourage the use of enveloping. The Government keep all taxes under review where individuals continue to hold property within corporate wrappers. They should be prepared to pay their fair share of tax.
These reforms to SDLT will remove the previous economic distortions in the system, benefiting the housing market and improving the fairness and efficiency of the tax system. They will give another boost to people looking to fulfil their aspirations of owning the place they live in and will make a real tangible and positive difference to the lives of people up and down the country.
It is a pleasure to serve under your chairmanship, Mrs Riordan.
I thank the Minister for his introduction to clause 1 and schedule 1. Let me confirm from the outset that we support these measures, as we did in the previous two debates on the Bill. We will do so again today. As I say, we have already had a couple of debates and it is a small Bill, so many of the issues have been debated thoroughly before. I am grateful to the Minister for dealing with some of the questions that arose on Second Reading. I have just a couple of points on which I would like to press him, and I will be grateful to hear his response in his summing up.
First, can the Minister provide us with an update on HMRC’s handling of the queries that arose when these measures were announced? Can he confirm the number of queries that HMRC had to deal with, clarify the nature of the queries that the public or their advisers raised and confirm whether all outstanding queries have been dealt with?
Secondly, let me press the Minister a little further on the revenue. I put some points to him on Second Reading about the expectations of revenue, but that matter has not been fully covered by the responses we have received. The Minister knows that these measures are expected to cost £395 million in 2014-15, rising to £760 million in 2015-16. Research by Lonres and Dataloft has found that more homes changed hands on the day of the autumn statement than on any other day in the past decade, so one in six of all homes sold in London’s most expensive areas in the last three months of the year changed hands on 3 December. The research by Lonres and Dataloft estimates that, as a result, buyers saved £9.4 million in taxes. Is that in the order of the behavioural change that was expected, as modelled by the Treasury in its costings? I am sure the Minister will repeat that they have been independently certified by the Office for Budget Responsibility.
I should like to know whether the number of transactions and the cost in Exchequer revenue after the announcement of the measures in the autumn statement are along the lines that the Government were expecting. As the Minister knows, the Office for Budget Responsibility, which applies a rating system to the “certainty” of costings, has said that it considers the costings to be medium to high risk. How confident is he about the numbers, and about the extent of the behavioural change that is expected?
I am delighted that the hon. Lady and her party welcome measures that are intended to help people who aspire to own their homes. How does she think this policy contrasts with a policy of an annual property tax which may force some people out of their homes if they have to pay it?
I think that the Bill shows that the Government have accepted that properties with a very high value are under-taxed. The hon. Gentleman alluded to our proposals for a mansion tax, which would help to pay for our NHS commitments. Our measures will not force anyone out of their homes, because, as we have pointed out, a deferment option will be available to basic-rate payers. I am afraid that that was a bit of party political scaremongering on the hon. Gentleman’s part.
The hon. Lady mentioned the mansion tax. My constituents fear that the threshold might start at, say, £2 million, and then drop very quickly to levels applying to properties that ordinary hard-working taxpayers are aspiring to own. The Labour party has done that in the past. Will the hon. Lady tell us what would be the threshold for her so-called mansion tax?
I am delighted that the hon. Gentleman has given me an opportunity to tell his constituents that their fears are entirely misplaced. Anyone who publishes literature suggesting that the threshold will lower is doing nothing more than scaremongering. As we have made clear, the number of high-value properties will not increase, because the indexation of the threshold will be in line with the average rise in value for the highest-value properties. That means that the number of properties caught by the tax is not expected to increase. I am, as I say, delighted that the hon. Gentleman has given me an opportunity to reassure people who are currently living in properties that are below the £2 million threshold that they will not be caught by our proposed mansion tax.
The Minister explained that the changes in the Bill would not apply to commercial property, and I am grateful for his clarification of the Government’s thinking. However, I should like to press him a little further on a couple of matters. First, one of the reasons why the Government were so keen to proceed with stamp duty changes applying to residential property was their anxiety about labour mobility. Has any thought been given to the impact on business mobility of maintaining the slab structure for commercial property transactions?
Secondly, changes will come into effect later this year in Scotland, where stamp duty is now a devolved matter. The Scottish Government will introduce a land and buildings transaction tax, which will apply to both residential and commercial properties. Have the Minister and the Treasury considered whether there is a risk that England might be disadvantaged, particularly in relation to business mobility? Does the Minister agree that the differential in the treatment of commercial property in Scotland and England is not ideal, and is the Treasury taking account of that aspect of the changes?
Finally, I want to raise a point that has been highlighted by the Chartered Institute of Taxation. It noted the different treatment given to definitions of residential dwellings, and observed that clause 1(3) inserts new subsection 1B:
“If the relevant land consists entirely of residential property and the transaction is not one of a number of linked transactions, the amount of tax chargeable is”,
and so on. The CIOT notes that various amendments to the tax system, including the introduction of the annual tax on enveloped dwellings, or ATED, have led to subtly different definitions of “residential” property for the purposes of SDLT. In schedule 29A to the Finance Act 2004 there is different treatment for investment-regulated pensions and potentially for capital gains tax, capital gains tax-related ATED, business investment relief for non-domiciliaries, capital allowances and VAT.
The Minister and I have had a number of debates when discussing other Bills about the different treatment given to particular phrases in employment law as against taxation law. There seems to be a nuanced difference in the way residential dwellings will be identified in these different elements of different taxes. I am concerned that inconsistencies are creeping in, which lead to complexity and create more work for lawyers. They will welcome that, of course, but ordinary taxpayers will not. It would be helpful if the Minister could give us his comments on those differences in definitions and say whether the Government are considering clarifying that.
I will keep my remarks brief. I have spoken in each previous debate and do not have a great deal to add. My party very much supports these measures and, as I have said in previous debates, dealing with the slab system that we had and the consequent cliff edges and removing the incentives for strange behaviour and sub-optimal activity has to be the right thing to do.
I have only one point to add, which partly follows on from the remarks of the right hon. Member for Wokingham (Mr Redwood) and the assessments of the Office for Budget Responsibility. I would have thought that the taxation of a fixed asset transfer like this, with the certainty that that implies, would mean this is a very low risk method of changing a tax system, but if the OBR regards it as medium to high risk, and if the right hon. Gentleman is suggesting there may be more complex effects that I have not understood, I would like the Minister to clarify whether I am missing something. I would have thought this was a very straightforward way of raising taxes in a highly certain manner—and certainty is, of course, one of the hallmarks of a good tax system.
I will not detain the Committee any longer. Our party supports these measures. They affect 98% of the population favourably, and, broadly speaking, the other 2% are millionaires, and therefore those with the broadest shoulders. I am pleased that through this Bill this Government have found yet another way to help deliver a small amount of redistribution, with the pain felt by those with the broadest shoulders. The support for it is universal in my constituency, as I think everybody will be a winner. Overall, these measures will lead to a more liquid housing market and therefore a stronger economy, and they also make the system fairer.
First, may I remind the Committee that, as listed in the register of Members’ interests, I provide advice to an industrial company and an investment company?
The Minister has produced what is on the whole an excellent scheme. I support most of it and was one of those, along with my hon. Friend the Member for St Albans (Mrs Main), who was lobbying hard to get this major reform through. I congratulate the Minister and the Chancellor on dealing with the problems that the slab system created. The peaks and the dead areas were damaging to the property market and made it difficult for some people to buy or sell properties in certain price ranges. The system probably distorted pricing as well, to the benefit of some people and the detriment of others. It is therefore good that we have smoothed it out and introduced a more sensible progression up to £937,000, where most of the transactions lie. The new arrangements will represent a fairer, lower-cost system for practically all transactions, which is wholly admirable.
I want to tease out a little more information about the rather pessimistic forecasts of how much revenue will be lost up to the end of this decade. It is clear from the figures that cutting the higher rate of income tax has produced considerable extra revenue, as it was bound to do, given that the previous rate deterred people or meant that they did not come here at all. It is also clear from the figures that the much higher rate of capital gains tax has been very damaging to revenues, which are still miles below where they were prior to the crash. This is a difficult one to call, and I am not saying to the Minister that the proposals would either damage or increase revenues. I am merely suggesting that the Treasury’s forecasts for that lengthy time period could prove to be inaccurate, and that it would be nice to unpack those forecasts in order to understand what the Treasury thinks is going on.
The problem with trying to forecast the revenues at this juncture is that, on the one hand, we have seen a slowing of the mortgage market in recent months through regulatory intervention, and we would therefore expect fewer transactions because the regulators and the banks are now being much tougher about mortgages. On the other hand, however, we have Government intervention trying to mitigate that effect through the very successful and helpful Help to Buy scheme, which I believe to be necessary. It is certainly helping people in my area to buy their own home. However, the net result of these arrangements seems to be a dampening of transactions, and we must bear that in mind when trying to judge the impact of those policies and to assess the impact of the stamp duty change. All things being equal, we should expect to see an increase in the volume of transactions under the £937,000 level because buying such homes will be a bit cheaper, and in certain price bands we will see activity occurring that would not have occurred at all because of the slab effect.
Does my right hon. Friend share the optimism that I feel, having talked to small businesses in my community, that there could be a knock-on effect from people having a bit more money to carry out home improvements? Those businesses have suffered in recent years because people have not been investing in their own homes.
Yes, indeed there could.
This is difficult to predict, because all these things need to be modelled. The level of the reduction in some cases is quite large, and it will be difficult to make up for all that lost revenue through increased transactions. That is why it would be interesting to probe the Treasury a little more on its forecasts. I expect it thinks that there will be quite a big revenue gain where the rate has gone up, but that effect might not prove to be as strong as it hopes, because there will definitely be a disincentive effect at the top end following the introduction of the very top rate for the privileged few who can afford those types of properties. Those people are often in the fortunate position of owning more than one property, and of being able to decide whether they wish to buy property in this country or elsewhere. There will be some kind of disincentive effect, and we need to look at relative taxes and relative prices in relation to London and other centres.
It would therefore help if we knew a little more about the Treasury’s numbers at this stage of the debate, so that when we review this policy in a year or two, we can see what was right and what was wrong. For example, does the Treasury think that there will be extra revenue from the higher rate? That has clearly not been the case in relation to the two big taxes that I have mentioned. Does it envisage a loss of revenue despite the effect on transactions at the lower level? It would be good to have more detail, so that we can have some benchmarks as we try to assess the financial impact of the policy.
I thank all right hon. and hon. Members for their contributions to this short debate on clause 1, and I shall attempt to address as many as possible of their questions. The hon. Member for Birmingham, Ladywood (Shabana Mahmood) raised a number of points about the impact of the changes. First, let me deal with her question about HMRC’s handling of inquiries. I do not have all the detailed numbers available, but, as I mentioned earlier, about 1.25 million hits have been made on the HMRC calculator, which is a substantial number. There have been relatively few queries made over the telephone or in writing. In practice the great majority of those can be dealt with by HMRC’s stamp tax helpline or by reference to ongoing guidance. More complex queries are escalated to HMRC’s technical specialists. As I say, I cannot give the numbers but I do know that the view within HMRC is that this process has gone smoothly, including in respect of the helpline provided on the day of the autumn statement, when, as has been pointed out, a number of transactions were accelerated in order to benefit from the transitional regime. All that has gone smoothly and I am not aware of any particular difficulties in that area.
Let me now deal with the definitional issues the hon. Lady raised. Ideally we would have a single definition for all tax purposes, and this is not an issue specific to what we have before us today—it is a wider point. Different areas of the tax system have different purposes. The same definition will not necessarily serve all purposes adequately, and so some differences are probably inevitable. However, we do keep all aspects of the tax system under review and we will consider simplifying definitions where that is desirable and practical. I am not aware of any particular difficulties in this context, but it is always worth having another look at this point over time to see whether problems emerge.
On the point about non-residential property, it is worth pointing out that if we were to have exactly the same regime applied there, approximately 40% of tax-paying non-residential transactions would pay more. That would not be terribly attractive for businesses. If we examine the costings of such a move on a purely static basis—I shall return to costings points in a moment—by which I mean there is no behavioural change, we find that a switch to an identical system for commercial property would be a substantial revenue raiser. It would raise about £3.6 billion, but that represents a substantial increase in the burden of SDLT on business and we do not believe it would be advisable. That is one reason why we have not gone down that route. So, inevitably, different regimes will apply for residential and non-residential property.
The hon. Lady asked whether the continuation of a slab structure for non-residential property could result in damage to business mobility. I make the point, of course, that the Government keep all taxes under review. Businesses incur costs from all manner of sources, of which SDLT is just one. The rates of SDLT in England and the land and buildings transaction tax in Scotland will differ owing to the natural consequences of devolution. It is unlikely that many businesses will move from England to Scotland, or vice versa, just because of changes in the SDLT or LBTT regimes.
My right hon. Friend the Member for Wokingham (Mr Redwood) and my hon. Friend the Member for Redcar (Ian Swales) raised the issue of costings, with my right hon. Friend rightly making the point that he was a strong advocate of reform in this area. We have to understand that a number of factors are involved in a change in SDLT in these circumstances. There may be changes in the number of transactions that occur depending on what is done with the rates. There may be changes in the value of the properties. To what extent will those changes be capitalised? There are also the changes in the amount paid per transaction. To make an assessment of how much will be raised or forgone as a consequence of these changes, it is necessary for the Treasury and HMRC and then the Office for Budget Responsibility to assess the behavioural changes.
To answer the point raised by my hon. Friend the Member for Redcar, the challenge for the OBR and the reason why it has rated this as a medium to high risk is that there will always be a degree of uncertainty over the behavioural response. Will people be much more inclined to move property as a consequence of these changes? A number of assumptions are made. We believe that the costings are robust, sensible and essential.
The overall impact will be additional revenue being raised at the top end—those transactions above £937,000 where a higher rate would apply. Even accepting that there may be an impact on the number of transactions and on property prices, the changes in the amount of stamp duty paid per transaction will mean that the overall effect will be to bring in revenue. But the reverse process applies for the vast majority of transactions where there is a reduction in rates. We may see more transactions and prices increasing slightly, which means that a slightly higher amount of SDLT will be paid. But the overall effect will be less revenue from those areas.
I thank the Minister for giving way and for his very helpful clarification. It is worth putting it on the record that the opportunities for avoidance of this particular tax, such as time shifting, charging different expenses and reclassifying income or capital gains, are simply not there against a fixed asset of this nature. Although I accept his clarification around those behavioural effects, it is worth saying that the public will not have any opportunities to avoid this tax in the way that they might avoid other taxes.