Tuesday 24 February 2015
[Martin Caton in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—(Gavin Barwell.)
It is a great pleasure to serve under your chairmanship for, I think, the first time, Mr Caton. I am grateful to the Backbench Business Committee for granting the debate, and pleased to see so many right hon. and hon. Members present. The Minister has of course frequently discussed issues concerning Yemen with me on the Floor of the House. My hon. Friend the Member for Harrow West (Mr Thomas) visited Yemen as International Development Minister in the previous Government, and the right hon. Member for Rutland and Melton (Sir Alan Duncan) is the Prime Minister’s special envoy to Yemen. I am pleased to see the hon. Members for Gillingham and Rainham (Rehman Chishti), for Hexham (Guy Opperman), for Croydon Central (Gavin Barwell) and for Elmet and Rothwell (Alec Shelbrooke), and my sister, my hon. Friend the Member for Walsall South (Valerie Vaz).
The need for the debate is greater now than when I first proposed it to the Backbench Business Committee. As we speak, Yemen is at crisis point. At no time in the past several decades have I feared for its future as I do today. In the past few weeks, President Hadi has escaped from house arrest and fled to his stronghold in Aden. The Houthi rebels are yo-yoing between forming their own Government and stuttered negotiations. The embassies of the United Kingdom, the United States, France, Italy, Germany, the United Arab Emirates and Saudi Arabia have all been closed and evacuated. Supporters of various parties and tribal groups are protesting and clashing in the streets, and some are being kidnapped and killed in the clashes. Terrorist groups such as al-Qaeda in the Arabian Peninsula are grabbing power amid the chaos.
Many Members present today share my concern about that beautiful country; but the crisis is now much wider. Those who are concerned for security and stability in the middle east should play close attention to the situation in Yemen. I believe that there is consensus in the House that more needs to be done and that the British Government need to do much more. I am proud to say that today’s is the first debate of any substance on Yemen in the Commons, and it is therefore an important one.
I congratulate the right hon. Gentleman on securing the debate, and I am enjoying the family outing that is this trip down Yemen lane. My serious point is that he is right to ask the British Government to do more, but does he agree that it is also incumbent on the Arab world, and particularly the wealthy and responsible Arab countries that are in control of their land, to do more to regulate and keep the peace in Yemen?
The hon. Gentleman is right. Indeed, I regard him as part of my wider family, because he is my next-door neighbour in Norman Shaw North, so I am cautious about raising my voice too much there, in case he hears me. In my speech I want to develop the argument that although Britain, being well respected, has an important part to play, it is not just up to us. It is important that we get the support of countries around Yemen—especially Saudi Arabia—if we are to make progress.
I congratulate the right hon. Gentleman on securing the debate. He is a passionate friend of Yemen, and I think he has always considered me as family down in the south as well. On international assistance, does he agree about the need to consider who is backing the Houthi rebels? Iran is a key backer, and nuclear discussions with Iran should be linked to its giving up the sponsoring and harbouring of terrorism in the middle east. Otherwise we might get a short-term fix but a long-term problem for the world.
The hon. Gentleman is right—and, yes, I do regard him as part of the even wider south Asian family that I come from. We must consider who is backing the rebels and what their cause is, and deal with that.
Nobody doubts the Government’s commitment to providing support for Yemen. The special envoy, the right hon. Member for Rutland and Melton, and my hon. Friend the Member for Harrow West can proudly say that because of their tenure in office, the lives of many Yemenis were saved. Few of us in politics can say that. They were able to deliver on a promise. The Leader of the House had a critical role at the time of the Arab spring when he was Foreign Secretary. We know that the British Government did a great deal in the past. That is why we look to the Minister; I hope that the Government will be able to do more, given the history of this matter.
As the House knows, I have a strong personal interest in the long-term future of Yemen. I and my two sisters—one of whom is present—were born in Yemen, and my mother, sisters and I left in 1965, when the situation was getting extremely hostile. I remember bombs exploding as we made our way to the airport. That was a time of crisis and civil war. Yemen is a country that it is easy to fall in love with. People were extremely kind to us. We were a Catholic family from India—from Goa—who had come to live in Yemen, but were treated so well, as were all the migrant communities who came to live in what was then South Yemen in Aden. That is why I feel strongly that we need to do more.
The UK-born hostage Luke Somers, who was tragically killed by al-Qaeda while serving as an aid worker, was described by his family as loving the people and culture of Yemen. I have returned repeatedly to the country as the chair of the all-party group. When I was last in Yemen, the situation was extremely dangerous—so dangerous, in fact, that we were advised not to stay in a hotel. We were required to stay in a fortified pod; indeed, I stayed in the bed of the British ambassador—he was not there at the time. I was locked in that pod because there was a fear that we would come to danger, and I would think that the present situation is much worse.
I went on a visit as part of an all-party group delegation with the hon. Member for East Worthing and Shoreham (Tim Loughton). He is a great photographer and he went into the old city of Sana’a, which is a world heritage site. We were worried and thought he had been kidnapped, but he had gone to the market to take photographs, because he felt so safe. I am afraid he would not be able to do that today, with the current crisis.
Yemen is a strategically vital country that faces three linked threats: political instability, a security vacuum and a growing humanitarian catastrophe. The political situation is on a knife edge. For every positive news report, there is continued violence, and there are obstacles to continued negotiations. There is no doubt that decisions made by the Houthi rebel group in the next few weeks will determine Yemen’s future. Their coup, which began the crisis, has probably gone further than they initially intended. After dissolving Parliament and declaring their intention to form a Government, the Houthis very nearly triggered a civil war. Internal pressure from political parties and tribal groups, and external pressure through the United Nations Security Council’s condemnation, with the strong stance taken by regional powers such as Saudi Arabia, have brought the Houthis back to the negotiating table. With that window of opportunity, I hope the UK and the Minister, in particular, will play a role in mediation.
The hon. Gentleman is right. We need to look at who is supporting them—he has said Iran—and find out what pressure we can put on them. Our ability to influence Iran is pretty limited. However, that is an important factor. As we know, middle east politics—he is also greatly interested in this area—is not necessarily about just the people at the front, so he is right that we should look at intentions.
A number of right hon. and hon. Members have met President Hadi since or before he became President, but he has now fled the capital. In my view—I hope that the Government agree—he is the only individual who maintains democratic legitimacy in Yemen’s current political system, if indeed we can call it a system. We need him to support any proposals, as he maintains a strong following in the country. Last week, the governors of the provinces of Aden, Lahij and Mahrah demanded the reinstatement of Mr Hadi and reaffirmed their support for Yemen becoming a federation of six regions. It is vital that pro-Houthi and pro-Hadi groups do not create the spark for an escalation of violence.
Last Friday’s preliminary agreement by the rival parties to form a people’s transitional council is a solution that the United Kingdom and the international community should rally behind. Jamal Benomar, the United Nations mediator, has described the agreement as
“an important breakthrough that paves the way towards a comprehensive agreement”.
Under that agreement, Yemen’s House of Representatives will stay in place, which will appease the former ruling party, which holds a clear majority in it. However, instead of the traditional Upper House, there will be a new transitional council that will consist of people from traditionally unrepresented sectors in Yemen’s formerly independent south—women and young people. That is positive, but the agreement is fragile: as we have seen before, if one party withdraws support, the entire deal may collapse. The United Kingdom and the international community need to keep the agreement on track. Otherwise, despite all the work we did in 2011 and all our progress since, we will be back to square one. We should not allow political progress to reverse any further.
One of my requests to the Minister is that we take the lead in maintaining the negotiations. Can we please speak to the United States and European and regional allies in particular, as the hon. Member for Hexham said, to pull the international community behind the transitional council, and offer our officials to assist the United Nations in its mediation?
The fragile political situation is strongly affected by the violence that has erupted across the country. Rival groups, both those that oppose and those that support the Houthi rebels, are clashing in the streets. I have been informed by various charities operating in the region, including Islamic aid organisations and United Nations organs, that such clashes are escalating and protestors have been kidnapped, injured or killed. Indeed, the majority of journalists have fled the country, as the risk of kidnap or injury is so high. That in part explains the appalling absence of media coverage of the country’s downward spiral.
By all indicators, levels of violence are dramatically increasing. UNICEF has informed me of a 40% increase in children being killed or maimed, a 47% increase in the use of child soldiers and repeated cases of children killed around their schools. In one example, in December 2014, 15 young children travelling to school were killed by bomb attacks. Schools are being used for military purposes as barracks, bases and firing positions.
One huge problem is the number of firearms available. There are between 8 million and 11.5 million guns in civilian hands. Yemen is second in the world for gun ownership, with 54.8 guns per 100 people. Civilians going about their lives are now regularly stopped by groups of armed men at hastily established checkpoints, as loosely affiliated tribal and armed groups fill the security vacuum. Meanwhile, tribal groups in the south have repeatedly fought with Houthi troops. It is vital that the violence does not escalate further. Groups loyal to President Hadi seized Government buildings in Yemen last week and clashed with pro-Houthi security forces, which led to a number of fatalities. That is a real flashpoint.
We in the west may not recognise the seriousness of the developments, but regional powers such as Saudi Arabia and the United Arab Emirates are incredibly concerned. If we are to be only a peripheral player, our ability to influence the actions of the regional powers that are pushing for a military solution will be extremely limited.
Those clashes need to end immediately, before the various factions lose faith in a non-military solution. Can we please provide more support to those forces still loyal to the Government? While an intervention involving the United Kingdom is not a likely prospect, what support or incentives can we provide to deter further violence? Can we and the international community apply carrots and sticks in any ongoing negotiations? That is needed if we are to make any more progress.
From a western perspective, one of the most worrying developments is the expanding power of extremist Islamic organisations linked to terrorist activity. One such group is al-Qaeda in the Arabian Peninsula, described by the CIA as one of the most dangerous terrorist groups in the world. That group trained Said Kouachi, one of the Charlie Hedbo killers: he received military training in Yemen in 2011.
Parts of Yemen already serve as a safe haven for the group, from which it directs operations and releases propaganda through the internet. That is a huge problem. Last year, 3,200 UK passport holders travelled to Yemen, and the group is known to train potential terrorists who want to use their new-found skills, such as bomb making, on the streets of London. By all accounts, they are benefiting from the current power vacuum.
On 12 February, an al-Qaeda-linked group, Ansar al-Sharia, successfully stormed a military base in Beihan, capturing between 1,000 and 2,000 soldiers and military equipment. The town fell after several hours of fighting. The US has had a long and positive relationship with security forces in Yemen in targeting terrorist organisations. After strikes were initially put on hold and then restarted, the long-term future of that relationship is sadly unclear.
We cannot lose such a strong ally in the fight against terrorism. One of our priorities must be to maintain that relationship, whichever group comes out on top in the political situation. We cannot allow al-Qaeda to gain any more territory or influence. The long-term answer to al-Qaeda is a strong Yemeni Government, with whom we should have a close, ongoing relationship. However, we need to be better at monitoring individuals travelling to the country, and must work with the authorities there to do so. We also need to recall that Turkey is the gateway to the middle east for individuals trying to join groups such as ISIL and al-Qaeda. We need better exit checks and co-operation.
All those factors risk an unimaginable humanitarian crisis across Yemen. It is already the most impoverished country in the region, and it has one of the worst records for malnutrition in the world. UNICEF has provided me with the latest humanitarian figures, which are dreadful: 8.4 million people lack access to basic health care services; 850,000 children under five are suffering from acute malnutrition, 160,000 of whom are at severe, fatal risk; and young girls are particularly vulnerable to abuse and female genital mutilation, with a staggering 83% of girls aged 10 to 14 experiencing some form of physical abuse. Overall, 15 million people need humanitarian assistance.
The United Kingdom has a good record in providing assistance to Yemen. I have paid tribute to the right hon. Member for Rutland and Melton and my hon. Friend the Member for Harrow West for all the work they did as International Development Ministers. However, the situation has got much worse, even since the Prime Minister’s envoy has been in office, although the Government have been very helpful. The current Minister of State for International Development has informed me that £9.5 million will be added to our existing £35 million nutrition programme. I also understand that we have fulfilled our commitments as co-chairs of the Friends of Yemen group, and that our development programmes are making a real difference, but we cannot do it alone. What of the other friends of Yemen who promised billions to the country, but, I am afraid, have delivered very little? What support is being provided by other EU countries? Could we please hold an emergency meeting of the Friends of Yemen, so that we can get an aid package together? If we do not, there will be bitter consequences for the country if it descends into civil war and for the people of not just Yemen, but the region.
When Yemen faced such a crisis in 2011, the right hon. Member for Richmond (Yorks) (Mr Hague), then the Foreign Secretary, and the Prime Minister stepped in and made a decisive difference. I remember speaking to the Prime Minister about this, and I know that he feels strongly that the British Government’s action was important. Yemen was pulled back from the brink on that occasion and put back on the path to democracy. I feel that the United Kingdom is in a unique position to effect positive change in Yemen. Now is the time for us to step up and take that urgent action.
The UN Secretary-General, Ban Ki-moon, recently said:
“Yemen is collapsing before our eyes. We cannot stand by and watch”.
If civil war breaks out, it will be as complicated and intractable a conflict as it is possible to see anywhere in the world, including in Syria, and I do not believe that we will be able to stand by and do no more. We need to be prepared to work with the international community to stop this crisis developing any further. If Yemen falls, the front line of this conflict will be the streets of London, Birmingham and Leicester. We are bound by our historical ties with this country to do more. We cannot allow this beautiful country to become a haven for terrorism and violence; I urge the Minister to act decisively and to act now.
Thank you for chairing the debate this morning, Mr Caton. I thank the right hon. Member for Leicester East (Keith Vaz) both for securing the debate and for every single word that he said. I agree with all of it. That illustrates that this is very much a cross-party issue, and by joining together across this House to focus on Yemen, we are doing the world a very important service. As he rightly says, it cannot be parked into a corner and isolated as a poor part of the Arabian peninsula that does not matter and has no effect on everything else, because it most certainly does. Perhaps the most important sentence of his comments this morning was that, if it goes wrong, a lot else goes wrong with it. That is what needs to govern our thinking and shape our conclusions.
The right hon. Gentleman can claim 50 years of experience in Yemen. I can claim only 30, after initially going as an oil trader but then taking a political and ministerial interest in the country. When I first went, as when he was there, one could travel in Sana’a and from Sana’a to Aden. At the moment, no such journey is possible in safety, and that illustrates the country’s deterioration, on which we now need to focus.
While I was a Department for International Development Minister, I tried to raise the profile of Yemen in government for the very reasons that the right hon. Gentleman articulated: it is more dangerous and more significant than people think, and has also had a long-term humanitarian need, where many children—a high percentage under the age of five—were stunted, and where a large percentage did not know where their next meal was coming from. That was before the deterioration over the past few months. The United Kingdom has been committing a direct budget of about £70 million a year to Yemen’s needs. When we apportion what we give to the United Nations and multilateral organisations, the figure is perhaps, in effect, double that, so we are giving Yemen well over £100 million. In my view, that is necessary money. It is being well spent, or has been so far. Perhaps the money I am most proud of is the £1 million that I committed as a Minister to launch Jamal Benomar as the United Nations special representative. Over the last few years, he has been crucial to the negotiations that have held the country together until today.
To understand the country, we need to step back, perhaps a few centuries, but at the very least a few years and look at what has happened in what we call the Arab spring, because it was not the same in Yemen as it was in Libya, Tunisia or even Egypt. Across Arabia, or Arab-speaking countries, some have changed regime by violent conflict. Others within the Gulf Co-operation Council have sustained current regimes, because they have greater resources with which to reach an accommodation with their own people. However, Yemen was very much unique, in that through the GCC initiative, it was able to effect, with a minimum of conflict, a presidential transition and move from one president to another without the violence we saw elsewhere. That transition got Yemen off to a very good start in the context of the disruption that we saw elsewhere in Arabia. The GCC initiative, supported by Jamal Benomar, and by the UK and the US, has allowed Yemen—let us put it honestly—to muddle along for the last three or so years without collapsing into a complete mess. In that sense, Yemen has not been like any other country.
It started unlike any other country, because it has a weak Government at the centre and very powerful satellite interests commanded by what one might loosely call warlords within the country. That has always created a very difficult problem of balancing power and influence and of attracting enough power into the centre to give it an effective and purposeful Government who can be said to be legitimate and doing what is necessary for the people.
I pay tribute to my right hon. Friend’s expertise in the area and his work. He is talking about the different factions in Yemen. Looking at the national dialogue—where it has been and where we are now—how do we ensure that everyone who has a stake in Yemen comes round the table and effectively moves the country forward?
That is exactly the right question, because what emerged from the GCC initiative was a plan for exactly that kind of unifying national dialogue within the country. It was a plan to bring together all parts, all sections and all interests in the country to agree a path towards a constitutional settlement that could lead to proper, legitimate and respected elections. That remains the objective of what we need to see yet return from the difficulties that the country faces. My hon. Friend is absolutely right that that strand of discussion and unifying constitutional debate in the country is the glue—they are components that stand to bring the country together.
With the GCC initiative came donor pledges— $6 billion or $7 billion dollars at a pledging conference arranged by the Friends of Yemen, co-chaired by the UK and the Saudis—and an International Monetary Fund package that was on the brink of being implemented before things deteriorated. The dialogue that my hon. Friend mentioned did come to a conclusion, but it has not yet been fully implemented with the subsequent actions that are necessary to make it effect the planned changes.
The tragedy is that the GCC initiative and the stability that we hoped for in the country have disintegrated over the last six months. The Houthis— or soft Shi’a Zaydis—focused mostly in the north, who comprise a maximum of perhaps 30% of the country, have taken arms and advanced on the capital city. Yemen is not a habitual sectarian country. It is far more tribal than it is sectarian, but that does begin to introduce a possible and dangerous sectarian element in the complex power play in Yemen itself. My hon. Friend’s reference to Iran has validity, although I do not think that the absolutist terms in which he describes it reflect what is actually happening in the country. It could be said that Iran backs rather than directs the Houthis, but what matters is what is happening inside Yemen.
My right hon. Friend says that Iran backs rather than directs, but even if that is the case, it has leverage over the Houthis by backing them, and it should use that leverage if it wants to be part of the international community, in relation to the nuclear deal that is coming up.
I refer to what I said a moment ago. No life is quite so simple as that, but I understand my hon. Friend’s view.
Let us just look at what has happened. The Houthis, perhaps against people’s expectations and largely because they had overtaken a battalion in Amran and taken its heavy weapons, were able to advance on Sana’a and pretty well march into the capital city uncontested, but what they were supposed to have done, just before they did that, was to have adhered to a firm agreement that was reached on 21 September last year—the peace and national partnership agreement—which should have said, “You’ve gone this far. Now hold it, muck in and work with everyone else to find a solution.” They have not adhered to the terms of the PNPA. By advancing into Sana’a, the Houthis have displaced the Government, but they have not replaced them with any form of government that can be called such, so in effect we have a vacuum.
An element that is utterly unacceptable is the placing of legitimate, continuing Ministers under house arrest. Fortunately, President Hadi escaped at the weekend, but Khaled Bahah, the Prime Minister of Yemen, remains under house arrest. He and others who have been put under house arrest must be released by the Houthis and allowed to go free. I have spoken to Khaled Bahah regularly. It is not right that he is detained under house arrest in the way he is.
We have seen a very strong United Nations Security Council statement. That is an essential part of the pressure that needs to be applied in relation to what is happening in Yemen at the moment. The next few weeks are crucial. Yemen is more on the brink today than people have said it has been for many years. Jamal Benomar is doing his best and deserves our full support. He is slaving away in Sana’a, trying to hold the country together and reach some kind of accommodation between all the competing parties, and he deserves our full support, as do all the efforts in the UN to apply pressure in relation to what is happening in the country.
This is an essential point. My hon. Friend the Minister will no doubt say more on all this, but I would like to echo what the right hon. Member for Leicester East said about the danger we are looking at. The list, when it all comes together, if it all goes wrong together, is potentially cataclysmic. We are looking at a country in the southern Arabian peninsula, close to Somalia, where there is people trafficking and things like that, where guns can run through the country and all kinds of risk can be nurtured, and at a country that might have no Government and hence be an ungoverned, anarchic space. We are looking at a country that could collapse into tribal anarchy and the absence of any kind of order and government whatever.
We are looking at the risk of tribal conflict. This country is more tribal than sectarian. That tribal conflict could become very vicious. As the right hon. Gentleman said, there are more weapons than people, and when they start firing at one another, there is no end to what could go wrong. The tribal conflict could collapse into civil war. There have been civil wars in Yemen before. The latest was in 1994. That could easily happen, even within the next few weeks, if things go terribly wrong.
We could again see, as part of the civil war, the division of the country between north and south. There are fewer people and more resources in the south and many more people and fewer resources in the north, so even if one liked the idea of a nicely contained southern Yemen, it is inconceivable that the north would accept that as an option when it would feel deprived and starved of resources.
We are looking at the danger of al-Qaeda being free to train and run riot, perhaps not just in southern Yemen but more widely across the country. We are perhaps looking at a proxy cold war, which could become a hot one, between the Iranians and the Saudi Arabians, fought out in Yemen because of their competing interests. Amid all those ingredients, we are looking at the awful danger of economic collapse and deep humanitarian disaster—not just lack of food, but disease, people trafficking and everything else that goes with it.
As I am sure the Minister will say, it is important to work with the whole of the GCC, but especially Saudi Arabia and Oman, which are the immediate neighbours, and with the United States and, lest anyone belittle it, the United Nations, which has proved so crucial both in the political negotiations and in the meeting of health and other needs in the country.
President Hadi remains the legitimate Head of State, but he has become separated from the functions of an effective Government. Somehow, legitimacy and effectiveness need to be remarried in a settlement that puts Yemen back on the path to some kind of stable government that people accept, and that can avoid the conflict and disaster that at the moment are looming if there is no such quick and effective solution.
I want to say a few words in support of the right hon. Member for Leicester East (Keith Vaz), who has brought a hugely neglected subject to the attention of the House. This is a neglected part of the middle east, yet, as he mentioned, it is crucial to the security of the region and, indeed, the wider world. It also has a strategic trade position. Some 5% of the world’s oil trade goes through the Bab al-Mandab strait. That is obviously an important trade route. Of course, the situation has greatly worsened in recent weeks, and there was the news just last week that the United Kingdom, the United States and France have closed their embassies in the country, so the ambassador would no longer be able to offer his bed to the right hon. Gentleman if the opportunity afforded itself again in the future.
I well remember the trip with the right hon. Gentleman some years ago. It was a fascinating journey. Yemen is probably the most extraordinary country that I have ever visited. The trip involved something of a pilgrimage to pay homage to the birthplace of the right hon. Gentleman at the Queen Elizabeth II hospital in Aden, where we were able, with the aid of several television cameras, to dig out his birth records. That was after an overland trip from Sana’a to Aden, which the right hon. Gentleman promised would take only three or four hours. We started off at 9 am and arrived at 11.30 at night. The noble Lord Kilclooney, who was among our number, was convinced that we had been kidnapped by a tribe at one stage of our journey. In fact, such was the security situation that the ambassador was allowed to travel only by air and not by land, but we, being mere dispensable MPs, were able to travel by land.
What we saw on the trip, apart from an extraordinary country apparently still deeply entrenched in the middle ages in many respects, was one that was deeply stricken with poverty. One could see the potential for the encroachment of extremism into some deeply impoverished communities who had little else to survive for and were easily tempted by extremist voices that offered, on the face of it, some form of hope out of their despair. It is that form of poverty that gives rise to extremism and everything that goes with it. That is why our international aid effort in the wider world but particularly in Yemen is so necessary. I think that we can take particular pride in the resources that we have put into alleviating poverty, malnutrition and the severe problems the right hon. Gentleman enumerated.
We also visited the port of Aden. It was one of the great ports of colonial times—it was the fuelling station for the British fleet travelling to India—and yet it is now in decay, with very little activity going on. It is a vast deep-water port that still has the potential to be a major economic player as a staging post in the middle east, so it was disappointing that the Dubai ports company DP World attempted to invest in the port in 2008 and obtained the concession, only for that concession to be relinquished in 2012 because it was said that Dubai was not investing in the port but seeking to mothball it because of the effect that it might have on Dubai’s own interests. I believe that the port offers major potential for regenerating economic growth in the country, which would have huge implications if we got it right.
When we visited Yemen some seven or eight years ago, large parts of the country were effectively no-go areas, and we were unfortunately unable to visit much outside Sana’a and Aden. Yemen is the poorest country in the Arabian peninsula, but it is the second most populous. In addition to all its current problems, its environmental problems can only get worse. It is a water-poor country and will run out of water resources in the next 15 to 20 years unless some serious investment is made in water management, including desalination plants. Unlike its wealthy neighbours, it has virtually no oil.
I was struck on our visit by the great links between our country and Yemen. The colonial links with Aden go back a long way. Veterans in my constituency remember being in the Army when it was withdrawn abruptly from Aden by the Wilson Government back in 1967, when things kicked off. There ensued some 25 years of chaos in the country, with various civil wars and the dismemberment of the north and the south before Yemen was eventually put back together in the 1990s. On our visit, we met many Cabinet Ministers who were highly Anglophile and highly articulate. Many had children who were at universities in the United Kingdom, if they had not done likewise themselves. They had interests in the United Kingdom and spoke fondly of it. It struck me as extraordinary that we did not have a closer relationship. Indeed, I wondered why Yemen was not part of the Commonwealth, given some of the culture and background that our countries share. There are, and there certainly were, people in positions of responsibility in Yemen who are an obvious channel for dialogue, discussion and potential co-operation with western nations and particularly with the United Kingdom. We have an open door for the British Government to continue to play a significant role in the future of that troubled part of the Arabian peninsula.
As the right hon. Member for Leicester East rightly said in his opening remarks, the future of, and the solutions to, Yemen are largely reliant on its partner states in the Arabian peninsula and the wider middle east. Yemen will require financial backing. We have heard about the abortive attempts to raise donor backing in the Friends of Yemen conference some years ago, in which we played such a strategic role.
Saudi Arabia has, from time to time, injected large quantities of money into Yemen to prevent economic collapse but also, of course, because many economic migrants from Yemen have come into Saudi Arabia. In the 1990s, at the time of the first Gulf war, the President of Yemen backed Saddam Hussein for extraordinary reasons and thereby managed to alienate himself from all the allied forces, Saudi Arabia and other middle eastern countries. Some 1 million Yemeni workers were expelled from Saudi Arabia and had to return to Yemen. That caused huge economic hardship. There was a further crackdown on illegal labourers in Saudi Arabia in April 2013, and hundreds of thousands of Yemeni workers were expelled back into Yemen, which has had huge economic implications.
The co-operation of Saudi Arabia is absolutely key to getting some form of economic stability in Yemen. At a time when the country is in the hands of militant Shi’a groups of one description or another, the Saudis are understandably loth to underwrite further loans to Yemen, because they do not know what its future will be. I gather that there are moves afoot to erect a 1,500 km fence across the whole Saudi-Yemeni border. That is a porous and fluid border, across which many al-Qaeda terrorists and others have moved from north to south and vice versa over many years. We also have to consider the role of Qatar, which invested a not insubstantial sum of money some years ago in real estate in Sana’a. One dreads to think what state that investment is in at the moment. The point is that the co-operation of those neighbouring Gulf countries, and their working in partnership, is absolutely key.
A point that hon. Members have only touched on is the strategic aspect—what might be termed the “great game” that Saudi Arabia and Iran are playing out for influence in Yemen, whether by backing a particular Government or providing other support. Yemen is in the middle of what has been called a Saudi-Iranian cold war, and the co-operation of both those countries is needed to find a solution in Yemen. It is not in the interests of Saudi Arabia or Iran for Yemen to become a training ground for terrorists who will wreak havoc in other countries—Arab and non-Arab—in the middle east and the wider western world. Yemen harbours terrorists, despite the intention of the previous democratic Government to try to clamp down on them. As the right hon. Member for Leicester East has said, the huge quantity of arms in Yemen gives rise to serious concerns. If we cannot contain and regularise the situation and bring back stability in Yemen, there will be a domino effect as terrorists trained on the streets of Sana’a—or, more likely, in desert training camps—try to do harm and wreak mayhem in the capital cities of Europe.
Yemen is a neglected and little-understood country in a location that is strategically and geographically important. As a matter of security, it plays a very significant role that we ignore at our peril. I applaud the efforts made over many years by the British Government, from whichever side of the House they have been drawn—this is not a partisan matter. It has been absolutely essential to be at the table and to try to broker partnerships to bring economic stability and security to Yemen. Hand in hand with that, the direct aid that we have given has played an essential part in trying to rescue some of the poorest people in the world, who are vulnerable to falling into the hands of terrorists.
I look forward to hearing what the Minister has to say. We are talking about a difficult and frustrating situation, in which we have seen many false dawns. It is essential that we continue to take a strong interest and a strong lead in Yemen. If we can bring about a solution, it will be a great tribute to the Government’s efforts. That can be done only in partnership with all the other nations in the region, and Britain is probably better placed than any other western power to bring it about.
I congratulate my right hon. Friend the Member for Leicester East (Keith Vaz) on securing this debate at such a critical time for Yemen’s future. As he rightly said, Yemen matters, and not only in terms of counter-terrorist actions against al-Qaeda in the Arabian Peninsula, the importance of which was underlined by recent events in Paris. Crucially, Yemen matters because of its strategic importance to the region, which the hon. Member for East Worthing and Shoreham (Tim Loughton) and the right hon. Member for Rutland and Melton (Sir Alan Duncan) rightly dwelled upon. Yemen also matters because of our close ties with the people of Yemen, which stretch back through our imperial past, and the urgent need to offer economic and social hope to the citizens of Yemen at this particularly difficult point. This debate is very timely.
It is important to consider the context experienced by the people of Yemen. Yemen remains one of the poorest countries in the region and worldwide. According to the Department for International Development, poverty and inequality have increased over the past 15 years, with the result that at least 10% of Yemen’s population live on less than $1.25 a day and more than a third live on less than $2 a day according to the most recent World Bank figures. It is worth stressing that those figures are from some time ago, and the current conflict will have served only to increase the scale of poverty and deprivation in Yemen. Girls and women suffer particularly severe discrimination, including high rates of early marriage and genital mutilation. According to the UN’s Office for the Co-ordination of Humanitarian Affairs, some 15 million Yemenis, more than half of the population, require humanitarian assistance, and half of all children under five years old are chronically malnourished.
The economic situation, if gloomy now, does not look much more optimistic for the medium or longer term. Most central Government revenue comes from oil production, which is set to decline sharply in the coming years. Yemen faces major problems from declining water resources and rapid population growth. Limited competition, considerable corruption and, above all, insecurity all mean that the private sector remains marginal. Civil society, too, is far from strong in Yemen. The grim social and economic outlook for Yemenis is, as other hon. Members have already pointed out in considerable detail, exacerbated by the huge political and security uncertainty facing Yemen. The rise of Houthi rebels, the presence of al-Qaeda in the Arabian Peninsula and the manoeuvrings of different tribal groups have all contributed to the sense of uncertainty and insecurity in Yemen. The close interest of Saudi Arabia and Iran in Yemen adds a further level of potential complication.
My right hon. Friend the Member for Leicester East alluded to my work in a previous role, when I had responsibility for our aid programme in Yemen. Among other things, I remember chairing what appeared to be a successful aid conference at Lancaster house almost 10 years ago. I visited Yemen to see our aid programme on the ground, and met the then President, Mr Saleh. I remember that visit well, not least because of the gold-plated AK47 on the wall next to the President’s office—it was apparently a gift from Saddam Hussein to the one leader who had recognised his brief conquest of Kuwait— but I remember my time in Yemen best for a wider visit to Sana’a old town. As the hon. Member for East Worthing and Shoreham and my right hon. Friend the Member for Leicester East said, Sana’a is a remarkable city. Even during that visit, the better part of 10 years ago, the insecurity was tangible.
In the past four years, insecurity has markedly increased. Following uprisings in the wake of the wider Arab spring in 2011 and the series of deadly clashes between protesters and Government security forces, President Saleh signed a transition agreement brokered by the Gulf Co-operation Council, which was led by Saudi Arabia and included the transfer of power to his deputy, Mr Abd Rabbuh Mansur Hadi. In March 2013, as the right hon. Member for Rutland and Melton rightly said, a national dialogue conference convened with the aim of drafting a new constitution. The conference concluded in January 2014 and agreed a document on which the new constitution would be based.
Following the unrest of 2011, President Hadi was able to establish some stability, although the complex alliances and groupings in Yemen meant that the security forces remained very divided, and even then the Government struggled to cope with the challenges posed by the Houthi rebels and al-Qaeda in the Arabian Peninsula. Even that fragile arrangement collapsed in September 2014, when armed Houthi rebels seized control of large swaths of the capital, Sana’a. The Yemeni Government signed a peace and national partnership agreement, which involved the formation of a new Government and required Mr Hadi, acting as caretaker President, to appoint a new Prime Minister. The agreement also led to the appointment of political advisers from the Houthi and southern movements. The agreement was welcomed by the UN, and the Secretary-General, Ban Ki-moon, urged all parties to implement the agreement without delay.
The situation has worsened dramatically since the turn of this year. In January, as my right hon. Friend the Member for Leicester East said, Houthi rebels rejected a draft constitution proposed by the Yemeni Government and seized control of state TV. President Hadi and his Government resigned. The President’s residence was attacked and he was placed under house arrest, as were the Prime Minister and many Cabinet Ministers. Earlier this month, the Houthi rebels dissolved Parliament and announced that a five-member presidential council would replace the President.
Jamal Benomar, the UN envoy to Yemen, rightly said on 11 February:
“We believe the situation is very dangerous. Yemen is on the brink of civil war”.
I therefore welcome reports that a UN-brokered deal was struck on Friday to agree on a compromise legislative council, although I understand that that falls short of a full new Government with clear leadership. I am told that Mr Benomar believes the agreement may pave the way for a comprehensive political agreement. I understand that the agreement keeps the existing Parliament in place but adds a people’s transitional council as a sort of second legislative chamber, drawing in members from the Houthi movement and other under-represented groups such as young people, women and those from southern Yemen. What apparently has not been decided is how a new President or Cabinet will be chosen. Mr Hadi was under house arrest until very recently and, like others in this Chamber, I welcome the fact that he has managed to escape. I share the view of the right hon. Member for Rutland and Melton that Mr Hadi’s colleagues, including the Prime Minister, need to be released immediately by the Houthi rebels. I look forward to hearing the Minister’s view on the prospects for the deal. What steps is the UK taking to encourage discussions between the various groups to try to build consensus for further agreement?
Jane Marriott, until very recently the UK’s ambassador to Yemen, recently stated:
“The GCC Initiative provided the mechanisms for an inclusive political dialogue involving those groups who hadn’t signed it, including the Houthis and Herak. The UK was in regular contact with all groups, including the Houthis, during the National Dialogue. They, like all groups, had legitimate grievances that were not being addressed quickly enough.”
I recognise that, with the closure of our embassy, maintaining contact with the different players in Yemen has been difficult, but it would be useful to hear what contact has been maintained. Further, what discussions have the UK Government had with the Saudi Arabian Government, in their role as co-chairs of the Friends of Yemen, on the support they are able to provide to encourage further political progress? As my right hon. Friend the Member for Leicester East rightly asked, will the Friends of Yemen meet again before the Dissolution of Parliament next month? What discussions have the Minister or his colleagues had with our EU colleagues, who will also play a critical role in providing further humanitarian aid and encouraging a collective way forward?
As the hon. Member for Gillingham and Rainham (Rehman Chishti) said, Iran has been accused of supporting the Houthi movement. There are clearly links, but it would be helpful to hear the Minister’s assessment of the allegations about Iran’s role in Yemen’s recent history. What discussions has he or ministerial colleagues had with Tehran—perhaps in the margins of discussions about the nuclear deal—about progress in Yemen?
Lastly, my right hon. Friend the Member for Leicester East raised concerns about the continuing presence and strength of al-Qaeda in the Arabian Peninsula. There is concern that the progress made by the Houthis has helped AQAP strengthen its position. If accurate, that is particularly troubling. My right hon. Friend also rightly discussed the need for better oversight of individuals travelling to Yemen. It would be good to hear the Minister’s reflections on that point. My right hon. Friend and others who have spoken today have done the House a service in raising the situation in Yemen. I look forward to hearing the Minister’s response.
It is a pleasure to work under your chairmanship, Mr Caton. It is also a pleasure to respond to this informative and interesting debate, which shows this House at its best. The amount of knowledge presented by the various contributors shows that it is an important issue and that Britain has a role to play. I thank the Backbench Business Committee for selecting this debate, and I pay tribute to the right hon. Member for Leicester East (Keith Vaz) for pursuing the issue not just today but on numerous occasions when he has brought it to the Floor of the House. I hope that he continues to do so.
It is right that this House is debating developments in a country that is a key partner for delivery on counter-terrorism objectives. I will, if I may, place the country in historical and geographical context. As I am sure hon. Members know, Yemen lies at the southern end of the Arab peninsula, bordering Saudi Arabia to the north and Oman to the east. In biblical times, Yemen was known by Noah as the land of milk and honey. The three wise men are said to have presented baby Jesus with myrrh and frankincense from the mountains in Yemen. Others claim that it is the home of the queen of Sheba.
In modern times, Britain has had strong historic links with Yemen. Aden was colonised during the 19th century and developed into an important staging post on the sea route to India, as my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) mentioned, but Britain was later forced to leave Aden following local insurgency in 1967. More recently, times have been less pleasant. After an eight-year civil war between the Saudi-backed royalists and Egyptian-backed republicans, the republics of North and South Yemen were established in 1970. In 1990, the Marxist South Yemen merged with the northern republic. Four years later, unhappy with northern oppression, the south fought and lost a brief war of secession.
Yemen was struck by further political upheaval in 2011, when thousands took to the streets to force out the then President Saleh after three decades in power. Saleh resigned at the end of 2011 as part of the Gulf Co-operation Council initiative deal, which signalled the start of Yemen’s political transition. Since then, that political transition has been making steady progress. The national dialogue conference, which several hon. Members have mentioned, agreed a vision for Yemen that went on to form the basis of the new constitution, a first draft of which we saw in January this year, as the Opposition spokesman mentioned.
Regrettably, since last September the Houthis, a political and cultural Shi’a Zaydi religious movement from the north of Yemen who make up one third of the population and who ruled the north until 1962, have staged a takeover of the legitimate Government of President Hadi and key state institutions, putting the transition process in jeopardy. We cannot accept the Houthi use of military means to achieve political aims. It is a clear violation of the 1994 Yemeni constitution and the principles of the GCC initiative.
Descent into further conflict is now a strong possibility, and the threat posed by al-Qaeda in the Arab Peninsula to the Yemeni state, as well as to our own national security, remains real. Recent events in Yemen threaten our ability to deliver our core objectives in Yemen: to disrupt al-Qaeda in the Arab Peninsula and its ability to launch aviation-based attacks against the UK and partners, to address the urgent humanitarian situation facing the poorest people in that country, and to bring about greater stability through a more inclusive political system that respects the rule of law.
We still want a stable, democratic and prosperous Yemen. Yemen is a key partner in the UK’s national counter-terrorism objectives against al-Qaeda, and we contribute large amounts of development aid, including more than $300 million over the past three years to help 16 million Yemenis who do not have access to basic food or services. Humanitarian developments as well as stable politics are fundamental to securing a stable and peaceful future.
The dust has not yet settled from the Houthi takeover; events continue to evolve. The worst-case outcome is that the Houthis may unilaterally come to dominate the Executive and continue their expansion into the largely Sunni governorates of the south. That could lead to a bloody civil war and greater instability.
On finding a peaceful long-term solution in Yemen, does the Minister know whether the Houthis are prepared to accept UN resolution 2201, which would ensure that all parties must come together and that the Houthis must withdraw from all Government institutions immediately?
I am developing my argument, and I will certainly come to that, but yes, the core of what we are doing is working with the UN special envoy. Indeed, we were integral to the drafting of that resolution. That is exactly where we want all parties to arrive, but particularly the Houthis.
In recent months, there has been an increase in al-Qaeda attacks, mainly targeting the Houthis and giving a more sectarian tone to what is essentially a struggle for power and territory rather than an ideological battle. Instability in Yemen increases the risk of opportunist al-Qaeda attacks and allows al-Qaeda to exploit the power vacuum and project violence beyond Yemen’s borders. A better outcome for Yemen would be a more representative Executive that returns to the political road map in line with the GCC initiative. To achieve that, all parties should re-commit to the principles of the GCC initiative, the NDC recommendations and the peace and national partnership agreement, which the Houthis signed before they moved into the capital. They should also agree to UN Security Council resolution 2201.
Although the Houthis have engaged in the political process, for instance by taking part in the NDC talks on the new constitution, they have repeatedly failed to implement the measures to which they have agreed. Their actions to date have spoken far more loudly than their words. Like my right hon. Friend the Member for Rutland and Melton (Sir Alan Duncan), I commend the efforts of our former ambassador, Jane Marriott, and her staff to deliver our core counter-terrorism, stability and humanitarian objectives in such a difficult operating environment.
Recent events in Yemen will hinder our ability to deliver our objectives there, and it is with regret that we have had to suspend embassy operations temporarily and withdraw diplomatic staff from Sana’a. We will continue to work remotely in support of Yemen’s transition under the leadership of our new ambassador, Edmund Fitton-Brown. We hope to return to Yemen as soon as the security conditions improve, and will make an announcement in due course.
We will make an announcement shortly on where the new embassy will be located; once that happens, the normal processes will then apply. However, the right hon. Gentleman makes an important point and, if I can, I will write to him with more details.
The Friends of Yemen brings together many countries around the region, and Britain is proud to co-chair that organisation. It met at the UN General Assembly in September last year, and all the countries involved were committed to encouraging the Houthis to enter into dialogue with the other stakeholders. My hon. Friend the Member for East Worthing and Shoreham talked about the slow pace at which funds are being released, such that they are not coming through, even though I understand they had been pledged in 2012 at a previous UN General Assembly. Money is available but it needs to be unlocked, and the institutions need to be in place in the capital of Yemen, so the money can be transported and spent in a transparent and appropriate way. Those aspects of the process have broken down, but we should not forget that those pledges, which amount to about $10 billion, were made in 2012. I understand that less than $5 billion was actually committed, as such, so there are international funds available, but they will only be used once the political situation in Yemen has indeed improved.
I apologise for missing the earlier part of the debate. While my hon. Friend the Minister is addressing this issue, may I ask him a question? The placing of funds from the Friends of Yemen into Yemen crucially depends on the commitment of Yemenis themselves to having the means to deliver money to the poorest people, to ensure that jobs exist. In the past, too many states have put money into Yemen and found that it was not being used effectively, because of problems within government. Is the Minister more assured now that that point is really understood, so that this money can be unlocked? Not only political will but economic competence in delivery is necessary and key to ensuring that that money is used effectively.
I am grateful to my right hon. Friend for that intervention, and I pay tribute to the work he did in the region as a Minister in the Foreign Office. He makes a powerful point. The unique position Britain finds itself in, compared with other countries, and the leading role it should play has already been mentioned. Part of that role has been to communicate with the Houthis and, indeed, with the other stakeholders to make them all aware not only of the wider consequences of civil war but of the positives. Once the structures are in place and there is stability, then we can unlock these funds.
However, an indication of the instability in Yemen is that Britain had to evacuate its embassy, along with the Americans and indeed others; the EU has evacuated its base as well. Until those embassy officials are able to return to Yemen, I am afraid the process of releasing and appropriately spending these funds, which are much-needed to help those caught up in the war, will be much slower.
The regional implications of instability in Yemen are serious, as hon. Members have mentioned. The increasingly sectarian nature of the conflict between the Shi’a Houthis and the Sunni tribes in the south will play into the hands of Al-Qaeda. We must work closely with allies such as Saudi Arabia and the Gulf states to ensure that there is a co-ordinated and multinational response to the situation in Yemen.
A number of hon. Members mentioned the important role Iran can play in the situation we face. We are in dialogue with Iran and we need to ensure that it understands that it has a constructive role to play, to make sure that we do not see a further degrading of the situation in Yemen into civil war.
We also continue to work through our embassy staff, the UN special envoy—Jamal Benomar, who has been mentioned—and key allies to encourage all factions to work together to agree a political solution within the framework of the Gulf Co-operation Council initiative, including a clear timetable for constitutional reform and indeed elections. We remain concerned by the continued house arrest of Prime Minister Bahah and other members of the Cabinet, and we are actively calling for their immediate release.
No country can tackle terrorism alone, and Yemen is no exception. The scale of the challenge is huge and in the longer term continued instability in Yemen may mean an increased risk of al-Qaeda in the Arabian Peninsula launching external attacks, including here in the UK. AQAP remains a major part of the global, multimillion-pound kidnapping trade, which directly targets the UK, the EU, the US and nationals of other western countries. Through its extremist propaganda, AQAP also seeks to radicalise Muslims around the world and incite extremist violence. That was illustrated, as hon. Members have mentioned, in the horrific attack in Paris on 7 January.
Addressing the underlying instability in Yemen and the country’s political and economic problems is essential to countering the AQAP threat effectively. We have temporarily suspended counter-terrorism capacity-building activity with the Yemeni security forces, but we are exploring ways to re-engage with them in such activity, in a human rights-compliant manner. Members will appreciate that, for operational reasons, I cannot comment in detail on this activity.
We know that the majority of Yemenis want the same things people elsewhere around the world want: a say in how their country is run; an education for themselves and their children; the chance to have a good job; and the chance to live in a peaceful and prosperous state. Therefore, economic stability is as critical as political stability. Sadly, however, the economic situation in Yemen is deteriorating fast, with almost zero growth, debt at 50% of GDP, rapidly declining foreign reserves and growing fuel shortages.
First, I apologise for not being here earlier. This is a subject dear to my heart, as my dear friends, the right hon. Member for Leicester East (Keith Vaz) and the hon. Member for Walsall South (Valerie Vaz), know. I am not sure I can spell it correctly, but all three of us remember Bikerji Cowji—the toy shop we all went to as children.
I know my hon. Friend the Minister cannot say why our counter-terrorism training has been suspended, but it is crucial that we get involved to help the Government in Yemen get a grip of counter-terrorism. It is so important, so we should go back there as fast as we can.
My hon. Friend is very experienced in these matters, and he makes an important and powerful point. Yemen has been an enormous incubator of terrorist groups; sadly, the potential for civil war in the country is also enormous. Working with our allies to ensure that we can return and work with the Yemenis themselves is therefore a priority. However, we must remember that we need a Government in Yemen to work with, and at the moment there is not one. There is a President, as such, and the President himself continues in that office. Nevertheless, there is confusion as to the direction we are going in, which is why we are calling upon the Houthis and others to recognise the UN resolution we are working towards implementing and to come back to the table, to provide the political basis from which peaceful dialogue can take place.
Without key reforms, the future Government of Yemen will struggle to manage not only terrorism but the country’s finances in the face of low oil prices and a burgeoning salary bill—issues we discussed earlier. International support remains crucial if Yemen is to avoid economic disaster. As has been reiterated across Westminster Hall today, we must remain engaged in what is going on in Yemen.
It is also important that Yemen avoid humanitarian disaster. I pay tribute to the work of the hon. Member for Harrow West (Mr Thomas), the Opposition spokesman, while he was at the Department for International Development; he brings a lot of expertise to this debate. With some 16 million Yemenis in need of humanitarian aid, Yemen’s humanitarian crisis is second in scale only to Syria’s. However, there is a real risk that humanitarian needs will increase in the coming weeks and months if the economy deteriorates or the conflict intensifies. The UN appeal is only 60% funded, and it is crucial that the international community maintain or even increase its support to Yemen at this time.
My hon. Friends know that we have provided £185 million in aid to Yemen during the past three years through DFID programmes. We are currently able to continue to deliver the vast majority of those programmes, particularly our humanitarian and nutrition programmes, although we are keeping in close touch with our partners as events develop.
The international response to recent events has been strong and united. The UN Security Council unanimously adopted resolution 2201, which was led by the UK and Jordan. It deplored the unilateral actions taken by the Houthis and urged them to engage in good faith in the UN-brokered political negotiations, to withdraw their forces from Government institutions and to release safely those who remain under house arrest. Regrettably, the EU, GCC and US missions have also had to suspend their operations due to the deteriorating security situation.
The future of the Yemen state is more uncertain than ever. The current political crisis has re-energised those groups in the south who long to return to the days of an independent South Yemen. The UK and the UNSC remain in support of the unity, sovereignty and independence of Yemen. There are secessionist sentiments in parts of the south, and we support calls for a new state structure that would give greater autonomy to the south of Yemen, as agreed in the National Dialogue Conference. However, the future structure of the state is ultimately a question for the Yemeni people.
Despite the huge challenges Yemen is facing today, I think there is a solution to get Yemen back on the right path. This includes, first, the immediate end to violence and intimidation, particularly in the oil-rich province of Marib, and the release of the remaining Cabinet members under house arrest. I am pleased that President Hadi is now safe and well and free from house arrest.
Secondly, there should be a swift, peaceful political transition. We urge all parties, particularly the Houthis, to implement the GCCI, the NDC outcomes and the peace and national partnership agreement that they signed originally in 2014. All parties should engage in good faith in the UN-brokered negotiations.
Thirdly and finally, there should be a new Executive to take urgent steps to improve the economic and humanitarian situation. The political road map must now become a reality. I assure hon. Members that despite the temporary suspension of our embassy operations in the capital, Britain will continue do what it can to help Yemen achieve a better future for all.
Police Numbers (Wales)
Mr Caton, thank you for allowing me to speak so early. I am glad I arrived early, because otherwise I could not have done so.
I called for this debate because everybody cares about police numbers. Everybody wants to feel safe in their homes and safe on the streets, and everybody wants to walk the byways free of antisocial and other nuisance behaviour. I am concerned that, as a result of decisions taken by this Government, Wales in particular has lost 500 officers from its service: North Wales police has lost 92 officers; South Wales police, 154; and my force in Gwent has lost 226 officers. The reductions in police numbers across Wales is the equivalent of Gwent police losing a full third of its officers. The fall in numbers is having a dramatic effect not just on our police, but on our constituents and businesses. In fact, police officers have said unequivocally, “Public safety is at risk.”
Last Wednesday, public safety was in the minds of people in Newbridge, when I attended a public meeting there. We talked about problems relating to antisocial behaviour in particular. I felt sorry for a police officer who told me that, unfortunately, due to cuts he could not bring in the CCTV they wanted and could not cut down on the antisocial behaviour, and that there was a real problem that impacted on public safety throughout Newbridge.
Research by the Police Federation has found that crime is not falling. Instead, it is not being reported or is being recorded incorrectly. In Wales, overall, crime has risen by 3%. Violent crime is up a fifth, with 38,000 violent attacks and 14 murders. Sexual offences are up by a shocking 30%. It is not as though Ministers can claim they did not know this would happen. Back in 2011, the Welsh Assembly launched an inquiry into the impact of policing cuts. The evidence taken during the inquiry came from a wide range of civil society. The advice was compelling and the outcome clear. The cross-party committee in charge of the investigation stated in its report that cuts to police numbers would be damaging, would impact on communities and would reverse progress made in the past decade. Equally, the Welsh Local Government Association said that reductions in police numbers would present a
“huge challenge for community safety and in continuing to tackle and reduce crime and disorder.”
It is clear that the loss of police officers has had a dramatic effect on the safety of our communities. The Government have claimed that officers have been lost only in respect of back-office functions. Although this may be so, it is shocking that Ministers do not recognise how important so-called back-office functions are to combating crime. Back office is more than just admin and human resources: it is, among other things, anti-terrorism intelligence, child protection, domestic violence units, family liaison, witness services and, crucially, 999 call handlers. Can the Minister honestly say that these functions are not vital to tackling crime?
The reduction in police numbers is not just making our communities more unsafe; it is harming their prosperity. It is making it more difficult for businesses to succeed. This is especially true in retail. I know so many shop owners in Islwyn who tell me of youngsters outside their shops who cause nuisance, and whose antisocial behaviour makes people fearful of going into the shops to make purchases. When they send those youngsters away, they usually get a mouthful of abuse.
Equally, large supermarkets, including Tesco and Asda, tell me that there is an increase in the number of shoplifters. In fact, shoplifting cost retailers more than £600 million last year, with an average incident costing companies £241. Now who is anti-business? That sum is a 36% increase on previous years. This is happening against the backdrop of police in Wales being forced to prioritise some crimes over others.
Her Majesty’s inspectorate of constabulary has recognised that police forces with reduced numbers of officers are having to make very difficult decisions. As a result, businesses are suffering, including from the unchecked increase in online and credit card fraud. I raised this matter with the Prime Minister. We are talking about gangs putting together nuisance mail, tricking older and elderly people into giving up their life savings through letters coming in the post. What is happening about that crime? People are suffering from that as well.
This damage to public safety and the impact on businesses will only get worse if these plans continue. In my own area, as I said, Gwent police has already lost 226 officers and 175 civilian staff. With £22 million more to be cut by the force, a further 200 officers could lose their jobs. That would take the force—policing one of the most deprived areas in Europe, covering a geographical area of over 1,500 km, with a population of 556,600—to just over 1,000 officers. I give the Minister the opportunity to guarantee here and now that this further reduction will not harm public safety.
I fear that the increases in crime we have seen in Wales, and particularly in my local area, are just the beginning. To put it bluntly, the police in Wales, including in Islwyn, Gwent, and all over the country, are being stretched to breaking point. Many forces are now at critical mass level, meaning that police numbers going any lower would put the public in serious danger. This Government’s approach to policing has been described by the Police Federation as chaotic and foolish.
Such aggressive reduction of police budgets is putting the public at serious risk of crime. Ministers should take the advice given to them by HMIC. Worst of all, these cuts to budgets and police numbers have been done without any consultation. For a Government who talk about localism, that is absolutely amazing. The Welsh Government were not asked for their view on what policing should look like. The people of Wales were not asked what they would like from their police service. It is a disgrace that wide-ranging funding changes, impacting our communities, were made without consulting either the people of Wales or their representatives.
The scale and pace of police cuts in Wales is greater than that of any other public sector cuts in Wales or England. Ministers are right that in these times, we face difficult situations and have to make hard choices. However, I believe that government has only one duty, and that is to ensure people’s safety. The truth is that by choosing to reduce the numbers in our police services, the Government have failed.
In 2010, the Home Secretary was publicly warned that a reduction in police numbers would damage public safety. Sadly, this warning was proven correct. For more than four years, our communities have been becoming less safe. In the dying days of this Parliament, will the Minister, who is a Liberal Democrat, admit that the Government simply got it wrong? Will she apologise to the victims who might never have experienced crime if there were more police? Will she commit the Government to changing course? I look forward to her responses. Our dedicated police officers deserve that change of course, as do the people of Wales.
What a pleasure it is to serve under your chairmanship, Mr Caton. I congratulate the hon. Member for Islwyn (Chris Evans) on securing this debate. I recognise that issues connected with the strength and capability of policing in our communities rightly continue to be of interest to all Members. I apologise on behalf of my right hon. Friend the Minister for Policing, Criminal Justice and Victims, who was unable to attend today because of prior diary commitments.
I will respond to the points made by the hon. Gentleman in a few moments, but before I do, I will reflect on some significant achievements by police forces in Wales. First, it is worth highlighting the contribution of Welsh police forces to the overall reduction in crime that we have seen since the coalition Government took office. As we have said a number of times, crime as measured by the independent crime survey for England and Wales is down by more than a fifth since 2010, and now stands at its lowest level since the survey began in 1981. Chief constables and police and crime commissioners have demonstrated that it is possible to deliver more for less and to prioritise resources at the front line. Communities in Wales are safer than they have been for decades.
Like forces elsewhere, Welsh forces are collaborating with one another and with other public services to transform the policing landscape. That is helping not only to achieve necessary savings, but to deliver better outcomes for the public. For example, North Wales police and Cheshire constabulary have recently merged their armed policing units to improve response times and cut costs. Dyfed-Powys, Gwent and South Wales police forces collaborate across a number of areas, including firearms, crime recording, mobile data, forensics and procurement.
I apologise for not realising that the debate started early. I am very concerned and would like the Minister’s opinion on the fact that the police and crime commissioner for Dyfed-Powys has withdrawn his funding for the monitoring of CCTV cameras. That was a partnership with the county council, which clearly cannot make up the shortfall. Does she agree that that decision is short-sighted? We have low crime figures now, but that could start the reversal of the trend.
As the hon. Lady knows, it is a matter for decision locally by the PCC. That is the whole point. The PCC has to judge the correct way to proceed on the spot. I am sure that she is more than capable of taking the matter up with the PCC directly.
The police and crime commissioner for Gwent, Ian Johnston, has announced plans for a new victims’ hub, which will bring together a range of agencies and organisations to enable the force to work more effectively and efficiently with victims of crime. Through the police innovation fund, we have provided funding that will further enhance collaboration, as well as improve digital working and introduce new means by which the public can make contact with their forces. In 2014-15, Gwent and South Wales police forces received £837,000 from the innovation fund to develop an app that will allow officers to record and upload statements from a crime scene to a shared system. That will free officers from having to return to base, allowing them to spend more time on patrol.
A collaborative bid from all four Welsh forces to create a pan-Wales women’s triage scheme received £235,000 from the innovation fund. That scheme will help to rehabilitate female offenders and divert them from a life of crime. Dyfed-Powys was awarded £95,000 from the innovation fund to introduce a new computer system that will allow the force to share information securely with the ambulance and fire services during emergency incidents, helping to improve response times. Those pioneering projects are exactly the types of schemes we want to see forces doing. They show that innovation and collaboration make the police even better at doing their job and solving crime.
I pay tribute to Gwent police for their successful policing of last September’s NATO summit, supported by mutual aid officers from across the country. Let us not forget that it was a significant international event, which saw one of the largest gatherings of world leaders ever seen in the UK. The hard work and dedication of all the officers involved in that substantial operation ensured the safety and security of local residents and delegates.
I thank the Minister for giving way, especially since the earlier start to the debate caught me somewhat unawares. I agree wholeheartedly with her comments on Gwent police and the policing of the NATO summit. It was an excellent example of community policing in action. I know that all the communities I represent greatly appreciated it, so I thank her for making that point.
The hon. Lady speaks very well for her community.
Officer numbers are a key issue. I understand that there are concerns about reductions in police numbers in Wales, as elsewhere, and that is reflected by the level of the debate we have had today. We recognise the enormous impact that seeing officers on the street has in reassuring the public and deterring crime. While we remain absolutely committed to the principles of visible community policing, we have had to be realistic about the tight financial constraints within which we have to operate public services. The Government inherited the largest peacetime deficit in the country’s history, and we have had no alternative but to address that. I am sure that would have been true whoever had come into government. We were spending £14 billion on the service at the start of the current spending review period, so it was inevitable that we had to look to the police to deliver their share of the savings needed, and they have done so. Her Majesty’s inspectorate of constabulary’s recent “State of Policing” report reinforced that, over the spending review period, forces have been successfully balancing their books while protecting front-line services and delivering reductions in crime.
We have always been honest about the fact that, with 80% of police spending being on the work force, reduced budgets will inevitably have an impact on the numbers of officers and staff that forces can employ. The key has been to maximise the savings that can be delivered from the remaining 20%, in such areas as procurement and IT, and to prioritise available resources where the public expects to see them: at the front line. We know that that is happening in Wales, and I have already mentioned some of the examples of collaboration between Welsh forces that are helping to drive greater efficiency. I am pleased to note not only that a greater proportion of police officers in Wales are in front-line roles than in 2010, but that the measures have enabled Welsh forces to reinvest savings in increasing their officer numbers over the past 12 months.
I recognise that that picture is not wholly reflected in Gwent, which is the local force of the hon. Member for Islwyn. The published statistics show that it lost 73 officers in the year to September 2014. The inspectorate has expressed concerns on the extent to which the force’s change plans are focused on work force reduction, without a full understanding of local service demands and the impact such reductions will have on the skills and rank mix. It is clear, however, that Gwent has resolved to address that and build a sustainable position for the future, based on the sorts of activities that other forces are successfully implementing.
In addition to the promising collaborative work with other Welsh forces and local services that I have already mentioned, the PCC has announced the decision to reopen or extend the opening hours of nine police stations throughout Gwent that had previously been closed to the public or had limited opening hours. The force is also developing a new operating model that aims to protect and improve front-line policing by allowing greater flexibility in how it deploys the available resources. From April, teams of officers will be based in local police stations, rather than operating from response hubs. Each station will be managed locally by a neighbourhood inspector, who will have their own team that they can deploy to tackle issues. Such local ownership will enhance the service that the force provides to communities by increasing police visibility, local knowledge and problem solving in those neighbourhoods. Front-line policing will further be bolstered in numbers by devolving operational support officers to front-line duties.
Ultimately, decisions on the size and composition of a police force’s work force are for individual chief officers and police and crime commissioners to make. They will take account of the needs and views of their local communities. Full-time officers are only part of the story. Police staff and police community support officers are an integral part of the policing family, as are special constables and other volunteers. For example, North Wales police, which already has more than 120 special constables, is running a recruitment drive to expand that number, particularly in rural areas and among Welsh-speaking communities.
A vital part of how policing is delivered today is the technology that officers have at their disposal. Technology has the power to transform and maximise the impact and effectiveness of the resources that forces have at their disposal. Supported in part by the police innovation fund, which I mentioned earlier, forces are investing in mobile technology to give officers instant, on-the-street access to the systems that they need, thereby reducing the need for officers to spend time in the station. For example, the police and crime commissioner in Dyfed-Powys has stated that officers will spend an additional 100,000 hours—a huge amount—on the beat this year, owing to IT improvements implemented by the force.
Turning to some of the points that were raised, fraud has tended to be under-reported. We have worked to increase reporting through Action Fraud, a specialist reporting and advice service for fraud victims. The rise in police-recorded fraud is likely to reflect the improved reporting that has been introduced to the system over time. The crime survey data on plastic card fraud suggest a small rise in the year to September 2014, but the proportion of card users who suffered fraud was 20% lower than in 2009-10.
The hon. Gentleman mentioned recorded crime in Wales being up 3%. The Office for National Statistics analysis suggests that increases in recorded crime have been driven by improvements in crime recording, particularly of violence. He also mentioned the fact that incidents of violence against women have risen by 30%; we at the Home Office welcome their being recorded. The Home Secretary commissioned Her Majesty’s inspectorate of constabulary to review crime recording in all 43 forces, and that has clearly had a salutary effect because crime recording is improving, as it had to.
We recognise the importance of vital back-office support functions. HMIC has found that forces are prioritising available resources in not only visible policing functions but key non-visible front-line roles, such as intelligence and the safeguarding of vulnerable people.
I thank hon. Members for participating in an informed and well-reasoned debate. It is clear that the police reforms delivered under this Government are working. The take-home statistic is that, according to the independent crime survey for England and Wales, crime has fallen by more than 20% and we are all safer than we have been for decades, including in Wales. The Government recognise that the funding settlement is challenging for police and crime commissioners and forces, but it also brings opportunities, particularly for those prepared to innovate, collaborate and transform to drive efficiencies, and to deliver even better policing across Wales.
[Dr William McCrea in the Chair]
It is a pleasure to serve under your chairmanship, Dr McCrea. It is also a pleasure to see the Minister in his place. I recognise that he has not been carrying out his duties for very long. I also know that the issues I am about to raise are possibly cross-cutting, and therefore do not expect him to be an expert on them. There may be some issues on which he will want to come back to me after the event.
I want to raise a specific example of how public procurement of infrastructure in the south-west could, in my opinion, be greatly improved. However, before I get on to that issue, I should say how much I welcome the extra investment the Government are making in our nation’s infrastructure. I often think that Governments do far too much, but one thing the Government can do really well—perhaps only they can do it—is ensure that the country’s infrastructure, whether it be for transport, education, communications or whatever, is in the first-class condition we would expect in a first-class country. I am glad that our disciplined adherence to our long-term economic plan has released the resources to invest in our country in that way.
I should clarify that, for the purposes of the example I am giving, the south-west is the seven counties of Cornwall, Devon, Somerset, Dorset, Wiltshire, Gloucestershire and Bristol, a vast region that stretches from the Isles of Scilly and Land’s End in the south to the Forest of Dean in the north and Stonehenge in the east. It does not quite take in Northern Ireland, Dr McCrea, but it comes quite close.
I welcome the two recent announcements of major infrastructure spending and improvements in our part of the world. The first is the dualling of the A303 all the way from the M3 to the M5, with a tunnel under Stonehenge, which when complete will give the far south-west a second major arterial road to underpin our growing economy. I am also exceedingly grateful to the Prime Minister and the Secretary of State for Transport for the commitment given to working with the Peninsula Rail Task Force to work up its three-point plan into a deliverable proposal with timings and costings that will give the far south-west a rail service fit for the 21st century, including journey times of two and a quarter hours from Plymouth to Paddington. That is all very welcome.
My specific concern, and the reason for calling the debate today, is the way in which the coalition Government have recently chosen to procure the building of new schools and the refurbishment of existing schools throughout our region. Of course, some think that what school buildings and classrooms are like does not matter for education, as long as the teachers are good, but I do not agree. Modern, well-designed buildings can lift the spirit and help a child to attain his or her potential. The gradual replacement of ancient school buildings, of which we have many in the south-west, is extremely important to the academic prospects of the next generation.
The Education Funding Agency regional framework is a four-year arrangement through which the EFA, academies, local authorities and other educational establishments can arrange contracts for individual school projects, both new build and refurbishment. In July 2014, the Education Funding Agency regional framework appointed seven contractors for lot 4, which is its rather unromantic bureaucratic description of the south-west. Thereby hangs the first problem I wish to raise with the Minister. Not one of the construction companies on our regional framework is local to the south-west—not one. There are some outstanding construction companies in our region, many with an excellent track record on public sector projects, yet not one made it on to the list. I will go further than that and say that some of the companies that are on the list do not have a proven track record in our region at all.
The hon. Gentleman may, in a way, have answered my question, but will he elaborate for me the process of procurement? In Northern Ireland, we have procurement clusters for councils that are close together and so do a lot of procurement together. Does the procurement system operate in the same way in his region?
That is a helpful and interesting question. I will describe the procurement process in a moment. The hon. Gentleman may be able to understand it more clearly than I do. I find it extremely complex. That is one of the things that has gone wrong. The system itself is complex and—dare I say it?—over—bureaucratic.
Not one regional company has made it on to the framework list. I believe—this is the thrust of what I am raising with the Minister today—that essential changes are needed to the framework system so that local businesses have a fair chance of winning prize public procurement contracts and projects. It sounds like the situation in Northern Ireland is similar, and I do not suppose for a moment that the south-west is unique. This is an issue to which civil servants and Ministers need to give a little more thought.
I understand the benefits of multi-user framework agreements for procurement. They give a pre-competed route to market, procuring a vehicle to centralise procurement spend. They also share procurement expertise and resources, and risk and contract management. They reduce the administrative burdens of the time and cost of running a full procurement procedure each time. Infrastructure work is also very attractive to suppliers in such large volumes, but—I use my words carefully—it is an insult to our region to exclude all our companies. It may also be counter-productive, as I hope to explain.
First, how did this come about? I will try to explain the process as I understand it. Prior to issuing the notice in the Official Journal of the European Union in 2013, the EFA was looking to engage with the market to invite ideas as to how best to encourage the markets at a local level to participate in tendering for the framework on offer in a way that would deliver the most economically advantageous commercial agreement for all parties. Although local companies, including many with a tremendous track record of delivering schools over many years, applied in the south-west, that clearly had no effect on the outcome. Of the seven construction companies chosen, not one is local.
The final seven are as follows. The first is a French company called Bouygues, which has its headquarters in Paris, France. The second is BAM, which has its headquarters in Bunnik, in the Netherlands. The third, Skanska, is perhaps better known—its headquarters are in Stockholm, Sweden. The others are UK companies: Interserve, a well-known company, ISG plc, Galliford Try and Kier Group, which, again, is well known. They are all based in the south-east.
I accept that the first three international companies have small UK offices, but they are essentially overseas companies. They have no relationship whatever with the west country and any profits made are unlikely to be spent in the UK. I recognise the nature of the world in which we live—multinational corporations get contracts in every country and work in and contribute to our country—but I firmly believe that regionally based companies are able to deliver schools successfully in a cost-effective manner, and so should not have been excluded from the EFA framework. Local companies are much more likely to understand and wish to contribute to the community in which they are working.
It is also the case that international companies tend to bring with them their own supply chain and specialist sub contractors. The Minister may be thinking of saying in his response—it may already be written in front of him—that, if a contract is won by a major national or international company, that company will sub contract parts of the work to local companies, but I urge him not to say that, because the evidence on the ground is that, more often than not, it simply does not happen, and those companies bring their own supply chains with them.
It might help the House to hear that there were plenty of alternatives to the way in which the Government chose to proceed. For example, Midas Construction, one of the outstanding and successful construction companies in our region, has developed something it calls the Midas model school solution. That concept, which is now in its fifth year, has delivered 13 cost-effective schools.
It began with the requirement to deliver a primary school pursuant to section 106 of the Town and Country Planning Act 1990. A housing development contractor thought that it could deliver a school directly in a more cost-effective manner and use surplus moneys to fund IT equipment. The school was designed on the standard template, using a framed solution with traditional construction. The concept allowed for future expansion from a one-form to a two-form school as the housing development progressed. The school was delivered successfully and benchmarked about 20% lower than the Department for Education allowance. The project was successful and, consequently, it was rolled out to a number of the contractor’s other sites and local authorities.
The evidence is that the model school is between 15% and 20% cheaper on average than the traditional public procurement route. The model has proved to be adaptable over time, but the most powerful testament is that every head teacher has been happy to accept the learning environment as fit for their school and, after years of use, they remain delighted with the product.
That model and others like it are now excluded from the south-west because of how the new framework agreement has been put together. Some excellent regional firms have also been excluded. I mentioned Exeter-based Midas Construction, but what about Henry Pollard and Sons from Bridgwater in Somerset, Ryearch Ltd, based in my constituency, Rydon Ltd in Bristol, or Devon Contractors, another Exeter-based concern? They are all capable of building and refurbishing local schools, but they are all excluded because of a needlessly bureaucratic approach to procurement.
I am sure the hon. Gentleman will agree that that flies in the face of Government policy to try to rejuvenate local economies. Certainly, in my part of the United Kingdom, many companies have fallen foul of EU legislation under which, if contracts are above a certain price, they have to go out for tender, as he has explained. However, if we get indigenous businesses operating again, surely that will benefit local economies and jobs.
I absolutely agree. It does fly in the face of Government policy, but I do not think Ministers are necessarily aware—I would not necessarily expect them to be—of the detail of the very technical framework agreements being put in place. I understand that clever people have brought them about for all the right reasons and with good intentions, but the upshot is that we have a product that local people are not happy with. That is why I am asking the Minister about this. I am optimistic that in a moment he will say that he will revamp the entire process—that would be good.
The Department for Environment, Food and Rural Affairs has a strategy for buying locally, so why cannot the Department for Education do the same for its contractors? All public bodies must become far better at doing local procurement. Our south-west economy and regions like it would be transformed if Departments, Government agencies, local authorities, the health service, emergency services and so on all procured locally whenever possible, especially for major projects.
The Minister may be tempted to say in his reply that it is possible for a local authority or academy to contract to build a school with a construction company that is not on the framework agreement, but I urge him not to hide behind that thought, because that will almost certainly never happen. Why would anyone or any committee wishing to build a new school voluntarily take on board that additional risk? Most decision makers when grappling with that will feel the need to play it safe and—this is the tragedy—stick with what will be perceived to be the seven Government-approved contractors. That puts everyone else on a second-class footing, which is simply not right or fair.
My less wordy second point is that the framework agreement actually increases the cost for the taxpayer. This is how I understand it to work. The contractors in the framework appear to have been selected via a contract notice published on Tenders Electronic Daily, the online version of the Supplement to the Official Journal of the European Union, dedicated to European public procurement. The notice asked potential suppliers to bid to be part of the framework—so far, so good. Bidders had to have a minimum financial turnover threshold of £25 million for the region and they are supposed to be evaluated on the basis of essential and specific criteria that together offer the most economically advantageous tender.
However, the bidding system for being part of the framework is based not on which contractor can do the job at the lowest price with the highest quality, but on which seven construction companies are closest to the mean average of the bids offered. The system penalises competitive pricing and rewards higher bids. The winners are those that, by chance, bid closest to the mean of all bids. The pricing criterion contributes to 70% of the overall score, which cannot result in the most economically advantageous tenders. For example, one local construction company outscored four of the seven chosen construction companies in quality, so those four were not the most capable of delivering the product.
The successful framework bidders following selection need to participate in a subsequent, local competition process for each project. At that point, the competition process is scored 70% on quality and 30% on price. At least four of the seven construction companies chosen have little or no experience or track record in the region, so it is highly unlikely that, in the context of the local market, a competitive price will be procured. Unlike some of the excluded local construction companies that I mentioned, those other companies certainly do not have a track record for delivering £3 million to £7 million education projects in these areas, which are typically the projects for which they will be competing.
With such limited competition and only 30% of the award criteria on price, it is close to inevitable that any public sector bodies using the framework will pay non-competitive prices. What kind of mind came up with selection criteria that did not judge on quality and price, but focused on selecting those bids that were closest to the average, rather than the cheapest? Surely if the quality threshold is crossed, the taxpayer should expect to pay the cheapest price, not the price closest to the average. If I have misunderstood the process, I am sure the Minister will correct me when he responds.
I suspect that the selection criteria were put together by intelligent, well intentioned officials in the DFE and Cabinet Office. We are so well served by our civil service in this country and I am in no way criticising them, but I suspect that there was next to zero input from Ministers on such technical decision making. I was a Minister 1,000 years ago when someone called Sir John Major was the Prime Minister. In those days, we were talking about procuring new magistrates courts using something that was quite new in those days: private finance initiative contracts. I therefore know that such technical issues are largely taken forward by civil servants. Perhaps that is right, but there needs to be political, regional input, with an understanding of how people in the region might respond to the end product. We have ended up with a process that excludes local firms and does not choose the cheapest price. That is not a good day’s work.
Finally, on the involvement of foreign contractors, the necessity of the current framework comes from Europe. However, despite of the Europe-wide requirement to treat companies equally regardless of origin, which I support, it is increasingly hard, according to several construction companies I have spoken to, for British companies to work in other European countries. One director told me he was laughed at even for suggesting that a British company might win a contract in France. Can the Minister name any major construction projects undertaken directly by British companies in France for which the French Government are paying? We have an equivalent project on our framework agreement for the west country. The four freedoms guaranteed for the internal market of the European Union are not enforced or strictly kept to in other countries, which creates an unfair system in which British businesses and small and medium-sized enterprises are limited in where they can work, so why do we bend over backwards in this country to gold plate and comply with every jot and tittle of the rules, when our European competitors do not?
I am afraid that I would have to describe the new way of procuring schools in the south-west as a lose-lose situation. It favours multinational and centralised national firms that have no vested interest in the area at the expense of regional firms. It is likely to reduce the opportunities for local contractors rather than increase them, and it has been put together in a way that does not guarantee the selection of the lowest price for the taxpayer. I urge the Minister to look into the matter very carefully, and if possible, to adapt or terminate the current framework agreement, which has another three years-plus to run. If not, the Government can expect the feelings of deep dissatisfaction and deep resentment in the south-west to continue to rumble on.
I am grateful to you for chairing this debate, Dr McCrea, and I particularly want to put on record my gratitude to the hon. Member for South West Devon (Mr Streeter) for securing the debate. Although in recent weeks we have debated in this place and the other place the contracting out of services, he has put firmly on the agenda the contracting out of infrastructure, which is becoming much more important. That is especially true at the moment, because as he rightly says, new funding is being brought forward to replace the funding that was lost under Building Schools for the Future, in the education area in particular.
Listening to the hon. Gentleman’s speech, I could feel his frustration at the way the outcome of this process has shut out some of the outstanding construction companies in his region. I think that that frustration is shared in many other parts of the country, particularly by companies that have a strong track record of providing goods, services and contracts in the public sphere and which feel, understandably, that this sends a very strong message to them that their work has not been valued. Although I would not suggest for a moment that the Government have intended to produce that outcome, he is right to put this very firmly not just on the Minister’s agenda, but on my agenda, as the spokesperson for the Opposition.
That frustration is particularly felt in areas of the country where local authorities have pushed ahead with a local procurement agenda that has sought to build on local and regional expertise to ensure that the benefits of those contracts are felt fully in the areas in which they are granted. However, when they look to national Government to do the same, they find that many of those contracts have been awarded to overseas companies, or companies out of the area.
The hon. Member for South West Devon (Mr Streeter) made the point that the idea of someone from the United Kingdom getting a contract in France was laughable. That is one of the major problems; other countries practise protectionism. We are not very good at that, and I do not think we should do it, but other countries in the European Union certainly do, and that has a detrimental, knock-on effect on the rest of the United Kingdom.
Yes, and in a moment, I will come on to things that the Government might consider doing to strike the balance better in this country, to ensure that we do not shut out some of our best companies with a really strong track record of delivery.
First, I say to the Minister that when commissioning goods, services and big capital projects of the sort that the hon. Member for South West Devon described, we accept that there is a balance to be struck between trying to guarantee value for money and trying to ensure the maximum social and local good. As the hon. Gentleman illustrated well during his speech, those things are often complementary and are not in contrast to one another. That is particularly the case when we look at what has happened to the economy, and particularly regional and local economies, over recent years. It makes a significant difference when services are procured locally and regionally, because that money remains in the region, as he said. Jobs are created and salaries are boosted. Every pound that goes into the pockets of working people in regions such as the north-west or south-west, where he is based, is then spent again in local shops and local businesses, and that cycle of growth continues.
However, in recent years we have seen the opposite. Although I accept that this Government have no huge plans to invest in our regions in the next few years, they have significant spending power; £187 billion was spent by national Government on public procurement in 2012, and I think there may be some more recent figures. That can have a significant impact if it is spent in local areas.
As the hon. Gentleman said, big national contracts are not always value for money. He made the point that many of the construction companies he was talking about have proven track records in his region. We have seen what happens when big national contracts are handed out without a real understanding of local areas. The Work programme was probably the most stark example, but that applies to infrastructure as well. As he said, one of the critical things that the Government could do is think about the impact that procuring services from outside the region has on supply chains, because often companies that come in from outside local areas bring their own supply chains with them.
The Government also need to recognise strongly that at the moment, in the way in which we contract and procure services and goods, there is a power imbalance between the prime contractor and any subcontractors or those providing services as well. A recent example of that was Capita and the civil service training scheme, which the Minister will be well aware of. That £250 million contract was supposed to be about opening up the best deal to the taxpayer, but subcontractors suffered a great deal because of the way in which the terms of that contract were drawn. Even where we decide that we will award contracts to big multinational firms, often based and operating overseas, we need to think much more clearly about how we balance that power relationship and ensure that those further down the supply chain are protected. One way in which we ought to do that is by getting a grip on how payment is made to providers. Quite often, in the procurement that we carry out, that is simply not thought about at the very beginning.
Another way in which the Government could help to move the agenda forward is by concentrating strongly on the expertise within the Government—of which there is a great deal, but it is patchy across different Departments—and on the staffing levels needed. An example of that was the west coast main line franchise, which was a £50 billion contract that was managed in the original instance by just three civil servants.
We think that the Government could do more to think about the wider impact of commissioning and procurement on the public. One way in which they could do that—we would strongly encourage them to do this—is by introducing a public interest test when they are going through the procurement process. We have committed to ring-fencing some contracts for companies in pursuit of a public service mission—that recently became one of the tools in the Government’s armoury. I would be interested to know whether this Government have thought about doing the same.
We are also committed to a community right to challenge where major projects have been announced that do not seem to be of enormous benefit to local areas or regions. It would be interesting to apply that community right to challenge in this case, because I suspect that the hon. Member for South West Devon speaks for many people in his constituency and across south-west England when he expresses anger about the fact that many organisations or firms that could have delivered the projects have not made it on to the list.
One way in which local providers can be of particular help is through their understanding of the local work force. That is one reason why we have given the committed that any national contract or major infrastructure project that is worth more than £1 million will specify that apprenticeships have to be provided as part of the deal. There is a particular benefit from procuring services locally and regionally, because quite often those firms—the sorts of firms that the hon. Gentleman talked about in his speech—will have knowledge of the local work force. They will already be working with education providers and other local businesses to help to provide opportunities for young people. The Minister recently visited the Youth Zone in Wigan, in my constituency, which has a very good record of working with local employers and local education providers to ensure that those links are made. In the case of High Speed 2, that policy would provide 33,000 apprenticeships. We think that the Government could commit to doing that.
It is also important, when commissioning projects and services, to think about the impact on the staff. In recent years, we have seen appalling examples of companies that have been commissioned from outside a local area to provide services. There was an example during the Olympics of a company in the Wigan borough that was commissioned to steward parts of the Olympics. The treatment of the staff in that company was found, when it was investigated, to be absolutely appalling. It was undercutting the minimum wage. There was no regard whatever for people’s terms and conditions, to the extent that staff were made to sleep under a bridge overnight in order to carry out their duties. That case hit the headlines nationally.
There is a particular impact from taking into account the strong and existing ties that local firms have to their own work force. I am thinking of the need to preserve their integrity and reputation. The hon. Gentleman talked about that. When we think about spending very large sums of public money, we should think about the impact on the people who end up delivering the services.
One of the very welcome things that the Government have done is introduce the Public Services (Social Value) Act 2012, of which the Minister’s predecessor but one, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), was a very strong supporter. Recently, the Government published the review of the social value Act to see what impact it has had. The review, by Lord Young of Graffham, unfortunately concluded that it has had a fairly limited impact, but ruled out extending the Act to goods and services, which could have made a huge difference to the sort of commissioning approach that we have heard about today. Surely the ethos of the Act should go beyond the limited scope that it has at present.
I would be interested to know what the Minister plans to do to try to extend the spirit of the social value Act to the sorts of projects that the hon. Member for South West Devon talked about. One point that Lord Young made in the review was that very few public sector commissioners know about the Act, so I hope that the Government will tell us today that they will take up his invitation to promote the Act much more heavily and the principles that lie behind it, because although at present it does not apply directly to school infrastructure projects, the spirit and ethos of the Act would have been extremely helpful in this case.
There is an agenda coming, I think, to most regions, regardless of who is in government after the general election. All three major political parties are committed to a greater devolution agenda. We need to think that through and get it right in advance of power being devolved to city and county regions and locally, because as more and more of these spending decisions are taken at local and regional level, getting it right will become very important indeed. It would make nonsense of the devolution agenda if the responsibility for major projects lay with a national Government who did not take account of the strengths and talents in regions such as the south-west, so I would be interested to hear what the Government have planned, as part of the devolution agenda, to ensure that we draw on those skills and help to boost growth and productivity in every region of the UK, not just a small section of it.
I am very grateful to my hon. Friend the Member for South West Devon (Mr Streeter) for initiating the debate. He is a great champion of his constituents and of Devon, but also of the wider south-west region. This debate is evidence of that fact. I will start with general comments and then move on to the specific issues that he raised.
Changing and improving the way in which the public sector spends money on goods and services has been a Government priority since 2010. We have brought about unprecedented and comprehensive reform across all areas of procurement and will continue to do so, making Whitehall leaner and more efficient, so that Britain can compete in a global sense. Through our rigorous commercial reform programme, stripping out waste and buying more goods and services centrally, we have made the way in which we do business in central Government quicker, more competitive, more transparent, better value and far simpler than ever before. Those commercial reforms, combined with a baseline of spend in 2009-10, have created savings of £2.9 billion in 2010-11, £3 billion in 2011-12, £3.8 billion in 2012-13, and £5.4 billion in 2013-14.
To be regarded as a global competitor, Britain must ensure that the right investment is made in national infrastructure, with a focused investment in skills, technology and efficiency initiatives that help businesses to operate and expand in a global economy. The construction industry underpins the growth of this sector and facilitates future prosperity. We are reforming public construction enterprises to make them more efficient, collaborative, innovative and competitive, both at home and abroad, ensuring that the money that we spend boosts Britain’s competitiveness and delivers greater social mobility.
We are rebalancing the economy to achieve strong, lasting growth and widely shared prosperity. The Government construction strategy is about cutting waste and reforming our procurement processes, and reinvesting the savings that we make in more progressive ventures that stimulate the economy, ensuring liquidity of all businesses, big and small. It gives us a competitive advantage, underpins economic growth and generates higher-quality jobs.
We are backing the industries of the future and making Britain a great place to do business. The construction pipeline will provide more than £127 billion of strategic investment opportunities for businesses from this year onwards—a significant boost to economic growth in the sector. Government and industry are working together to create strong communities and to support local and national economies, investing in world-class, functional public buildings and spaces and inspiring businesses to grow.
Let me turn to the south-west. I can assure my hon. Friend that the Government are fully committed to a flourishing and prosperous south-west. Last month, my right hon. Friend the Chancellor of the Exchequer set out the Government’s long-term economic plan for the region. In delivering it, we will increase regional productivity, create more jobs and improve road, rail and digital communications infrastructure. My hon. Friend gave a couple of examples of where we are doing that, including the tunnel under Stonehenge and some of the rail improvements that will ensure a better rail service to the south-west in due course. The Government are therefore actively reforming procurement, encouraging construction and promoting regional growth, all of which is good news for companies in the south-west. Nevertheless, we recognise there is still a lot more we can do.
I am grateful to my hon. Friend for his three comments about the procurement activity undertaken by the EFA as part of its regional framework in the south-west, and I would like to deal briefly with each in turn. The first was about tenderers being selected on the basis of not the cheapest tender, but being closest to the average of the tenders. I understand from EFA officials that tenderers were selected on more complex price grounds than those mentioned by my hon. Friend, and I would be happy to share with him separately details of the methodologies used. I can assure him, however, that the approach adopted was meant to ensure a level playing field for suppliers by preventing larger companies from artificially deflating prices in their initial bid and then squeezing subcontractors in the supply chain. Contracts awarded under the framework follow a mini-competition to ensure that best value for money is achieved.
My hon. Friend asked about the procurement process, so let me briefly outline it for him. Public procurement rules apply to public purchases above defined thresholds and require those purchase opportunities to be advertised across Europe. In October 2013, the EFA advertised a prior information notice in the Official Journal of the European Union. Bidder days were then held to explain the tendering process to interested applicants. Interested firms were required to provide submissions by completing a pre-qualification questionnaire consistent with the Government’s publicly available specification 91 format. Following their submission, the PQQs were evaluated according to the published selection criteria. Shortlisted bidders were then invited to tender. I hope that gives my hon. Friend confidence that the proper process was followed in this case.
The Minister’s last comments were about as clear as mud, but I understand that that is what was on the paper he was given. I do not doubt for one minute the Government’s sincere objectives in this procurement process, but what is happening on the ground is totally different from what he has just said about procedures preventing subcontractors from being squeezed. Subcontractors are being squeezed, and that is why we need to look at what is happening down at the coal face.
I thank the hon. Gentleman for raising that issue. If what he says is the case, we will certainly look at it. The second point my hon. Friend the Member for South West Devon raised was that there are no local companies in the framework, despite there being substantial companies in the south-west.
Before my hon. Friend moves on, will he deal with the issue of tenders being judged on whether they are closest to the average price, rather than the lowest price, once they have got over the quality threshold? He said that I may have misunderstood the methodology, which is very complex, and that he is prepared to share it with me. However, for the purposes of the debate, will he tell me whether I am wrong about how the tenders are judged, or whether that is part of the process?
If my hon. Friend will allow me, I will come to that. To return to the previous intervention, however, where there is poor practice in the system and companies are being squeezed, we have a mystery shopper system, which will investigate cases thoroughly. [Interruption.] It is indeed called a mystery shopper system, which is probably mystifying everybody. By and large, it has yielded significant results for those who have made complaints.
As a contracting authority for the purposes of the applicable legislation—the Public Contracts Regulations 2006, which were introduced by the previous Labour Government—the EFA is bound by requirements of objectivity and non-discrimination. Those extend to a duty not to extend preferential treatment purely on the grounds of a bidder’s geographic location at the time of submitting a tender. EFA officials have assured me that robust and effective selection criteria were applied in the exercise we are discussing. They have also assured me that, in line with legal requirements, the evaluation criteria to be applied were shared openly with all the bidders.
It is important to remember that the largest part of procurement spend in the construction industry is with subcontractors, the majority of whom will be local suppliers. My hon. Friend tried to block that avenue off for me, but the evidence is that subcontractors are local in most cases. If he is telling me that local subcontractors are not being used in the south-west, I will ask my officials to look at what is happening there, but this does not seem to be the case in other areas. The French company that is one of the seven companies on the EFA’s list bought out Leadbitter, a UK company active in the south-west, although I am not sure of the full details of the purchase.
If the Minister has any figures about subcontractors, it would be helpful to all of us to see them—perhaps at a later date, if he does not have them to hand. However, I would be grateful if he addressed my point about the power imbalance between subcontractors and contractors. Does the Cabinet Office have plans to make sure that, even where local or regional companies are not granted the primary contract, local subcontractors can still take part in the process without detriment?
As I said, where there is an imbalance, and subcontractors providing a service to the main contractor are being, for want of a better word, abused, we have the mystery shopper system, which will thoroughly investigate any abuses. Where it has investigated complaints on behalf of individual organisations and it has found problems, it has taken actions that those organisations have found very useful. Most of these concerns can, therefore, be sorted out on the ground while contracts are being supplied.
The third point made by my hon. Friend the Member for South West Devon was that the seven firms include three foreign firms, including the French one I have just mentioned. Public sector procurers are required to seek value for money through fair and open competition. Through our membership of the European Union, and because we are a signatory to international agreements, our contracting authorities are required to place suppliers from Europe and various other countries on an equal footing with UK suppliers. That is a two-way street, as it gives our suppliers access to public procurement markets overseas, maximising value for money for the UK taxpayer, while ensuring that UK companies are able to compete abroad.
The Government want UK companies to be successful in public procurement. The best way to bring that about is for those companies to offer the goods and services we need at quality levels and for whole-life costs representing value for money. To that end, the Government are seeking to ensure that their large-scale purchasing power supports the task of boosting growth and enables us actively to shape the UK market for the long term. To place a value on a bid based on the geographical origin of the bidder would be contrary to the single market.
All the same, the Government understand the importance of a long-term approach to supporting UK business and aligning activity to deliver that. As part of the work, several areas where Government action can have an early impact have been identified. They are sectors, technologies, access to finance, skills and procurement. Strategies for 11 key sectors, including construction, are being developed in partnership with business. I should also point out that use of the Education Funding Agency regional framework is not mandatory. I am aware of two other construction frameworks for the south-west. Construction Framework South West, managed by Devon county council, has 11 suppliers, nine of which are British, including Midas. South West Consultancy Framework, managed by Torbay council, has seven suppliers, of which six are British.
The Government are committed to increasing opportunities for suppliers of all sizes to bid for work successfully through the procurement reforms, which also secure value for money for the British taxpayer.
Before the debate, I had not been given any such list, but during it I have been given some information; I think it has been provided from memory, and we should do some research and send that to my hon. Friend. I understand that a company based in west Cumbria just won a £1 million contract in France. We are not quite clear about whether that was Government-funded. I think the best thing would be for me to write to my hon. Friend.
Human Rights (Democratic Republic of the Congo)
I am very pleased to have secured this debate on the activities of the London-listed oil company, SOCO International plc, in the Democratic Republic of the Congo’s Virunga national park. “Virunga”, a documentary that covers many of the matters I will highlight today, was shortlisted for an Oscar this past weekend. In the limited time I have today, I hope to draw attention to the allegations of corruption and human rights abuses that have arisen following the arrival in 2007 of SOCO International in Virunga, which is a UNESCO world heritage site.
It should be noted that SOCO International has been offered the chance to respond to the allegations that will be laid out this afternoon. It has strenuously denied making illicit payments or intimidating civil society opponents in Virunga. However, the company has so far failed to provide a convincing response to the specific evidence of wrongdoing that will be described this afternoon. The “Virunga” documentary and Global Witness’s report, Drillers in the Mist, contain further detailed evidence of improper behaviour.
SOCO International is one of the UK’s 200 biggest companies listed on the FTSE 250, with oil and gas operations in Asia and Africa. It turned its attention to Virunga after the DRC Government declared that 85% of the park would be divided up into oil blocks. There was an outcry at that decision, because Virunga is Africa’s oldest and most bio-diverse national park; it is home to some 220 endangered mountain gorillas. UNESCO says that oil exploration and drilling are completely incompatible with world heritage site status.
The “Virunga” documentary and research by Global Witness, the anti-corruption campaigners, have revealed that in addition to threatening the world heritage status of the park, SOCO International and its contractors have made illicit payments, appear to have paid off armed rebels and benefited from fear and violence in the Virunga area of the DRC.
As I have already said, SOCO International has denied these allegations. However, the evidence is compelling. In the documentary, SOCO International’s military liaison officer, Major Feruzi, is caught on a hidden camera offering a $3,000 bribe to a park ranger. Feruzi wanted the ranger to spy on Virunga’s chief warden, Emmanuel de Merode, who has been singled out by SOCO International representatives as a key opponent of the company’s ambitions in the park. The army officer refers to a SOCO International contractor as his “boss”. Under the UK Bribery Act 2010, it is a crime for a UK company to fail to prevent an act of bribery carried out on its behalf.
The film also presents evidence of payments to a Congolese MP for the area covering Virunga who, at the time, was also a Government Minister. He campaigned vociferously on SOCO International’s behalf and helped to organise payments to local organisations to hold a pro-oil demonstration in the park. Also, he was covertly filmed saying that SOCO International officials told him that signing a contract with him was likely to be illegal under British law, as he was a public official. SOCO International’s official “focal point” in the park authority is also on film, telling rangers that those who work with SOCO will get “money, money, money” and those who oppose the company will be fired.
From this material, it seems that there is a clear case for UK enforcement agencies to investigate SOCO International under the Bribery Act 2010. This information and film footage has been in the public domain for months. What assurances can the Government give that these allegations will be considered by the relevant enforcement agencies?
While SOCO International is listed in London, investigations by Global Witness note that the company also has links to the US. Its executive directors, Ed Story and Roger Cagle, are American citizens and are employed through a wholly owned subsidiary company registered in Delaware. These individuals therefore fall within the jurisdiction of the United States, and there seems to be a case to be made that SOCO International, under their stewardship, has breached the terms of America’s Foreign Corrupt Practices Act. Bearing that in mind, can the Minister say whether the relevant British authorities will contact their American counterparts about an investigation into SOCO International plc’s activities in Virunga, and ensure that they are made aware of any evidence showing that SOCO International has committed any offence under that Act?
It is also worth noting that SOCO International is, in a sense, an ambassador for British trade and industry. In eastern DRC, “SOCO” is synonymous with “Britain”. Inevitably, UK companies investing in the developing world will often operate in environments with high bribery risks and in jurisdictions that may lack the infrastructure necessary for the proper oversight of corporate behaviour. For that reason alone, SOCO International should be obliged to hold its staff and representatives to the strictest and highest standards of business responsibility.
If a company’s code of ethics is failing and, as seems to be the case with SOCO, there is little willingness on its part to investigate its actions or omissions, can the Minister say what sanctions we might expect the British Government to apply to companies that break the law and damage the reputation of UK plc? Given that private UK investment in developing economies is supported as a policy of this Government, it is surely incumbent on the UK Government and their agencies to ensure that any credible evidence of corruption or other criminal behaviour by a UK company, as we have in this case, is fully investigated by the relevant authorities. Failure to do so risks sending a message that British companies will not be held accountable for their actions or omissions overseas. If the UK hopes to be taken seriously when we speak about responsible business practice internationally and the capacity for investment to grow economies and reduce poverty, it must be incumbent on this Government to act without delay and to investigate fully whether SOCO International has been paying bribes or corrupting officials in the DRC.
To date, the UK has secured only one corporate conviction of foreign bribery. I suspect that cases such as this, which involves SOCO International and which only came to light following an independent investigation by a film company, may represent the tip of the iceberg of corporate misdemeanours in high-risk environments. The Serious Fraud Office has suffered budget cuts and institutional uncertainty, which must lead to doubts as to whether the ambitions expressed in the Bribery Act will ever be met with the resources and political will they deserve. What assurances can the Government give that foreign bribery cases will be resourced adequately now and in the future?
Beyond the allegations of bribery, SOCO International’s actions in Virunga threaten the integrity of the park’s UNESCO world heritage status. Virunga was already on the list of UNESCO’s world heritage sites considered to be in danger before SOCO International arrived. That status should protect the park from being intentionally despoiled.
The Minister may be aware that last year, SOCO International backed down from working in Virunga following pressure from the World Wide Fund for Nature, the environmental campaigners. Indeed, in response to a question from the hon. Member for Mid Derbyshire (Pauline Latham), my fellow vice-chair of the all-party group on anti-corruption, on 17 December 2014, the Secretary of State for International Development stated:
“I expect SOCO, as a British-listed company, to adhere to the highest standards. In June this year, SOCO and the WWF announced that it would complete their existing programme of work at Virunga and then not undertake or commission exploratory or other drilling within the national park unless UNESCO and the Government of the DRC agreed to it.”—[Official Report, 17 December 2014; Vol. 589, c. 1393.]
In reality, SOCO International committed not to work in the park unless the Congolese Government and UNESCO eventually
“agree that such activities are not incompatible with its World Heritage status.”
Therefore, the door is open for SOCO International to continue to explore and drill for oil inside Virunga national park if the boundaries of the park are redrawn, an option that the Congolese Government are understood to be considering.
The director of the Oscar-nominated documentary “Virunga”, Orlando von Einsiedel, recently described SOCO International’s statement as “purely a PR exercise.” The Church of England, which owns £3 million-worth of shares in the company, has recently demanded that SOCO International amend its statement to
“remove any room for doubt about their intentions within existing or future boundaries of a World Heritage Site”.
Given the evidence that has already been outlined, do the Government continue to accept the statement made by SOCO International, as the Secretary of State for International Development did—a position that has now been shown to be perhaps misplaced? Does the Foreign and Commonwealth Office stand by its 2012 statement, in which it opposed all oil exploration inside Virunga? Will the Minister hold SOCO International to those standards, and how will he do so? Moreover, what can and will the UK do to defend the integrity of UNESCO world heritage status in this case and in principle? Belgium, Germany and the EU Parliament have all passed resolutions critical of oil exploration in Virunga. Will the Minister follow suit?
Some of the most serious questions that SOCO International has to answer relate to allegations that its representatives and allies used threats and physical violence against opponents of the company’s operations in Virunga. There have been worrying reports from credible and respected local organisations since at least 2012 of SOCO International allies orchestrating a campaign of intimidation against local anti-oil activists. SOCO International’s army liaison, Major Feruzi, has been identified as the driver behind much of this terror, which includes arrests and violent intimidation, but other local allies are also implicated. Local non-governmental organisations said that Feruzi’s
“military status has been utilized to silence anyone who has questions about the true impact of the oil project.”
On 15 April last year, the park’s chief warden and SOCO International opponent, Emmanuel de Merode, was driving back to his Virunga HQ after depositing a dossier on SOCO International’s activities with the public prosecutor in the provincial capital. His car was sprayed with bullets by unknown gunmen. Emmanuel de Merode was hit twice, but miraculously survived. SOCO International felt moved to issue a public statement denying involvement in the shooting.
An article in The Daily Telegraph published in September said that, in April last year, two fishermen were killed by soldiers protecting SOCO International’s compound, just hours after arguing against SOCO International’s presence in their community. The deaths were verified by Human Rights Watch, according to the article.
In December, the all-party group on anti-corruption heard from members of civil society in the park, and their stories of intimidation were deeply concerning. One activist, Alphonse Muhindo Valivambe, told the group that he and his colleagues “faced death every day” in their campaign against oil activities in Virunga. Indeed, Mr Valivambe was forced to flee to London for three months in 2012, so concerned was he for his personal safety.
As per the UN guiding principles on business and human rights, I ask the Minister whether and in what capacity the UK’s diplomatic missions in the region will support the human rights and civil society activists who are trying to defend the park’s protected status. What have the field offices done thus far to support civil society activists, and does the FCO feel it has done enough? Those guidelines say that states must take responsibility for the actions of companies domiciled within their jurisdictions. What can the UK Government do to ensure that SOCO International is conforming to these guiding principles, and what sanctions can they impose if they find that SOCO International, its representatives or allies have committed human rights abuses?
I congratulate my hon. Friend the Member for Wells (Tessa Munt) on securing the debate. She has brought to the House a case study in the Democratic Republic of the Congo that has attracted widespread attention not only in the United Kingdom, but globally, and that brings together two related but distinct issues: the protection of the unique environment of the Virunga national park; and the specific, serious allegations that have been made about the conduct of one company, to which my hon. Friend related. I want to try to address both those questions.
All hon. Members know that the Democratic Republic of the Congo is one of the most beautiful places on earth, but, particularly in the eastern region, it has been beset by conflict and grave human rights abuses, and there remain endemic, appalling levels of poverty. The coalition Government are committed to supporting the DRC in developing and growing. Our assistance to the country is lifting people out of poverty, helping to improve security and human rights, and supporting an improved business climate. There is a long way to go—I am the first to agree—but the Government, through our international development programme, are investing in reforms to increase access to finance, in job creation and the promotion of opportunities for entrepreneurs, especially women and young people, and in essential infrastructure to increase access to markets.
Our objective is to make the DRC extractive sector more transparent and accountable, given its potential to be an engine for growth and public revenue generation, but for that to happen, any development of extractive industries in the DRC needs to be done in a way that both meets its domestic legal requirements and conforms to international norms, laws and codes on the extractive industries. We certainly expect any UK company to set an example in that respect and not to try to subvert those standards.
I apologise for not being here from the start of the debate, Dr McCrea. I am sure my all-party parliamentary group colleague, the hon. Member for Wells (Tessa Munt), made her case robustly.
The Minister mentioned the role of UK companies. Obviously, some that represent our overseas territories and Crown dependencies had some role in the Virunga situation. What action can we take against those jurisdictions for which we have some responsibility?
I may come to that later.
My hon. Friend asked about our political engagement with the DRC Government. We are committed to working with the DRC Government to try to spread the values of the rule of law, transparency and good governance, which we believe are right in principle. Their implementation would help the DRC to bring about improvement in the material standard of living and a better quality of life overall for its people.
We are committed to supporting UK companies in the DRC. Foreign investment in sectors such as hydro- carbons and the extractive industries can play an important role in boosting the development of countries such as the DRC and lifting people out of poverty. However, the Government’s long-standing position has been, and remains, to oppose all oil exploration in the Virunga national park, a world heritage site listed by UNESCO as being “in danger”. Our position has not changed. Any investment in that world heritage site needs to be done responsibly and sustainably, in compliance with local law and conforming to international standards.
The UK Government welcomed the announcement that SOCO plc made on 11 June 2014, in conjunction with World Wide Fund for Nature. SOCO pledged that it would complete its existing programme of work in Virunga and committed not to undertake or commission exploratory or other drilling within Virunga national park unless UNESCO and the DRC Government agree that such activities are not incompatible with its world heritage status. We also welcome SOCO’s commitment not to conduct any operations in other world heritage sites. I emphasise that we expect SOCO to honour those commitments. If we had evidence that SOCO was breaking those commitments that it entered into publicly, we would not hesitate to press the Government of the DRC or, in another jurisdiction, the Government of that country, to take the appropriate action.
My right hon. Friend the Minister will understand my confusion. He just confirmed that the 2012 statement, which opposed all oil exploration inside the Virunga national park, is current, but there is potentially pressure from the company on members of the DRC Government or UNESCO—it is more likely to be members of the DRC Government—to redraw the boundary lines of the Virunga national park. Therefore, I should like him to confirm that the existing boundaries are those we recognise, and that that is final.
When I refer to potential breaches of the commitments into which SOCO entered, I include within that any attempt by SOCO to redraw the boundaries of the Virunga national park to suit those commercial interests. In the June 2014 statement, we welcomed the fact that any agreement on development would need the consent not only of the DRC Government, for the reasons my hon. Friend intimated in her speech, but of UNESCO. That was important and created a double lock on any such assessment.
There should be no attempts to delist Virunga as a world heritage site or a national park, nor should any further company be awarded exploration rights in Virunga. We continue to urge the DRC Government to respect the international conventions to which it is a signatory. We are aware of the allegations, which my hon. Friend has repeated today, of wrongdoing against SOCO corporately, its employees and the agents connected to its activities in Virunga. Some of those allegations were listed in the documentary film “Virunga”.
The Serious Fraud Office is aware of the allegations. I am sure the House will understand that it is important that the decision on whether to prosecute in any case is made by the prosecutorial authorities and not by politicians. We expect all companies either operating or registered in the United Kingdom to act appropriately and in compliance with the law. We encourage anyone with evidence of serious fraud, bribery or corruption to contact the SFO. The Government have explained to some of the Virunga campaign groups how exactly they should go about supplying securely any evidence they have to the SFO for it to investigate.
My hon. Friend asked about the UK’s broader approach to combating corruption and the implementation of the Bribery Act 2010. The Government published the United Kingdom’s anti-corruption plan in December last year. It sets out how the Government are doing more across Whitehall’s areas of responsibility to increase transparency, tackle money laundering and ensure that the UK is at the forefront of efforts to raise international standards. The plan sets out a range of measures that we are taking to tackle corruption around the world. Priorities include identifying illicit financial flows; the return of stolen assets; efforts to raise global standards for all, including our international development programmes; and the promotion of sustainable growth, which includes work to stop bribery.
We are committed to going further by leading the way on the international stage, as was done at the 2013 Enniskillen G8 summit, and by impressing on the international community the benefits of measures, such as publicly accessible registers of company beneficial ownership, in the fight against illicit financial flows. The purpose of embodying that in an anti-corruption plan is precisely to enable more effective and more transparent collaboration across Government to try to break out of a silo mentality, to ensure that the efforts of all Departments and agencies are directed effectively to securing our objectives.
If the hon. Gentleman will forgive me, I have given way once to him already and I want to reply to the points that my hon. Friend the Member for Wells made.
Our embassies, high commissions and consulates are active in supporting the effective implementation of the Bribery Act 2010, which has been recognised as a world-leading piece of legislation. Our posts overseas are always keen to ensure that British companies are fully aware of their obligations under the 2010 Act when they seek to invest or trade in any of those foreign jurisdictions. We are also working to improve standards of anti-corruption legislation and enforcement among our trading partners internationally through the OECD, the United Nations and the Council of Europe conventions against corruption.
Within the Foreign and Commonwealth Office, a new central anti-corruption and transparency team was established in August 2013. Its remit includes improving the support and guidance provided to officials overseas and exchanging best practice. We have supported the DRC Government in particular to improve their business environment. In 2012, we supported the launch of the business code of conduct, an initiative of the DRC private sector anti-corruption initiative. Already around 20 companies adhere to that private sector code of conduct.
On international anti-corruption day, which was 9 December 2013, we supported the signing of the DRC’s national anti-corruption pact between the public sector, the private sector and civil society. Prime Minister Matata attended the event. The best way forward is to persist with those efforts and to work to improve economic growth and the human rights situation in the DRC. I will not stand here and pretend that the DRC will be brought to prosperity, political stability and high standards of anti-corruption overnight. A long task still lies ahead of us and our international partners, but the course that we have established is starting to deliver some results.
I thank the Minister greatly for letting me intervene again. Will he address the fact that American citizens are involved in the company? The masking of company identity and the individuals involved in companies registered in Delaware is a perpetual problem. Can something be done with our American counterparts on the Foreign Corrupt Practices Act?
I will write to my hon. Friend in more detail on that point. I want to check whether, in the case of the American prosecutorial and judicial authorities, any evidence or information that might lead to a prosecution has to be transmitted through international legal channels, rather than just being transmitted through diplomatic or political channels. If there is a legal channel that enables evidence to be sent to the American authorities, I will alert her to that.
To respond to the points that the hon. Member for Glasgow Central (Anas Sarwar) made, the Prime Minister has made clear to the overseas territories that he wants them to follow the United Kingdom’s lead and mandate publicly accessible registers of company beneficial ownership. The overseas territories are not fully independent, but they each have their own legislatures and their own democratic and constitutional arrangements. Most of the overseas territories decided to consult on the question of publicly accessible registers. The majority of those consultations have taken place and most overseas territory Governments are still analysing the results. We are keeping them informed of how our register will work in practice, so that they can take that into account when considering what works best for them. The UK Government have made it clear that we expect the British overseas territories to apply the highest international standards when it comes to such things as registers of beneficial ownership. The Prime Minister has made it clear that he intends to pursue that.
I highlight the UK’s commitment to the region and to eastern DRC in particular. Our development assistance and political engagement are targeted on what is important: bringing people out of poverty; promoting the rule of law, transparency and good governance; supporting civil society; and encouraging economic growth. In pursuing those objectives, we will always ensure that while we support responsible investment in the DRC by UK companies, we expect high standards and we expect those companies to follow legal obligations. We will continue to make businesses aware of their obligations under the Bribery Act 2010.
Virunga is a jewel in the centre of Africa. The people who live there must be protected, and its rich biodiversity must be protected for future generations. We support the alternative vision for Virunga, which emphasises such enterprises as sustainable fisheries, eco-tourism and small-scale hydropower. I finish by applauding the tenacity and bravery of the director of the Virunga national park, Emmanuel de Merode, and his rangers. Their work has had a real impact in bringing this issue to the attention of the world and in ensuring that the importance of Virunga and the need to protect it are not forgotten.
Mining in Goa (UK-listed Companies)
This debate is about the effects in Goa of mining by UK-listed companies, and I called for it because I have a sizeable number of constituents of Goan origin, one of them being my wife. Goans take an absolute pride in the beauty of their state in India, from its architecture—buildings, homes, towns, churches and temples—to the long, unspoilt beaches along its coast and the breathtaking splendour of the mountains of the Western Ghats. That deep feeling for the environmental beauty of their home state has mobilised Goans both at home and abroad to expose and tackle head-on the devastating threat from mining that over recent decades has disfigured its hills, polluted its rivers, undermined its agriculture and put at risk its tourist trade.
I wanted to bring this issue to the attention of the House because a London-listed mining company, Vedanta, and its subsidiary, Sesa Goa, have been at the forefront of the mining practices that have caused such environmental, social and economic devastation. I also wanted to raise the issue because the next few months are a critical time for determining the future of the mining industry in Goa: will we see a return to rapacious profiteering and the exploitation of the Goan environment, or will Goa strike out on a new path, with not only a respect for the environment but the establishment of institutional arrangements that ensure that the past and future earnings from mining are invested in the interests of the Goan people? By offering both moral and practical support, the UK could assist the Goan campaigners who are working so hard and courageously to ensure a sustainable future for Goa’s economy and environment. We can learn much from their recent campaigning to protect their environment.
Goa combines a richness in mineral resources with a rich and diverse environment. The Goa Foundation was established by members of the Goan community in 1986 to protect and promote a sustainable environment for the state. Since the early 1990s, the foundation has worked to achieve a balance between mining and the protection of the environment. In a recent report, the foundation described how in the decades prior to 2012 the environment of Goa became the victim of
“unbridled mining by greedy mining companies and an administration that steadfastly looked the other way.”
The report goes on to explain what happened in the decade up to 2012:
“As prices skyrocketed due to robust demand from China, miners flouted rules to extract as much iron ore as possible while government officials looked on and even joined in the plunder…As a result of reckless mining, our natural environment suffered irreparable damage due to the mining operations, adversely affecting the surrounding ecology and assaulting public health…Since most mining leases are located in forest areas, we lost many hectares of prime forest which can never be replaced…Our streams dried up and our rivers ran red with the mud from the mining dumps…We denuded entire hills and replaced these with new mountains made up of nothing but mining wastes.”
Campaigners also published a short report in July 2011 about what happened at the village of Mulgao that year as a result of unrestrained mining operations at one of the largest mining sites. Visible as one flies into Goa, it is an open-cast iron ore operation that is 14 km in length and carves through tropical forest, cutting across fertile farmland and polluting vital water sources. In July 2011, a large section of the mine’s outer wall collapsed during heavy rain. Thousands of tonnes of silt and mud cascaded into adjacent settlements, swamping paddy fields, polluting lakes, destroying trees and risking lives. The company whose woeful negligence led to the disaster is Sesa Goa, which is owned and managed by the London-registered Vedanta. It was not the first time that the company was held responsible for such a calamity: a similar collapse occurred in June 2009 at two other Vedanta pits in the same area. Vedanta was ordered to close them down but neglected to do so: for two years running, it flagrantly ignored Goa’s air and water pollution regulations.
Thanks to determined and courageous campaigning by the Goa Foundation, in 2012 the Indian Government established under Justice Shah a commission to investigate the mining industry in Goa. The Shah commission exposed systematic illegality, with mining taking place without the necessary licences and outside the leased areas. The commission said:
“The regulatory mechanism has been totally collapsed and irregularities due to maladministration have risen to its peak. In the process, the sole loser is environment, eco-system of the Western Ghats, general public and treasury of Goa State.”
The Indian Public Accounts Committee reported:
“There is a complete breakdown of all machineries provided by the Statute which are required to ensure that mining is undertaken and carried out in a legally permissible manner. The term ‘irregular mining’ is nothing but illegal mining.”
The three reports of the Shah commission and the Supreme Court-appointed Central Empowered Committee exposed the illegal and corrupt practices of the mining companies and their political allies, including the use of force and forgeries. I visited one of the lawyers representing local village communities in their attempts to protect the local environment and their farms from the mining industry. He explained the standard practices of intimidation that the mine owners use against anyone who stood up to them. First, they try to bribe people to stay quiet. If that fails, they send in the goondas—thugs—to threaten people. When that fails, they lodge spurious claims against people with the local police, including, in the case of the lawyer I spoke to, a claim of attempted murder. I pay tribute to the courage and determination of the lawyers, campaigners and honest politicians who have stood up to such intimidation.
The Shah commission estimated that the continuation of mining on such a scale in Goa would ensure the
“complete removal of all mineral wealth in nine years”.
After the commission’s report, mining operations in Goa were suspended in 2012, and the Supreme Court ordered a ban on mining operations in the state in October 2012. Subsequently, in a case brought by the Goa Foundation, the Supreme Court ruled that the mining operations—including the extraction, sale and export of ore from all Goa mining leases—was illegal from November 2007, when the leases came to an end and were not renewed. It held that all mining dumps and dumping outside mines was illegal and that the operation of leases by persons and companies that were not the leaseholders was also illegal. It asked an expert committee to return with a cap on ore production within 12 months, with an interim cap set at 20 million tonnes a year, and gave the environmental Ministry six months to issue a formal notification declaring a buffer zone of 1 km around various sanctuaries and protected areas in Goa.
In the light of the judgment, the Goa Foundation, working with the Natural Resource Governance Institute in Oxford and the Cambridge Judge business school’s Centre for Endowment Asset Management, has explored in expert detail how Goans can halt the loss to the Goan community of the massive wealth that has been generated by mining. The foundation proposed that from now on, funds raised from mining, including the mining of the dumps, should be placed in a permanent fund to be managed and invested independently of the Government. The income from the fund would be used for the welfare of Goa’s citizens, with clearly defined entitlements relating to educational opportunities, health facilities, housing and the rehabilitation of the environment damaged by the mining operations. As a model for the permanent fund, the foundation looked to the Norwegian pension fund, which was created from the sale of oil resources and has amassed $870 billion for a population of 5 million. I commend the Goa Foundation for its creativity and foresight, and I hope that our Government look at some of the developments in the shale gas industry in the same way.
The Supreme Court decided that a Goan iron ore permanent fund should be established, with 10% of the proceeds of all mineral ore sales to be allocated to it. The Goan state government has notified a permanent fund scheme, but the scheme notified is impermanent, which will almost certainly be open to challenge by the Goa Foundation. In addition, the capture rate—the intrinsic value of the mining assets allocated to the fund —was set at 10%, which is viewed by many as unrealistically low. Indeed, under India’s Mines and Minerals (Regulation and Development) Act 1957, the Goan government has a duty to recover all revenues and profits from mining operations conducted without a valid lease.
The Goa Foundation has assessed a minimum amount recoverable from the illegal iron ore mining between November 2007 and September 2012. It looked in particular at the exports of Vedanta’s subsidiary Sesa Sterlite, or Sesa Goa, during that period. Sesa Goa was by far the largest producer and exporter of iron ore in Goa, controlling about 30% of the volume. When the foundation looked at those four years and estimated a price of $60 per tonne, it put the amount payable to the people of Goa for the illegal export of ore by the company at $3.687 billion. Another estimate put the figure even higher. A contribution to a permanent fund of that magnitude would finance significant social investment in the health, education, employment and quality of life of all Goans for the long-term future.
Under pressure from the mining companies, however, the Goan government has decided to renew almost all the mining leases, instead of recovering the significant amounts owed to the Goan community or even auctioning off the leases. Other states, including neighbouring Karnataka, have proposed the auction of the mine leases on a revenue-share basis, with a minimum bid of 35%. That is considerably higher than the 10% contribution to the permanent fund proposed for Goa.
I attended Vedanta’s most recent annual general meeting. I expected to see an impairment written into its accounts to provide for its liability to pay back the $3.687 billion that it had earned from illegal exploitation of the iron ore deposits between 2007 and 2012. Such a figure had not been set aside in the accounts. The annual report made no reference to the illegal mining that the Supreme Court had found the company to be carrying out from 2007. At the time of the publication of the Vedanta annual report, the High Court had not determined the renewal of the leases, nor had the Goan state government. I am suspicious of Vedanta’s confidence that it could exercise sufficient influence over the Government to avoid paying for its illegal mining activities and that it would soon be up and running again in its mines.
I hope that the determined and courageous campaigning by the Goa Foundation will win out, and that the permanent fund will be established with sufficient income from the past illegally mined assets of the Goan people and from future, environmentally sustainable operations. I am confident that the heroes and heroines of the foundation will be successful. Their determination is to be admired. I pay tribute to a number of them: the foundation’s director, Dr Claude Alvares; Rahul Basu; Dean D’Cruz; Carmen Miranda; and Samarendra Das. They all, at some risk to themselves, have stood up to be counted on behalf of the Goan people.
I fear for the future, however, while rogue companies such as Vedanta are allowed to destroy environments, undermine communities and abuse human rights with virtual impunity. Vedanta is a UK-listed company that enjoys the prestige and financial benefits of being listed in London. The UK therefore has a responsibility to monitor and police the company’s operation, in particular its adherence to international conventions and treaties on civil liberties and environmental impacts.
The company has gained a reputation for abuse of human rights, tax avoidance and environmental degradation in its operations in Zambia and India. In 2007, Norway’s Council on Ethics concluded:
“Continuing to invest in…Vedanta would present an unacceptable risk of contributing to grossly unethical activities.”
In response, the Norwegian sovereign pension fund sold all its Vedanta shares. Only last week, Vedanta was involved in yet another scandal when civil servants were arrested for leaking mining industry information to the company. In 2010, the Church of England divested itself of its shares in Vedanta, because
“after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares.”
In the debate on the legislation to erect the new architecture for the supervision of our banking and financial system, I tabled various amendments intended to award the new Financial Conduct Authority powers to supervise the adherence of London-listed companies to international treaties and conventions on human rights, labour law and environmental sustainability. More recently, the Select Committee on Business, Innovation and Skills, in its report on the extractive industries, warned of the negative impacts on local and indigenous communities of the mining industry. The Committee welcomed the Government’s work to increase openness and transparency and the signing up to European Union directives. The report went on to support my view:
“We believe that the Government should consider expanding the FCA’s remit to include not only oversight of financial transparency, but also the social, environmental and corporate governance reporting for companies applying to list on the London Stock Exchange. If it is not felt appropriate for the FCA, the Government should determine which body should have the remit to do so.”
Successive Governments have watched the excesses of the deregulated finance sector and the banks and have done nothing. As a result, we have endured an economic crisis that has produced immense hardship here and across the globe. If we sit back again and do nothing to control and curtail the damaging, divisive and destructive activities of rogue companies such as Vedanta, a UK-listed company, the long-term consequences for our country, its reputation and its standing in the world, and for our environment, could be equally devastating. I urge action on the Government, not only to support the Goan community, of course, but—as importantly—to control the excesses of the likes of Vedanta as they seek to trample over the lives of people and communities throughout the world.
Already there are concerns about the environmental impact if the mines start to operate again in an uncontrolled fashion that will undermine the Goan environment and economy, and the quality of life of the Goan community. I urge the Government to do everything possible to support those who have bravely campaigned to protect the environment of Goa and to secure the rewards of the mineral resources of Goa for the people of Goa.
It is a great pleasure to serve under your chairmanship, Dr McCrea.
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing the debate and on taking us through a fascinating, if deeply worrying history of mining in Goa. He clearly has great constituency interest in the matter, as well as a personal one. He outlined details of the damage that can be caused to the natural environment in terms of deforestation, pollution and public health. The impact of corruption on the population is significant and, sadly, not unique to Goa.
Natural resources can be of huge benefit to countries and can be used to improve and develop the economies of those countries blessed with them, if managed well. They can transform poor countries. For example, in 2012, Nigerian oil exports were worth almost $100 billion, which is equivalent to more than the total net aid to the whole of sub-Saharan Africa. In 2007, Botswana became an upper middle-income country, although upon independence back in 1966 it was one of the world’s poorest countries. That success is largely due to well-managed mining revenues from diamonds.
Mining developments internationally therefore have the potential to boost economic growth dramatically and to provide a route out of poverty for resource-rich countries. However, there are also many examples of the temptation of such money leading to corruption and the kind of problems the hon. Gentleman outlined; natural resources can be more of a curse than a blessing for particular countries.
Extractives companies, whether listed or unlisted, are important partners for the Government. We want to make sure that developing countries can make the most of their natural resources to tackle poverty. We are committed to increasing transparency in the sector, encouraging strong, transparent and accountable institutions to regulate extractives properly and promote open markets and societies. We therefore need to facilitate an environment in which resource-rich developing countries and regions can attract responsible investment to help them transform the vast potential that natural resources offer into growth, jobs and development.
During the UK presidency of the G8 in 2013, we secured a commitment to working towards common global standards of extractives transparency. We want to level the playing field for business internationally and provide information for more citizens around the world, so that they can hold their Governments to account for how such resources are used. The G8 also launched eight partnerships, working with companies, Governments and civil society in resource-rich countries to improve transparency and build accountability and capacity to manage resources better. Our work through Department for International Development country offices is helping resource-rich developing countries to derive the maximum benefits from oil, gas and mining projects.
The problems the hon. Gentleman described impact significantly on the human rights of the population of Goa—on their rights to health, clean water and due legal process. As he will be aware, UK-listed companies are already required to report on the human rights implications of their operations. Those reports will be further strengthened under the recently agreed directive on non-financial reporting, which will be in place by 2017 and requires listed companies to include information on human rights in their strategic reports.
High standards of reporting on human rights issues are an inherent part of the UN guiding principles on business and human rights, which were adopted in 2011. In 2013, the UK was the first country to publish an action plan on business and human rights, which sets out the Government’s expectations of business to respect human rights at all times. In December, I was delighted to attend the third UN forum on business and human rights in Geneva, which had a constructive atmosphere with an increased business presence; civil society was very engaged in making the forum a success. UN action on this agenda is now in place and an increasing number of countries—although not yet enough—are producing action plans. We want to encourage work and progress on this agenda in countries around the world.
The UK is showing leadership on the issue; indeed, this evening, I will be launching the UN guiding principles reporting framework, which provides, for the first time, a comprehensive standard for reporting so that companies can be held to account by shareholders and customers. The reporting framework applies to all sectors, including extractives. Newmont Mining is one of five companies that have committed to applying the framework straight away.
The combination of enhanced disclosure in the strategic report and the UN guiding principles reporting framework, which sets the standard for that disclosure, will mean that from 2017 listed companies will be more effectively held to account for the human rights impacts of their operations. For that reason, I am proud of the work this Government have done on human rights.
We are also leading the way on extractives transparency. Back in May 2013, we made a commitment that the UK would sign up to the extractives industry transparency initiative, or EITI. In October, after a lot of work by a multi-stakeholder group, we formally gained candidacy status and will now proceed to produce the first reports. UK corporations have engaged constructively with civil society and Government, and their approach is a real example of how progress can be made. The whole process of EITI is designed to build trust and dialogue, and to put information into the public domain, which then prompts public debate. That can be a useful tool for holding companies to account. To give an example, in the Democratic Republic of the Congo, which is not necessarily renowned for its good governance, the EITI process was the first time different stakeholders sat down around the same table to discuss mining sector management. That kind of dialogue and co-operation can also help to prevent conflict.
Many extractive companies listed or headquartered in the UK are active in supporting EITI; for example Rio Tinto and Shell are part of the multi-stakeholder board I have mentioned. The UK’s intention in signing up to EITI is to show that it is not just for developing countries. We want to show that it is not a case of the UK simply telling other countries what they need to do; we recognise that we need to lead the way. That gives us a much stronger argument in our international discussions on the issue.
In addition to EITI, there is also chapter 10 of the accounting directive, which requires listed and large extractives companies to report the payments they make to all Governments. The Government committed to early implementation of those provisions, and our regulations came into force in December 2014. The Financial Conduct Authority, which the hon. Gentleman mentioned, has also changed its rules to require listed companies that are not registered here in the UK to report, implementing the requirements of the transparency directive. Companies will be required to report their payments to Governments from 1 January this year, six months ahead of the EU’s transposition deadline. We will start to see reports being published during 2016.
Bribery and corruption are barriers to trade and growth. The UK is a signatory to the UN convention against corruption and the OECD bribery convention. The Government published the first UK anti-corruption plan on 18 December last year, bringing together all the UK’s anti-corruption efforts under one cross-departmental plan. The Bribery Act 2010 came into force in July 2011, so a company that carries on business in the United Kingdom can be prosecuted for bribery anywhere in the world. On the other hand, other companies can trade on the honesty and integrity that the Bribery Act implies, bringing a benefit for business.
I am aware of the issues the hon. Gentleman raised about Vedanta in particular. It is important that companies listed in the key financial centre of London, which are therefore UK companies, are held to high standards. Quoted companies have to include information about environmental risk in strategic reports. Of course, some corporate governance failures will not necessarily be addressed purely through shareholders holding companies to account; that is one important route of accountability, but some failures may be so serious that the company and directors are exposed to criminal liability. For example, if a commercial organisation fails to put in place adequate procedures to prevent bribery, it could be criminally liable under the Bribery Act.
It is important to be clear: we expect all UK businesses to comply with all applicable laws and to respect internationally recognised human rights wherever they operate. It is no excuse if an offence is committed in another jurisdiction—a company should not feel that it can get away with behaviour and practices in a distant part of the world that it would not even attempt to get away with here.
Trust and transparency are incredibly important, which is why we have prioritised them as part of our corporate governance framework. Wide-ranging reforms in the Small Business, Enterprise and Employment Bill will enhance corporate transparency and increase trust in UK business. Central to that is implementing a publicly accessible central register of information on the people who ultimately own and control companies—the persons of significant control. We are proud to be leading globally in this space, and are encouraged by the growing international momentum on these issues. For example, the soon to be adopted fourth money laundering directive will require all EU member states to hold company beneficial ownership information in a central register.
It is absolutely right that the hon. Gentleman has raised these serious issues. It is a positive thing that a particular problem in a particular area of the world, or with a particular company and its practices, can be highlighted in this place and a spotlight shone on such activities. He has done that today through this debate on mining in Goa. I hope I have set out that the Government take these issues incredibly seriously and are aiming to be a world leader in transparency and accountability—in extractive mining companies and much more widely—as well as in encouraging businesses to take their human rights responsibilities seriously.
There is no room for complacency. We must continue to promote these issues. There will always be money to be made somewhere in the world by exploiting human rights, but that is unacceptable and we in the UK should have no truck with it whatsoever. That is why it is so important to empower citizens in Goa and elsewhere to encourage the development of strong corporate governance, and to make sure that UK-listed mining companies are able to lead the way on these matters.
Question put and agreed to.