Tuesday 27 January 2015
[Mr Philip Hollobone in the Chair]
Employment in Wales
Motion made, and Question proposed, That the sitting be now adjourned.—(Alun Cairns.)
Thank you for that great introduction, Mr Hollobone. Bore da! Sut wyt ti y bore ’ma?
I will speak primarily about my constituency and north Wales, but I am sure that there will be interventions and speeches by Members from elsewhere in Wales—although not from any Government Members, because no Conservative or Liberal Democrat Back Benchers are present—[Interruption.] No, here they come. Better late than never.
I will focus on five areas: the quality of jobs in the UK and Wales; the impact of cuts on jobs and employment in Wales—not only the current cuts, but the proposed future ones highlighted by the Chancellor in his autumn statement; the rebalancing of a local economy highly dependent on the public sector; the possible impact if we pulled out of the European Union on job prospects in north Wales especially; and the impact of capital projects on jobs.
On the face of it, employment in north Wales seems healthy, but scratch below the surface and we see a different picture. Wages in the UK have decreased by £1,600 per annum over the past five years. There has been a shift from secure, long-term employment to short-term, zero-hours, part-time working.
Two years ago, the national press highlighted Denbighshire as having the highest level of zero-hours contracts in the UK, although the local authority disputed the figures. Nevertheless, the whole of the UK has suffered from the steep rise in the use of zero-hours contracts. The public sector has had a pay freeze at only 1%, which in real terms amounts to a cut, while the impact on ordinary workers of the casualised employment promoted by the Government is stark. Families cannot plan for their summer holidays, as they might usually do in January, because people do not know whether they will still be in employment in six months’ time.
I thank my hon. Friend for his intervention —the freeze or cut in the public sector has been bad for workers and families in my constituency as well. Parents cannot even plan to pick up their children the following day or week because of zero-hours contracts, which bring no stability or security. Families do not even want to go in for mortgages, because they are not sure about employment in a year’s time, so they are forced to stay in private rented accommodation.
The net impact on families is a hit on their well-being and mental health, which is so unnecessary. Nor is it only the private sector that is extending the use of zero-hours contracts; the public sector is increasingly being hollowed out by the outsourcing of functions that councils used to do in-house to the private sector, the past masters in the use of zero-hours contracts. At the same time, Tory MPs and the press vilify public sector workers for having “gold-plated pensions”, saying they are mollycoddled and cosseted.
The real situation could not be further from the truth. I speak for the 4,500 public sector workers who work for Denbighshire county council and the 4,500 who work for ysbyty Glan Clwyd—teachers, nurses, doctors, social workers, care workers, all doing their best in difficult times. Workers in secure jobs are being forced to become self-employed and to take a hit on their hard-won rights on holiday pay, sick pay, redundancy, and maternity and paternity pay. The rise in the number of self-employed has not resulted in an army of Richard Bransons, Alan Sugars or Nicola Horlicks; it has resulted in workers being thrown from security into insecurity.
I have listened to the hon. Gentleman with interest, but the way in which he just described self-employment is a disgrace to any politician in north Wales. In my constituency, which has the highest percentage of self-employed people in north Wales, such individuals are making a real difference, creating not only a job for themselves, but jobs in the wider economy. The hon. Gentleman should applaud them, not imply that self-employment is a dark option forced on them by the Government.
The hon. Gentleman totally misrepresents me. I am not talking about those small business people who want to go into business or about entrepreneurs, whom I applaud; I am talking about people who were in secure employment but were told, “We’re sacking you now—you can go and get a job in the private sector, which will take away all your rights.” They have been forced into self-employment. Those are the self-employed whom I am talking about. I pay tribute to the Federation of Small Businesses, especially the FSB in north Wales, and I will come on to the CBI in a moment.
The net effect of all that uncertainty, low pay and zero-hours contracts in my constituency is that, according to the citizens advice bureaux, the Vale of Clwyd has the highest level of insolvencies in the whole UK and the highest percentage of people seeking debt advice through the CAB. That is the legacy of five years of Tory rule.
My hon. Friend has referred to parts of his constituency that are desperately poor; as he knows, parts of my constituency are also very poor. Does he agree that what has really made the difference in pushing down living standards for many people has been the extremely harsh and unfair so-called welfare reforms?
Absolutely. I agree with my hon. Friend entirely, and the point has been ably illustrated by my hon. Friend the Member for Alyn and Deeside (Mark Tami). When a person has invested tens of thousands of pounds in installing disability access into their council house, where is the sense in forcing them out of it into private sector accommodation, which must then have disability access added? The previous place will not necessarily be used by a disabled person. It makes absolutely no sense.
We have reached the point where even the CBI is telling the Government that they have got it wrong and that workers need a decent wage and job security. John Cridland said in The Observer on Sunday:
“I am not sure this would have been natural territory for us five years ago.
I have been banging on for a year about higher earnings growth. I have been doing that in part because it is a sensible part of economic rebalancing to have sustainable consumption. It is important that low-paid workers are able to play their part as active consumers”.
He also talked about
“inequality having reached a point where it is not acceptable from a moral point of view and that, in a commercial sense, it’s bad for business.”
That is the head of the CBI. He did not think that five years ago, when Labour was in power; he thinks it now, at the end of five years of Tory rule. The loss of £1,600 from each worker’s pocket has had a negative impact on consumption, demand and profits. That comes from the top.
Another crucial impact has been from the Tory VAT increase, which takes money directly out of consumers’ pockets—[Interruption.] I am sorry that the Government Members are so upset by my saying that, but my constituents are upset about money out of their pockets going straight to the Treasury rather than our high streets.
Absolutely. When Labour reduced VAT, that had a positive effect. All the economic indicators from 2008 to 2010 were going upwards; in June 2010, they started to go down. [Interruption.] The hon. Member for Aberconwy (Guto Bebb) might laugh, but he does not know his economics.
John Cridland added:
“I am particularly interested in the escalator that takes people who are unemployed or low-paid on to better-paid work. Something has gone wrong with it. There are two or three missing steps in the middle.”
The missing steps to which he refers will not be provided by zero-hours contracts, the minimum wage with no prospect of progression and cutbacks in skills and training.
I am grateful to my hon. Friend for making an insightful, thoughtful and comprehensive speech. Does he agree that another theme related to this issue is instability? Several years ago, I read some of the writings of the Centre for Social Justice, an institution that many people see as tending to favour Conservative thinking, although not exclusively. I was interested that one thing the centre spoke about was how insecurity affects family life. Does he agree that when zero-hours contracts are not a matter of genuine choice and flexibility, they really contribute to insecurity? If we are serious about enhancing family life and stability we have to tackle that.
I agree entirely. The impact on mental health and well-being can only be detrimental.
Going back to the CBI, I pay tribute to John Cridland. He has made a brave intervention on this matter and I hope the Conservatives heed his wise words.
The next aspect I will look at is the impact of public sector cuts, especially cuts to local government. I have the statistics from the House of Commons Library. English local authorities have had cuts of up to 43%: Kingston upon Thames, Bournemouth, West Berkshire and Brighton and Hove have all had cuts of 43%. Those cuts to local government come from this Tory central Government.
No, the hon. Gentleman has had one bite of the cherry.
The cuts that English local authorities have experienced are more than decimation. The same research says that the Welsh Government have largely protected Welsh local authorities from those cuts over the past five years. According to that research, in my own county of Denbighshire there has been an increase in funding of 3% from the Labour Welsh Government. That protection has now ceased, however, as the Welsh Government feel the full impact of a £1.7 billion loss to their budget because of the Tories here in Westminster.
Welsh local authorities are implementing cuts that in my county will see the closure of the pest control department, the ending of help with school uniforms for low-income families and the loss of jobs for those who help children with psychological problems. I do not blame the local authorities—not the officers, and not even the Tory councillors. The finger of blame has to point at those at the top of this Conservative Government, who decided that, of all the departments in the UK, local government should have the biggest cuts. They planned for 27% but have implemented 43%.
The hon. Gentleman is making a typically impassioned attack on the austerity policies of the Conservative party, and I agree with a lot of what he says. Will he explain why he and his colleagues voted for the Tory austerity charter only two weeks ago?
Cuts have to be made, but the tempo, pace and degree of cuts, and the ideology behind them, are the key issues. These are cuts for cuts’ sake, because the Conservative party believes in a low percentage expenditure of GDP on the public sector—an issue I will come to in a moment.
I am not sure whether the hon. Gentleman has ever experienced that state in his time in Parliament. I am saying that the cuts proposed by my party—indeed, his party has had to make cuts in Gwynedd—are not ideological. They have been practical cuts. The Conservative party wants to introduce cuts for ideological reasons. It wants to cut back the state and sees the public sector and the state as bad. I do not perceive them in that way.
In the autumn statement, the Chancellor said that he wants to see the percentage spent by the state come down to 35% of GDP. His own creation, the Office for Budget Responsibility, said that, if he did that, public sector spending would be at its lowest since the 1930s, before the establishment of the national health service—we spend £115 billion on the NHS, yet the Chancellor wants to take us back to the 1930s. His vision for the UK economy and our society is “The Road to Wigan Pier” and “Love on the Dole”. It is not a vision I share, or one that the Labour party shares; I dare say Plaid Cymru does not share that vision either. It is a dark, bleak vision, offering no hope. The British public, especially in those areas that rely on public sector jobs, will reject the Chancellor’s vision.
Although one faced the effects of recession and the other the effects of war, Franklin D. Roosevelt’s Government of the 1930s and the Labour Government of the 1940s knew that investment and capital projects were the key to recovery and growth. The Labour Welsh Government are heeding the lessons of history and have implemented a huge capital building programme in the Vale of Clwyd. They have invested £100 million in refurbishing ysbyty Glan Clwyd. In partnership with Denbighshire county council, they are investing £70 million in refurbishing and rebuilding schools.
I will graphically illustrate the difference in approach between the Welsh Government and this Government in just one town in my constituency—my home town of Rhyl. The Prime Minister stood at the Dispatch Box and said that the town of Rhyl had been neglected by the Labour Welsh Government and the local authority. While he was speaking those words, he was closing down the Army recruitment centre in John street in Rhyl, which opened in 1914, and was closed in 2014 by the Tories; while he was speaking at the Dispatch Box, he was also closing down Rhyl county court and the tax office in Rhyl, and relocating the Crown post office from Rhyl.
Compare and contrast that with the investment that has come to my home town of Rhyl from the Welsh Government. There is a £10 million new harbour, a £22 million new community hospital, opening in 2017, and £28 million is being spent on replacing the old houses of multiple occupation with decent family accommodation. As we speak, £25 million is being spent on a new high school and £12 million on new flood defences in Rhyl. Now tell me who is neglecting Rhyl.
The hon. Gentleman needs to be careful about using examples that are tantamount to disingenuous. As far as Army recruitment centres are concerned, I know that he knows that the closures are nothing to do with resource, but to do with different recruitment procedures that are more effective in the 21st century. I would be grateful if he were careful about that.
The hon. Gentleman may have a point, as the Government have cut back the number of members of the armed forces dramatically; but I see a closure as a closure.
Last Thursday, I met Jane Hutt, the brilliant Welsh Finance Minister who is masterminding much of the investment that I have mentioned. We met at Rhyl high school, which as I said is undergoing a £25 million rebuild. The contractors, Willmott Dixon, said that 60% of the investment will be spent within a 30-mile radius of Rhyl. The jobs, training and growth from that investment will be multiplied many times over because of local procurement. The Labour Welsh Government are playing a vital role in ensuring that my constituency is able to withstand the ravages of Tory cuts.
In Vale of Clwyd and, indeed, in the neighbouring constituency Clwyd West—it is interesting that the right hon. Member for Clwyd West (Mr Jones) is not here today—there is a huge percentage of public sector workers; 37% of the workers in those two constituencies work in the public sector. What will happen when we have these huge cuts? We know what has happened in the past. In the early 1980s, Shotton steelworks closed, and 7,000 jobs were lost in one day—the biggest lay-off in British industrial history—with no help or intervention from the Tories.
I am sorry to intervene on my hon. Friend when he is making that important point, but may I just correct him? Over 8,000 jobs were lost on that day, and the area still shows the effects of that devastating loss of jobs—still the largest single loss of jobs at a single plant on a single day in the UK.
I thank my hon. Friend for that, and I accept his correction.
The Government in the 1980s gave no support. There was no compassion and no thought. Areas were almost punished for being Labour. I have repeatedly asked Tory Ministers, from the Chancellor to the Secretary of State for Wales, what measures are in place to help the rebalancing between the public and private sectors in areas with large numbers of public sector workers. In one constituency, which is, I think, in Edinburgh, 78% of the workers are in the public sector, but there is no help from this cold-hearted Conservative Government.
Finally, I turn to Europe. Shotton was rescued by the rise of Airbus. The factory has 7,000 workers and 600 apprentices, and there are 70,000 jobs in the supply chain—it is one of the biggest factories in western Europe. This is a joint European venture, which includes Spain, Germany and France; it is a living example of how co-operation is better than confrontation. However, those jobs will go if we pull out of Europe, as Tory Back Benchers—I am sure there are a few out there now—want us to. There would be massive job losses at not just Airbus, but Toyota and other foreign inward investment businesses, which have said they will leave Britain if it pulls out of the EU.
In St Asaph, in my constituency, work is being done on the Extremely Large Telescope—a £2 billion project to put the biggest telescope the world has ever seen in the Atacama desert in Chile. The lenses alone will be £200 million. I hope they will be made in my constituency, but there is no chance that that will happen, with the high-tech, highly skilled jobs that the project would bring, if we pull out of the EU.
My hon. Friend is correct about Airbus. Does he agree that such companies have choices? They do not have to invest in the UK. Airbus is an example of a good partnership, but, equally, the factories in Germany, France and Spain want the wing work we have in this country, and further investment in the Broughton plant would be in doubt if we were outside Europe.
Absolutely. The Conservative element of the Government thinks we can pull out of Europe, where we do about 40% of our trade, and stick two fingers up to it, and that everything will be the same afterwards—that that trade and co-operation will carry on. That will not be the case. Europe will punish us. It does not want us to pull out; it wants us to be included. We are 60 million people out of 6 billion—1% of the world’s population. If we pull away from Europe, our voice will be miniscule. We are part of the biggest trading bloc in the world’s history.
Order. We will hear from Mr Ruane at the end of the debate, because it is a Back-Bench debate, and he will have between three and five minutes to sum up. I will call the Front Benchers no later than 10.35 am, but it might be before that. Before that, the order of speakers will be Government, Opposition, Government, Opposition.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I turned up to the debate thinking that we would at least have a reasonable discussion of the facts, but what we actually heard was a pre-election rant from the hon. Member for Vale of Clwyd (Chris Ruane). That is a real shame because, outside the Chamber, he is often thoughtful and constructive; in the Chamber, however, he becomes blatantly partisan and can see good only within the confines of the Labour party in Wales.
Listening to the hon. Gentleman reeling off the record of significant investment in his constituency, one wonders whether there really is a shortage of money in the Welsh Assembly. If there is, that is probably because the money has been spent in Vale of Clwyd. If nothing else, therefore, we will have to compliment him on his ability to lobby his political colleagues in Cardiff.
The title of the debate is “Employment in Wales”, and any politician who takes themselves seriously should at least acknowledge that the employment figures in Wales are most encouraging.
Does the hon. Gentleman not agree that, even if we do accept that more jobs are coming in, we are also losing jobs? A few days ago, we had the announcement that 120 jobs were going at the Shotton paper mill. Although I welcome all jobs, replacing those quality, highly skilled jobs with minimum wage jobs is not the same thing.
I accept entirely that we would be disappointed to see job losses in any part of Wales. I know full well how the north Wales economy works, and a number of people who work in the hon. Gentleman’s constituency live in mine. People travel to work down the A55 corridor, whether that is from east to west or west to east. Even though the road makes that difficult, I often meet people who work in Chester or in Alyn and Deeside when I am out canvassing. I accept that any job lost is a concern, but it is important to remember that although the Labour party has been highlighting the doom and gloom, and saying that Wales will never recover from public sector job cuts, the number of jobs created in the private sector in Wales has far exceeded the number lost in the public sector.
In that respect, we need to respond to the slur made by the hon. Member for Vale of Clwyd regarding Government Members’ attitude towards public sector workers. I have never heard a Government Member criticise anybody who works in the public sector. The one simple point we have made is that we need to have fairness between those who work in the public sector and the majority—even in Wales—who work in the private sector. Do public sector workers have gold-plated pensions? No, they do not in terms of what they get out of their pensions, but in comparison with the situation for somebody in my constituency who is self-employed, “gold-plated” is a fair description. The changes the Government have brought in simply move the balance of pension contributions slightly from the taxpayer to the recipients of the significant pensions in the public sector. The Government’s changes on pensions are to be applauded because they have ensured that we retain a degree of support for those who opt to serve in the public sector, and that support is well beyond what is available to those who work in the private sector.
The hon. Gentleman should remember a simple point: even on trade union figures, the average public sector pension is about £8,000, and that is equivalent to a pension pot of roughly £120,000. If Labour Members do care about people in Wales, they should be aware that the average pension pot for somebody in the private sector in Wales is £30,000. Even the trade union figures still imply that people in the public sector have a fund that is four times more than that of somebody in the private sector, but I see no concern among Labour Members about the situation faced by the vast majority of Welsh workers.
It is important to highlight that Labour Members have said time and time again that there is concern about youth unemployment. What we have seen, however, is that there is a difference between what happens when Labour is in power and what Labour thinks happens when it is in power. In my constituency, for example, youth unemployment has fallen by almost 50% since 2010. That fantastic achievement is the result of this Government’s attitude that people are better off in work than not working. Under the previous Government, youth unemployment went up and the benefits system picked up the strain. Nobody who is young should be on benefits; they should be able to be trained and to get work, and that is exactly what we are seeing in Aberconwy as a result of the Government’s changes.
It is interesting that the hon. Gentleman is posing as Mr Egalitarian between the public and private sectors. Is he not part of a Government party that spent millions of pounds of our money contesting a court case so that bankers in this country could get extra bonuses? Where does that put him? We are not talking about the difference between the public and private sectors when it comes to ordinary jobs in north Wales, but about a Government who act fundamentally against the interests of people in north Wales when they take such actions.
I am constantly amazed at Labour Members’ hatred of the entrepreneurial spirit. The simple fact of the matter is that we need a successful economy to pay for the public services we need. The Labour party has always believed that money derives from thin air; it does not understand how the economy actually works. To have a strong health service, we need a strong economy. To have employment growth, we need a strong economy. To have a strong economy, we need a strong entrepreneurial spirit. This Government understand that simple fact; the Labour party clearly does not.
The key issue we need to look at is employment rates. Employment rates in Wales are notoriously low by UK standards, but they are going in the right direction. I was interested to note from the debate pack that the hon. Member for Vale of Clwyd once tabled a question requesting employment figures for north Wales constituencies. Remarkably, in comparison with the glory days of the Labour Government, the employment numbers for all of them are higher than they were when Labour was in power. We hear rhetoric from the Opposition, but when they are in power we always see failure. Everyone in UK politics knows that not once has a failed Labour Administration left government with unemployment lower than it was when they came to power. That has always been true—[Interruption.] The hon. Member for Pontypridd (Owen Smith) suggests that that is an old chestnut, but he knows that where there is unemployment, there are Labour Members. The eight constituencies represented by the Conservative party in Wales have a lower unemployment rate than the Welsh average. Suffice it to say, the areas of hard-core unemployment are typically represented by the Labour party, which despises enterprise and is not willing to recognise the work that the self-employed do. Labour Members say that they will change things, but vote for exactly the same fiscal position as the Government.
I will not give way to the hon. Gentleman, but I will ask him a question. We heard of a litany of cuts that are unacceptable to the hon. Member for Vale of Glamorgan—[Hon. Members: “Vale of Clwyd.”] I apologise. I would not have expected any such nonsense from the Minister, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns).
The hon. Member for Vale of Clwyd gave a litany of complaints about cuts, but I want the shadow Secretary of State to tell us which of the cuts Labour would reverse, because I understand that the Labour party is conducting a zero-sum spending review. That means that there will be no additional spending, and that any cuts that are reversed will be achieved by making cuts to another area of activity. We have been told that local government cuts were the wrong decision—the hon. Member for Vale of Clwyd made that very clear—so where, in the zero-sum spending review, would be the right place to cut to make right the local government cuts that he believes were too great?
Alternatively, is all that we are getting from Labour rhetoric? The truth is that when there was a vote last week on spending plans for the forthcoming Parliament, the official Opposition—fair play to them—recognised the reality and voted to support the Chancellor’s view that £30 billion of additional cuts are needed. Labour Members can claim to represent people who are typically of the view that they have been served by that party, but all their rhetoric is trumped by the reality of their support for the Government changing the economy in the right way.
We should be proud of our record on employment and the re-emergence of entrepreneurial spirit in north Wales. We need a continuity of purpose. The dead hand of Labour has damaged Wales time and again and should not be allowed to derail the economic recovery, which is giving hope of full employment in Wales for the first time in a generation.
I congratulate the hon. Member for Vale of Clwyd (Chris Ruane) on securing this important debate. I will begin with a timely reminder to the hon. Member for Aberconwy (Guto Bebb); he is slightly behind the wave on the matter of cuts. The Prime Minister, on Radio 4 this morning, called them not cuts but adjustments—but of course, both sides are signed up to those adjustments.
I want to consider some of the more interesting facts of the matter, as opposed to engaging in rhetoric such as we have heard this morning. A key element in respect of employment in Wales is the balance between the public and private sectors. That is extremely important in my constituency, and in Vale of Clwyd, Aberconwy and other constituencies. A key element of the Government’s austerity strategy is that public sector expenditure cuts will be rebalanced by growth in private sector employment. What has happened and, in particular, how far has Wales succeeded compared with the rest of the UK?
The financial crisis broke in 2008 and the immediate impact was seen in the sharp drop in employment in the private sector in the following year to September 2009. There were 60,000 fewer people employed by the private sector in Wales in the year to September 2009 compared with a year earlier. Since bottoming-out in 2009, private sector employment in Wales has steadily increased and is now slightly higher than in 2008, with an increase of 1%. I am, by the way, using figures from the Office for National Statistics. That 1% compares poorly with the figure for the UK as a whole, which is 12%. We have done comparatively badly. Had private sector employment in Wales tracked that of the UK since 2009—the low point—and had we performed as well as the rest of the UK, there would have been an additional 43,000 people in private sector employment in Wales by September 2014. That is a criticism of the UK Government’s macro-economic policy, but also of the performance of the Welsh Labour Government in Cardiff.
If employment in the public sector in Wales had shown the same rate of decline as in the UK between 2010 and 2014, an additional 12,000 jobs would have been lost. The Welsh Labour Government have protected public sector employment, which is a good thing, and it has been more resilient than in the UK as a whole, but the figures are significant for the Government’s contention that cutting public sector employment leads to growth in the private sector. If Wales had tracked the UK since the Conservative-Lib Dem Government came to office in 2010, there would have been an additional 41,000 in employment in Wales by September 2014.
My hon. Friend is giving a forensic analysis of the employment situation across the UK and in Wales in particular. Is not private sector employment growth geographically lopsided, located very much in the south-east, with the other nations and regions of the UK lagging behind? There has not been the geographical and sectoral rebalancing of the economy promised in 2010.
My hon. Friend makes an interesting point. We have such a geographical imbalance in Wales, in relation to not only the number of jobs, but their quality, as the hon. Member for Vale of Clwyd pointed out. We have seasonal and low-quality jobs—some part-time and some on zero-hours contracts. My hon. Friend’s remarks have several implications.
In the case of Wales, therefore, the figures show scant evidence that austerity has worked either to rebalance the employment mix between the private and public sectors or to increase total employment. The data on the balance between the public and private sectors need to be treated with caution, because of the effects of reclassification. That political sleight of hand has frequently been used in the debate on the issue. For the UK, the proportion employed in the public sector has fallen from 20.4% in 2008 to 17.7% in 2014. In Wales, the proportion has declined from 25.8% to 23.9%. That is a smaller drop, and of course there is a much larger public sector in Wales.
We in Plaid Cymru were concerned about whether growth in private sector employment would be achieved for the UK, and particularly for Wales, because of its greater dependency on the public sector and the fragility of its private sector. After four and a half years, and with an election pending, the statistics are interesting, but we must be careful because, for example, the ONS reclassified staff of RBS and Lloyds Banking Group from the private sector to the public sector in 2008, and that represented 225,000 workers. Royal Mail staff went from the public to private sector following privatisation in the fourth quarter of 2013, while further education staff in England were reclassified to the private sector. In a later twist, employees at Lloyds Banking Group have been reclassified to the private sector, as the share of private sector ownership of Lloyds has grown.
The total private sector year-on-year decline of 6% in Wales compares unfavourably with the corresponding fall of 4% across the UK as a whole. Since the trough in 2009, private sector employment in Wales has steadily increased, as I said, but that compares poorly with the UK, where private sector employment has grown by a massive 1.7 million jobs. As I said, public sector employment in Wales has declined, while private sector employment has risen slightly, but in the UK, the situation is a good deal better. The conclusion that one has to reach is that had private sector employment in Wales tracked that of the UK since 2009, an additional 43,000 people would have been in private sector employment in Wales. Public sector employment in Wales has been quite resilient, which has been a good thing.
Let us have a quick look at the unemployment figures. If the unemployment rate in Wales was the same as that of the UK, 10,000 more people would be in work. In Wales, the figure for those who are economically active is 74%, whereas it is 78% for the UK as a whole, so we also have a problem with economic inactivity. That is well known, but the point is the number of people involved. It is equivalent to 67,000 fewer people of working age in Wales either being in employment or seeking work, and that shows the size of the problem that we face. Of those economically inactive people, 120,000 would like work. We therefore have people who are looking for work, which suggests to me and other observers that the measures in place to encourage those who are economically inactive into work just are not working properly. That is the challenge facing Wales—not only reducing the unemployment rate, but raising the rate of economic activity to the UK level and ensuring that the quality of the jobs is right for Wales.
There is scant evidence that austerity has worked for Wales, either from the viewpoint of rebalancing the employment mix between the private and public sectors, or by growing total employment. A great deal needs to be done, and we are looking in vain to the two main London parties for action.
I came into the Chamber at half-past 9 naively hoping for 90 minutes of informed debate, rational argument and, to be honest, a bit of peace and quiet, so I was not really planning to speak, but the hon. Member for Vale of Clwyd (Chris Ruane), who opened the debate, has driven me into an uncharacteristic state of fury and indignation. I hope that people will forgive me if I try to paint a more positive picture of the Wales that I know rather than getting involved in the constant negative talking down of a success story, which seemed to be the main theme of the hon. Gentleman’s speech.
I was also expecting more than we got, which was a series of contradictions. We were told that the wicked coalition was responsible for starving Wales of money, yet in the same breath the hon. Gentleman listed a whole range of ways in which investment has been made available to Rhyl in his area, presumably as a consequence of not only Welsh Government intervention, but the underpinning strength of the UK economy.
Let me make it clear early on that I probably will not give way to the hon. Gentleman, unless I have a sudden attack of good will. That does not mean that I will not give way to anyone, but I will not be persuaded to do so just yet.
We also heard the contradiction of the hon. Gentleman condemning the coalition’s spending proposals in almost the same week that his party voted in favour of them. Is it any wonder that we question the economic literacy of his case when the shadow Chancellor of the Exchequer—perhaps the hon. Gentleman will have some comments to make about this—told us not long ago that interest rates would go up when in fact they have done down, that inflation would go up when in fact it has gone down, that fuel prices would go up when in fact they have gone down, and that unemployment would go up when in fact it has gone down? Is it any wonder that when the hon. Gentleman starts pontificating about a gloomy prognosis for Wales, we take it with a pretty big pinch of salt?
My hon. Friend makes a good point. Sometimes we think that we can get away with saying things in the Chamber because we seem to think that we exist in a bubble and that people are not watching, or listening to and examining the words that we say, whereas in fact, of course, the opposite is the case. That leads me quite neatly to a point that I wanted to make: there is ideology at play here. The Conservative ideology is that we tackle poverty through the creation of jobs and opportunity, yet we heard this morning the Labour ideology that poverty should be tackled simply by swelling the welfare state. If the former is an ideology, I am pretty happy to go along with it, as the route out of poverty is obviously through the creation of jobs. A proper welfare state looks after people who need assistance, not those who simply choose to use it as a lifestyle choice. That is an important ideology, so if an accusation is being pointed at me, I will happily plead guilty to it.
I am offended every time I hear people describe certain jobs in my constituency as somehow unimportant and not proper jobs. I can tell hon. Members that no one feels more patronised than those working in my constituency, whether in agriculture, tourism or engineering, or in a multitude of small and medium-sized businesses, when they hear people from the Labour party describing their jobs as somehow unimportant, unrewarding or unreal. Those jobs are the absolute opposite of those things—they are important.
I remember only too well taking home my first pay packet when I had my first job, which would probably have been described as low-paid, irrelevant and unimportant by one or two Opposition Members. To me, it was the opposite of that. That was the most important moment of my life. The money for that job may not have been as much as I might have got elsewhere, the hours may not have been very special and the terms of my employment may not have been particularly good by today’s standards, but I did not half appreciate it and it put me on the road to a decent work ethic and a hard-working life. That was all because someone gave me the chance to do the job. No one talked down my job in those days, and I do not think that we should talk down people’s jobs today, either.
As we approach the election, it seems to me that Labour’s electoral fortunes depend on fear and failure. It seems that the more fear and failure there is, the more electoral opportunity there is for the Labour party. I find it quite offensive that we should go into an election with one party almost promoting fear and failure as a means to success at the ballot box, and I think that that will reflect badly on it come May.
I put down a challenge to the hon. Member for Vale of Clwyd, so I will take an intervention now if he wants to make one. He condemned pretty well everyone, it seemed, for this country’s economic direction, strategy and success, yet the voters’ attitude seems to suggest that there is precious little confidence in his own party leader in terms of the economic future of the country. Opinion polls clearly show more confidence in the Cameron leadership of the country, in terms of its economic direction, than the Miliband leadership. Perhaps the hon. Gentleman would like to comment on the confidence that he has in his own leader in terms of economic competence and the future of the country.
The point that I want to make is about the hon. Gentleman’s argument that I was too negative about the economy. Given the rosy picture that he has painted, I think that he is too complacent about the economy. People outside the House do not believe him. The people out there who have suffered a £1,600 loss in their pockets do not believe him.
I am glad that I took that intervention because the hon. Gentleman completely misrepresents my view. No Conservative Member and no colleague in Plaid Cymru or in the Liberal Democrat party—indeed, no politician, candidate or Government—has a monopoly on brilliant ideas, wisdom or compassion. It is crazy to suggest otherwise. I am well aware that there are significant difficulties in my own constituency, which is why I have organised five jobs fairs since I have been a Member. That is why I spend most of my working day trying to resolve such hardships and to point people in the right direction on future job prospects. That is why I deal every day, as we all do, with difficulties when things go wrong.
It is wrong to suggest that we live in a bubble of complacency and that the future is gloomy. The distinction that I am trying to make is that there are plenty of success stories in Wales of which we should be proud. Plenty of indicators suggest that we are pointing in the right direction. I absolutely accept that we are halfway along the road to success. Nobody is suggesting that we have got there and nobody is suggesting that it will not be a hard crawl from here to our destination. What we are suggesting is that to alter the course now would damage the prospects of not only people who are working their way back into employment, but those who already have a secure job.
What I am trying to do is to be part of an economic policy that creates greater opportunity, higher wages and better long-term prospects for families and individuals in my area. That is what I am driving towards. It is wrong to suggest that I could sit back and feel content if even a single person in my constituency was unemployed for avoidable reasons. I would be upset and disappointed, and I would strive to help them back into employment. The same is true of anybody on an unsustainable wage. The point I am trying to make is that the direction of travel—I hate that expression, so please forgive me for using it—is correct.
I could point the hon. Member for Vale of Clwyd to numerous people in my constituency who have been able to make the transition from the gloomy position that he describes into a more prosperous world with better pay, better conditions and a better job. That is a consequence of confidence among UK, European and global companies, which are investing in our area, and it might not have happened under a different form of economic leadership. That is the point that I am trying to make. Of course we are not there yet—we are some years away—but I think we are on the right path to that kind of success story, which was lacking from the hon. Gentleman’s speech.
It is a pleasure to serve under your chairmanship, Mr Hollobone, and to follow the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart). We nearly ran into each other this morning when we were on our daily jog.
Only a fool would not welcome the news that there are 4,000 more people in work this year than there were last year. Even though Wales has the lowest employment rate of any region in Britain, at 68.7%, anybody gaining work can be only a good thing. However, the number of long-term benefit claimants and long-term unemployed remain stubbornly high. It seems that we cannot talk about employment in Wales without mentioning the elephant in the room, which is welfare reform.
For too long our welfare system has been broken. It teaches the wrong values, rewards the wrong choices and hurts those whom it should help. We must offer people on welfare education, training, child care and all the things they need to get back to work. We need to offer them opportunity, but at the same time we must demand responsibility. We know that no one wants to change the system more than those who are trapped in it, such as the single mother who came to see me recently in a surgery in Islwyn who has to work part time because she simply cannot afford to go full time. More than 70,000 people in Wales feel the same way.
We have to end welfare as a way of life and make it a path to independence and dignity. The problem is that the terms of the debate are all wrong and too partisan. Knock on any door in any constituency in Wales, and if it is answered by someone who is in long-term work, they will attack those whom they term “benefit scroungers” and people who make benefits a way of life. The coalition and the Opposition are locked in a battle over the merits of their respective approaches to tackling long-term unemployment. The coalition has set a limit on the annual increases in the majority of benefits; for tax credits it is 1% over the next three years. Only today in an interview, the Prime Minister set out the battle lines when he said that the Tories will reduce the welfare cap to £23,000 if they are elected in May. In fact, he said that that would be the first piece of legislation for any future Conservative Government.
The Prime Minister has also said that he wants to cut the welfare bill by £10 billion or £11 billion over the next five years. The hon. Gentleman’s colleagues signed up to the welfare measures last week. Does he support that level of cuts over the next five years?
There we go again. I have a lot of time for the hon. Gentleman, but I have just said that we need to change the terms of the debate. The debate is once again about the various approaches, but we are missing the wider picture. Every time that we talk about welfare reform, it becomes about hitting various groups in society. The major problem is not benefit scroungers, but the simple fact that thanks to globalisation—a good thing that is creating more opportunities than ever before for people in Wales, young and old—the labour market has changed beyond all recognition. As we have heard, the recent growth in jobs has been at either the very top or the very bottom. That means low pay at the bottom and high pay at the top, but those in the middle are finding themselves forced out due to what we could call a hollowing out of the labour market. When those people lose their jobs, they encounter tremendous barriers to getting back into work, which forces many families into poverty, and that process will only quicken as the years go on.
We must be honest about the fact that despite attempt after attempt, welfare reform, in all its guises, has failed. Long-term unemployment remains stubbornly high and there are still long-term benefit claimants. At the same time, we carry on debating the belief that there are welfare scroungers abusing the system, but I believe that we need to change the terms of the debate. Policy Exchange recently came up with a programme with three planks that merits further consideration. We need to build self-sufficiency in the welfare system. In the UK as a whole, 60% of households receive more in benefits than they pay in tax, so they are net recipients of state support. That is, in part, the result of the tax credits introduced under the previous Labour Government which, in an attempt to tackle low pay and to eradicate relative income poverty for children, began to support families earning as much as £50,000 a year. Poverty came down, but the problems remain.
There is still a general presumption in the welfare system that the solution to low pay and poverty is to redistribute income through cash benefits. I emphasise that doing so simply subsidises low pay, leads to low wages for recipients and does nothing to encourage progression and self-sufficiency. Future reforms must be built around the principle that income should come from work, not benefits, but that will require reforms to the scope of benefits while ensuring that family earnings increase along with the living wage. There needs to be more support for those who seek to increase their income, but that is sadly lacking from this Government.
We need to build a system on the principle of “something for something”. Although it is important to build a system that encourages self-sufficiency, we must recognise that some families will fall on hard times. Companies will close; that is the way of life and the way of the economy, no matter who is in government. In such times, the welfare system should support people and recognise the contributions that they have already made. The current welfare system does not reflect such contributions. Strengthening the contributory principle through a system of welfare accounts that sit on top of universal credit, which can be drawn down in periods of need, should be a key plank of a “something for something” system that all parts of society believe to be fair.
Employment support is the most controversial part of the system—it is the biggest bugbear in my constituency. The state must get better at helping people to move back to work through a modern system of employment support, and that must begin with an acceptance that Jobcentre Plus has not been effective for some years. Although 75% of jobseeker’s allowance claimants move off benefits within six months, only about half of them are still in work eight months later, while a third are claiming benefits again. The goal should be to support claimants into substantial long-term employment and that should be delivered by providing targeted support for jobseekers not after six months, but from day one of their employment claim.
We should also look at examples such as that in Australia with regard to building and improving the Work programme. That is particularly relevant for groups furthest away from the labour market that currently face being parked without support and still face a real risk of benefit sanctions. Those groups need a new support system that ensures that they have help for the very real difficulties that they face, and that view was backed up by a National Audit Office report on the Work programme in July 2014, which stated:
“The Programme has…not improved performance for harder-to-help groups compared to previous schemes. The Department designed the Programme to help participants whose barriers to employment mean that it is more difficult for them to move into employment. However performance has been similar to previous initiatives and falls well short of the Department’s and bidders’ expectations. Prime contractors have reduced what they plan to spend on the hardest-to-help, with support for these participants lower than for those with better employment prospects.”
We need reforms that build on the three principles that I mentioned to make the welfare state more effective, efficient and fair. That would rebuild support for the welfare state around the principles upon which it was founded by Beveridge all those years ago and ensure that all families receive the support they need to increase their earnings and reduce their reliance on the state. At the same time, it would ensure that those in need get the support they require. As we face the general election, those three principles should be the terms of the new debate on welfare reform.
It is a great pleasure to serve under your chairmanship for the first or second time, Mr Hollobone. I congratulate my great and hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing this vital debate and on the clarity and passion with which he laid out his case.
This has been a very good debate so far. It has been slightly ill-tempered on occasion, but we have heard an excellent speech from my hon. Friend the Member for Islwyn (Chris Evans) and excellent interventions from my hon. Friends the Members for Caerphilly (Wayne David), for Clwyd South (Susan Elan Jones), for Wrexham (Ian Lucas) and for Alyn and Deeside (Mark Tami). We have also heard equally passionate, albeit slightly misguided, speeches from the hon. Members for Carmarthen West and South Pembrokeshire (Simon Hart), for Aberconwy (Guto Bebb) and for Arfon (Hywel Williams).
I wanted to respond personally to this debate, not only because it was secured by my hon. Friend the Member for Vale of Clwyd but because work and employment are at the heart of our debate in this Parliament, our politics and our economy. The success of working people, what they do with their time and how they exchange their finite time for reward, are, of course, at the heart of not only our economy in Wales but all economies.
Our growth, productivity and dynamism are reliant not on innovation, entrepreneurialism or capital investment—all words that one often hears from Ministers of all Governments—but on the sweat from people’s brows. Hard work and hard graft underpin our economy, and they are key to a successful and stable society. More than an economic driver, work is the key to people’s dignity, security and, indeed, identity. In Wales we know that more than in many other parts of the UK. In Wales, whether it has been colliers and quarrymen, women working in service or people working in steelworks or on the land, our work has been how we have defined ourselves.
Does my hon. Friend agree that what has been ignored by Conservative Members throughout this debate—yes, there is a welcome rise in the number of people in work—is the huge rise in the number of people in temporary employment and the lack of full-time jobs? Underemployment affects 70,000 people in Wales, and a similar number are on zero-hours contracts. The Conservative party is ignoring just how precarious the employment situation is for many people who do not have a guaranteed income.
I agree. That has been the yawning hole at the heart of what we have heard so far from Conservative Members, and I suspect it will not be filled by the Minister. In the past, our work has defined us in Wales, and work is in danger of defining us once more as a low-wage, low-security economy. That is becoming the reality of the world of work for people in Wales, which frankly is not good enough.
I do not expect the Minister to recognise that picture, and I am sure he will talk to us in a moment about the recovery and the extra jobs that his Government have created, but unfortunately the facts do not bear out his arguments or the arguments of the hon. Member for Aberconwy because the statistics are relatively clear. Despite all the rhetoric, the truth is that in May 2010, when the last Labour Government left office, there were in total 1,471,000 economically active people in Wales. Today, on the latest numbers, there are 1,471,000 economically active people in Wales. That is the reality. We have not seen a surge in new jobs in Wales; we have seen a displacement of jobs, often from the public sector to the private sector and absolutely from more secure, more stable, better paying jobs to worse jobs.
The other statistics are even more damning. In Wales, according to the Office for National Statistics labour force survey, the number of economically inactive people has gone up from 989,000 to 1,039,000; the economic activity rate has gone down as a percentage; the employment rate has remained absolutely static at 54.4%; and the economic inactivity rate has gone up from 40.2% to 41.4%, which is in part a reflection of the offsetting effects of public sector job losses in Wales over the period. Some 351,000 people were employed in the public sector at the beginning of the Government’s term; the figure is now 315,000. That is a reduction of 36,000, part of the 1 million public sector jobs that have been lost.
That is the truth of the headline statistics, but let us look a little deeper at the nature of the jobs that people are currently enjoying. There are perhaps more jobs in the private sector, but the truth is that productivity in Wales and in Britain is down; corporate and personal tax receipts in Wales and in Britain are down; investment in Wales and in Britain is down; and consumption in Wales has flatlined.
My hon. Friend the Member for Vale of Clwyd made the point earlier in relation to the respected leader of the CBI, John Cridland, who says that, if we have a low-wage economy with increasing numbers of people who are unable to pay for white goods or even basic services, we will have lower consumption, less productivity and less growth in Britain. Those are the basic economic facts in Wales, and the reason for that is simple: the Conservative party set out to create and—let us give it its due—has succeeded in creating a low-wage, low-security economy in Wales and in the rest of the UK. That has been the Conservative party’s objective—greater flexibility but, unfortunately, at the expense of working people.
It is a reality that wages are down on average by £1,600 per family over this Parliament. It is also a reality that Wales already has the lowest disposable incomes of any part of the UK—just £14,623 versus an average in England of £17,066. The Conservatives have succeeded in overseeing a shift in the nature of our employment from a relatively secure, better paid work force to a less secure, worse paid work force. The facts do not lie. Total temporary employment across Wales has increased by 28%, and in the same period the number of people on permanent contracts in Wales has decreased by 25,000, more than 2%.
There is a direct transfer of people from being full-time employees to effectively being part-time employees. Some of those people are calculated and recorded as FTEs, but that is because of the nature of their zero-hours contracts. There are 300,000 people in Wales on less than a living wage, and far too many of those people—more than 40,000—are currently on zero-hours contracts, which have been the great explosion and change in our economy. That shift from permanent, properly contracted work, in which people have rights to maternity pay, paternity pay and sick leave, towards a low-wage, insecure, zero-hours-driven culture is unparalleled in any other period of modern economic history.
I will give one illustration, involving a young woman in my constituency whom I met a fortnight ago. She is 17, just about to turn 18, and she works in a local pizza restaurant. She goes in to work at 10 o’clock, when she is expected to be there. She has no guarantee of how many hours she will work that day: it might be six, eight or two. The nature of her contract is such that she can be laid off by the company for a period of its choosing during her working day if demand in the pizza restaurant drops below a certain level. She cannot afford to go home and wait for the company to call her to bring her back in, so she sits in the back room of the pizza restaurant for up to four or five hours in the middle of the day, waiting for the volume of customers to pick up later in the evening so she can be taken on.
It is an utter scandal that that sort of practice is going on in Britain—and not just occasionally; it is becoming the norm, just as minimum-wage jobs in Britain are becoming the norm, not the exception. The minimum wage in this country is becoming a ceiling on wages, not a safety net. Governments of all colours must recognise that, and the fact that we must do something about it.
I agree with everything that the hon. Gentleman is saying about the situation in Wales. It is true not least of the care sector in Carmarthenshire, where the Labour council has privatised social care by outsourcing it to private contractors, and many workers are in the same scenario. They are not paid for travelling between calls, so in very rural areas, such as some parts of Carmarthenshire, they can travel for half an hour and not be paid for that working time.
During the recent passage of the Social Services and Well-being (Wales) Bill in the National Assembly, Plaid Cymru tried to deal with that situation by outlawing zero-hours contracts in the social care sector. Can the hon. Gentleman explain why the Labour Government in Wales refused to support that amendment?
As the hon. Gentleman will know, the situation is far more complex than he allows, although I will say straightforwardly that I do not believe that we should have 15-minute calls. One of the areas on which we will absolutely need to concentrate when Labour wins in May is the care sector, in which women are exploited all the time. More than 60% of the women in Gower, Ogmore and the Vale of Glamorgan who work part-time contracts, many of them zero-hours, are paid less than the living wage. That is the truth for many people in this country.
Equally, House of Commons figures show that areas of Wales, including the Rhondda and Dwyfor Meirionnydd, account for the nearly 40% rise under this Government in people shifting into working for the minimum wage or less than the living wage. Those are sea changes in the nature of the economy experienced by working people. Not all those changes started under this Government; we must be honest about that—the stagnation in wages started around 2007-08—but the unprecedented pace of change and the shift to low-wage, high-insecurity work has been exacerbated and compounded under this Government. In my view, that is scandalous.
The Welsh Labour Government have done their best to mitigate those trends. Initiatives such as Jobs Growth Wales have created 12,000 job opportunities for people in Wales, and tuition fees have been capped in order to hold open the door to advancement and social mobility through education. The Welsh Government have stood up for the lowest-paid workers against this Government—by maintaining the Agricultural Wages Board, for instance.
However, the truth is that we still have a significant problem in Wales, and it will take a Government in Westminster with the right policies—and, frankly, the right ideology—to change that. That is what we will see in this country when the Labour party wins in May: a rise in the minimum wage, intervention in our markets to freeze consumer prices for people suffering under high energy bills and the backing of small business through a reduction in tax cuts to large corporations and an increase in benefit to smaller companies.
Crucially, we will deal with zero-hours contracts and scrap the bedroom tax, which perniciously affects the most vulnerable in our society. That is the sort of Government programme that we need to deal with the issues in Wales. It is not what I anticipate we will hear from the Minister, which is why I hope we will see a Labour Government preside over Glamorgan, as well as the rest of Wales, come 8 May.
It is a privilege to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Vale of Clwyd (Chris Ruane) on securing this important debate. We have heard a range of contributions. It was certainly interesting to hear that of the hon. Member for Vale of Clwyd, although of course my hon. Friend the Member for Aberconwy (Guto Bebb) highlighted the impact of the dead hand of Labour on the Vale of Clwyd and every other constituency. He also reminded us that Labour signed up to the public spending commitments set out by the Government for the forthcoming years; whenever the Opposition criticise this Administration’s cuts, they must demonstrate which they would make instead of ours.
The hon. Member for Arfon (Hywel Williams) highlighted the fragility of the private sector in Wales. I challenge some of the points that he made about that fragility, as the private sector is thriving in terms of creating employment, but the greater stability and security that we can offer such businesses will allow the sector to be more robust than ever. My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) highlighted a host of contradictions made by some Opposition Members and discussed Labour’s tactic to grow wealth by swelling the welfare state, which is clearly economically illiterate and does not stack up. My hon. Friend was absolutely right.
The hon. Member for Islwyn (Chris Evans) focused on welfare reform, and seemed to complain about the benefit cap of £23,000 proposed this morning by the Prime Minister. I remind him that many people in Wales who work hard day in and day out do not earn that much salary. If he does not support a £23,000 benefit cap, the money saved by such a cap would need to be found in cuts elsewhere, which I hope Labour will outline.
The hon. Member for Pontypridd (Owen Smith) covered a range of issues. He seemed to suggest that public sector jobs were good and private sector jobs were bad, which I absolutely reject. He also highlighted the issue of zero-hours contracts. The Government are tackling the abuse of zero-hours contracts, but I remind the hon. Gentleman that the Labour party itself, and even Labour MPs, use zero-hours contracts. He rightly focused on the living wage and minimum wage. We encourage as many employers as possible to live up to the living wage, but I point out that a number of Labour-run local authorities in Wales do not pay the living wage, and I encourage Labour Members to consider that within their budget plans and affordability measures.
The hon. Gentleman closed on the minimum wage and said that the Labour Government would increase it; I think that the latest policy to which they are committing is £8 an hour. However, a Labour former Cabinet member has highlighted how unambitious that is; even under past projections, by 2020 it will not buy much. If historical increases in the minimum wage were projected forward, they would go well beyond that. In reality, Labour is talking about cutting the minimum wage for hard-working people.
Although I aspire for people to be paid more than the minimum wage, it is important when we discuss it not to forget that many of those on the minimum wage pay significantly less tax as a direct result of this Government’s policies to ensure that people keep more of the money that they earn.
I am grateful to my hon. Friend for making an extremely important and valid point. Some of the data and statistics highlighted by Opposition Members were somewhat selective, and we need to take the totality of Government changes into account; doing so highlights the progress that has been made.
It is also important to remember the context in which this debate is taking place. We need to remember that when Labour came to power in 1997, Wales was not the poorest part of the United Kingdom. Since then, sadly, there has been a complete shift in culture. That is simply illustrated: in a population of 3 million, there are 200,000 people in Wales who have never worked. The Government needed to act. We were simply not prepared to allow the previous trends to continue, whereby, sadly, the economy of Wales was being compared to those of Romania and Bulgaria; whereby parts of Wales were blighted with worklessness; and whereby a third of the working-age populations of some communities were claiming out-of-work benefits.
We have taken key steps to deal with that legacy of worklessness and a welfare system that encouraged dependency. As a Government, we have put in place a long-term economic plan to deal with the situation that we inherited—in 2010, Wales was, sadly, the poorest part of the UK. That fact will always come back to haunt Opposition Members. They talk about wealth, prosperity and growth, but they left Wales as the poorest part of the UK, despite receiving in 1997 an economy that meant Wales was not the poorest part of the UK.
We developed a plan to stabilise the country’s economy, to deal with years of financial mismanagement under the last Labour Government and to get the people of Wales and Britain back to work. That long-term economic plan is paying dividends. It surprises me that during the last hour or so I have listened to Opposition Members playing down the progress of the labour market in their constituencies.
For example, in the hon. Member for Vale of Clwyd’s constituency, unemployment more than doubled between 2005 and 2010; there was a rise of 105% under the last Administration. Since 2010, unemployment in Vale of Clwyd has dropped by a third. Surely he welcomes that as a positive outcome.
The hon. Gentleman points back to 1997, but I can speak only about the time since 2010, when this Administration came to power. However, I remind him of what I said before: in 1997, Wales was not the poorest part of the UK but, sadly, by 2010 it was. That happened under both a Labour UK Government and a Labour Welsh Assembly Government. Thirteen years of Labour Administrations in Wales between 1997 and 2010 left Wales as the poorest part of the UK.
On a positive note, I hope that the hon. Gentleman welcomes the fall in unemployment in his constituency since this Administration came to power. The picture is similar for youth unemployment in the Vale of Clywd; it went up by 82% under Labour, but since 2010 it has come down by a third. Why does he not recognise the positive steps that the Government have taken in that regard, and why is he not congratulating the businesses in his constituency that are creating these jobs and employment opportunities for his constituents?
It was a privilege to visit Clogau Gold in the hon. Gentleman’s constituency just a short time ago. It is expanding, exporting, and creating wealth and employment locally in the Vale of Clywd. I regret how the hon. Gentleman is talking down his own area; that is hardly creating the mood to attract investment and to encourage companies such as Clogau Gold to continue to spend money on investing, exporting and creating yet more wealth.
The Minister talks of the “long-term economic plan”, but have not the deficit reduction targets of his Government been missed by a country mile? One of the major reasons for that is that the jobs being created are low-wage in nature, which means they do not generate the revenues the Treasury was expecting.
The hon. Gentleman makes an important point; we need to recognise the context in terms of deficit reduction. Given that we had been so over-dependent on the eurozone as our export market and that the eurozone went into near-meltdown, naturally that hit the Welsh economy disproportionately harder than we would have liked. That is why the long-term economic plan aims at growing exports, such as those of Clogau Gold in the hon. Member for Vale of Clwyd’s constituency, well beyond Europe—to the middle east, to the far east and to the fast-developing economies of Brazil, Russia, India and China. Excellent progress has been made in that regard.
Would I have liked the deficit to have been cut further? Of course I would. However, the process is about achieving a balance between reducing the deficit and creating wealth and employment. The Government’s record is positive in that respect. We need to remember that last year the UK was the fastest growing economy in the G7, and that Wales is the second fastest growing part of the UK. We are absolutely up there at the top; we need to recognise and celebrate that, rather than hearing the arguments that we have heard from Opposition Members. It is in their interests to talk Wales down, creating more dependency and trying to create a sort of depth of Labour voters to look to Labour for help rather than looking to the private sector for wealth as well as opportunity creation and generation.
Overall, the picture throughout the whole of Wales is positive, just as it is in the Vale of Clwyd. I could highlight more statistics about north Wales and the south Wales valleys, but the reality is that long-term unemployment is falling and the Work programme is having a major effect. Jobs Growth Wales has a part to play, but we must remember that the independent assessment of Jobs Growth Wales highlighted that 73% of the people who found jobs through it would have found jobs elsewhere.
Let us pool our ideas and resources, to try to get people off welfare and into work through the positive culture of cutting tax, growing the economy and reducing unemployment, in exactly the way that the Government have done.
I am grateful, Mr Hollobone, for the opportunity to speak again.
I will respond to a few points that Conservative Members made. Virtually every Conservative speaker today spoke only about cuts, but the balanced approach to rebalancing the economy means talking about cuts and growth. From 2008, all the indicators up to 2010 were going in a positive direction; when this Government got in, they all went in a negative direction. The cuts are ideological, because the Conservatives believe in cuts. They want a small state; they do not recognise the value of the public sector.
The hon. Member for Aberconwy (Guto Bebb) again used divisive language about public sector pensions and private sector pensions, saying that private sector pensions were minimal. Who was it that promoted and encouraged the mis-selling of pensions to the private sector? It was the Conservative Government of the ’80s and ’90s. Why not raise the private sector pensions up to the level of public sector pensions? Why does the law of the lowest common denominator have to apply?
The Minister mentioned the number of people in Wales who have never worked. We had jobs—quality jobs—in Wales, in the steelworks and the mines, but what happened? Those workers were laid off and put on the dole. Then, when the dole queues started to rise, the Conservative Government in the 1980s and 1990s got worried. They altered the figures for calculating statistics 30 times, and they encouraged those proud miners to get off the dole and go on to incapacity benefit, in order to park up those workers—and, indeed, whole communities —for decades to come. After someone spends six months on the dole or incapacity benefit, something changes inside them; they lose their confidence. That is what happened in those communities. No help was put in place for those proud miners; they were just cut adrift, as political punishment for what they had done.
The Minister talks about the success of job creation in Wales under his Government. He mentioned Jobs Growth Wales briefly towards the end of his speech, but let me remind him that Jobs Growth Wales is responsible for an extra 400 young people in my constituency being employed. Also, there is European funding in my constituency, which I secured for my county of Denbighshire and the county of Conwy in 2000. We have had a quarter of a billion pounds worth of investment in my constituency, and the same in Conwy as well, as a result of that European funding. But what will happen to the remainder of that funding if the Government have their way and pull out of the EU? These are big issues for the electorate to face in the months to come and on 7 May, and I hope that they look carefully at our record and that of this Conservative Government. If they do, they will realise which box to put their x in.
I thank all Members who took part in this important debate on Wales. If they are not staying for the next important debate, I ask them to leave Westminster Hall quickly and quietly, because it is time to get all aboard for a train services debate.
London Bridge Station (Redevelopment)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank you and the rail Minister for allowing my hon. Friends the Members for Lewisham West and Penge (Jim Dowd) and for Eltham (Clive Efford) to participate in the debate. I also thank the Minister for organising the session that we had with Network Rail and Southeastern last week—perhaps I should call it a grilling—which was much appreciated. I expect that she will have some idea of my concerns, but I am pleased to have the opportunity to put them on record.
The rebuild of London Bridge station is long overdue. It is a poor relation of King’s Cross, Paddington and Waterloo, but no less busy. I fully support the redevelopment of the station, but I am concerned about the impact of the latest phase of works on rail services and passenger experiences. I know there has been mayhem on Southern routes—my hon. Friend the Member for Lewisham West and Penge might speak about that—but I will focus my remarks on the Southeastern network, given its importance to my constituency.
The new timetable, which has been introduced as a result of the 18-month closure of four platforms at London Bridge, has caused havoc. With no Charing Cross trains stopping at the station, many Cannon Street services have been dangerously overcrowded. There have been reports of fights at stations on lines into London Bridge because people simply cannot get on to a train. The remaining operational platforms at the station have seen scenes of utter chaos due to the volume of people and last-minute platform alterations. What has always been a poor and overcrowded service is now abysmal and yet, as with every year, fares have gone up. How that can be justified when some people cannot even get on a train is beyond me. In my constituency, many trains are full when they arrive at stations and people are paying for a service that they can barely access.
What can be done and what do I want the Government to do? Commuters in south-east London are crying out for longer trains and better communication from the train operating companies. If we cannot find a way to ease the current problems, the Minister will need to look carefully at next year’s annual fare hike and ask herself whether it is acceptable. At the most basic level, we need extra carriages on the Cannon Street services. Those should not be pinched from other overcrowded services, but if any reasonable adjustment can be made, that should happen. Given that, on the Southeastern network, only Cannon Street services will stop at London Bridge for the next 18 months, every rush hour train into Cannon Street should be a 12-car train.
If we cannot get extra carriages immediately, we will desperately need the old Thameslink rolling stock when it becomes available towards the end of the year. Will the Minister guarantee that those old Thameslink carriages will end up on Southeastern services? Is it true that the current plan is to use the Thameslink carriages for services between Manchester and Liverpool? Will she review that, as well as looking at what can be done to source extra carriages in the interim?
Southeastern also needs another communications drive. Rather than waiting for frustrated passengers to work out alternative routes for themselves, a big communications effort is needed that prompts people into changing their journey patterns. It should set out all alternative travel options and ticketing arrangements.
I congratulate the hon. Lady on again securing a debate on rail transport in the south-east. She will agree that the redevelopment is a welcome investment in the infrastructure of our railways that will ultimately benefit her constituents and mine. I am pleased that she mentions communication. Does she agree that communication during this work is crucial? Southeastern has to get that right, but communication is something at which Southeastern has often failed in the past.
I share the hon. Gentleman’s view. This is difficult, to be fair to Southeastern, but we need to find a way of raising awareness of the other tube and bus routes that people can use to travel to and from the London Bridge area. If extra buses are needed on some of those routes, they should be delivered. Transport for London has laid on extra buses for the No. 21 route from Lewisham, but is there a case for some express services from south-east London into London Bridge further to ease some of the overcrowding?
The past few weeks have reinforced my constituents’ long-held view that annual fare hikes are not justified. Will the Minister expect Southeastern customers to pay more for their travel next year, too? If the services continue to be abysmal, is it not reasonable to consider freezing Southeastern fares next January to reflect the huge inconvenience that so many are experiencing? The current compensation scheme for delays on Southeastern is almost meaningless to my constituents, as whether or not a train is on time is irrelevant if people cannot get on it.
I could say much more, but I am conscious that my hon. Friends wish to speak, so I will draw my remarks to a close. More capacity and better communication could help to ease the pressures on the Southeastern network. If that is not possible, fair and reasonable compensation should be considered. I look forward to the Minister’s response.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Lewisham East (Heidi Alexander) on securing this important debate and thank the Minister for organising Thursday’s meeting with Southeastern and Network Rail, which gave us an opportunity to get some answers to questions following the timetable changes. I met Network Rail on 10 December to talk about the arrangements. I was also in contact with Southeastern, and its representatives were due to attend that meeting, but unfortunately did not turn up. Some of the things I feared have come to the fore, but I would like to draw the Minister’s attention to the customer satisfaction survey that was published today. It shows that Southeastern has the worst customer satisfaction of the train operating companies, and that survey was carried out before the changes.
My constituents who want to go to London Bridge, especially from Mottingham and New Eltham, are finding the Cannon Street trains to be dangerously overcrowded. It is clear that there was no plan for the extra demand for those trains. They are the only trains stopping at London Bridge, but there was no plan to make them longer to increase capacity. Will the Minister tell us what will be done in the short term to address the serious overcrowding on those trains? Overcrowding is also being experienced by those who are forced to go to Waterloo East and then try to travel back to London Bridge on the London underground. Southeastern seems to have taken the view that if it sits this out, passengers will be forced to find other forms of transport. My constituents have told me that they are getting off at Lewisham, which is becoming very overcrowded. British Transport police have to be at the station because the situation is becoming dangerous. Passengers are starting to use the docklands light railway as an alternative route. It is shocking that the approach seems to be to force passengers to go elsewhere. That is just not good enough. Southeastern has not planned for the capacity that is necessary to enable passengers to get to London Bridge and continue their journeys.
What will be done in the short term? Like my hon. Friend, I want to find out what will happen about the Thameslink trains, because we know that we need them. There should have been 12-car trains on our network from January last year, but Southeastern has failed to address the problem.
I shall make what will be my final point, because I know my hon. Friend the Member for Lewisham West and Penge (Jim Dowd) wants to speak. In response to this morning’s survey results, Mr Statham, the managing director of Southeastern, said:
“Over the next three years we’re investing more than £70m in the things that our passengers tell us are important to them. This investment will enable us to provide better information to our passengers”—
that is fine—
“improve the interior and cleanliness of our trains”—
that is excellent—
“refresh the look of our stations and provide extra staff to deliver more face-to-face customer service.”
That is all wonderful, but if passengers cannot get on the damn trains, what is the point? There is nothing in that statement about increased capacity, extra carriages or 12-car trains, which we have been promised by two successive Governments. The issue is capacity. Southeastern is not addressing the problem, so we want to hear from the Minister what she will do about it.
I will be as brief as possible, although given the volume of material that I have received from constituents about this subject, I could take up the rest of the morning, let alone five minutes. I thank my hon. Friend the Member for Lewisham East (Heidi Alexander) for sharing her time with us. The issue is critical for all of us in south-east London. As she suggested, I will concentrate on Southern services.
Rail transport throughout south-east London is particularly important. Of all 32 London boroughs, including the City of London, Lewisham has the highest proportion of residents who work outside their borough, so all public transport, and rail in particular, is evidently important to them. Transport is critical to the well-being of residents and the community at large.
Our recent experience includes the shambles that is London Bridge station and Southern rail generally, even predating this disruption. Network Rail states on its website that there are two types of disruption at London Bridge: “planned disruption” and “unplanned disruption”. I am not sure where the overlap lies, but the fact of the matter is that the travelling public pay the price and suffer the consequences.
Like my colleagues, I thank the Minister for her involvement and interest, right back to our immediate return after Christmas, and for organising last week’s meeting. I very much look forward to speaking to Southern Railway on Monday afternoon. Southern’s performance—certainly subsequent to 5 January, but previously as well—has been lamentable and shameful. It predates the problem with the Thameslink work at London Bridge by a number of months.
When deciding what to say in the few moments that I have, I thought that I could do no better than to repeat what some of my constituents have told me. A resident of Penge said of London Bridge station:
“The works taking place there caused constant delays and cancellations last year, and so far this year the station has pretty much ground to a halt.”
A resident of Forest Hill said that on the evening of 5 January they
“left London Bridge in tears having been crushed by the crowds being kettled into a small part of the concourse. Half empty trains left with us not being allowed access to them by Network Rail staff.”
The impact on services into London Bridge is reflected in the impact on services out for people travelling south. One constituent said on 7 January:
“Today the 8am, 8.30 and 9.30 trains were cancelled”
between Brockley and Streatham Hill, with
“no excuses at all so I and my fellow passengers have no idea what the problem was. I really feel it’s just not good enough and I was told today that it’s going to be like this until 2018.”
Another constituent from Penge said:
“We’re only a week or so into the ‘works’ so I guess we need to see how it settles down but it’s apparent at this stage that the train companies, Southern, Southeastern, Thameslink and Overground have not planned adequately for these changes and made additional capacity available.”
That is the point that my hon. Friends the Members for Lewisham East and for Eltham (Clive Efford) were making about the rebuilding of London Bridge.
I speak as someone who started to commute into London Bridge station more than 50 years ago to get to my school at Stamford street, between Waterloo and Blackfriars road, so I know it well from the days of steam, amazingly enough—I am probably alone in the Chamber in remembering that. Even though there were southern electric services at London Bridge, steam trains still ran. It has always been a Cinderella station without the kind of impact of the other stations mentioned by my hon. Friend the Member for Lewisham East, but it is a critical one. Those pictures of people walking across London bridge to get to the City are almost invariably of people coming from London Bridge station. It is a vital interchange and artery, but at the moment it is completely and utterly clogged up.
As I said, the problems with Southern trains predate the work that is going on. A constituent who lives a few doors from my constituency office carried out a survey of 19 journeys between 7 June and 1 August last year on services from Forest Hill to London Bridge. Seven of those 19 trains were on time, while the other 12 were between three minutes and 44 minutes late, and that is for a journey that should take only 16 minutes. That has been the standard for quite a long time now.
I am grateful for the passion that Opposition Members are expressing on behalf of their constituents, which I share. Although there have been problems at London Bridge, I am pleased to say that, through the Thameslink programme, regular updates and communications have been received by the train operating companies. Does the hon. Gentleman agree that those companies need to improve their communications during this difficult time?
Indeed I do, but while communications are one thing, people want to rely on performance. If trains are running properly and with enough capacity, they do not need explanations. Communication is needed when things go wrong, and they are going wrong far too often via London Bridge. There is much else that I am tempted to say, but I have gone beyond the time that we agreed, so I will leave it there.
It is a pleasure to have your train-related interventions from the Chair, Mr Hollobone.
I congratulate the hon. Member for Lewisham East (Heidi Alexander) on securing this important debate. I also thank the hon. Members for Eltham (Clive Efford) and for Lewisham West and Penge (Jim Dowd) and my hon. Friends the Members for Dartford (Gareth Johnson) and for Hendon (Dr Offord) for participating. I also thank the participants in the important performance summit we held last week, at which MPs from across the House were able to quiz the Southeastern management team and Network Rail, and air concerns on behalf of their constituents. The Minister of State, Ministry of Justice, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), in whose constituency London Bridge station lies, has written to me with his concerns; he is attending an engagement to mark Holocaust memorial day and apologises for not being here.
As my final bit of preamble, I will say that I really welcome this debate and all interactions I have with hon. Members on the issue. The tone of these discussions is not ideological and we are not debating ownership of the railways; we are trying to work out how to get the best possible service from the current structure and investment. All of us are clear that it is passengers who matter on the railways. We are not moving boxes or units of capacity, but people, who are trying to get to work or get home to see their families. For me, it is vital that their interests are at the heart of this essential improvement work and, indeed, all investments in the railways.
As we all know—the hon. Member for Lewisham West and Penge alluded to this—we face two problems. One is decades of under-investment in many parts of our network, and in particular, in vital transport infrastructure such as London Bridge station. The other problem, if we can call it that, is the extraordinary growth in passenger numbers right across the country that has happened since privatisation. As the hon. Gentleman will know from his long history of using London Bridge, passengers have faced an almost 200-year-old station, with tangled access tracks and problems getting in and out. It is the poor relation to the other great London terminals, yet has some of the busiest platforms and intersections in Europe.
I think all Members welcome the decision to proceed with such vital investment even when economic times were tough. The £800 million invested at London Bridge, and the wider investment of almost £5 billion across the Thameslink network, will unblock the vital north-south bottleneck for our constituents. That investment will also deliver longer trains to provide more frequent and reliable services across London and the south-east.
The prize for London Bridge, in 2018, will be a world-class station that handles more trains, with 60% more capacity and all platforms accessible from the wonderful concourse we have heard about. I am told that the development is the most complex set of works ever undertaken on an operating station in the UK. In my view, it was the right decision to keep the station open during the works, given that 56 million people use it each year.
With such a mammoth engineering undertaking, some disruption is inevitable, but that disruption must be minimised for passengers, who must be kept in the loop as to what is happening. No one could say that either aim has been achieved for London Bridge users in the past few weeks, so what is happening? As we heard last week, there are some long-term service changes that were well known and, to pick up the point made by my hon. Friend the Member for Hendon, reasonably well publicised. Thameslink services are being diverted and Southeastern services to Charing Cross will run through until August 2016. When the Charing Cross services resume calling at London Bridge, the Cannon Street services will stop calling until 2018.
During those planned changes, everything has to be done to ensure that passengers know about the changes for their destinations. One part of that is to ensure that passengers can use their tickets on alternative routes. I am pleased that we have negotiated a £25 million deal with Transport for London to enable that. The hon. Member for Lewisham East made the sensible suggestion of running more express buses to try to offer a joined-up solution to serve passengers. I will certainly discuss that idea with TfL.
Another element it is vital to address is crowding at stations and on trains. I am aware that, as the hon. Member for Lewisham West and Penge said, there has been dangerous overcrowding on platforms 1 and 2 at London Bridge. That is being addressed right now. Southeastern and Network Rail are freeing up space for passengers, trying to move them more dynamically along the platforms and providing additional “next train” indicators so that people do not lump together in one place before surging at once to get on a train.
At Lewisham station, in the constituency of the hon. Member for Lewisham East, Southeastern and Network Rail are also making changes to mitigate the crowding at peak times as people move between the Cannon Street and Charing Cross services. They are extending public announcement systems along the length of the platforms so that people can hear what is happening, putting up extra passenger information screens and generally trying to help passengers to get the information they need so that they can move smoothly through the station. That work is under way, and it will be complete by February. Additionally, the operators are moving existing retail units and British Transport police accommodation to make more space for passengers, and that work will be complete by July.
The key, however, is for the operator and Network Rail to put in place a timetable that delivers capacity and space when people need them. Since 12 January, a new timetable has been in place across the Southeastern network, and that includes the changes at Charing Cross. The timetable has been designed to maintain journey opportunities. To answer the point from the hon. Member for Eltham, there was planning regarding the likely changes in the timetable, and there were capacity increases for the services being put on to Cannon Street.
What is happening, however, is that passengers are still working out the best way to make their journeys, and the situation is very fluid. We know, anecdotally, that Charing Cross services are quieter than anticipated and that Cannon Street services are very busy. Southeastern says it is operating the maximum number of trains per hour into and out of Cannon Street at peak times, and there is no space for extra services, but it has put in longer trains, providing higher capacity into Cannon Street, with 8,000 additional spaces in the morning peak and 13,000 in the evening peak.
I will find out for the hon. Lady and let her know.
I am told by Southeastern that all its rolling stock is in passenger service—that goes back to the hon. Lady’s point about potential new capacity. Lengthening services into Cannon Street would therefore require a reduction in the number of carriages on other routes—for example, services to Charing Cross or Victoria. That is possible, but I should emphasise that today is the 12th working day since the new timetable started. Every day, passengers are changing their journeys. The operators have asked—I think this is sensible—for a month to review what the passenger flow looks like, so that timetabling and service lengths can, potentially, be amended.
The Minister will have heard at our meeting on Thursday that Southeastern said it had shifted around some of the carriages, taking them from some services and adding them to others. However, my constituents feel—I certainly feel the same as a user of the trains—that those carriages have gone to the longer-haul services, where people pay higher prices for their season tickets. Services from places such as Dartford through places such as Eltham and New Eltham are the ones that have suffered. Those services are not sufficient, and my constituents cannot get on them, particularly when they are going home in the evenings. We need extra carriages; we do not need Southeastern just to shuffle them around.
I assure the hon. Gentleman that I and my officials are in constant contact with the operator, and we are encouraging it to do whatever it needs to with the rolling stock to try to alleviate the crowding that is happening as service patterns change. I would hate to think, if there is excess crowding on shorter journeys, that the management was not fully aware of it and not working actively to alleviate it.
Let me briefly mention the point about new rolling stock. The hon. Member for Lewisham East is right that there is potential in the next couple of years for some rolling stock. I have checked, and about 100 class 377 units provide capacity for approximately an additional 10,000 passengers. She is right that some are already committed to go to other parts of the country—that is the way, as she knows, the cascade system works—but the stock is potentially available to come on to the franchise. We have asked Southeastern to consider all available opportunities to look at this, demonstrate the business case and really push on trying to get the additional capacity. I agree with all hon. Members that that is something we would need to do over the medium term.
This is really the key issue because it is essential, given all the disruption, that there is, if people will pardon the pun, some light at the end of the tunnel in the form of longer trains. What proportion of that Thameslink rolling stock has not been allocated to other parts of the country and is still up for grabs?
I do not know and I am not sure—I will need to check whether the information is commercially confidential—but, like the hon. Lady and other hon. Members present, I share the aspiration to reward commuters. As the hon. Member for Eltham pointed out, today we have the results of the passenger satisfaction survey. Commuters are clearly very unhappy with the services they are getting. These people are going to and from work and paying for season tickets to do so. They expect a better service.
May I touch on the point about fares that the hon. Member for Lewisham East made?
If the hon. Gentleman will forgive me, I want to make this point, because it is important. The hon. Member for Lewisham East will be aware that, until recently, fares on this franchise were rather inflation busting and measures of up to RPI plus 3 plus flex were permitted. That has been scrapped, so now passengers on this franchise, like passengers right across the country, are benefiting from this Government’s decision to freeze fares in real terms—RPI plus zero for last year and this year—and to scrap the flex, which meant that additional fares could also go up by 2%. [Interruption.] The hon. Lady says that that is not enough, but it was a bold decision to take, particularly at a time when family budgets are stretched.
I will make a quick comment, if the hon. Member for Lewisham West and Penge will allow me, about Southern, because I know it is important for his constituency. Southern’s performance currently is inexcusable, and I will make that point, as I expect other hon. Members to make it, at the performance summit we are holding next week. Network Rail’s infrastructure problems are causing many of the difficulties with the timetable along the line. I expect Network Rail and Southern to sort that out as soon as possible.
Let me make a couple of general points in conclusion. We have to learn lessons, because we are continuing to do this work at London Bridge until 2018. It is vital that whatever went wrong after Christmas—not enough communication and not enough modelling of the platform flows—is addressed, because we will be asking a lot from passengers. Let me put on the record my thanks to passengers for their tolerance at a time of great disruption. We are very aware that we are disrupting people’s lives, but the prize is a much better service and a station that is much more fit for purpose.
I am grateful to the hon. Members in the Chamber and others across the House for ensuring that all parties involved in the reinvention of London Bridge remain really aware of passenger concerns. My officials are in daily contact with Southeastern and Southern. We are all focused on the need to minimise inconvenience and maximise communication to passengers. There are constraints on what we can do, and there are years of work ahead, but I am determined that the unprecedented investment that we are making right across the country will be seen and felt as benefits for passengers as soon as possible.
This is the point that I wanted to make. The Minister will be aware that Southern has cancelled all the peak-hour evening services from London Bridge to West Croydon and is encouraging people to use Overground instead. Actually, it is encouraging them to go on to Norwood Junction and then go back to the station that they originally wanted to get to. That is now causing severe overcrowding on the Overground service, so will she look into it?
The hon. Gentleman is aware that that is a temporary reduction in the service, designed to let the new timetable, which is more disruptive for Southern operations rather than Southeastern, bed in. The hope is that those services will be restored as soon as possible. I am very aware of the concerns.
Let me put it on the record that all of us realise that many people at London Bridge station are working very hard on a daily basis to deal with the disruption. These are people on the front line—operational staff. We would all like to pass on our thanks to everyone out there who is trying to maximise convenience for passengers.
Commonwealth Immigration and Visas
[Mr Peter Bone in the Chair]
I am delighted to be able to introduce the debate. There is no doubt that immigration is a sensitive and often controversial subject. I am pleased to have the opportunity to discuss ways in which we might reshape our immigration system so that we have control not only over the numbers coming into the United Kingdom, but over the nature of those individuals wishing to work, study and make our country their home.
To be absolutely clear, I am not advocating an increase in immigration. I am, however, seeking to establish ways in which we can have better immigration. What do I mean by better immigration? I am referring to the re-establishment of the United Kingdom’s ability to be selective about who enters and settles in our country and the ability to favour immigration from countries with which Britain enjoys long-standing cultural and historical links, where English is the common language and with which we share values and principles, the rule of law, and common judicial and parliamentary systems. I am of course talking about the countries of the Commonwealth of nations, most notably the 15 realms with which we have an even closer bond and shared constitutional link in Her Majesty the Queen, who remains as much their Head of State as she does ours.
In spite of those special ties, since our accession to what was known at the time as the Common Market, Britain appears to have discarded the potential for trade, immigration and co-operation with the Commonwealth to accommodate the new European political union, which dominates so much of how we are governed today. It is time for a radical rethink.
Our immigration system is in need of complete reform and the British people are demanding change. Indeed, the time has surely come to enforce a total overhaul of the way we operate immigration in the United Kingdom, but we can do so only if a British Government, elected by the British people, can decide what British immigration policy is. We have a broken immigration system—a system in which we have neglected the possibility of positive immigration from our wider Commonwealth family to accommodate uncontrolled and indiscriminate immigration from within the EU. As a result, for example, over the past 13 years immigration from Australia and New Zealand—two nations with which we have a shared history and culture like no other, expect perhaps for Canada—has almost halved, whereas immigration from EU continues to rise at a rapid pace.
The members of the Commonwealth network of nations and territories are not part of the EU, apart from Malta, Cyprus and Gibraltar, so they have been the losers as our UK Government have sought to reduce immigration. Meanwhile, the citizens of any country that happens to have been accepted into the EU can freely enter our country without restriction.
Immigration has always been a feature of Britain’s social and economic development, over many centuries, and it has been without doubt overwhelmingly positive, with the vast majority coming to our country to work and contribute as hard-working people. It must surely be, however, the absolute right of every nation—especially a country the size of the United Kingdom, where there have to be limits—to control its own national borders and to determine its own immigration policy. With free movement from the EU, though, we have given up that right.
My hon. Friend is making some strong points. He mentioned the 15 dominions in which the Queen is still Head of State. Does he agree that because those countries have decided to keep the Queen as Head of State, their citizens should be afforded certain privileges on arrival at our ports of entry? It is ridiculous that they are confined by those barriers that accommodate the rest of the world. Those people should have special privileges afforded to them.
My hon. Friend is absolutely correct. When he was a Minister in the Foreign and Commonwealth Office, he was a champion of Her Majesty’s realms and territories. I feel that it is shameful that subjects of Her Majesty arriving at Heathrow airport are treated as if they were from any other country in the world. There are no special privileges, nothing whatever, and that is wrong. It is time for us to look at things afresh. He will recall my 2012 United Kingdom Borders Bill, which highlighted this very issue and asked the Government to take action, which, sadly, they have not done so far. I will come back to that.
The truth is that, if we are serious about restoring control of immigration and widening the base of potential future migrants to our country so that our friends from the Commonwealth may again have opportunities to live and work in this country, the EU doctrine of free movement without any control or restriction whatever must end. That would not prevent the UK from agreeing bilateral reciprocal arrangements with other EU nations, or indeed from continuing to accept EU citizens who met the criteria decided by Her Majesty’s Government and who came here, as the vast majority do, to work and contribute to the economy of our nation. Britain would, however, have the opportunity to set the rules in so far as who did and did not come in. Those from Her Majesty’s realms and territories and from the wider Commonwealth would have the greater opportunities that are reserved now only for citizens of the EU.
Surely it makes sense to establish a system with substance and purpose—one that continues to allow the brightest and best from Europe to come to Britain, but no longer alienates or excludes those from places around the world with which Britain has enjoyed much longer and closer historical links. Being a subject from one of Her Majesty’s realms or being from a Commonwealth nation should count for something when looking to visit, work, study or live in the United Kingdom. At the moment, it appears to count for little. That is our fault and we should not be proud of it.
The Commonwealth is an underutilised resource for the United Kingdom. It offers vast opportunities outside the uncertainty, stagnation and turbulence that we have endured over the past decade.
It is a pleasure to serve under your chairmanship, Mr Bone. Does my hon. Friend also agree that the Commonwealth is increasingly becoming a successful organisation that people want to join? In recent years, Mozambique and Rwanda have joined, and Burundi is very much knocking on the door and would like to enter.
Once again, my hon. Friend is absolutely correct. The Commonwealth is an organisation of the future. For a time, the FCO tended to feel that the Commonwealth was no longer relevant and that we should focus entirely on the EU, but the world has changed. Our historical, traditional links with the Commonwealth of nations can provide a way forward for Britain, so he is completely correct. Thus, not only are former colonies wanting to be part of the Commonwealth, but countries that have never had any link with the British Crown, such as Rwanda, Mozambique and Cameroon, want to join, which shows that the Commonwealth has a great future. We, as the United Kingdom, need to do more to harness the Commonwealth and make it stronger if we are to succeed in making it as relevant to our future as it has been to our past.
For so many years, British foreign policy has failed to grasp that concept, preferring to shun our traditional ties and place most of our eggs in the EU basket. Now that it is clear that trade with the wider world is becoming more important by the day, it is imperative that we change course and grasp the opportunities that the nations of the Commonwealth represent.
My hon. Friend is a great champion of the Commonwealth and those from the Commonwealth who reside in the UK. He talks about the Commonwealth’s great past and future. Does he agree that the Government have done a lot to foster trade links with other Commonwealth countries? We have seen our bilateral trade with India grow significantly. What more does he think this Government or future Governments can do to ensure that that trade increases significantly over the next decade?
My hon. Friend is completely correct that this Government have done more than any other in my memory to make the Commonwealth more significant and to develop trade and co-operation with it, but we can go only so far because, as he will know, as a nation we can sign up to trade deals with countries only via the EU—again, the EU is a block to us utilising our Commonwealth network for trade and co-operation.
Until we have a new relationship with our neighbours on the continent—one that is less of a political union—and again have the freedom to agree trade agreements, deals and immigration arrangements, we can go only so far, however positive the Conservative-led Government have been in this respect. We need to alter our relationship with the EU to allow us the freedom to develop greater trade with the Commonwealth.
Does my hon. Friend then feel that if we are going to renegotiate our relationship with the EU, we should have similar discussions in parallel with some Commonwealth countries, particularly on trade, to see what sort of relationship we can come up with and what the British people prefer?
My hon. Friend makes an excellent point. As a vice-chairman of the Conservative party, he does good work with Commonwealth countries, and I commend his enthusiasm. We need to decide for ourselves, as a nation, what we want to do not only with Europe but with the rest of the world. Part of that process should perhaps be to consult our Commonwealth friends on how our relationship can be developed in tandem with a renegotiated arrangement with the European Union. They are two sides of the same coin. We all want trade and co-operation with Europe, and good immigration from Europe as well, but sadly we have gone down that road to the exclusion of developing all those things with our Commonwealth friends. A reconfiguration is well overdue.
The UK has the largest Commonwealth diaspora in the world and many people in all our constituencies come from a Commonwealth background or have Commonwealth ancestry, yet it is much harder for someone to come to the United Kingdom if they are a citizen of the Commonwealth than if they are a citizen of an EU member state. Britain needs a renewed sense of balance, fairness and opportunity in our immigration and visa regime.
The Prime Minister has a difficult task. Having pledged to cut net immigration numbers, he has discovered that although he can reduce immigration from the Commonwealth and wider world, he is unable, under current treaty obligations, to reduce it from the European Union. That means that the only policy lever left open to him is a reduction in immigration from outside the EU—meaning, of course, the Commonwealth. The Minister will understand that that has created unintended consequences for Commonwealth nationals. For that reason, I call on her to lead a significant review of Government immigration policy and to establish a system that works for the United Kingdom, not one that is imposed on us and over which we have no ultimate control.
Apart from the restoration of British control over immigration, which would require a fundamental change in our relationship with the European Union, there are many other things that could be done in the meantime gradually to rebuild our partnership with the Commonwealth and, most especially, Her Majesty’s realms. Here are some ideas to get the Minister started. First, we should look at the UK’s tier 5 youth mobility visa. With over 60% of the Commonwealth population under the age of 30, that visa is of fundamental importance. Before 2008, the UK had a youth visa that included all Commonwealth nations and allowed any young person in the Commonwealth the chance to apply to visit and work in the United Kingdom for two years. After 2008 that visa was reformed and only four nations were granted such access: Australia, Canada, Japan and New Zealand. The scheme has now been extended to Monaco, South Korea, Taiwan and Hong Kong.
I would like the Government to consider a more Commonwealth-oriented view when looking at extending the youth visa. Working towards restoring Commonwealth countries to the visa would make young people see the Commonwealth as something of value rather than an abstraction. Importantly, the youth visa is based on reciprocal quotas—the numbers of young Britons leaving the UK should balance the number of people entering, thereby keeping net migration stable. Equally, the visa’s very nature is transient; it is not a route to remain. The changes that I propose would rejuvenate the UK’s Commonwealth policy, repair relations and replenish our soft power, so I urge the Minister strongly to consider such a plan.
The second policy proposal is the creation of a Commonwealth concession for tourist and business visitor visas. Citizens of 21 Commonwealth nations need a tourist visa to visit the UK, while citizens of 50 need a business visitor visa. Both visas, which last for six months, cost £83. That fee is perceived as making it more difficult for many Commonwealth citizens to enter the UK for tourism or business. A Commonwealth concession, set at the discretion of the Home Office, would go a long way towards building UK-Commonwealth relations.
Whatever their reason for visiting, Commonwealth tourists are important contributors to the UK economy. Commonwealth Exchange is a think-tank that promotes the trading, educational and strategic potential of the Commonwealth in the UK, and I am proud to serve on its advisory board. It has highlighted that official figures for visitors from a number of Commonwealth nations, and for those visitors’ average spends, nearly match, or else equal or even surpass, the figures for Chinese tourist visitors. There is certainly a strong economic case for increased Commonwealth tourist and business visitor visas, which I hope the Minister will also consider.
However, I put forward that idea against the backdrop of a preoccupation with Chinese tourists, the most recent demonstration of which was the Chancellor’s announcement that the Treasury will refund the first 25,000 visas for Chinese visitors between 2015 and 2017—Chinese visitors, but not Commonwealth ones. That policy is wrong-headed, especially at a time when the Foreign Affairs Committee, of which I am a member, has been refused entry to Hong Kong by China. We should not be awarding China free UK visas when it refuses entry to democratically elected parliamentarians and is not acting in the spirit of the joint declaration. Does the Minister agree that there are Commonwealth nations that are far more deserving of favourable visa policies?
In addition, it has been reported to me that the British Bangladeshi community has experienced unnecessary delays, lack of communication and inefficiency in the processing of visa applications, among other things, since the visa section was transferred from Bangladesh to New Delhi. Two years ago, the Prime Minister and I attended the British curry awards, which were founded by Enam Ali MBE. Some of the guests who were invited to that event could not obtain their visas in time. A similar thing happened at last year’s world travel market event in London, when several business delegates could not attend because of the delay in processing their visa applications at the New Delhi office. I hope that the Minister will look at that matter because Britain is losing business and good people who want to come to our country for legitimate reasons are being preventing from doing so.
Does my hon. Friend agree that we need an explanation from the Minister about the hub-and-spoke visa issuing system? Certainly in Africa, a number of smaller Commonwealth countries are now spokes and have to feed through to hubs such as Accra, Pretoria or Nairobi. It is obviously incredibly important that that system is as efficient as possible so that people from smaller Commonwealth countries who want to come to this country to trade, for a holiday or to do business have their visas dealt with as quickly as possible.
My hon. Friend makes an important point. We have all heard of concerns in that respect. The creation of hubs in various parts of the world, which are not as accessible for people, has clearly been a cost-cutting measure by the FCO, but the system makes life very difficult for people who need to get visas quickly so that they can come to our country. I hope that the Home Office, together with the FCO, will try to find a more efficient way of dealing with the problems that we are speaking about.
The question of business visas is equally important. Commonwealth countries often share our language and have a similar business culture, with similar legal systems based on the common law. The Commonwealth has key developed and emerging economies, so it makes economic and political sense to place a high value on business visits through a Commonwealth concession. That is another idea for the Minister to take back to her Department.
I draw hon. Members’ attention to the United Kingdom Borders Bill, which I introduced in the House in 2012. Although the Bill did not progress to Second Reading, there was enormous support for the principles contained in it. The idea that there should be more accessibility for citizens from Her Majesty’s realms received widespread support from several political parties. Following the Bill’s presentation, I received many messages of support from across the UK and the wider Commonwealth. I sincerely believe that we must not fall into the trap of underestimating the significance of such a relatively simple change. It is a travesty that citizens from Australia, Canada, New Zealand and Jamaica, together with those from all Her Majesty’s realms, have to queue up in the foreign nationals channel at London Heathrow airport and other points of entry into the United Kingdom while citizens from EU countries that have never had any historical connection to the Crown or the United Kingdom are allowed to enter alongside British citizens simply by virtue of their EU membership.
Since introducing my Bill, I have become aware of the SmartGate scheme in Australia and New Zealand, which allows for a separate queue for nationals from Australia, New Zealand, Singapore, the UK and the US. That shows that a similar procedure could be adopted in the UK in the context of the Commonwealth realm, thus illustrating powerfully the renewed value of being a subject of Her Majesty’s realms. Interestingly, a citizen of the UK, as a realm, would also have the chance to choose which airport queue they wanted to go through. It could be the EU/EEA/Switzerland queue, or one for Commonwealth realms. It would be nice to have that choice because we are, of course, part of both. I might be pre-empting the Minister by saying that the UK has made it easier for Australians, New Zealanders and Canadians to visit the UK through the registered traveller scheme, but although that policy is welcome, its scope is too limited, and we could and should do better.
If the Government wanted to be bolder, they could consider the London Mayor’s proposals for bilateral mobility zones between economically developed Commonwealth nations—they are now dubbed “Boris bilaterals”. Commonwealth Exchange has found that that could work on a similar premise as the trans-Tasman travel arrangement, which exists between Australia and New Zealand. That might prove difficult, but I am aware that such a proposal has support from the New Zealand Prime Minster and the tacit backing of Tony Abbott’s Government in Australia. The UK holds the key to advance such a policy, so will the Minister undertake to examine the proposition and make a statement?
I would like the Minister to answer several key questions. Will she meet me and a delegation from Commonwealth Exchange to discuss Commonwealth immigration and visas in greater detail? What assessment has been made of the tier 5 youth mobility visa, and which nations is her Department looking at adding? Will she update the House on visa developments with Jamaica and South Africa, as those nations have had tourist visa restrictions for 11 and five years respectively? Will her Department consider ways to create a Commonwealth concession for the tourist and business visitor visas? Will she conduct a feasibility study for a pilot of a Commonwealth realm airport queue or smart gate at Heathrow and Gatwick? Has she made an assessment of the London Mayor’s labour mobility zone between Australia and New Zealand, and will she make a statement?
I believe that Britain has focused for far too long on the European Union, which I believe is distracting us from the rest of the world and the opportunities that lie beyond the shores of Europe. In 1973, we in this country turned our back on our Commonwealth cousins, which was the most short-sighted act carried out by any British Government in my lifetime. Let us begin to end that cold shoulder treatment in 2015. I hope that my hon. Friend the Minister will be the one to lead that change of direction.
In 2010, the Government said that they were putting the “C” back into the FCO, but only with a concerted effort across Departments, and particularly the Department for Business, Innovation and Skills and the Home Office, will the UK be able to state proudly that it has Commonwealth policies fit for the 21st century. We must remove ourselves from the unhelpful and unfounded mindset that association with the Commonwealth is nothing more than reminiscing about Britain’s colonial past and instead recognise that there are huge economic, cultural and diplomatic opportunities that are today being missed. That short-sightedness has done nothing to help our country or the countries of the Commonwealth, and we must move on from it once and for all. Let us begin today.
I congratulate my hon. Friend the Member for Romford (Andrew Rosindell) on his powerful speech and on bringing the subject before the House. I shall make a few remarks on visas, starting with visitors visas, but want to preface that by underlining the importance of the Commonwealth, which my hon. Friend and other contributors have rightly emphasised.
The population of the Commonwealth far outweighs that of the EU and one Commonwealth nation alone, India, has a bigger population than the countries of the EU put together. Economic development in Commonwealth countries—not only the fantastic growth in India, but the substantial growth in many countries in sub-Saharan Africa and in Asia—has shown that the Commonwealth is, as my hon. Friend said, the place of the future. That is why countries have been queuing up to join. I am talking about countries that did not have a particular historical connection with the United Kingdom, such as Rwanda and Mozambique, which are already part of it, and Cameroon. Part of that country was under British administration, part under German, and at one time, after the first world war, part was under French administration. Burundi is also seeking to join the Commonwealth, and I believe that other countries have expressed interest.
It is therefore vital that we maintain, and indeed enhance, the links with Commonwealth countries. That is not only about history; it is about business opportunities. For instance, in Tanzania—I refer Members to my business interests in Tanzania, which are in the Register of Members’ Financial Interests—the United Kingdom is the single biggest investor and trading partner. These days, we tend to think that China has taken over everywhere in Africa, but that is not the case at all. In many countries, the United Kingdom is still a major trading partner and investor, and it is, indeed, growing in importance in those countries.
On the issue of visitor visas, a few months ago, a Tanzanian lady, Rhodi Samwell, was invited to the United Kingdom on an extremely important mission. She works for the Anglican diocese of Mara on female genital mutilation, and she is building a safe house in the area for women and girls who do not wish to be subjected to that practice. The House has debated this issue many times in the past year, and I know the Minister is keenly concerned about it.
At my invitation, Rhodi Samwell was coming to this country, and indeed to the House, to talk to the all-party group on Tanzania about her work, but she could not get a visa. Her application, which was processed in Pretoria, was refused. Only after a large number of Members of the House and the other place wrote to those involved and pressed her case was she finally able to come here on a visa.
This lady was in full-time, secure employment with the Anglican diocese of Mara. She had the backing of the Tanzania Development Trust, the Britain-Tanzania Society and many other reputable organisations, which bore witness to the fact that she would be supported while she was here and that she was planning to return. Indeed, the very reason she was coming here was to help to enable her to return home to fulfil her dream of setting up a safe house for women and girls. However, the United Kingdom was unable to issue her with a visa without pressure from Members of Parliament and without volunteers across the country putting in a great deal of time and effort. That does the United Kingdom’s reputation no good.
I am glad to say that, ultimately, Rhodi Samwell was able to come here, and she gave an excellent talk in the House of Commons, alongside my right hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone), who was then an International Development Minister. We were delighted to see her. She gave talks all across the country. As a result of her visit, the remaining money needed to build the safe house was collected— indeed, school children in my constituency also contributed. The safe house is now in operation, and more than 100 girls and women have found help there.
That is just one instance, but I have heard of many others from right hon. and hon. Members in both Houses. People are doing fantastic work for non-governmental organisations or charities, and we want to hear from them first hand. They are invited here, and they will be fully provided for, but the only obstacle is a visa. Most of the time, these are people from Commonwealth countries.
The second issue I want to bring up is business visas. It is vital that visas are made available quickly and easily for those with whom we wish to do business. Before coming to this place, I travelled to Tanzania and other countries fairly frequently on business. As a British citizen, I could send my passport, together with the necessary documents, to the Tanzanian high commission in London, and sometimes I would receive my business visa back within three days. However, Tanzanian business people, who are often running businesses that are far bigger and of far more significance to the United Kingdom economy than that which I ran, sometimes find it incredibly difficult to get visas. That cannot help our trade with Tanzania or, indeed, with other countries.
Finally, there is the issue of family. The Commonwealth of nations is a family of nations, but it also contains family members of people in pretty much every constituency in the House. Surely it is important that we facilitate family visits that are done in the proper way—where it is clearly shown that these are not visits to seek long-term admission to the country, but family visits to see nephews, nieces, grandparents or grandchildren. That is all about humanity.
In those three areas—visits from charities and non-governmental organisations, visits for businesses and visits for family—it is surely possible to organise things in such a way that the cost is reasonable and that applications are dealt with in a matter of days or weeks, rather than the months we sometimes hear about.
I want to give a final example from my own experience to show what things can be like. My son was born in Nairobi about 25 years ago this month. We took the birth certificate and one or two other documents to the British high commission there, and we were issued with a British passport pretty much over the counter. A constituent, whose grandchild was born in Kenya last year, went through the same process, albeit with one or two complications. However, those complications should not have resulted in it taking several months for that child to be issued with a passport. Surely, things should have gone forwards after 25 years, not backwards, particularly with the access we now have to technology, but it seems that things were a lot easier 25 years ago.
It is a pleasure to serve under your chairmanship, Mr Bone. I thank the hon. Members for Romford (Andrew Rosindell) and for Stafford (Jeremy Lefroy) for their contributions on this important subject, which is worthy of discussion with the Minister today.
The subject of the debate is the Commonwealth and visas, and it is important that we begin, as the hon. Member for Romford did, by recognising the crucial importance of the Commonwealth to the history of the United Kingdom and our close ties with countries across the Commonwealth.
Yesterday was Australia day. Today, we celebrate the 70th anniversary of the liberation of Auschwitz; the second world war saw members of armed forces from across the Commonwealth join soldiers from the United Kingdom in the fight against fascism. Last year, we celebrated the start of the first world war. My grandfather, who was from the Lancashire area, fought his first battle in March 1915—almost 100 years ago—alongside thousands of Indian troops at Neuve Chapelle.
We have a long history with the Commonwealth, which we need to celebrate and recognise. As a member of the executive of the Commonwealth Parliamentary Association for five years now, I know how important that link is and how valued our parliamentary democracy is by the 53 nations of the Commonwealth across the world.
As the hon. Member for Romford said, what is important is not just historical ties, parliamentary democracy or the history of empire translated into a modern partnership. The Commonwealth is also a crucial economic driver, which we need to look outwards to. I have been to Australia on holiday, and I have been to New Zealand with the Commonwealth Parliamentary Association. What struck me on both occasions was that those countries are beginning to look towards the east, because that is where their market is. We need to look at how we can cement and develop our ties in a strong, effective way.
With a combined population of 2.3 billion people, the Commonwealth is a significant market, and there are significant transferable skills that we may want to work with and develop. As the hon. Gentleman also said, there is also the potential for export, tourism, business, family and education links, and we should look at how we can facilitate and build on those, while maintaining the integrity and strength of our borders. The hon. Member for Romford took the route I expected—of querying why we are cosying up to Europe while partly shutting the door on our historical Commonwealth links. My view of the European Union is slightly different from his. He can speak for himself, but I recognise that we are still part of a family of nations in Europe, and have historical ties to a range of those. Portugal is our oldest ally, for example, never mind the other countries that we have worked with.
I mentioned that, 100 years ago next month, my grandfather was fighting in the trenches of France with Indian soldiers, against Germans. He would be happy today that we are part of a family of nations in Europe as well as the Commonwealth. Relatives of mine who lost their relatives in the second world war, when the Commonwealth fought side by side with us, would also welcome our present economic partnership with Europe, in addition to the fact that we look out to the wider world. The hon. Member for Romford raised conflicts in talking about tightening our relations with Europe and relaxing them with the Commonwealth, but I do not share his view. I think there is potential in both areas.
The right hon. Gentleman made the point that we are in an economic partnership with the European Union, but we are not. We are in a political union, and that is different from a simple economic partnership. If we were in an economic partnership alone, we could do other things with the rest of the world, including the Commonwealth. The fact that we are in a political union and not the economic partnership that was the original intention—or certainly the British people’s original intention—prevents us from doing more with the Commonwealth. Does the right hon. Gentleman accept that point?
We have a large trading partnership with Europe and political union through the European Parliament and other agencies in Europe, and I do not have a problem with that. We will disagree on this issue.
We also have the potential for economic growth in Europe. The biggest employer in my constituency is a company that makes the planes that will probably take the hon. Member for Romford to Australia: Airbus. They are made by Britain, France, Germany and Spain, and free movement means that French people work in north Wales, and north Walians work in France, making the biggest plane in the world and our biggest export. That is a positive. The second and third biggest employers in my constituency are the car manufacturers Toyota and Vauxhall, and they are probably in that area for access to the European market.
There are big issues to debate, but perhaps not today, because I want to focus on how to encourage more aspiration and partnership in the Commonwealth without throwing out a valuable partnership in Europe. I am interested in where the hon. Member for Romford thinks the 1.6 million Britons currently living in France, Germany, Spain and Italy would go if we suddenly closed our borders to people from those countries. I would welcome his thoughts on that—another day, perhaps.
In preparation for the debate I looked at the Commonwealth Exchange report, which is valuable for this Government and future Governments as a way of generating discussion and positive suggestions about how to attain the hon. Gentleman’s objectives. It suggests the restoration of the youth mobility visa, and considers the idea of Commonwealth concessions for tourist and business visas. We have heard the case for “Boris bilaterals”; I would not necessarily call them that, but there is potential to examine the idea in detail. The idea of a Commonwealth component to exceptional talent visas is worth considering; another important contribution would be to think about how to make it easier for business people throughout the Commonwealth to get business visas to come to this country.
The hon. Gentleman did not focus much on post-study work visas, but they are also important. Representations have been made to the Opposition about them from people who want to come to the United Kingdom to study and then to work here for a short period afterwards—particularly those who have been sponsored. All those things are worth exploring and reviewing.
As the potential Minister in 12 weeks’ time, I am particularly drawn to the idea of the youth mobility visa. It could be very positive. If young people between the ages of 18 and 30 come to the United Kingdom and contribute to the economy and to life here, they should, after leaving to become chief executives of companies throughout the world, always remember the importance of the UK in their development. That is very important. It is worth looking at the idea of annually reviewing the case for returning more Commonwealth nations to the approved youth mobility list, and expanding it. We also need to think about how, with the immigration department, to improve our use of technology to achieve greater transparency, so that the public can be better informed on the matters in question.
The Commonwealth Exchange report makes it clear that visitors from Nigeria, South Africa and India are more significant contributors to the UK economy than Chinese tourists, because of relatives, business and historical ties. We make efforts to attract visitors from China to the UK, and we should make significant efforts to make the visa application process simple for people from the historic Commonwealth countries.
I challenge the assertion that we could drop the visa price. I do not say it cannot be done, but I should be interested in a proper review of the costings by the hon. Member for Romford or the Home Office. We need to know whether that uncosted proposal would generate a sufficient increase in visitors to offset the loss of income. Costings are important, and the hon. Gentleman would expect no less of me if I were to make such a proposal.
The hon. Member for Stafford made a cogent point about making it clear that it is easy to get business visas. It is important that people who want to invest here, or in whose countries we invest, and who do business with us, should be able to get their visas approved speedily. It is worth thinking about extending the idea of a faster track for visas for regular visitors to the UK. Business demands better, and we should not turn the best and brightest away. We need to review the matter, as part of a range of measures that we have been considering.
I still think that the central problem faced by the hon. Member for Romford is the Prime Minister’s net migration target. The Prime Minister said at the last general election that he would get migration down to the tens of thousands; to try to achieve that—which he has failed to do—he has had to consider making it more difficult for people from outside the EU to come to the United Kingdom. The target has been missed. The Government have said it will not be met. We should consider calibrating it.
For example, under a future Labour Government I would not want students to be part of the net migration target. The hon. Gentleman made the strong point that students who come here, who have historically included those from Australia, New Zealand, India, Pakistan, African countries and the wide range of Commonwealth countries, do so because we have some of the best universities in the world, and because they feel a historic affinity to the United Kingdom and want to be educated and to work here. The net migration target has caused great difficulties in that market, particularly in India and Pakistan but also elsewhere in the Commonwealth.
With some general tweaks in policy, even without the measures that the hon. Gentleman has proposed, we could and should make it easier for people to come to the United Kingdom to study and to learn. We need a general overhaul of a policy that is damaging the United Kingdom’s £18 billion-a-year university industry. That is particularly important because people who come to study in the United Kingdom do not simply learn about and enjoy our country and receive the best education; they will, at some point in their lives, be senior doctors, senior business people and world leaders who will do business with this country.
I happened to see in the Evening Standard that 200 Australian paramedics landed in London yesterday, having been recruited from Sydney, Adelaide, Melbourne and Brisbane for the London Ambulance Service. That shows that, for reasons that are not only historical but practical, we must look outwards to the rest of the world and to the Commonwealth. I support measures to manage migration in the interests of the United Kingdom, and if that means Australian medics, Indian students or Tanzanian business people, that has to be good. The positive contribution that such people make is sometimes lost in the ever-present debate about immigration issues.
I do not think that anybody in this room would disagree with what the shadow Minister is saying. The crux of the matter is that Australians have to jump through lots of hoops to be allowed into the country, but those from EU countries do not jump through any hoops; they can just walk in. Surely he can see the unfairness in how the system has developed.
We have discarded opportunities with countries with which we have the most in common and the closest connections historically. Successive Governments have made it harder and harder for citizens of the Commonwealth, and particularly those of the realms, to come into this country. At the same time, anyone from any country that happens to join the EU can just walk in unrestricted. Surely he can see that that is an unfair situation and that we need to redress that balance.
That is one of the conundrums of membership of the European Union. It goes with the club. However, there are probably as many Australians in the United Kingdom now as there are Greeks. We are not talking about two sides of a coin; we can look outwards to the world while recognising our responsibilities in the European Union. That is a wider debate, and I appreciate that the hon. Gentleman has focused us on a narrower issue.
I want to give the Minister the opportunity to contribute to the debate, so I will draw my remarks to a close. We must look seriously at possible solutions. I am attracted to some, and I am not attracted to others. In particular, I am not attracted to separate airport queues, as the hon. Member for Romford has proposed. The key message that I take from the debate—in the spirit of friendship, I hope that it is one that I can share with the hon. Gentleman—is that we should look at how to make it easier for businesses, students and tourists to come to the United Kingdom as part of managed migration. We need to know not only when they come, but when they go. We need to know that they are coming here for the reasons that they have given, and we need to encourage historic ties to ensure that we grow our economy for tourists, businesses and students.
I still think it is important—here the hon. Gentleman and I may part company—that we are part of the European Union and part of free movement within the European Union. Although we can apply certain restrictions on benefits such as child benefit and working tax credits, we still have free movement, which allows Britons to work and live in France and Germany, and allows Poles, Italians and others to work in Britain and elsewhere. That is part of the deal, but we should not close our eyes to the wider world.
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Romford (Andrew Rosindell) on securing a debate on this important matter, not least because it gives me a welcome opportunity to provide an update on the progress we have made.
The right hon. Member for Delyn (Mr Hanson) spoke about the links that we have with the Commonwealth, particularly through world war one. On Holocaust memorial day, we should remember the links we need to have across the world. If we understand each other’s way of life, we will see that we all want the same things and we will maintain peace. The Commonwealth and the EU both have an important role to play in that respect. I hate to do this to the right hon. Gentleman, whom I respect enormously, but I am sure that he meant to say “commemorate” rather than “celebrate” world war one. I am sure that the record will be corrected accordingly, because I know that he would not have wished to give a false impression.
I will endeavour to address all the questions that my hon. Friend the Member for Romford has raised. In answer to his first question, which was a request for a meeting, I am happy to agree and I hope that it can be organised shortly.
There is much to be gained from promoting the trade, educational and strategic capabilities of the Commonwealth, and we are doing a lot of work on that. My hon. Friend the Member for Reading West (Alok Sharma) talked about the work that the Government have done to forge links with Commonwealth countries, particularly, in his case, India. I pay tribute to him for his excellent work in, for example, leading trade delegations to ensure that we maximise those opportunities. Businesses in all our constituencies benefit from trade with Europe and with Commonwealth partners. That is incredibly important and should not be forgotten.
I believe that our offer to students to stay in the UK after their studies is an excellent example of the work that we are doing. I will talk later about some of the things we do with students to ensure that Commonwealth students benefit. The building of links with the Commonwealth should never be to the detriment of the security of our borders. As the Minister with responsibility for modern slavery, I am particularly concerned about that. I will talk about how the Commonwealth can assist us in the important work of tackling modern slavery and human trafficking. I know that you have spent many years working on that area, Mr Bone, and I bow to your considerable expertise.
The UK is committed to the Commonwealth and to our relationships with all member states. The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), who has responsibility for the Commonwealth, has championed the UK’s relationship with the organisation, which we value greatly as a symbol of democratic values and prosperity.
The Commonwealth is unique in having a young, vibrant population of more than 2 billion people, nearly half of whom, as my hon. Friend the Member for Stafford (Jeremy Lefroy) pointed out, are in India. It spans every inhabited continent. It is far more than simply a grouping of Governments, and we see potential in its future. That is why we continue to invest so much in the Commonwealth and we want to welcome people from right across it to the UK. There is much that we can do together to further the development of our countries, whether in education, health or trade, and we should take advantage of our shared values to enable us to do so. It is difficult to think of another organisation that brings together the representatives of 53 diverse sovereign states from each and every continent, and that gives each one, large or small, an equal voice in global affairs.
My hon. Friend also mentioned the attractiveness of membership of the Commonwealth. He is absolutely right, and it is incumbent on us all to send out the clear message that membership is a wonderful privilege and that we want to encourage countries to come forward and join with that diverse and exciting group of sovereign states.
Business and trade are areas in which the Commonwealth has great potential. Intra-Commonwealth trade in goods is already worth some £300 billion, built on our inherent advantages of a common language, shared legal principles and a commitment to inherent values and rights. Those advantages provide solid foundations for doing business, and they create a platform for trade, investment, development and, in turn, prosperity. That leads to what we call the Commonwealth effect, which studies suggest is worth between 20% and 50% in trade advantage.
The United Kingdom has a growing economy and a proud history of tolerance and acceptance of those who genuinely need our protection. It is, therefore, no surprise that we are an attractive destination. With that, however, we face particular challenges on all forms of immigration. My hon. Friend the Member for Romford introduced the debate by saying that immigration is a sensitive issue. He is right, but, despite those challenges, we are making significant progress on ensuring that our immigration system works in the national interest. He talked about a broken immigration system, but I do not believe that we have a broken immigration system today. We inherited a broken system of open-door immigration, and the right hon. Member for Delyn was a member of a Government who had an open immigration policy, but this Government have taken significant steps—I will address some of the steps we have taken—to address the important issues of EU and non-EU immigration.
To clarify, I spoke about a broken immigration system, but I commend what the Government are doing to change the shambles that we inherited five years ago. The system is broken in the sense that we have no power to control immigration from the EU. Whoever is in power after the election, no one can decide who comes in from the EU because we have given away that power. In that sense, the system is broken. We have failed to reduce immigration overall, which we promised to do, because we cannot control immigration from Europe; we can control only immigration from outside Europe. That is why I said the system is broken.
I understand my hon. Friend’s point, and he will forgive me if I indicated that I understood it differently. The Government have taken significant steps to address that matter, and if we form the next Government, as I fully intend—I apologise to the right hon. Member for Delyn, but I fully intend to be sitting in this seat in 12 weeks’ time—the excellent measures that the Prime Minister set out in his speech close to my constituency in Staffordshire just before Christmas will enable us to take even further steps to ensure that free movement within the EU comes with responsibilities and that we do not have free movement of criminals, which I particularly care about, or for welfare benefits. There is agreement on both sides of the House that access to welfare payments for non-UK nationals should not come without the responsibility of having contributed to the system.
The immigration system plays a strong part in supporting growth and meeting the needs of UK businesses. Migrant workers can fill skills gaps in our labour market and help to boost our economy. However, as the economic recovery continues, we are clear that employers should look first to recruit people who are already in the UK and are already UK nationals.
The Government are aware of the Commonwealth Exchange report “How to Solve a Problem like a Visa”—I commend the Commonwealth Exchange for its engaging title—and we are working with other Commonwealth countries to consider options to improve migration opportunities within the Commonwealth. Although the UK is happy to work with and consider ideas proposed by Commonwealth partners, the UK maintains that immigration and visa controls are a matter for the UK Government. It is important to remind the House—I know this has been mentioned already—that citizens of the majority of Commonwealth countries, 31 out of 53, do not require a visit visa to come to the UK.
My hon. Friend the Member for Romford made the point that visas are an effective tool for the UK in reducing illegal immigration, tackling organised crime and protecting national security. The visit visa regime is an important tool in reducing the national security threat to the UK, allowing us to intervene in a number of ways before someone arrives in the country. We can prevent someone from coming to the UK by refusing a visa or, where appropriate, we can allow travel while setting up an operational response when someone in whom we are interested arrives in the UK. The information provided in the application process also allows us to identify links about which we would not otherwise have known. The backflow of data can be vital to new investigations, and the security and intelligence agencies require a biometric visa regime for all visa nationals.
Visas have a role to play in reducing crime. We can use the application to check whether someone is known to international partners, and we can check a range of databases to see whether someone has a criminal background here in the UK.
Finally, the process helps to tackle illegal immigration. The visa process enables us to check whether the applicant has a genuine reason for coming to the UK and enough money to support themselves. The use of biometrics enables us to lock an individual securely to their identity so that we know who we are dealing with.
As the Minister with responsibility for serious and organised crime, I know it is incredibly important that we keep in mind the security of British nationals with regard to foreign offenders. Commonwealth countries feature in the top 10 nationalities of foreign national offenders and, sadly, the top two nationalities are Commonwealth countries: Jamaica and Nigeria. We are working closely with those countries to ensure that we have upstream work to deal with foreign national offending so that it does not hit our streets, but I want to ensure that people in Romford, Stafford, Staffordshire Moorlands, Delyn, Tamworth and Wellingborough can walk the streets knowing that foreign national offenders are not coming to the UK without our knowledge. We should all recognise that that is incredibly important.
Economic factors are a big part of the decision on whether to impose a visa on a country, as they can be a big pull factor on illegal migration. Nevertheless, because of the traditional ties that we have with the Commonwealth, the UK is arguably more generous in that regard. Eighteen of the 31 Commonwealth countries with visa-free access to the UK, which is more than half, are classed as developing nations by the World Bank, which shows that there is occasionally a different approach to Commonwealth countries. The EU economies, in contrast, are more on the same economic level as the UK, with the majority being in the world’s 50 richest countries based on gross national income per capita per year. Economic criteria are one area of assessment for countries that want EU membership under the accession criteria.
I always think of immigration as being like the movement of air: it moves from high pressure to low. Wind is created when high pressure moves to fill a low-pressure gap. If we consider that high pressure for immigration is poverty, lack of opportunity and lack of education and that countries such as the UK represent low-pressure areas where there are opportunities, jobs and the potential to achieve wealth, it is understandable why people want to move from one to the other. Our job is to ensure that, when we look at the movement of people, we do not get to the point where, continuing the analogy, the low pressure in the UK becomes the high pressure that means we are overburdened—that is a strange analogy, but I hope it makes sense. I like to perceive immigration as being like the movement of air around the world.
Even within the EU, as the Prime Minister has made clear, disparities in income per head, as well as disparities in labour markets and work opportunities, create incentives for migration—let us remember that in the past four and a half years the UK has created more jobs than the rest of the EU put together. That is why the Government have started a debate within Europe on future accessions, such as linking freedom of movement to relative wealth and, of course, limiting the access of EU nationals to welfare and other services.
Visa regimes for some Commonwealth countries are an effective tool for the UK in reducing illegal immigration, tackling organised crime and protecting national security. The visa process enables us to check whether an applicant has a genuine reason for coming to the UK and enough money to support themselves. We take our duty to protect the public extremely seriously and, where foreign national offenders commit serious crimes in the UK, it is right that they are brought to justice and removed from the UK at the earliest opportunity. Since April 2010, we have removed more than 22,000 foreign national offenders. Where a Commonwealth national commits an offence in the UK, we will pursue deportation, unless they were resident in the UK before the commencement of the Immigration Act 1971. Visa regimes are an important part of the UK’s immigration system, which is fair to British citizens and legitimate migrants, and tough on those who flout the rules.
The UK has a flexible policy for visitors that enables people to come for a range of purposes. Work is under way to streamline the policy further and consolidate the routes that will make the system even more accessible and provide greater flexibility. I acknowledge, however, that obtaining a visit visa for the UK is an inconvenience for some, which is why the UK has invested heavily in ensuring that applying for a UK visa is as easy as possible.
My hon. Friend the Member for Stafford spoke about a specific visa case, although I cannot comment on the individual circumstances of that case. It is important that Members of Parliament always raise such cases because, no matter how good the system, there will always be the odd occasion when something does not quite work as it should. I am glad that the lady in question was able to visit the UK, and that my hon. Friend could help her in that regard.
We have upgraded our entire network of visa application centres to increase capacity. We have made our processes less bureaucratic, and we ensure fast turn-around times and offer appointments out of working hours. We have extended our three-to-five-day priority service, which is now available in more than 100 countries, and we have introduced a passport pass-back service in a number of countries so that customers can retain their passport while their UK visa application is being processed. A new super-priority 24-hour visa service, building on the popularity of the three-to-five-day service, has been introduced in India and China and will be extended to New York, Abu Dhabi, Dubai, Manila, Istanbul, Bangkok and Pretoria by April 2015.
My hon. Friend the Member for North West Norfolk (Mr Bellingham) mentioned the hub-and-spoke model for visa applications. We have more than 300 visa application points around the world, connected to a network of decision-making hubs. They are in similar places to the ones I just mentioned: Beijing, Manila, Abu Dhabi, Shanghai, New Delhi, Riyadh, New York, Istanbul, Chennai, Bangkok, Mumbai and Pretoria.
The next generation of the outsourced visa project has delivered the next set of outsourcing contracts for the visa application process, including biometric enrolment, courier services and interviewing facilitation. The new contracts have allowed us to increase the number of application points globally, offer improved customer services including increased access to premium priority services and deliver efficiencies in the visa application process. To increase access to our visa services overseas, we have considered how best to support our operation and our customers, including by extending opening hours in some locations and trialling new “user pays” services in developing markets.
As for all such important new projects, will the Minister undertake to get a bit of customer feedback, particularly from Members of Parliament, to whom constituents often come as a matter of last resort when, for instance, a business partner, relative or non-governmental organisation worker whom they are supporting has spent weeks or even months trying unsuccessfully to get a visa? Will she consider collecting information from colleagues and seeing how the system can be improved? Clearly, if this is a new system, we will want to ensure that it works as efficiently as possible.
I assure my hon. Friend that we in the Home Office take seriously all comments and feedback from fellow Members of Parliament on all aspects of our work. He makes an important point about ensuring that we take seriously our colleagues’ feedback when their constituents experience new systems, because that feedback gives us on-the-ground evidence about what is happening and how it is working. I welcome comments from all Members about how the system affects their constituents and those constituents’ families. I have said that all the changes are working, and I hope that we have proved that they are. They provide greater flexibility and choice, and we know that they have been welcomed by many travellers and tour operators.
On longer stays, the UK views the Commonwealth as an important partner in helping the UK to grow. A number of routes are open to Commonwealth citizens who want to work in the UK. There are further provisions specifically for Commonwealth citizens, such as the UK ancestry route. My hon. Friend said that the Commonwealth was a family, and he is right. When I visited Pakistan last year, it was extraordinary how familiar it looked, given how Pakistani culture has become so commonplace within UK culture. The furnishings, the look and the things that we talked about—cricket, for instance—are common across the Commonwealth. In fact, during my visit to Islamabad, I do not think I met anybody who did not have family in Britain.
The UK ancestry route is for Commonwealth citizens with a UK-born grandparent who intend to work in the UK. Applicants do not need to come for a specific job and are not restricted to graduate-level occupations. They may be accompanied by dependants and can apply for indefinite leave to remain after five years’ residence. In 2013, a total of 4,100 UK ancestry visas were issued, including 1,600 to Australians, 500 to Canadians, 1,000 to New Zealanders and 870 to South Africans.
My hon. Friend the Member for Romford mentioned the UK’s youth mobility scheme which, as he rightly said, operates in eight countries, three of which are Commonwealth countries: Australia, Canada and New Zealand. It enables young people to come to the UK for up to two years to experience UK culture. The UK is happy to engage in discussions with any country meeting the YMS eligibility criteria, which include presenting a low immigration risk to the UK, having satisfactory returns arrangements and offering a reciprocal arrangement for young UK nationals. My message to those countries is, “Please come forward and talk to us.” We are open to talking to countries that want to be part of the arrangement to see whether the eligibility requirements and reciprocal arrangements can be put in place to enable young people from the UK and Commonwealth countries to enjoy each other’s culture by living in each other’s countries.
The right hon. Member for Delyn wanted to remove students from the immigration target. That might seem like a quick fix for reducing immigration levels, but it is important that we understand how many students are here in Britain and ensure that they are leaving, as we will be able to do much more effectively when exit checks are introduced this spring, because we know that the student visa route was being exploited. This Government have clamped down on nearly 800 bogus colleges, slashed 45,000 visas from the further education route and cut family visas by nearly one third since we came to power. Our reforms have reduced net migration from outside the EU and, importantly, ensured that our higher and further education systems are not being abused. I caution the right hon. Gentleman against removing student numbers from the net migration figures. Although that might give a short-term boost to the figures, it would not enable the Government to manage the situation, thus leaving the potential for that important route to be abused, as has been the case in the past.
We have an excellent offer for students to stay in the UK after their studies. In April 2012 we closed the old tier 1 post-study work route, which gave two years’ unconditional access to the UK labour market, allowing many students to stay on in low-skilled work. We have replaced it with a more selective system. Graduates who get a graduate job that pays a graduate-level salary can stay in the UK, and there is no limit on their numbers. Also, we have created a scheme for graduate entrepreneurs and doubled the number of places on it to 2,000, as well as creating a new visa for graduates wishing to undertake a corporate internship or professional training related to their degree.
We are continuing to ensure that the scheme for the exceptionally talented attracts those who are already internationally recognised at the highest level as world leaders in their particular field, or who have already demonstrated exceptional promise. We wish to encourage more take-up of that route, and we are working with the endorsing bodies to do so, but the number of places available—1,000—is a limit, not a target. We wish to attract exceptional talent, wherever it comes from.
On 1 December 2014, the UK introduced new “transit without a visa” provisions that make it easier and clearer to transit through the UK. Commonwealth citizens who hold valid exemption documents, including visas for Australia, New Zealand, Canada and the US, which is a close partner, although it is not in the Commonwealth, can transit through the UK without a visa, regardless of where they are travelling. The UK has also reduced the cost of the direct airside transit visa to £30, making it cheaper than the Schengen alternative for the citizens of the 21 Commonwealth countries who need to apply for one.
Also, after a successful pilot, on 17 November last year we launched our new registered traveller scheme. The scheme permits approved members who undergo advanced security checks access to our e-passport gates at Heathrow and Gatwick, or the option to use the EEA queue at Heathrow or a special RT lane at Gatwick, expediting their clearance through the border. The scheme is open only to a select number of countries but, crucially, travellers from Canada, Australia and New Zealand who are aged 18 or over, meet the criteria for the scheme and travel to the UK at least four times a year are eligible to apply. Applicants pay an average membership fee of £50, and since the scheme’s formal launch in November, more than 5,000 regular travellers, almost a quarter of whom come from Canada, Australia and New Zealand, have been approved to join it. Keeping the UK’s borders secure is our priority but, at the same time, we want to welcome legitimate visitors and trade that contribute to the UK economy and to show that we value our links with other countries. Using the latest technology helps us to do both, and the scheme is proving popular with regular travellers.
My hon. Friends the Members for North West Norfolk and for Romford talked about separate entry as a possibility for Commonwealth citizens, or for citizens of those Commonwealth realm countries for which Her Majesty the Queen is Head of State. Any policy or operational decision to create an additional line for Commonwealth nationals at ports must be taken with due regard to the wider operational impact—the likelihood of placing an additional burden on port operators—and the impact on other passengers. That is key to ensuring that any benefits to a limited number of individuals are not outweighed by a negative impact on border security operations more generally by constraining UK Border Force’s flexibility to respond dynamically to fluctuations in passenger flow.
Having visited UK Border Force and seen its work, I can say that there is very careful management of the lines at the borders. We have a registered traveller scheme that enables people who have gone through pre-clearance to go through e-gates, which is the quickest and easiest way to access the UK, and such people include those from Australia, Canada and New Zealand. However, having a separate route for those travellers from Commonwealth countries who do not have registered traveller status would, in many cases, hamper UK Border Force’s ability to deal with fluctuations in arrival flows.
Let me give an example of that. If a flight arrives from Jamaica, it would be highly likely that many of its passengers will be UK nationals who have visited Jamaica, but many other passengers would be Jamaican nationals. Due to the prevalence of foreign national offenders from Jamaica, we need to check those people and ensure that they go through the proper immigration and border gates, as would be the case for people coming from places such as Albania, or perhaps south-east Asia. We want to ensure that those travellers have the right security checks at the border. It would create a problem if we had a separate Commonwealth gate when all the passengers being dealt with had arrived from Commonwealth countries, meaning that there was only a limited number of gates through which those passengers could pass although there were many other gates available for passengers whose flights had not yet arrived.
To give UK Border Force the flexibility it needs, if it felt that it would be appropriate to have specific gates in operation to help its staff, that would be entirely down to the Border Force itself. However, we should not try to restrict it, given how its staff have to manage flows of arriving passengers. It does not want to keep people waiting for longer than the 40-minute target that we have set.
The Minister seems to be saying that people from countries in which the Queen is Head of State—the realms—must go through security checks that are perhaps more stringent than those for an EU citizen. I find that strange, because Australia, New Zealand, and Jamaica, which she mentioned, are countries that have fought for King, Queen and country and stood behind us. They have the Queen as their Head of State, yet we treat people from those countries differently from individuals from European countries with which we have had this new partnership for only a few years—since they joined the EU. I understand why people in the Commonwealth countries feel that we have let them down badly over this issue. Surely this should be about not just operational convenience, but our cousins throughout the world with whom we have so much in common and to whom we owe so much.
I thank my hon. Friend for his comments, but perhaps I can clarify the situation. This is about having information and knowledge about people who come into the UK to ensure that they will not hurt our citizens. Within the EU, there are information exchanges for criminal records, such as the European criminal records information system, and data are available about criminals’ past activities. As the Minister with responsibility for serious and organised crime, I am determined that we have that same level of information exchange with other countries. Actually, I would like that same level of information exchange across the world.
I have attended meetings with Caribbean Community countries in which I have encouraged them to adopt the kind of criminal information exchange that we have in the EU. If they had that, we could start to have some certainty about how we deal with people travelling to the UK from those countries because we would then have any relevant information about criminals’ past activities.
This process is about the practicalities of how we ensure that people coming into this country are not coming here to do us harm, but so long as we do not have such information about travellers from certain countries—I do not wish to single out Jamaica, but it is the largest source country for foreign national offenders—we must put the security of the British people before anything else. However, if countries meet the eligibility criteria for the registered traveller scheme, travellers from those countries are welcome to join that scheme, as travellers from Australia, New Zealand and Canada have already done, which means that they can access the e-gates that are available to people from members of the European economic area.
Having seen the e-gates in action, I know that they are a good tool for finding any EEA national who is marked as being wanted, a criminal and so on, meaning that UK Border Force can stop them at the border and go through the necessary checks. We are stopping many EEA nationals who try to come through the border via e-gates because those e-gates have great technology that allows digital information to be used to find criminals.
The Minister is absolutely right that the security of the British people has to come first and that we need to know who is coming into our country. If people have a propensity to commit crimes, of course we need to take action to prevent them from coming in. However, does she understand that if someone is a New Zealander, a Jamaican, or from another one of these countries with such close links with the UK, the system might come across as slightly offensive because it suggests that we are worried about criminals coming from in Canada, and that while we can have arrangements with Slovakia and Portugal, we cannot have those same arrangements with New Zealand, Canada and the Bahamas, for example? Surely we can find a way to deal with this situation. She seems to be saying that she is not against the idea in principle, but that it is just a question of getting the practicalities right. Is that the case?
I thank my hon. Friend for his comments. I do not want to dwell on this issue for too long, because we are running out of time and I would like to cover modern slavery, but I reiterate that an enhanced criminal information exchange is available to us with regard to EU nationals, and that provides information over and above that which we have about non-EU nationals. I want to reach a point at which we have such exchange of criminal information across the board, because that would be a very good thing to keep all of us safe. While we do not have that, however, I am not prepared to put the security of the British people at risk by opening our borders in a way that might create a problem. I hope that he understands that point.
Let me conclude by saying something about the work that we are doing on modern slavery, which we all agree is an international problem. We are committed to working with other countries to prevent individuals from being exploited. Commonwealth countries are often source countries for modern slavery, so we are committed to working with them to tackle the problem. The modern slavery strategy, which was published on 29 November, commits us to raising the profile of modern slavery through the institutions of the Commonwealth and the EU, and to working with partner Governments to implement positive changes in law and practices. It also commits us to identify annually between 20 and 25 priority countries, which will include a number of Commonwealth countries.
Through our links with the Commonwealth and civic organisations such as Rotary, we are trying to ensure that we have on-the-ground information so that we can tackle this issue upstream, so that people are not trafficked and do not become victims of slavery in the UK, and so that we can deal with slavery on the ground. The UK Government are committed to stamping out that abhorrent crime by building on our strong track record in supporting victims and fighting perpetrators. Promoting links with the Commonwealth should not be to the detriment of maintaining the security of our borders, which is what allows us to tackle problems such as modern slavery.
Let me reiterate our commitment to the Commonwealth. We want to welcome citizens from across the Commonwealth to the UK. Britain is open for business. We welcome legitimate students, tourists, business people and others who want to come to this country to contribute. The changes that we have put in place ensure that Britain remains an attractive destination while maintaining the security of our borders. Britain is a place that people want to visit so that they can work hard, study, and enjoy our historic buildings and beautiful countryside.
British Nationals in Goa
[Mr Philip Hollobone in the Chair]
I am grateful for the opportunity to raise a slightly obscure and rather distant subject. It is, however, a subject that has the potential to ruin the parents of one of my constituents and apparently affects many hundreds of western expatriates who have also invested in property in Goa. I am delighted that the Minister is responding to the debate in the absence of the Minister of State, my right hon. Friend the Member for East Devon (Mr Swire), who I know is abroad.
Many other Members have been involved in this issue and frustrated at the lack of action by Indian and Goan Government officials when some fairly blatant corrupt practices are at work. That is why I am raising the issue and putting it firmly on the radar. I hope that something will come from it.
I want to give a brief background on this particular case, which came to me from my constituent. Just over 13 years ago, Mr Leslie Medcroft and his wife purchased a hotel in Canacona, Goa. They were at pains to ensure—they had done extensive research—that they complied with all the rules and regulations. They complied with the money laundering laws. The funds came from legitimate sources and banks in the UK. They complied with all the residency conditions, which can be strict, and bought the business through a local company that was properly registered. They were buying an investment in an ongoing hotel business, with appropriate Government of Goa licences. They paid all the taxes due and had all the licences that were needed. Those licences were kept up over many years as they ran that hotel business.
Subsequently, it was claimed that the property had been purchased illegally because, among other things, the area was designated for agricultural usage, but no evidence for that was produced. In contrast, my constituent’s parents produced a forest of documentation to show that everything had been complied with and that the purchase and the running of the business were entirely proper and above board.
A couple of years ago, they became the subject of an investigation by the enforcement directorate. The ruling given on 12 February 2013—almost two years ago—by Mr Lotlikar, the deputy director of the enforcement directorate, was that the property of the Hotel Oceanic should be confiscated. He claimed that it had not been properly acquired, despite all the evidence produced to the contrary. My constituent’s parents understandably appealed the decision, but had a long wait, which caused them huge stress. They had given up their life savings and their jobs in the UK to start the business in India and spend their retirement years there.
Eventually, on 26 August 2014, my constituent’s parents received a letter stating that their appeal hearing was at last to be held on 22 August—four days before they received the letter. Fortunately, the advocate they had retained in Goa saw a copy of the letter in time to attend the appeal hearing. That was quite coincidental; his office happens to be next door to the enforcement directorate. The appeal hearing was further postponed to 4 September 2014.
On 2 September, the company accountant acting for Mr and Mrs Medcroft was approached by the special director of appeals in Mumbai, who said he would make a judgment in their favour if they gave him 10 lakh rupees. That is 1 million rupees, which equates to £10,800. There is a certain irony, not missed here, that the origin of the word “lakh” in the Indian numbering system is the amount of money that can be stuffed into a small suitcase, as no doubt those proceeds would have been, had they been forthcoming. It would appear that the request was made for the money not to be paid to the court, the legal system or a Government department, but directly into the pocket of said official. It was a thinly veiled threat that failure to comply with the demand for a bribe would result in a ruling against Mr and Mrs Medcroft and, ultimately, their property being confiscated.
My constituent’s parents were left in something of a dilemma, as we can imagine. Should they pay up, perhaps then getting recognition that they own the property they knew they already owned and had bought legitimately, and thereby condone corruption? Alternatively, should they pay up and risk the case not actually being resolved? As we know, blackmailers usually come back for more. Would they be charged as participants in corrupt practices for ostensibly bribing an Indian official? Should they not pay up and risk the confiscation that has been looming over them for some years? Whichever way we look at it, it appears that they cannot win.
My constituent’s parents were unable to raise the amount of money in the short term in any case, so they did not really have a choice: they did not pay the money. They were also unable to return to India—they were in the UK at the time, renewing their visas—before 17 September, but the appeal went ahead in their absence. The ruling from that appeal was that the argument they put forward was incomplete, despite their having provided comprehensive documentation in support. A further hearing date was set for 26 September, and they were subsequently told that on top of the bribe, they might have to pay an additional sum of £6,000.
“Where does it end?” you may well ask, Mr Hollobone. The case went to a further hearing and the presiding judge, Ajit Kumar, the additional income tax commissioner, very much expected my constituent’s parents to pay. In the absence of that, he deferred a ruling and apparently threatened to have them arrested in the meantime. Tape recordings of that conversation were taken as evidence. They were advised by their advocate that this process will go on indefinitely until they pay up and that they will have constant doubt and worry overhanging their business.
My constituent’s parents have invested their life savings. They were running a legitimate business that helps the Goan economy—tourism, in particular, on which Goa greatly depends. They have had to spend a lot of their money on lawyers, accountants and other professionals, first to ensure that they acquired the business legitimately and maintained all the licences and secondly to maintain their innocence against corrupt officials. If this case goes against them and their hotel is confiscated, they face ruin and a great deal more stress. They would probably have to return to the UK.
I gather, however, that my constituent’s parents are not an isolated case, and that is why I am raising the issue today. The hon. Member for Birmingham, Edgbaston (Ms Stuart) wanted to be here today, but she is receiving an honorary doctorate from the university of Birmingham—I am delighted to point that out, as she wanted me to. She was approached by some of her constituents who were lecturers. They took early retirement and invested through a direct foreign investment channel in a dilapidated old colonial mansion on the coast in southern Goa in 2005. They spent a fortune renovating it. It was originally set up as a business to cater for convalescing foreigners undergoing medical and dental treatment.
The project was successful and has become a general guesthouse business. In 2009, on having acquired the business, the hon. Lady’s constituents were summoned to Panjim to give assurances, initially on money laundering. In 2011, they received notices from the enforcement directorate claiming that they had illegally purchased agricultural land and that their business was illegitimate—similar circumstances to the case against my constituent’s parents. Yet they had documents to prove categorically that the land they had acquired was in a settlement zone, was listed in the Portuguese book of descriptions in 1905 as an urban dwelling and has absolutely no history of crop growth. Clearly, the charge of agricultural usage is entirely bogus. The business is properly owned by an Indian private limited company, regarded as resident in India for the purposes of FEMA, the Foreign Exchange Management Act 1999. It complies with all the regulations, but the parents of my constituent are facing a lengthy and costly court action and the threat of confiscation.
Only today, I received an e-mail from a member of the British nationals’ working party in Goa, who has been dealing with a number of other expats in similar situations. She told me that in the past two years she has been working on a number of cases and has knowledge of four in which confiscation orders have already been served on people. In one case, a confiscation order has been issued against a British couple aged 80 and 77 in relation to their studio flat. Another confiscation order was issued two years ago against a single British woman in her 70s who owns a small flat in a purpose-built complex in north Goa.
In addition, hundreds of British subjects have been prevented from registering their properties in Goa, having previously fulfilled the requisite legal processes, primarily because of restrictions on visas. In some cases, that has led to criminality and harm against foreigners when they have tried to obtain the properties, causing loss of investment. Some cases have involved extreme violence. Other people affected include those who came together to invest in Indian tourism and who have been prevented from trading due to altered interpretations of the law and, in tandem, prevented from registering their properties.
The problem seems to be quite widespread, with a number of British expats suffering such consequences. It has been suggested that there are in excess of 300 similar cases that we know about. Huge stress is being caused to people who legitimately went out to invest in businesses in Goa. In most cases, they are not wealthy, but have invested their life savings. The situation is proving to be a nice little earner for the Government in Goa, and various Government officials are pretty brazen in demanding money to make the problem, which is of their making, supposedly go away. We seem to have the Goan equivalent of the mafia.
It is surely entirely inappropriate for a fast-growing democracy such as India, which attracts, and needs to attract, large amounts of foreign investment as an important UK trading partner, to allow such practices to go on under its nose. The Indian Government should be keen to find out what is going on and to intervene. In the past few months, however, I have written to the Indian law Minister, Shri Ravi Shankar Prasad, and to the Chief Minister of Goa, Shri Manohar Parrikar. The latter responded and diverted my attention instead to Dr Rajan Katoch, the director of the enforcement directorate, who has also not responded. I have written to the Minister of Finance, Arun Jaitley, who is responsible for the tax commissioners, including the judge Ajit Kumar who I mentioned earlier.
I also wrote to the high commissioner in London, His Excellency Ranjan Mathai, no fewer than three times, and chased up with several calls and e-mails. I had no reply until yesterday—after I had secured this debate, coincidentally. The response came from the first consular secretary to the high commissioner, Mr P. K. Patel, and merely stated:
“You will appreciate that the High Commission cannot intervene in administrative judicial proceedings in India. If your constituent’s parents are aggrieved by Directorate of Enforcement actions, they may seek appropriate legal redressal of their grievances.”
They have been trying that, and they have not been getting anywhere. Clearly, they will not get anywhere with the high commission in London either, which is a great pity.
The British high commission in Delhi is aware of the problem and the Business Secretary, on a visit to the Indian subcontinent, raised it with Ministers. A high commission official has been dealing with British cases, but cannot get individually involved in them. I was also able to collar the British high commissioner James Bevan when he was about to appear before the Foreign Affairs Committee on 15 October. He has been helpful and entirely sympathetic, saying that the high commission is aware of the problem. Action needs to happen, however, and things cannot be allowed to go on unchecked.
The Government need to use their good offices to impress on their Indian counterparts that that sort of practice does the reputation of Goa and India at large no service at all. It stands in the way of legitimate investment. It would be a great problem if that investment were deterred by obviously corrupt practices.
I hope that the Minister will be able to give assurances today, to my constituent’s parents and to the affected constituents of other hon. Members, that this matter will be looked into properly and further pressure will be brought to bear on the Indian Government. I also hope that His Excellency the high commissioner to London is listening intently; I am sure he would not want such practices to besmirch the reputation of the Indian Government. They are clearly doing so at the moment.
Unfortunately, I am not specifically responsible for India and I begin by extending apologies that the Minister of State, my right hon. Friend the Member for East Devon (Mr Swire), is unable to reply to the debate. I know that he is aware of the issue, whether or not he is not able to watch the debate on the internet, and he will certainly want to follow the matter up with my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton).
I thank my hon. Friend for initiating the debate. He has been and remains an advocate for British nationals facing difficulties in property disputes in India. As hon. Members will be aware, until 2007—my hon. Friend alluded to this—the rules governing purchases of property by foreigners in Goa were open to misinterpretation. Many foreign buyers fell prey to unscrupulous lawyers and property developers who took advantage of the ambiguity of the laws.
Although the purchases of properties were made in good faith by foreign buyers, in 2008, the Indian enforcement directorate served notices to about 400 foreigners who had been found to have violated foreign exchange and immigration regulations. Simultaneously, the Goa Government sent a notice to all registrars instructing them to close the registry to foreigners. There are about 750 British property owners in Goa, many of whom have been under investigation for six years and are still unable to register ownership of their properties or to sell legally.
Our policy on dealing with property disputes worldwide is clear: we cannot get involved in private disputes, as we are in no position to judge the facts of the cases and have no overseas jurisdiction to resolve such matters. It is the responsibility of the Indian authorities to regulate property laws and Her Majesty’s Government have no authority to intervene in matters concerning domestic legislation. We do not become involved in individual cases, nor do we take steps to recover any capital outlay in individual property deals that might have gone wrong.
That said, we do consider raising systemic issues by lobbying national and local Governments. I reassure the House that we take this matter seriously, as my hon. Friend can attest. We are assisting groups of British nationals who have been genuinely cheated by lobbying the Indian Government to seek settlement or a reasonable solution. I am pleased to say that, through our sustained lobbying of a range of interlocutors, the Indian enforcement directorate has cleared for registration a number of cases involving British nationals. The high commissioner in New Delhi and the deputy high commissioner for western India have discussed with the former Goa Chief Minister the problems faced by groups of British property owners and asked that the cases be considered carefully. The Chief Minister was receptive to finding a solution to the problems faced by British nationals and as a result set up a special committee to assess all outstanding cases.
In addition, during a meeting with the deputy high commissioner just last week, the new Chief Minister renewed the Goa Government’s commitment to finding a resolution to the issue. Consular officials regularly meet with all local authorities—the enforcement directorate, the property committee and the state registrar—that are assessing the cases of British nationals.
The authorities do not want to confiscate property and will act sympathetically where possible, especially where it is obvious someone has made Goa their permanent home, or when dealing with sick or elderly owners. However, they have made it clear that they cannot ignore cases where individuals have built properties on agricultural land or wilfully flouted rules on transferring funds or on visa regulations. We recognise that position.
In January 2013, we encouraged British property owners in Goa to start a working group. They have undertaken to lobby on individual cases, and we have facilitated meetings between them, the Chief Minister and local authorities, with some success.
I am grateful for what the Minister has said thus far, and I entirely appreciate, as the Foreign Office has told me, that it cannot involve itself in individual cases. However, could we not do more where there is systematic or systemic abuse, as he mentioned? We are talking about British citizens being denied justice. The rulings against them are not specifically saying what they have done and then proving it; they are constantly saying there is not enough information, so the case is deferred and deferred. In the meantime, money is, effectively, being demanded with menaces. If such corruption were happening in the United Kingdom, on the part of British officials dealing with Indian nationals, we would absolutely want to do something about it and to liaise with the Indian authorities.
I will certainly relay that to the Minister of State. Perhaps I can put him on the spot in his absence and suggest that he and my hon. Friend meet so that, rather than the issue lying dormant after the debate, we can move the process forward.
Consular staff are dealing with the property issue at a wider policy level, engaging with the Goa Government and local authorities directly, and that must fit in with what my hon. Friend said about the difference between taking a systemic approach and looking at individual cases. That approach, which I hope will be joined up, has been effective, with approximately 40 cases being cleared of investigation over the last year. However, as has been reiterated today, many more outstanding cases need to be looked at.
We are aware of corruption allegations against local authorities in Goa. However, the matter must be dealt with by the Indian authorities. We have always advised British nationals to report corruption complaints to the Indian law enforcement system.
Although there has been some progress, I recognise that the issue continues to cause distress to British nationals. We will continue to lobby the Goa Government and local authorities on systemic issues relating to expatriate property disputes and to work with those who have been affected to find an appropriate solution.
SportsDirect (USC Dundonald)
It is good to see you in the Chair, Mr Hollobone, and the Minister in her place. Of course, Mr Hollobone, you and I served in the same police force for 10 years, and I think that you still serve in the police, so it is good to see you here—after this debate, we might need your services.
I would like to make a few remarks by way of background to the reason why I asked for the debate. This year is the celebration of the 800th anniversary of the sealing of Magna Carta, one provision of which was that no free man should unreasonably be deprived of his livelihood. I am speaking on behalf of 245 workers in my constituency who question whether they are treated as free men and women.
USC is a clothing distribution company providing goods to retail distribution outlets. It opened in 1989 in Edinburgh. The company was worth £43 million by 2004, when it was purchased by Sir Tom Hunter, a constituent of mine, but it went into administration in 2008, after which 43 of the 58 stores were bought by Sir Tom. That happened through something called pre-packaged administration, whereby a deal is struck to sell parts of the business before it is put into administration, minimising losses and cherry-picking the most profitable part of the business. At the time, MPs, through the Commons Select Committee on Business and Enterprise, raised serious concerns about that practice. In particular, the hon. Member for Mid Worcestershire (Sir Peter Luff) said:
“The principle of administration is sound but you’ve got to make sure that the administration process is working in a way that doesn’t disadvantage people and impose other costs on the economy”.
In 2011, SportsDirect bought 80% of USC, and it completed the purchase of the remaining 20% in 2012. In 2013, SportsDirect bought the company Republic—more of that later—out of administration and merged it with USC. USC’s headquarters have long been in Dundonald in central Ayrshire. On 28 December last year, 245 people —79 permanent employees and 166 agency or zero- hours contract workers—were employed at the Dundonald site.
On Wednesday 7 January, senior managers arrived at the site early in the morning and informed staff that the business was not making money and was going into administration, and that all the stock would be removed to SportsDirect’s central depot in Shirebrook. There then followed a pantomime: staff were not told that they were being made redundant and were asked, would you believe, to assist with the removal of the goods. I am told that some 100 journeys were made by heavy goods vehicles between then and when the process was completed, on Sunday 11 January.
It is not clear whether USC/SportsDirect’s actions were initiated by the companies themselves or as a result of creditors, a clothing company called Diesel, seeking a winding-up order because of unpaid bills, to which USC/SportsDirect responded by moving the company towards administration, presumably resulting in Diesel joining the list of creditors that would have to wait for payment. I have heard it said that there was a one-week delay in the court process, which I am told means that the timetable followed by the company is even further out of kilter with what staff were told at the time. I seek clarification from the Minister on that point.
No information was given to staff about the future of Dundonald and their jobs until Wednesday 14 January, when Philip Norvell from Gallaghers dismissed all the staff, telling them that they would not receive any money at all from SportsDirect and that anything owed to them would have to be claimed from the Government via the administrator.
On Friday 16 January, Republic, a wholly-owned subsidiary company of SportsDirect, bought the USC business, apart from the Dundonald warehouse and operation, from the administrators. At the same time, billionaire Mike Ashley is well known for his love of football—he owns Newcastle United—and his company, the very same SportsDirect, has just bought a 26% stake in Rangers Retail Ltd, in return for £10 million of credit, adding to his previous 49% stake and making a total of 75%. Rangers football club gets a very small percentage of the profits from that retail activity. The worrying thing is that that is very much the pattern that he adopted in buying USC: he built up a majority stake in stages before finally assuming control of the company.
Of course, there are rules governing the ownership of football clubs, especially as there have been some notorious multiple owners such as the pensions robber Robert Maxwell. There must be a question whether Ashley’s activities are a precursor to a greater involvement in Rangers football club itself. Is it right for an individual to have a serious financial stake in more than one side? Is this man more than just a shareholder? Has he become the banker of the club?
Does the hon. Gentleman feel, as I do, that the behaviour of Mike Ashley is damaging to him, and that the contrast between his wealth and the way the workers were treated is appalling?
I am coming to that, but he does not care a damn. That is clear, given what I am about to say.
The USC Dundonald situation is a murky affair. It leaves unanswered a lot of questions about the way some businesses are allowed to operate. For instance, did Diesel seek a winding-up notice on USC as a result of unpaid bills, as claimed in some reports? That is an answer that I need this afternoon. If so, what alternative courses of action were considered by SportsDirect—such as, for example, paying the bill to its loyal workers at Dundonald? Was USC/SportsDirect’s action in seeking administration a response to the claim made by Diesel or was it initiated by the company separately? Was there a delay in the timetable for granting administration and, if so, what was the impact on the work force and the potential timetables for redundancy and required consultation on both redundancy and business plans? Was that brought to the notice of the Department for Business, Innovation and Skills? What will the cost to the public purse be of supporting the 245 people who are out of work without back pay, holiday or redundancy payments and who have bonuses of as much as £12,000 outstanding?
I congratulate my hon. Friend on obtaining the debate. He is working hard on the issue, and he knows that many of my constituents were also employed in the business, and have lost their jobs because of this debacle. Yet again, a company in Ayrshire has behaved disgracefully —my hon. Friend knows what happened with the former coalfield sites. Is there a need to look at the way companies are allowed to do such things, treating employees so despicably, and to hold them accountable?
I am grateful to my hon. Friend, whose constituency neighbours mine, as does that of my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). I thank them for their support. I do not see any difference between the cases referred to, which is why there is a need to examine the law to protect workers in such circumstances. It is blatantly obvious that that does not happen now.
How long is it likely to take for the employees to receive payments from the administrators? Will employees get 100% of the money due to them? I doubt it. What sanctions can be imposed on the company for failing to consult employees about the future of their roles at the Dundonald site, or about redundancy? Given that all the companies in the exercise are owned by SportsDirect, is not it just a scam to let SportsDirect off its financial responsibilities to a less successful part of Ashley’s estimated £3.3 billion fortune?
I thank my hon. Friend for securing the debate; people in my constituency are, as he mentioned, also affected. Does he agree that it is particularly disgraceful that everything he described was happening over Christmas and the new year, when it was almost impossible for employees to get the advice and support they needed, which they might have been able to get in other circumstances?
I congratulate my hon. Friend on getting the debate. We had a similar one last Thursday, about City Link. He has spoken about changes to the law, and with City Link the pattern was the same. Workers were told over the Christmas holiday period that their jobs had gone. More than 1,000 men contracted to it could not take their jobs, because of the law. We have been pressing the Minister on those points. This is very similar.
I am grateful to my hon. Friend for that intervention. The Scottish Affairs Committee is about to call that company to book, or has already done so, and has approached me to ask whether to call Mr Ashley to the Committee for what he has done to the company for which he is responsible. Do we agree with the BBC’s 2009 quote from a self-confessed asset stripper that the law in such circumstances is a pirates’ charter? I wonder whether that description could apply to Mr Ashley.
Has the Magna Carta principle that no citizen should unreasonably be deprived of their livelihood been breached by Mike Ashley and SportsDirect? Given how he has behaved on the issue, is Ashley, SportsDirect’s supremo, a fit and proper person to buy shares and give loans to Glasgow Rangers football club, and to appoint his men to the board? Should not the Scottish Football Association look more closely at this person’s credentials for involvement in a team that is not just a business venture, but a Scottish—indeed, a UK—institution? His track record, particularly his treatment of USC workers, shows that he has scant regard for anything but balancing the books and maximising profits, even if loyal staff are thrown on the scrap heap as a result.
I congratulate my hon. Friend on securing this important debate. Does he agree that it is wholly worrying that someone of Mr Ashley’s background, employment and business practice is moving into the highly delicate area of Scottish football, especially with a football team that is having difficulties at the moment?
I agree. Glasgow Rangers is an institution, and some 25% of the population of Scotland follow that team. It is wrong that that individual should be allowed anywhere close to the team. As I will request of the Minister in a moment, I hope that the SFA gets to the bottom of this and does not allow him further into the club’s business.
Will the Minister set up an inquiry into the affairs of Mike Ashley in relation to the USC Dundonald situation affecting my constituents and his interest in Glasgow Rangers? Such a move would be welcome to the former employees of USC Dundonald and, I am sure, to the great bulk of Glasgow Rangers supporters. We need to bring some transparency to the affairs of Mike Ashley and of Glasgow Rangers. I look forward to the Minister’s response.
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing this timely but unfortunately necessary debate. I do not think that any of us wish the situation to be as it is—particularly those who have, sadly, lost their jobs.
The concerns about the events leading up to and surrounding USC’s failure, particularly some of the allegations made about the company’s treatment of its creditors and employees, are valid and genuine, and I assure the hon. Gentleman that they are shared across the House. It is important that answers are found. As with any company failure, it is important to establish the facts of the case: what occurred in the lead-up to the administration of USC, the reasons for the failure and whether the company has been a victim of circumstance, as sometimes happens with companies, or whether the conduct of its directors has fallen below the standards that we rightly and reasonably expect. Those standards include treating creditors and employees of the company fairly and in accordance with the law.
Based on the information that we have been given, USC’s administration seems to have been due to the company’s failure to pay its rent and suppliers when they came due. On the specific questions asked by the hon. Gentleman about the winding-up orders and so on, I understand that, according to the administrators, a statutory demand had been issued to USC by a key supplier on 17 December 2014, payable by 31 December. That would have allowed the creditor to seek a winding-up order if the debt was not paid. On 6 January, the company gave notice of entering administration, and it did so on 13 January, but I am not aware that a petition for a winding-up order was made.
As a local MP, the Minister knows something about Glasgow Rangers, but she might not know as much about USC. Is there an urgent need for a change in the law if, on the one hand, a creditor can seek a winding-up notice and, on the other hand, the company can frustrate that by making an application to the courts for administration?
This case raises many questions. We are making several changes to insolvency law, and particularly to the pre-pack regime, where there are particular concerns. The hon. Gentleman is right to say that I have some familiarity with Glasgow Rangers—indeed, Murray park, their training ground, is in my constituency. I confess that I am not a football fan, but my late grandfather was a very proud and longstanding season ticket holder and supporter of Rangers. He enjoyed many trips to matches on the supporters’ bus.
We all have to think about the context. USC was not just a small company on its own; it was just one part of a large retail group. The events are particularly concerning in that context.
Given what the Minister is saying, does she feel that USC, and perhaps Mike Ashley, too, have been guilty of using loopholes to get round certain situations and to create part of these problems quite deliberately? Could employment law be tightened so that workers are not victims, as they have been in this case?
There are a couple of different issues within that question. We will need to wait to see the specific facts that come out of the investigation. Obviously, the administrators will provide information to the Insolvency Service, and they have to file a report within six months, although the general practice is to file such reports much more quickly. Indeed, we will be shortening that time to three months.
On whether there are loopholes, action has been taken on the pre-packs issue, which I will address in a moment. The hon. Gentleman is absolutely right that employment law is not negotiable. Employment law is not something that is optional or that a company can decide to take or leave; it is the law, and it needs to be followed. Enforcement is particularly important. A range of issues have been raised, including some of the issues surrounding zero-hours contracts, which I will also address.
One of the key questions is why USC, which was wholly owned by SportsDirect, was allowed to reach the point at which its key suppliers and landlords were not just threatening but taking enforcement action. SportsDirect purchased USC’s business through another company, Republic. We have been told that USC’s key suppliers have been left out of pocket, so it seems odd that they would continue to supply Republic. There are, therefore, a lot of unanswered questions.
The law is clear that employees should be consulted where 20 or more people are being made redundant at the same establishment, and it can be a criminal offence to fail to notify the Secretary of State of proposed redundancies. Tribunals can make protective awards where employees are not properly consulted.
I am not going to give the hon. Gentleman that assurance in the Chamber today, but I reiterate that we will be looking very carefully at all the facts that emerge and at the picture created from the information that comes from the administrators. There is a wide range of both investigation and enforcement powers, and it is important that they are used wherever it is found that companies have not behaved properly, and particularly when directors have not behaved properly.
The Minister refers to wanting to look at the issue very closely without giving any commitments in this Chamber. Will she also give a commitment to refer Glasgow Rangers football club, and the potential issues there, to the sports Minister—particularly in respect of the constituency issue that has been raised?
I will happily talk to the sports Minister about those issues, and obviously there are specific issues for the Scottish Football Association to consider. Insolvency Service investigators are already in contact with the joint administrators of USC. That is at an early stage because the administration is fairly new, which affects the information that can be provided, but there is a legal duty to provide a confidential return to the Secretary of State about the directors’ conduct. Although the administrators’ view about that is certainly relevant, ultimately their assessment of whether there are grounds for disqualification is based on the Insolvency Service’s independent view and conclusions.
Directors can be disqualified for anything between two and 15 years. It is also worth noting that, in addition to director disqualification proceedings, the Insolvency Service can exercise its powers to investigate any UK company where it suspects misconduct. We are making it easier for disqualification proceedings to be brought where other laws have been broken—it is currently possible, but we want to make it crystal clear that it should be easier. Measures in the Small Business, Enterprise and Employment Bill explicitly state that, in deciding whether someone should be disqualified, the criteria that courts will be required to consider will be extended to include breaches of legislation. That could include health and safety law, immigration law or employment law.
I have been listening to what the Minister has said. In my constituency, directors walked away from coal mines leaving £140 million of damage. I have been pursuing that matter with the insolvency people for two years and nothing has happened, so she will forgive me if I am slightly cynical about what she is saying.
I will be happy to look into the specific issues that the hon. Lady raises. Although the powers already exist, we recognise that making it more explicit that breaches of law can be considered in the disqualification process will make such cases easier. That is why we are changing the law. I will happily look separately at the specific case that she is pursuing.
I turn now to pre-packaged administrations, or pre-packs. They have been discussed in this House on many occasions, because there are understandable concerns about them. In a pre-pack, the sale of the viable parts of an insolvent company’s business is arranged before the administration starts and concludes shortly after the administrator is appointed. In the case we are debating, the administration has allowed the majority of the business, including more than 600 jobs across the UK, to be transferred to the purchaser, Republic, although unfortunately another 84 employees have lost their jobs.
It is important that we establish whether the pre-pack represented a necessary step to save an insolvent business, or if, as has been suggested, it was an abuse of the insolvency process. I reassure hon. Members that officials are looking at that as a matter of urgency. The changes that we are making, following the review of pre-packs by Teresa Graham, will mean that by spring there will be new checks and balances on pre-pack administrations where the sale is to a connected party, so that there is independent evaluation of whether that party is a viable business with a viable underlying business model that will not simply run into the same problems as the business in administration; there will also be evaluation of whether the sale represents the best value.
I happily give that assurance. Obviously, certain elements remain confidential because of specific legislative requirements, but I am happy to keep the hon. Gentleman updated on the issue.
I will touch on the important matter of the employees and support for them, before coming to some of the specific issues raised about Mike Ashley. Obviously, whenever people are made redundant, support is crucial. That is why the Jobcentre Plus rapid response service is available and can provide everything from information to help with job search, identifying skills gaps and, ultimately, training to update skills or learn new ones to ensure that people can move back into employment. That is particularly important for those individuals.
In terms of redundancy payments, employees are guaranteed to receive their wages and other payments owed, subject to certain limits. That money comes from the national insurance fund.
I will certainly come to that issue. The redundancy payments service has begun processing claims—I understand something in the region of 30 claims have already been put in. It aims to pay 80% within three weeks of receiving the claim form and 93% within six weeks of receipt of the form.
Obviously, within the group of people who have been made redundant, there is a mix of those who were on fixed-hours permanent contracts and those who were on zero-hours contracts. However, it would not be accurate to say that somebody on a zero-hours contract has no right to a redundancy payment. The calculation for the payment tends to be made on the basis of an average of, I think, the 12-week period running up to when they were made redundant. I hope that will provide some reassurance to the hon. Lady’s constituents who may find themselves in that position. Guidance on redundancy pay for any employer affected is available on gov.uk.
Hon. Members have raised significant concerns about the behaviour of Mike Ashley, and I share those concerns. He seems determined to show that rules are for other people. We know that he bought nearly 10% of Rangers football club, and in doing so rather skirted the edges of the SFA’s rules on owning two clubs. Despite being blocked by the SFA from increasing his shareholding further, he appears to be looking to expand his influence. The rules that prevent the same person from owning two clubs are there for a good reason: to prevent conflicts of interest and to safeguard the integrity of the sport.
We are talking about a man who, according to media reports, forced through a £200 million bonus scheme at SportsDirect and subsequently withdrew his own participation amid speculation that he introduced the scheme simply to show his investors who was in charge. Some 90% of SportsDirect employees are reported to have zero-hours contracts, so they would not be eligible for the scheme. At least one worker was allegedly told that a zero-hours contract meant that she would not receive holiday pay. I cannot emphasise enough that that is against employment law.
There are serious questions to be answered about USC and many of its practices. I have outlined that the Insolvency Service has the power to receive information from the administrators and to investigate any company that it believes has questions to answer. I welcome the suggestion that Select Committees may also wish to ask questions.
I believe that zero-hours contracts have a place in a flexible labour market, but they are not a substitute for proper business planning. I fail to understand how a retailer can get away with employing the majority of its staff—up to 90% of the work force of 20,000 at SportsDirect—on zero-hours contracts. Apparently, SportsDirect operates some 420 stores, but it has a permanent work force of perhaps only a couple of thousand people. I do not see how a retailer can reliably open its stores every day if the workers on zero-hours contracts genuinely have the power to say that they will not take any given shift. A zero-hours contract should mean that the employer is free to offer work or not to offer work, and the employee is free to accept or decline that work.
I am at a loss to see how such use of zero-hours contracts can be deemed to be in any way responsible, and I think there are even questions about whether it is in line with employment law. Certainly, exclusivity clauses, which must be part of the way in which SportsDirect operates zero-hours contracts, will soon not be legal in such contracts as a result of the action we are taking in the Small Business, Enterprise and Employment Bill, and rightly so. Using zero-hours contracts to fill the gaps by requiring people to turn up for work but not giving them guaranteed hours is not a responsible use of such contracts.
Cases have been brought against SportsDirect by people such as Zahera Gabriel-Abraham. That case was settled out of court, but some of the media reports were concerning. The Guardian reported that
“the retailer will have to make clear in job adverts, contracts and staff rooms that it does not guarantee work, sick pay or holiday pay”.
I do not believe that that is the full story, because it is not for an employer to decide whether their employees get sick pay or holiday pay; it cannot simply opt workers out of their statutory rights. One of the barristers from Leigh Day summed it up well:
“Zero hours workers are not second class workers. They have the right to be treated fairly and with respect. They have the right to take holidays and to be paid when they take them. They have the right to statutory sick pay. They have a right to request guaranteed hours. Sports Direct will now have to make that crystal clear to staff.”
I hope that the reports do not suggest that those staff have not been getting sick pay, holiday pay or their other statutory rights. I encourage anyone at SportsDirect or anywhere else who thinks that they have not been receiving their proper rights to contact ACAS or the pay and work rights helpline on 0800 917 2368. Breaking employment law is absolutely unacceptable, and compliance will be properly enforced.
There are certainly questions to be answered about the matters in the USC administration and pre-pack sale, and the Insolvency Service will be looking at the information that it has received. The hon. Member for Central Ayrshire asked a wide variety of questions, and I appreciate that time is short—