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Commons Chamber

Volume 602: debated on Tuesday 10 November 2015

House of Commons

Tuesday 10 November 2015

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Business, Innovation and Skills

The Secretary of State was asked—


More than 2.4 million apprenticeship starts have been delivered in England since May 2010, but we are now going even further. We are committed to 3 million more over the course of this Parliament and we will ensure that they deliver the skills that employers and the economy need for continued growth.

We need to fill 1 million more digital jobs by 2020, not to mention finding 1 million more technicians and engineers. In that context, I am sure that the Secretary of State would agree wholeheartedly with the Science and Technology Committee’s first report, published yesterday, which states that cuts to science and innovation spending are a false economy. That spending is an investment, not a state subsidy, and it creates jobs, increases productivity and attracts inward investment. It is essential for science, technology, maths and engineering—STEM—apprentices seeking innovative British employers.

I commend my hon. Friend for her leadership of the Science and Technology Committee. She is absolutely right to talk about the importance of science, innovation and digital skills. She will know that I made a speech yesterday to Innovate UK’s annual conference, in which I set out new plans to boost science and innovation capabilities.

There were 740 new apprentices in my constituency last year. Will the Secretary of State join me in congratulating the hundreds of new apprentices, and confirm that he will continue to work to improve not only the quantity but the quality of apprenticeships?

I am delighted to congratulate those who have started their apprenticeships in my hon. Friend’s constituency. There has been a 45% increase in apprenticeships since 2010, and we have ensured that they are high-quality paid jobs that last at least 12 months. The whole House should acknowledge the incredible work that has been done by the Minister for Skills, my hon. Friend the Member for Grantham and Stamford (Nick Boles) on apprenticeships. He has focused not only on quality but on quantity.

Cobham, a company in Wimborne in my constituency, takes on between 12 and 18 new apprentices each year, and there have been just under 700 new apprenticeship starts in my constituency in the past 12 months. Businesses are responding to the call for new apprenticeships, but may I urge the Secretary of State to ensure that these apprenticeships really are worth while and high-skilled, so that those who undertake them will really benefit from them?

I am delighted to say that my hon. Friend’s constituency has had a 37% increase in apprenticeship starts since 2010. I know that he is very passionate about this, and that he has done much to promote apprenticeships. He is absolutely right to talk about the quality. Higher and degree apprenticeships are widening access to professions, giving young people new, well-respected routes to professional education at some of our best universities.

The Secretary of State talks a good game, but the fact is that apprenticeship starts have dropped in every single year since 2011-12. The ambition for 3 million new apprenticeship starts is commendable, but would he concede that, in the light of the uncertainty surrounding key policy aspects such as the apprenticeship levy, he is going to struggle to hit that target?

First, I must point out that there were more than 492,000 apprenticeship starts in 2014-15, which was up 50,000 on the previous year. The hon. Gentleman mentioned the apprenticeship levy, and I know that he and his Select Committee have done some work on this. I hope that he will acknowledge that that will be a way of ensuring proper funding for apprenticeships, not just for the quality but for the quantity too.

In Doncaster, we were absolutely delighted to secure one of the two sites for the national college for high speed rail, but the Government seem to be a bit lukewarm about that now. We want to get on with developing and expanding apprenticeship opportunities in the rail industry, so will the Secretary of State confirm that he still fully backs the site in Doncaster for the college?

I am happy to reassure the right hon. Lady that we are committed to the college. It is right that it should be in Doncaster, and it will make a big difference to skills in an important area for our future infrastructure.

What impact does the Secretary of State think cutting the funding for further education colleges by 40% might have on the availability and quality of apprenticeships?

I speak as someone who went to an FE college, and no one needs to tell me about their huge importance up and down the country. My priority is to make them stronger, and one way we are going to do that is through local area reviews, which will look at local need.

The video gaming industry contributes more than £3 billion to our economy and supports skilled jobs across the country, including in my constituency. Representatives of the industry tell me that the biggest barrier to growth is a lack of skills, yet there are no employee-led level 4 higher apprenticeships in video gaming, and the NextGen Skills Academy, which was working with employers to develop such an apprenticeship, is said to have lost its funding. We cannot allow the Government’s lack of a digital skills strategy to make it “game over” for Britain, so will the Secretary of State give me a guarantee now that the video gaming industry will get the apprenticeship standard that it needs? Yes or no?

The hon. Lady should be reassured, first, by the fact that I have met representatives of the video gaming industry on a number of occasions to discuss several issues, including skills. She will know that it is important that apprenticeships are employer-led, and it is up to any industry to come forward with proposals. We are already working with more than 1,000 employers on more than 140 apprenticeship programmes that they are helping to set up, and we will work with the video gaming industry, too.

Aerospace Industry

The Government are working with industry, through the Aerospace Growth Partnership, to remove the barriers to growth, to boost exports and to grow high-value jobs. As part of that work, we are supporting the industry’s investment in technology, competitiveness, productivity, and skills.

I am grateful to my right hon. Friend for that answer. Will he join me in congratulating Boeing, which has a significant base in my constituency, on more than doubling its workforce since 2010 and on increasing investment in UK suppliers from £1 billion to £1.4 billion over that period?

I certainly will. Crawley is an important area for aerospace: Jeppesen-Boeing has a fantastic flight training and service facility, which includes the largest number of Boeing Dreamliner simulators in the world; and of course the area is also home to Thales and London Gatwick airport. I commend my hon. Friend on the work he has done to promote this industry.

The last financial quarter saw the highest ever number of aircraft deliveries—it was up 5% on last year’s figure and up 34% on 2010’s. Many aerospace companies across Pendle credit the Government’s Aerospace Growth Partnership as having played a key role in that success, so will the Secretary of State confirm that he will continue to support that valuable partnership?

Yes. I see regular dialogue with the sector councils, such as the Aerospace Growth Partnership, as a vital part of our industrial approach. It is important that the UK continues to become more productive and more competitive, and that has been central to the work of the Aerospace Growth Partnership. I will be meeting many of that industry’s representatives on 3 December in Filton.

Further to that question, will the Secretary of State confirm today that the UK Government will continue to fund the Aerospace Growth Partnership through their £1 billion contribution over seven years from 2013 and that he is not considering in any way diluting the funding available for the Aerospace Growth Partnership, particularly by converting it into loans?

The Government are absolutely committed to having a strong aerospace sector, and that strength is represented in our commitment to the Aerospace Technology Institute, which is what I believe the hon. Gentleman was referring to.

Discussions move ahead on the UK’s first space port. Does the Minister agree that safety, especially that of the general public, is of primary importance in considering the location of such a space port? Do not a coastal location and extensive airspace unhampered by commercial flying, such as are available at Llanbedr in my constituency, make a crucial contribution to any safety assessment?

The hon. Lady is absolutely right to say that safety is paramount in that sector. We have consulted on a location and we will be talking to our colleagues in the Department for Transport on the outcome.

As the Secretary of State is aware, I have world-leading aerospace companies in my constituency, and they are appreciative of the help the Government are giving to the sector. The biggest problem they still face is the inability to recruit a sufficient number of young people who are considering engineering as a career. What discussions is he having with the Education Secretary about persuading teachers to enlighten pupils as to the opportunities that exist in the sector?

My hon. Friend makes an important point. Skills in engineering, not just for this sector, but for many others, are hugely important. With my right hon. Friend the Education Secretary, we are working closely to get more employers into schools to talk to schoolchildren about their prospects and the huge opportunities that exist in that industry. There is always more that we can do, and he is absolutely right to raise this issue.

Last week, Paul Everitt, the head of the aerospace trade body, ADS, said:

“Loans for research and development are not appropriate and that kind of approach would put the UK at a disadvantage.”

May I press the Secretary of State to answer the question of my hon. Friend the Member for Wrexham (Ian C. Lucas) and rule out replacing research grants with loans that will damage Britain’s ability to innovate and compete?

I made a speech yesterday at the annual conference of Innovate UK in which I talked about the many ways to help the sectors. Grants, exports and skills are just some of them. One thing this Government will not shy away from is supporting that sector, and supporting innovation.


The best way the Government can support manufacturers is by sticking to their long-term economic plan. That includes cutting red tape by a further £10 billion, creating 3 million apprenticeships, lowering corporation tax and devolving budgets and powers to local leaders.

My constituency of Carlisle in north Cumbria has a strong and healthy manufacturing sector. I helped to promote the industry locally by organising a skills fair, which the Minister for Skills will hopefully attend next year. However, what assistance can the Government give to Cumbria to attract skilled workers not just from Cumbria, but from other areas to help complete large infrastructure projects such as the nuclear new build at Moorside?

I commend my hon. Friend on his annual skills fair, which I know is already making a big difference to his constituents. He will be pleased to learn that the advanced manufacturing centre at Carlisle college will begin construction in 2016-17 with growth deal funding. There is no doubt that that will help to boost local skills.

Does the Secretary of State accept that although it is important that employers have a leading role in the development of skills, it is also necessary that skills are transferable? Unless the FE sector is involved in the process of training people and giving them those skills, those skills will not necessarily be transferable.

I agree about the importance of transferable skills. Our local area review of the FE sector up and down the country will look very closely at local needs, and at ensuring that skills are transferable.

What steps is my right hon. Friend taking to protect British manufacturing from dumping on our market and maximising the effect of existing international rules?

My hon. Friend knows that, when it comes to trade measures, action has to be taken by the European Union. I know that he has a particular interest in steel, and this is a hugely important issue about dealing with unfair trade. We discussed that at the emergency Council that I attended yesterday in Brussels. One thing that was agreed in the presidency conclusions was that the Commission should prioritise certain cases, and that certainly includes the steel industry.

Last week in my constituency, the Mahle Group announced the loss of up to 200 highly skilled jobs in the manufacturing sector. The Scottish Government, devolved agencies and local authorities are already involved, but this is a classic example of a European-wide company shipping the process and jobs to another plant in the EU. What support can the UK Government provide, and what can they do both to stop such moves in the future and to encourage long-term investment in technology here?

We can continue to make the UK as attractive as possible for manufacturers. What we have seen in the past five years is that output is up for the manufacturing sector, exports are up and jobs are up, and that is because of our long-term economic plan, which is bringing in tax cuts, investing in skills, cutting red tape and boosting exports.

Will the Secretary of State bring forward details of the package of support that will be put in place to help those workers in the black country affected by the collapse of Caparo, including 54 in my constituency, so that the skills can be retained within the black country engineering sector?

My hon. Friend is right to raise the issue. It is hugely important that workers who are affected by the crisis in the steel industry get whatever help can be provided. We have rolled out plans for support across the country, and we are talking to local leaders to see what more we can do.

The official Opposition have had to drag the Government, kicking and screaming, to the House time after time to get them to stand up for British steelmaking. It is now almost two weeks since the Business Secretary finally went to Brussels to hurry along the European Commission on state aid approval, and yesterday he attended the EU Competitive Council. Although there were welcome pledges for the future, no action was agreed that will make a material difference to our steel industry now. How long must the industry continue to wait for the compensation package promised by the Prime Minister in 2011 to be paid in full? When will the Business Secretary get a grip, stop hiding behind the EU and do more to tackle the root causes of this crisis?

It is a shame that the hon. Lady has to take that attitude. It would be better if she were a lot more constructive on this issue. I could point out that under 13 years of Labour we saw a 45% collapse in steel production and jobs halved—cut by more than 10,000—because of her Government’s policies. This Government are taking the issue seriously. This Government called for, and were granted, an emergency Council meeting at which we agreed on a number of actions. They will be published today and there will be further information in my written statement, which the hon. Lady can read.

Pub Tenants

The Government published a consultation on the introduction of the market rent only option on 29 October. Our proposals have been drafted to strike a fair balance between pub companies and tenants, and we look forward to hearing views from across the industry during the consultation period.

The draft pubs code released by the Minister in late October was supposed to signal the end of the unfair practice of forcing tied tenants to buy their beer only from pubcos. In fact, the code seems to give tenants the freedom to buy on the open market only in exceptional circumstances. Does the Minister agree that the code will mean in practice that very few tenants will be free from the pubco profiteers?

No, I am afraid that I do not agree with the hon. Lady’s assessment of the consultation at all. The clue is in the name: this is a consultation. We are therefore, quite rightly, publishing our proposals, and I look forward to representations from everybody, including the hon. Lady.

I join the hon. Member for Sheffield, Heeley (Louise Haigh) and say that a number of pubs have closed in my constituency and those of my colleagues simply because property prices and rents are too high? I recognise that we need to keep the pubcos in business too, or we will not help anyone. Does my hon. Friend agree that exceptional circumstances would include any situation in which a pub would have to close because the rent was too high?

This is all very useful and helpful, and I thank my hon. Friend for his contribution. I look forward to him putting his views into the consultation; a mix of views is critical to what I emphasise again is a consultation.

Tenants’ groups and the Fair Deal for Your Local campaign have contacted me to say that they believe that the Department for Business, Innovation and Skills has acted in bad faith, and that the draft code of practice for pubs does not even abide by the legislation and entirely negates the market rent only option. They will be asking the Minister tomorrow to withdraw the code, which is entirely unacceptable, and engage with them to come up with something that accords with the will of the House as it was expressed last November.

I am very disappointed to hear all that. Let me make it clear that I have stood up against planned closures of public houses in my constituency and railed against companies such as Greene King. [Interruption.] Yes, I have, and I have fought for other pubs. Hon. Members can look on my website for details. That is not the point. It is really important that we strike the right balance on this issue. I say to the hon. Gentleman that the parallel rent assessment provision, which I know he has not always been in favour of—I think he changed his mind at the last moment—is not in the code.

Shouting from a sedentary position does not help at all. The new style of politics has not quite reached the Liberal Democrat Benches. The noble Lords have made their concerns very clear to Baroness Neville-Rolfe, and as a result of my conversations with her, that particular proposal will go into the second part of the consultation.

The Minister’s so-called consultation scrapped the promised parallel rent assessment, so I am pleased to hear that she has put that back in. Will she do the same with all the provisions that were offered by Baroness Neville-Rolfe in the other House on 28 January and make sure that the vast majority of pub tenants are offered a fair deal when it comes to the market rent-only option? If she does not, she will be acting in bad faith and she will have betrayed the trust of thousands of pub tenants up and down the country.

As I keep saying, it is a consultation so we will listen to everybody. It is important that we strike the balance fairly between both sides of the argument, and that we understand and accept that there has been a great deal of movement to the betterment of tenants over the past few years. We must recognise that. I know from my own constituency work that pub companies such as Punch and Greene King have hugely changed their views to the benefit of tenants, and that must be welcomed.

EU Reform

6. What his priorities are for business in the Government’s negotiations for reform of the EU. (902088)

We must empower businesses to compete more effectively by accelerating the integration of the single market, especially in the services, digital and energy sectors. We will do this by cutting red tape for business and pushing for more ambitious free trade agreements between the EU and the rest of the world.

Does the Secretary of State agree that the best interests of business will be served by our being a member of a reformed and reforming European Union? That extends to our remaining in the single market. From my right hon. Friend’s vantage point as President of the Board of Trade, it is extraordinarily useful that the European Union can negotiate such good strong deals for us globally.

My hon. Friend is right to highlight the importance of the need for EU reform, but many businesses believe that the costs of membership currently outweigh the benefits. As the Prime Minister said, in order for us to get the best deal, we must have the referendum and let the British people decide.

Last week a group of senior business figures in the north-west said it was vital for jobs in our region that Britain stays in the European Union. Will the Government heed what they say and perhaps make it a priority in the negotiations that the £800 million of EU structural funds given to the north-West will continue?

The one thing that businesses agree on is the need for reform. They are united in that, whichever business group one speaks to. If we can get those reforms, which I am confident about—and the Prime Minister has talked more about them this morning—we will see an even bigger boost to jobs and opportunities in Britain.

Will the Secretary of State remind the House of the trade deficit that we have with the EU, and of the fact that the unreformed EU is clearly not working for British business?

My hon. Friend is right to remind us of the current deficit. That is why one of the reforms that we want is a deeper and broader single market which includes digital and professional services, which Britain is very good at, alongside manufacturing, so that we can do more trade.

Writing in The Telegraph, the Prime Minister’s potential successor as leader of the Tory party, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), said that the Prime Minister was right

“to unsheathe a section of the blade that might soon be used to cut the rope and set Britain free”

from the EU. Has the Secretary of State made an assessment of the likely impact on Scottish business of Britain turning its back on its European trading partners, and does he think that is appropriate language from a man of such standing?

I agree that we need reform. All Members on the Government Benches agree on the need to fight for that reform, which means cutting red tape and creating a deeper single market, more ambitious free trade agreements and fairness between the euro-ins and outs. I hope the hon. Lady will join us in fighting for that reform.

A poll of Scottish business last month found that 82% of small and medium-sized businesses support the UK remaining in the EU. I dare say that those businesses value their ability to export more than £12.9 billion-worth of goods and services throughout the EU, creating wealth and jobs at home. Have this Government not lost all control of an exit agenda that was started only to appease right-wing Eurosceptic Back Benchers and may very well result in Scotland being dragged into delusional imperial isolation against its will?

I welcome the hon. Lady to her new role, which I omitted to do earlier. She will know that one of the most important sectors in Scotland is the financial services industry, whether asset management or banking. That is one area where we could have deeper single market and do more trade with the rest of the European Union. If she supports that cause, then she will support our efforts to reform the EU.

Overseas Students: India

7. What estimate he has made of the number of students from India applying to study in the UK in each of the past three years. (902089)

While overall international student numbers are up year on year, there were 16,000 Indian students in 2015—a decline of 13% over the past three years. However, it is worth stressing that India remains our second largest such market.

The fact is that the numbers of students choosing to come here has declined by 53% in the past four years. There is clear concern that we need to do something about this so that Britain, rather than the United States or elsewhere, becomes the choice for Indians to study. What measures can my hon. Friend take on visas, changing times for study and the ability of students to work here?

It is important that we clear up misperceptions in the Indian market about the openness of our offer. We are open to international students. There is no cap on the number of international students who can come and study here, or on the number who can come and stay here after they finish studying, provided that they get a graduate job. We want to make more Indian students feel welcome here, and that is what we will be doing during the visit of Prime Minister Modi later this week.

The Minister says that we want to make more Indian students feel welcome here, but it is clear from the figures that they feel much more welcome in America, Canada and Australia—our competitor countries. Will this not have a substantial impact on Britain’s trade relations with India and other countries such as Pakistan where the figures have fallen, and what is he going to do about it?

Overall international student numbers are up year on year. We have a competitive offer for international students. We have a world-class higher education sector, with 38 out of the world’s top 100 universities. It is not surprising that international students from all over the world want to come and study at our great universities.

I alert the House to my interest in the register. When is the Minister’s Department going to show some leadership and get the Home Office to take students out of the migration figures? This Government are undermining the global reach of our universities, and America, Canada and Australia are benefiting.

We have a competitive offer, as underlined by the fact that international student numbers are up by 3% to 4% year on year. We work closely together to ensure that our international offer is competitive. It remains competitive and will continue to be so. There is no cap on the number of international students coming to this country and no limit to the number who can go on to work in graduate jobs with a sponsored employer.

British Exports

8. What assessment he has made of the effectiveness of steps taken by UK Trade & Investment to encourage British exports. (902090)

I am delighted to be able to report that UKTI has increased its effectiveness year on year since 2010. We have doubled the number of UK companies assisted on exports from 27,000 in 2010 to 55,000. This is working. We have secured an extra £60 billion in additional sales and a rise in exports of 9% for existing exporters and 46% for new exporters. I am also delighted that the life sciences are doing their bit. I recently signed a £2 billion trade deal with China, and there will be more announcements on Thursday with the Indian state visit.

Britain brews the best beer in the world, and I know that the Minister wants to get our brewers exporting, but sadly they tell me that the performance of UKTI to date shows that it could not organise a party in a brewery. Will he sit down with UKTI and do all he can to help medium and family-sized brewers export across the world?

May I pay tribute to my hon. Friend, who is a doughty champion for British beer and Burton brewers? He makes a very important point and I would be delighted to convene that meeting with UKTI. We need to roll out the barrel for British beer and I am delighted to say that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I have set out an ambitious food and agri-tech export plan, to ensure that the whole world experiences the benefits of British beer and food.

The Northern Ireland agri-food industry depends on exports. With the Secretary of State for Environment, Food and Rural Affairs in China this week, what further steps will the Department for Business, Innovation and Skills take in accessing new market opportunities for British and Northern Ireland exports?

The hon. Lady makes an important point. The Northern Ireland sector is a crucial part of the UK sector, and that is why we have set up the exports implementation taskforce. We are absolutely dealing with the points she has raised about Northern Ireland.

22. My hon. Friend the Member for Burton (Andrew Griffiths) is absolutely right: small and medium-sized businesses are still not getting the traction they need from UKTI. Will the Minister do everything possible to help chambers of commerce to engage with one another so that we can hit our £1 trillion of exports? (902106)

My hon. Friend makes an important point. Lord Maude is overseeing an important review of the way in which UKTI works, to make sure that we are developing a sector focus and a strategic market focus around the world. We are maintaining momentum—and we will improve on it in the years ahead—in order to hit that ambitious target.

The deficit for which this Department is responsible is the trade deficit. The current account measures our ability to pay our way in the world and its deficit recently reached its highest point since the second world war. It is still at 3.6% of GDP. How on earth will refusing to have an industrial strategy help British exporters overcome the failure of this Government’s trade policy?

The hon. Gentleman has picked the wrong Minister to talk about industrial strategy, seeing as I lead one of our most successful ones on life sciences. The Secretary of State’s speech yesterday made very clear our commitment to innovation, and this Department, though our investment in science and innovation, is leading in building a long-term economic plan for the science, industries and innovation of tomorrow. The hon. Gentleman can cite trade balance figures all he likes, but the truth is that we are in a global economy and we cannot control the rate at which other economies grow around the world.

Migrant Workers

We are creating a director of labour market enforcement. This will strengthen our ability to find and stop exploitative employers, such as the 41 businesses in my hon. Friend’s constituency who have had their gangmasters’ licences refused or revoked.

As my hon. Friend knows, Lincolnshire produces some of the finest food in the country, but some of its workers are affected by the issues under discussion. Does he agree that it should be as much down to supermarkets and consumers to make sure that everyone knows that the food we eat is produced in humane conditions?

I absolutely agree with my hon. Friend. It is very important that supermarkets and other traders are as transparent as possible about the work they have done to ensure that nowhere in their supply chain is there any kind of slavery or other kind of labour exploitation. The Modern Slavery Act 2015 specifically requires them to make a statement of that kind.

Further Education: Sussex

An area review—the Sussex coast review of post-16 education and training—is taking place and it will recommend high-quality, sustainable and financially viable further education and sixth-form colleges through a reformed structure.

Two FE colleges in my constituency—Worthing college and Northbrook college—are part of that review. They are good and improving colleges, providing valuable apprenticeships, training and education. They have already taken large cuts—there is much uneconomic provision—so can the Minister assure me that the area reviews are not just a cover for further, unrealistic cuts that will threaten their viability altogether? Why are sixth forms in schools not included in those reviews?

I am glad to have an opportunity to reassure my hon. Friend. Regional school commissioners are absolutely required to be part of the area reviews. Those in some parts of the country have perhaps been surprised by that requirement, so I am happy to reassert it: they are employed by the Department for Education and are required to be part of those area reviews. The point of area reviews is to have strong, sustainable FE and sixth-form colleges that can take advantage of growing revenue streams such as the funding for apprenticeships.


I am sorry to detain you yet further, Mr Speaker.

Data from the 2014 UK Commission for Employment and Skills employer perspectives survey showed that, in England, about 15% of establishments have offered formal apprenticeships. When we introduce the apprenticeship levy in 2017, we expect that percentage to increase significantly.

Quite why the Minister supposes that I find it anything other than joyous to sample his mellifluous tones I frankly cannot fathom. I am not being detained by anybody; my duty is to be in the Chamber, and I shall always be here.

The Apprenticeships Suffolk Business Service has been formed by the chamber of commerce and the county council, and it is already delivering many more apprenticeships. Will my hon. Friend do all he can to ensure that businesses themselves play the major role in increasing the number and quality of apprenticeships?

I am really delighted that Suffolk authorities and the chamber of commerce have created that service. A number of authorities around the country have created similar things—apprenticeship hubs and the like—and such interventions by local authorities are incredibly worth while. My hon. Friend is absolutely right that, ultimately, we want employers to take control of this: we want employers to develop standards, as the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) mentioned earlier, to control the funding and to ensure that more people get the opportunity of an apprenticeship.

Can the Minister tell me three specific things that the Government are doing to encourage apprenticeships in construction, where there is a huge shortage?

I am absolutely delighted to be able to tell the hon. Gentleman three specific things. First, we are introducing an apprenticeship levy. I would have thought that he might have taken the time to welcome it, because it will require larger employers to make a substantial investment in apprenticeships. Secondly, we have reformed the Construction Leadership Council under new leadership and charged it with taking a very active role in promoting apprenticeships in the sector. Thirdly, I regularly meet the new, very focused leadership team of the Construction Industry Training Board, and I have charged it with focusing on apprenticeships as the key method of delivering high-quality training and further skills.

Road Haulage Industry: Driver Shortage

Mr Speaker, you can see why I was a little bit nervous about popping up again.

We are working closely with a group of leading sector employers to support the development of a new apprenticeship standard for heavy goods vehicle drivers. The standard will equip apprentices with the driving skills the road haulage industry needs.

Could my hon. Friend name five—no, I will not go there.

Will my hon. Friend work with employers in the road haulage industry to try to incentivise driving as a career choice for young people?

Yes, I absolutely will. There is a desperate need for more skilled drivers. It is actually a great opportunity for people who are in relatively low-skilled employment. We had a very interesting discussion in the Social Justice Cabinet Committee recently about this being an opportunity, as a very good kind of first employment, for ex-offenders. A Defence Minister has mentioned that it is a great opportunity for people leaving the forces. We need to do more on all sides in the Government.

What more can the Government do to help haulage companies with the exorbitant fees of £3,500 that are charged to train for HGV licences?

There is a convention, which we have stuck to for very good reasons, that we do not ask the taxpayer to pay for licences to practise a particular profession. We believe that doing so should be directly in the interests of both the employer and the employee who will benefit from having the licence. However, we are encouraging those companies to develop, and they are working on developing, an apprenticeship standard to include the whole of the rest of the training, which will of course receive substantial support from the taxpayer and from the apprenticeship levy.

Business Finance

13. When he plans to bring forward proposals to improve access to finance for (a) the smallest businesses and (b) people who are self-employed. (902096)

According to the latest SME Finance Monitor survey, net lending to smaller businesses has recovered substantially since 2014 and businesses are increasingly finding that banks are more willing to lend. In relation to Government assistance, we have provided finance help to small businesses—for example, through 32,800 start-up loans worth £176 million. Turning to the self-employed, Julie Deane, the founder of the Cambridge Satchel Company, is currently carrying out an independent review of self-employment, and I am sure we will welcome her recommendations. We of course need to do more to make sure that everybody knows about the brilliance of the financial tech sector.

I thank the Minister for that detailed answer. On small businesses, she will be aware that the Secretary of State visited the west midlands last Friday, accompanied by the Coventry and Warwickshire growth hub. He visited a small company near his constituency, Ricor Ltd—a company that is indicative of why the Government should maintain their positive support for business. Will she assure me, and the business hubs that provide such a good link with those businesses, that that will be the case?

I understand from the Secretary of State that that is an excellent company. I agree that these things are really important. It is also incredibly important that we encourage small businesses to consider alternative sources of funding. That is why the FinTech sector is doing so well. We need to get out information about crowdfunding, peer-to-peer, angels and so on, especially at a local level.

The Minister will be aware that in my constituency, many people go into self-employment and start a small business as one of their first steps into employment. That means that they are unlikely to be familiar with the system. What steps will she take to ensure that people are aware of the options open to them, particularly once the review of self-employment funding finance is completed?

Of course, we offer people information. The British Business Bank puts together the various funds that are available to small businesses. One reason why I am in favour of the great devolution deals is that they take that sort of activity right down to the local level. The coming together of local authorities, businesses and local enterprise partnerships enables us to get this sort of information out. The Federation of Small Businesses and the chambers of commerce also have a huge role to play, because they do excellent work, often at a local level.

EU Membership

15. What recent discussions he has had with the Foreign Secretary on the effect on businesses of the UK’s membership of the EU. (902098)

I work closely with the Foreign Secretary, particularly through the exports taskforce, which I chair, to deliver growth for British business. UK businesses send 45% of their exports to the EU and benefit from the single market. The reforms that we are pursuing are good for the EU, good for the UK and good for British business.

Some 160,000 jobs in the north-east rely on trade with the EU. We are the only region in the country consistently to deliver a trade surplus. What assurances can the Secretary of State give my constituents, many of whom are understandably concerned about what an isolated Britain on the fringes of Europe might mean for their jobs and livelihoods? Will he vote to stay in the EU and stand up for British jobs?

The hon. Lady has some excellent manufacturers and other companies in her constituency, including Nissan, which recently announced a huge investment. What business wants in respect of the EU is more certainty and reform, so it welcomes the reforms that we are fighting for, and the certainty that the referendum will bring.

One of the biggest impacts on UK businesses comes from the EU social chapter. As recently as 2010, the Conservative manifesto said that we would “negotiate the return” of power over “employment legislation”. Is that still going to happen, or have we gone backwards in our ambition?

We have set out our priorities in respect of making the whole EU, not just Britain, more competitive. They include cutting red tape and having more free trade agreements. We have set out those priorities in detail. I listened carefully to what my hon. Friend had to say and will reflect on it.

Topical Questions

My first and foremost priority in recent weeks has been to do what I can to help the steel industry. I pushed for and was granted an emergency meeting of the Council of Ministers, which took place in Brussels yesterday and led to a number of actions being agreed. I reiterate our support for the people in Redcar, Scunthorpe, Lanarkshire and elsewhere who have lost their jobs recently. This is an extremely difficult time for all who are affected. I say to them: we are resolutely on your side.

Many businesses in the construction sector in my constituency are still suffering from excessive levels of retention being taken by prime contractors. What more can the Secretary of State do to encourage the phasing out of retention before the 2025 deadline?

My hon. Friend raises an important point that a number of people have made to me recently. Cash retention is a common practice that can provide insurance for customers against poor workmanship. However, the scope for misuse is clear. That is why the Government have commissioned a review of the practice. We will see what action we can take.

Further education has already been weakened by five years of Government funding cuts, so why are Ministers having hasty, half-cocked area reviews that threaten forced course and college closures? Figures released by the Library today suggest that the Chancellor is demanding at least £1.6 billion in FE cuts, and a new Green Paper proposes free-for-all providers that would threaten colleges’ higher education teaching. Are Ministers doing anything to stop FE being the spending review’s whipping boy?

We have discussed this issue previously. As I have said, we want an even stronger FE sector that provides even more opportunities across the country, and local area reviews are essential for that. We need to understand local needs much more carefully, and local reviews will achieve that. We will then be able to offer more opportunities.

T3. Many English Members of the House, while unable to recall individual results in the tournament, were extremely proud that England hosted the rugby world cup this year. What does my right hon. Friend estimate is the positive economic impact of hosting the rugby world cup? (902074)

Independent consultants—EY, the old Ernst & Young—estimated pre-tournament that the rugby world cup would attract more than 460,000 international visitors to England and Wales, which is the highest ever number for a world cup. That, apparently, would add up to £1 billion to the United Kingdom’s GDP, which is excellent, and we will know whether that figure was accurate sometime in May, when the impact statement has been done. By way of an anecdote, my hon. Friend the Member for Rugby (Mark Pawsey), who represents the birthplace of this great game, says that one business in his constituency reported a 250% increase in turnover, purely as a result of this great tournament.

T2. Wyke sixth-form college in Hull does a vital job for young people in a city that has struggled with educational attainment, and the FE colleges and other post-16 provision in Hull are deemed to be either good or outstanding. Will the Minister guarantee that that vital provision in developing the skills agenda in the city will be protected, and not decimated by the cuts that his Government are likely to propose? (902073)

We all share a sense of the importance of sixth-form and further education colleges to all our communities, and we all rely on and value those institutions. We need them to be stronger, however, and the area reviews are about enabling those institutions to form arrangements with each other that strengthen them for the future. This will be of less relevance for sixth-form colleges, but for further education colleges, the funding going into apprenticeship training is growing fast. Those colleges have a great opportunity to win a lot of that funding for the future.

T4. I wish a happy Diwali to you, Mr Speaker, and to everyone celebrating it. Given Narendra Modi’s visit this week, will my right hon. Friend describe the various trade, educational and bilateral arrangements that will be announced, and say what Narendra Modi is looking forward to seeing during this visit? (902075)

I commend the work that my hon. Friend has done over many years to boost ties between India and Great Britain. A number of commercial announcements will be made during the visit of the Indian Prime Minister. Those will demonstrate the full breadth of the relationship between us and India, and will cover healthcare, energy, financial services and creative industries. That will help to boost both of our economies. Later next month, I will lead a trade mission to boost education exports alongside the Minister for Universities and Science.

T6. In his Green Paper, the Minister says that he wants to improve access to higher education for the most disadvantaged students. Will he match that rhetoric with action and protect the student opportunity fund, which does so much to support young people from across the country in realising their full potential? (902077)

Yes, indeed. In the Green Paper, we set out various proposals on which we want to consult with the sector. I have also announced the creation of a social mobility taskforce, which is to report back to me by Christmas with proposals on how to meet the Prime Minister’s ambitious target of doubling the proportion of people from disadvantaged backgrounds who attend university by 2020.

T7. The Government are making large infrastructure investments in my area, through projects such as the dualling of the A303 and Hinkley Point. I am trying to encourage large-scale inward investment. How can my hon. Friend help us to build on local skills and research and development? (902078)

Through our growth deal with the Heart of the South West local enterprise partnership, we have invested £6.5 million in the Hinkley Point training agency. Yeovil college and its partners can bid for that funding to build capacity and deliver skills training for Hinkley Point. The LEP is leading work with partners, including Yeovil college, to develop an action plan to deliver the construction skills that the area will need.

T9. The Minister appears to be a little shy about telling us exactly when the compensation scheme for energy-intensive industries such as steel is likely to be introduced, or whether it will be ahead of the original planned date. While she is thinking about that, will she also give thought to other industries, such as chemicals, ceramics, paper and cement, with a view to providing sufficient compensation for them? They face greater competition, uniquely, because of the high cost of additional UK Government energy and climate change electricity taxes. (902080)

At yesterday’s excellent meeting held by the Secretary of State in Brussels, the presidency agreed that this matter should be prioritised. We are now waiting for the European Union to sign off on it, and we are told that it will be in a matter of weeks. We are doing everything we can to advance that.

T10. I welcome the Government’s ambition for 3 million apprenticeship starts in this Parliament—three times the number under the last Labour Administration. As the numbers rise, will the Minister ensure that those apprenticeships provide the high-quality skills that our young people deserve and our employers demand? (902081)

Absolutely. There is no point having 3 million apprenticeships unless they are high quality and add to the skills of the people who take them up. That is why we are introducing new trailblazer standards, developed by employers: apprenticeships have to last at least a year and involve 20% formal off-the-job training. We are also introducing higher-level and degree apprenticeships.

I was at Caparo Atlas Fastenings in my constituency talking to the administrators last Friday. I am sure that the whole House will send their condolences to the Paul family. Will the Minister say what specific steps can be taken to preserve those skilled jobs for the future, given that infrastructure projects are coming up in the west midlands?

Of course we always listen to what the local enterprise partnerships are asking us to do, if they need any additional support. As the hon. Lady knows, in relation to steelworkers who have unfortunately been made redundant—notably at Redcar, but with more fears for Scunthorpe and Rotherham—we have put in substantial amounts of public money, specifically to ensure that those highly skilled workers get all the opportunities they need to retrain. The amount for Redcar is £16.5 million, and for Scunthorpe it will start at £3 million. We have already started to work with Rotherham and, if we get more bad news, money will be available for that area.

The issue of switching suppliers is particularly acute in the mobile phone space, where just 6% of users change contracts each year, and many people find it difficult to find the best deals. What plans do the Government have to improve switching and price transparency in the mobile sector?

The Government are determined to encourage more consumers to vote with their feet in key markets such as energy, banking and mobile phones. We are currently conducting a call for evidence on a set of six switching principles that will make the process quicker and easier for consumers. My hon. Friend the Minister for Culture and the Digital Economy—for digital everything—and I will shortly write to the chief executives of mobile telephone companies to encourage them to co-operate fully with those new principles.

The Caparo group, which has its headquarters in my constituency and is currently in administration, provides high-quality steel products to the supply chains for both the motor industry and civil aviation. Those products are difficult to source from elsewhere. What will the Minister do to ensure that those companies survive?

May I first apologise, because I should have added my condolences to the Paul family on their loss yesterday?

The difficulties in Caparo are not as simple as those involved in the decline in the steel industry, with which we are all familiar. One of the difficulties at the Hartlepool plant, for example, was the decline in oil and gas. We will work with the LEPs—we will work with anyone—to make sure that workers who need extra skills to transfer into new jobs have that opportunity.

What steps will the Minister take to promote reform of the EU regulations specifically on biotechnology and life science?

My hon. Friend raises an excellent point. I was yesterday in Brussels with my right hon. Friend the Secretary of State to convene a summit with European leaders on biosciences. We are pushing for an enlightened regulatory framework to support EU and UK leadership in the fields of food, medicine and energy for global benefit.

May I ask the Minister why his Department is keeping further education and skills out of the Liverpool city region deal? They are crucial to the Liverpool city region.

I am not directly responsible for city deals, but there are many such deals around the country that have specifically majored on the inclusion of skills—Manchester and elsewhere. I am happy to look into it, but I am sure it was not because we resisted. Frankly, we are very keen for local authorities and local enterprise partnerships to take a bigger role.

May I refer the Minister back to his earlier answer regarding the shortage of heavy goods vehicle drivers? Only last Saturday, my surgery was attended by someone who wanted to establish themselves as a trainer for HGV drivers. Will my hon. Friend look again at the support that such people receive, as it could go a long way to more drivers becoming available?

When there is an apprenticeship standard for HGV drivers, the company in my hon. Friend’s constituency will be able to offer training to employers for that apprenticeship, and to secure the funding that the Government will provide through the apprenticeship levy and other public resources.

I welcome the decision the Department has made on name-blind applications to university, but the Minister will know that this does little to deal with prejudices of class and race. Postcode, school and being first in the family to go to university are just as important. What progress is being made on contextual data?

It is a priority for the Government to increase the proportion of disadvantaged people going to university. We have brought forward proposals for UCAS to look at, so that for the 2017 admission cycle, we can introduce name-blind applications—an important step to ensuring that application and admission to university is on the basis of merit.

For British businesses operating in highly regulated sectors such as the legal sector, India remains an incredibly restricted market to break into—in many respects, even more so than China. Will the Secretary of State use this week’s visit as a catalyst to move forward long-standing discussions on the service sector?

My hon. Friend is absolutely right to raise this issue. Britain and India do a lot of trade together, and there is a lot more we can do if we put our minds to it. These are exactly the kinds of issues we look forward to raising this week.

As has been well documented in this House, Ministers promised £80 million for retraining and economic development in Redcar. We know now that only £30 million of that will be saved for pension payments. Less than £10 million has been paid out already, and more than 90% of people have received their payments. Will the Minister promise the people of Redcar that what is not spent on redundancies and final salaries will stay in the region and go to the people of Redcar, not be sucked back up to the Treasury?

I can absolutely assure the hon. Lady, who rightly fights very hard for her constituents, that only today I met again with my officials and said that I wanted the remaining money to go in tranches to Redcar, so that people there can determine how it will be spent for the benefit of her constituents.

Will the Minister join me in congratulating Jack Hammond and Ashley Churchman, two inspiring apprentices who addressed a joint Education and Business, Innovation and Skills Committee seminar last week? Does he agree that apprentices sharing their experiences in this way can demonstrate to businesses the real value of employing apprentices?

I certainly would like to congratulate my hon. Friend’s constituents. As she says, there are no better advocates for apprenticeships than those who have completed them—not a bunch of middle-aged people like us—who can go to their schools and preach the virtues of apprenticeships.

In the Scottish Government’s programme earlier this year, the First Minister announced three new innovation centres for Scotland across Europe, one of which will be based here, in the great European capital city of London. How do the Government plan to support that centre, to ensure that Scottish businesses compete on the world stage?

We continue to support innovation across the UK. I was pleased to be in Glasgow 10 days ago, laying the turf for a new innovation centre, the Imaging Centre of Excellence, in the University of Glasgow. Scotland punches above its weight with regard to research funding—it has an 11% share of it, whereas it has an 8% share of the population—and I hope it continues to do so.

Europe: Renegotiation

With permission, I would like to make a statement on the Government’s EU renegotiation.

As the House knows, the Government were elected with a mandate to renegotiate the United Kingdom’s relationship with the EU, ahead of an in/out referendum to be held by the end of 2017, and since July, technical talks have taken place in Brussels to inform our analysis of the legal options for reform. Today, the Prime Minister has written to the President of the European Council to set out the changes we want, and we have laid a written ministerial statement, including a copy of that letter, hard copies of which are available in the Vote Office.

I would now like to offer the House further detail. The Prime Minister’s speech at Bloomberg three years ago set out a vision for the future of the EU. Three years on, his central argument remains more persuasive than ever: the EU needs to change. Increasingly, others, too, have recognised this. Only a fortnight ago, Chancellor Merkel said that British concerns were German concerns as well. The purpose of the Prime Minister’s letter today is not to describe the precise means, including the detailed legal amendments, for effecting our reforms—that is a matter for the renegotiation itself; what matters to us is finding solutions. The agreement must be legally binding and irreversible and, where necessary, have force in the treaties.

We are seeking reform in four main areas. The first is economic governance. Measures that the eurozone countries need to take to secure the long-term future of their currency will affect all EU members. These are real concerns, as demonstrated by the proposal we saw off this summer to bail out Greece using contributions from non-euro members. As the Prime Minister and the Chancellor have set out, any long-term solution should be underpinned by certain principles and should include a safeguard mechanism to ensure that these principles are respected and enforced. The principles should include recognition that the EU has more than one currency; that there should be no discrimination or disadvantage for any business on the basis of currency; that taxpayers in non-euro countries should never be financially liable for supporting eurozone members; that any changes the eurozone needs to make, such as the creation of a banking union, should never be compulsory for non-euro countries; that financial stability and supervision should be a key area of competence for national institutions, such as the Bank of England, for non-euro members, just as those matters have become a key area of competence for eurozone institutions, such as the European Central Bank; and that any issues affecting all member states must be discussed and decided by all member states.

Secondly, we want an even more determined focus on improving Europe’s competitiveness. Unemployment, especially youth unemployment, in Europe is still too high. Unless Europe can raise its game on competitiveness, the challenges we all face from global competition and digital technology will pose a serious risk that the next generation of Europeans will not be able to afford the living standards, social protections or public services that our citizens take for granted. We therefore welcome the European Commission’s focus on competitiveness. The number of legislative proposals has been cut by 80%, while more regulatory proposals have been taken off the table this year than ever before. Progress has been made towards a single digital market and a capital markets union, as well as in last month’s Commission trade strategy. But we need to go further. The burden from existing regulation remains too high. Just as we have secured the first-ever real-terms cut in the EU budget, so we should set a target to cut the total burden on business. This should be part of a clear strategic commitment that brings forward all the various proposals, promises and agreements on European competitiveness.

Thirdly, we come to sovereignty. As the Prime Minister said at Bloomberg and as we have stressed many times since, too many people in the UK, and in other member states too, feel that the EU is something done to them. In his letter, my right hon. Friend makes three proposals to address this. First, we want to end the United Kingdom’s obligation to work towards an ever closer union as set out in the treaties. For many British people, this simply reinforces the sense of being dragged against our will towards a political union. Secondly, we want to enable national Parliaments to work together to block unwanted European legislation, building on the arrangements already in the treaties. Thirdly, we want to see the EU’s commitment to subsidiarity fully implemented, with clear proposals to achieve that. We believe that if powers do not need to reside in Brussels, they should be returned to Westminster. As the Dutch have said, the ambition should be “Europe where necessary, but national where possible.”

Fourthly, I want to turn to the issue of welfare and immigration. As the Prime Minister made clear in his speech last November, we believe in an open economy, which includes the principle of free movement to work, and I am proud that people from every country can find their community here in the United Kingdom. But the issue is one of scale and of speed. The pressure that the current level of inward migration puts upon our public services is too great, and also has a profound effect on those member states whose most highly qualified citizens have emigrated.

The Prime Minister’s letter again sets out our proposals to address this. We need to ensure that where new countries are admitted to the EU, free movement will not apply until their economies have converged much more closely with existing member states. We need to crack down on all abuse of free movement. This includes tougher and longer re-entry bans for fraudsters and people who collude in sham marriages, and stronger powers to deport criminals to stop them coming back and to prevent them from entering in the first place. It also includes dealing with the situation whereby it is easier for an EU citizen to bring a non-EU spouse to Britain than for a British citizen to do the same.

We must also reduce the pull factor drawing migrants to the UK to take low-skilled jobs, expecting their salary to be subsidised by the state from day one. We have proposed that people coming to Britain should live here and contribute for four years before they qualify for in-work benefits or social housing, and that we should end the practice of sending child benefit overseas. The Government are open to different ways of dealing with these issues, but we do need to secure arrangements that deliver on our commitments to fair and controlled migration.

Let me say something briefly about the next steps. There will now be a process of formal negotiation with the European institutions and with all 27 European partners, leading to substantive discussion at the December European Council. The Prime Minister’s aim is to conclude an agreement at the earliest opportunity, but his priority is to ensure that the substance is right. It is progress on the substance in this renegotiation that will determine the timing of the referendum itself.

The Government fully recognise the close interest from Members on all sides of the House. We cannot provide a running commentary on an ongoing negotiation, but we will continue to engage fully with the wide range of parliamentary inquiries, now numbering, I believe, 12 across both Houses of Parliament, into the renegotiation. Documents will be submitted for scrutiny in line with normal practices, and the Foreign Secretary, other Ministers and I will continue to appear regularly before the relevant Select Committees. Of course, the European Union Referendum Bill will return to the House before long.

The Prime Minister has said and he repeated this morning that should his concerns fall on deaf ears, he rules nothing out, but he also believes that meaningful reform in the areas that I have described would benefit our economic and our national security, provide a fresh settlement for the UK’s membership of the European Union, and offer a basis on which to campaign to keep the United Kingdom as a member of a reformed European Union—and it is that which remains the Government’s objective. I commend the statement to the House.

I thank the Minister for updating the House, and for giving me advance sight of his statement.

The decision on whether or not the United Kingdom will remain a member of the European Union is the biggest decision that the country will make for a generation. Labour Members are clear about the fact that Britain is a more powerful, prosperous and secure country as a result of its membership of the EU, and we want to see it play a full role in shaping a reformed and better Europe that deepens its single market in areas such as digital and services, offers more hope and jobs to its young people, uses its collective strength in trade with the rest of the world, and stands together to combat the urgent security problems that we face. We do not stand for the nationalism that says that we would be better off out, or for a Brexit that would see Britain weaker in power and influence, and diminished in the eyes of the world.

In his speech this morning and in the letter to the President of the European Council, the Prime Minister set out his negotiating agenda. As we have already heard in comments from his own Back Benchers, the problem that the Prime Minister faces—and, in fact, the reason he has been so reluctant to put his position down on paper until now—is that there is nothing he can renegotiate that will satisfy the large number of right hon. and hon. Members sitting behind him who want to take Britain out of the European Union at all costs. They are desperate to be disappointed, and they are here in the House today. Their only role in this debate is to push for demands that they know will not be met.

The agenda that was published today raises important issues including some that were in our own election manifesto, such as protection for the rights of non-eurozone countries and those of national Parliaments. It also includes other ideas which are already in train. May I now ask the Minister to respond to some specific questions?

It is right that we press for guarantees for non-eurozone members in the future. Our manifesto argued for that, and it is in our economic interests. Does the Minister agree, however, that it would be a mistake for Britain, in so doing, to volunteer or embrace some kind of second-class or associate membership of the EU, while still paying the full costs of membership? Would not such an outcome weaken Britain rather than strengthening our position?

Why is there so little in the agenda about jobs and growth for the future, given that the problem with which Europe has been struggling for some time has been low growth and high unemployment? The Minister has talked of reducing the burden on business. Can he guarantee that nothing in this agenda will reduce the hard-won employment rights that have been agreed at European level over the years, including rights to paid leave, rights for part-time workers, and fair pay for temporary and agency workers? Does he accept that it would be a huge mistake to try to build support for a reformed European Union on the back of a bonfire of workers’ rights?

We note the retreat from earlier statements and hints from the Prime Minister that he would seek an emergency brake or an end to the principle of free movement. Is the Prime Minister set on the four-year timescale for access to in-work benefits, or is that subject to negotiation at the European Council? Will the Minister also tell us specifically whether it would mean a change in EU legislation, or a change in the way in which the system works here in the UK?

Does the Minister agree that it is for those who wish to reject the agenda as too little—many of whom are sitting behind him, and who are determined to take Britain out of the EU—to state clearly to the British people what being out would mean for our jobs, for our trade, for our investment, for our employment rights, and for our national security?

Of course the European Union faces big challenges in recovering from the eurozone crisis, offering more hope for the future, and dealing with the urgent and immediate refugee crisis that it faces, but we believe that those challenges will be best met if Britain plays a leading role in the future of the European Union, and if we use our power and influence with others to overcome them.

There is a broader case that goes far beyond those four points about Britain’s place in the world and the EU, and that case has to be made. Our history is not the same as that of many other member states, and perhaps we will never look at these issues through precisely the same eyes, but that is not the same as wanting to leave. Reform is essential. It should be an ongoing process, not a single event, and Labour Members will keep arguing for a Britain that is engaged with the world, using its power and influence to the maximum and not walking away from a partnership that we have been members of for 40 years and which has brought many benefits to the people and the economy of this country.

The right hon. Gentleman asked four specific questions and I will deal with them in turn.

On relations between EU and non-EU members, we do need to have, as part of this negotiation, safeguards against any risk of caucusing by eurozone countries, who if they chose to act as a caucus could command an automatic qualified majority within Council of Ministers meetings. There are clearly going to be some issues that derive directly from a currency union where eurozone countries quite legitimately will want to talk among themselves, and it is going to be important that we have a deal that allows the eurozone to do the work of integration it is going to need to do, but which properly safeguards the integrity of the single market of 28 members and decision making across the board in terms of the EU responsibilities in respect of the 28.

The right hon. Gentleman teased me a little about the views of some of my right hon. and hon. Friends. I have to say that when I have appeared before some of the Committees of this House, I have encountered Opposition Members who are equally committed to British withdrawal from the EU. The truth is that this is a matter—[Interruption.] Indeed, I am reminded that the Labour party leader, the hon. Member for Islington North (Jeremy Corbyn), has not been renowned for his enthusiasm for British membership of the EU. This issue has legitimately cut across party divisions for as long as EU membership has been a concern in the UK. People within both parties hold honourable, principled views both for and against British membership, and I think that that is likely always to be the case.

The right hon. Gentleman asked about the challenge of low growth. I think that not only what the Government are saying in this renegotiation, but what they have led and helped to shape within the EU ever since 2010, demonstrates the seriousness with which we take this issue. I know the Prime Minister was personally involved in the negotiation that clinched the deal on an EU-Korea free trade agreement, something that is now proving of immense value to British industry. It is the British Government who have helped to energise the debate towards a digital single market across Europe, something that will give small and medium-sized enterprises, as well as large companies, increased opportunities.

No Conservative Member wants to make, in the right hon. Gentleman’s words, a bonfire of workers’ rights, but we also need to have in mind the reality that other countries that have chosen to go for a much more regulated approach to the employment market have often, tragically, suffered much higher levels of unemployment than we have in the UK. Keeping the UK’s opt-out from the working time directive, for example, is something we will fight very hard to make sure is entrenched by this renegotiation.

On freedom of movement, the Prime Minister made his view very clear: our objective is to better control migration from within the EU. There are obviously different ways in which we could achieve that. We think we can do that by reducing the incentives offered by our welfare system, which is why my right hon. Friend set out proposals in November and repeated them today. Others in the EU have concerns about this, and that is why we say to them, “If that’s what you think, put forward alternative proposals that deliver the same result.” It is the outcome of the measures—controlled, fair and properly managed migration—that is the end that we seek.

Finally, on the question of what is meant by “out”, the Prime Minister said again this morning that he did not think either the Swiss or Norwegian models would be right for the UK. The question of what “out” might mean will be a key element in the forthcoming referendum debate.

Order. A very large number of Members are seeking to catch my eye, and that was entirely to be expected. In order to have any chance of accommodating them, brevity will be of the essence.

Does my right hon. Friend agree that the big issue that will be settled in this forthcoming referendum is how best this country is to protect its national interests and security in the modern world and how best to enhance our prosperity for the next 30 or 50 years? Will he seek to ensure that we do not lose sight of that when we address current events?

While our right hon. Friend the Prime Minister is embarking on very important negotiations—and I wish him success on competitiveness in particular—will the Minister for Europe ensure that when we are negotiating the benefit rights of those foreign nationals who work alongside British people in employment in this country, we remember the interests of the 2 million or so British nationals who live and work in the EU and do not wish to see those Governments start to discriminate against our nationals in their tax and benefits systems?

The answer to my right hon. and learned Friend’s second point is certainly yes, the interests of British people are always at the heart of this Government’s thinking about any area of policy, and we will certainly continue to treat the national, economic and security interests of the UK as the core objective of every aspect of this European negotiation.

I thank the Minister for making an oral statement to the House and for forward sight of his statement.

What a difference a year makes: just last year Scots were being told that if we voted yes to independence we would be getting chucked out of the EU, and now, frankly, we could not be closer to the exit.

The Minister said earlier that there would be a process of formal negotiation with the Europeans. Will he make a commitment to us today to consult the devolved Administrations as a formal part of that negotiation? He also said, quoting the Dutch:

“European where necessary, national where possible.”

Will that include devolving the powers, where appropriate, to the devolved Administrations? Finally, will the Minister tell us what on Scotland’s agenda for reform has been included in this statement today?

Of course, we were voting to give additional devolved powers to Scotland only yesterday in this House. I can tell the hon. Gentleman that I spoke to Minister Fiona Hyslop this morning, and the question of the reform and renegotiation is now on the agenda as the first item at every meeting of the Joint Ministerial Committee on Europe which I chair and which includes Ministers from all the devolved Administrations. I am visiting Edinburgh tomorrow when I will have further conversations with the Scottish Government of the type the hon. Gentleman urges upon me, and as I said to Ms Hyslop this morning, I remain open to listen to the views of, and make sure the UK Government take full account of the interests of, all three devolved Administrations as we take this negotiation forward.

The Minister is, if I may say so, not correct in thinking that the legal mechanisms for delivery of these proposals are not part of the solution. Does he not accept that treaty change is needed for virtually every proposal and, furthermore, that treaty change is not on offer, so how are the so-called legally irreversible changes going to be made when even the legal expert from the European Commission says that the Danish and Irish precedents are not valid? How is he going to be able to sell this pig in a poke?

Some but not all aspects of the package of reforms that we are seeking will need treaty change. We are certainly looking at different models, including those that have been used by Denmark and Ireland in the past. The technical talks that have taken place in Brussels involving senior British officials have also involved representatives of the institutional legal services, so we are working closely alongside the current heads of the legal services of the institutions. We believe that we will be able to find an appropriate way forward on every one of the issues that I listed in my statement.

Further to the question from the right hon. and learned Member for Rushcliffe (Mr Clarke), will the Minister acknowledge that other EU citizens living here contribute far more through their taxes than they receive in services or social security payments? The problem with social security is not the EU; it is the fact that, almost uniquely, we in the UK have lost the contributory principle from our system. The answer is to start to reintroduce that principle.

I would certainly agree with the right hon. Gentleman that in the debate about migration controls, it is important that we do not stray into stigmatising people from elsewhere in Europe, or from any other part of the world, who are here obeying the law, working and contributing to life in this country. He mentioned the contributory principle, but that point could also apply to policy pursued under successive British Governments of all political stripes. I draw his attention back to article 153 of the treaty, which makes it clear that it is for member states, rather than the EU, to define the fundamental principles of their social security systems. I believe that it would contradict that treaty provision if we were to say that only one model for social security was compatible.

The Minister has described different legal mechanisms for achieving our objectives. Will he tell us what they are?

No. That is a matter for the detailed negotiations that are now under way. The technical talks have given us a menu of options to help us determine, in respect of particular reforms, whether we would be able to rely on secondary legislation, on treaty change, on protocols or on political commitment. That menu of options will now be available to the Heads of Government as they embark on the political negotiations. The purpose of the technical talks has been to ensure that leaders are informed about the legal and procedural solutions that are available, so that they do not have to start that work from scratch when they are in a leaders’ meeting.

We believe that if powers do not need to reside in Brussels, they should be returned to Westminster. Will the Minister tell us which treaty provision he intends to use for that purpose, and if he does not have one, will he negotiate a new one?

In my statement, I described the areas in which we are seeking change. If the right hon. Lady looks at what the Prime Minister said in his speech this morning, she will see that he spoke of making the principles of subsidiarity and proportionality more of a reality, and of establishing an agreed mechanism within the EU system to ensure that we not only look at new proposals coming out of the Commission but have a means of reviewing regularly the existing exercise of competences and deciding which competences that are currently exercised at EU level no longer need to be exercised at that level.

Do we not have to control our own borders in order to fulfil the popular Conservative promise to cut net migration by more than two thirds during this Parliament? Should not we decide what the rules are, and apply them fairly to the whole world, rather than distinguishing between Europe and non-Europe?

My right hon. Friend the Prime Minister has been completely consistent in saying that he accepts the basic principle of freedom of movement for workers, but that that should not become a freedom to choose the most attractive welfare system in the European Union. On our estimate, something like 40% of the people who are here from elsewhere in the EU are receiving benefits or tax credits of some kind, and action on that front will have a significant effect on the pull factor that our welfare system exercises at the moment.

I thank the Minister for giving me advance sight of his statement. He has already set much store by treaty change, but the Council of Ministers and the European Commission constantly break their own solemn word, and their treaties, in matters that are fundamental to them, so why should we put our faith or our trust in any changes that they might agree to?

When matters are made the subject of treaty change, they become binding in European and international law. There have been occasions, particularly in regard to the development of the single market, when British interests have been safeguarded by the existence of treaty provisions relating to discrimination against a country’s products in the single market. For example, we went through the European process in order to secure the lifting of the beef export ban. There is a stronger element of protection there than the hon. Gentleman might think.

Further to that point, does my right hon. Friend agree that the creation of a single market for services would be a big prize for British business, and that it would create many jobs? Does he also agree that that can be achieved only by being within the European Union?

My right hon. Friend makes a powerful point. We have a single market for goods, and it is working pretty well, but the single market for services is woefully underdeveloped, despite the fact that in every European economy, it will be the services sectors from which the new jobs and the new growth will come. We need to seek determined action in that area.

The Prime Minister has paid the usual lip service to the EU’s crisis of competitiveness, but, rather like what happened under his predecessor, Tony Blair, 15 years ago, nothing has changed. The Minister’s own officials are growing weary of initiatives that fail to tackle Euro-sclerosis. What exactly is going to be different this time? Will the Minister spell out the details of the plans that will magically make the EU more competitive?

If there is one thing that does not change, it is the nature of the hon. Gentleman’s interventions on this subject. The Prime Minister, the Chancellor, the Business Secretary and I have spoken frequently on the agenda on competitiveness, and I would be happy to send the hon. Gentleman a sheaf of speeches if he would like me to. Broadly, this is about three things. It is about cutting the cost of unnecessary red tape and regulation on all businesses, particularly on small and medium-sized enterprises. It is about deepening the single market, particularly in digital and in services, where it is underdeveloped at the moment. And it is about forging ambitious new trade agreements with other countries and other regions of the world, for their benefit and ours. These are the opportunities that British business has urged us to take, and this Government are determined not to follow but to lead on these matters in the European debate.

Will my right hon. Friend avoid using up his limited bargaining power to obtain purely symbolic changes such as removing the words “ever closer union”, given that they have never been invoked by the European Court against Britain or used to require any other member state to move in an integrationist direction? They have even been dropped from the constitutional treaty. Will he instead focus on getting back any powers that are not required to run a common trading area, so that we in this Parliament can make more of our own laws and hold our lawmakers to account?

My right hon. Friend the Prime Minister has always said that he is seeking a deal on reform that is substantive. That will be challenging to negotiate, and I do not want any Member to think that these reforms will somehow fall easily into our lap. There will be some tough negotiations ahead.

The importance of the words on “ever closer union” is that they encapsulate the fact that the EU at the moment is insufficiently flexible, still thinking of a single destination on integration for all its member states. As the Prime Minister said in his speech this morning, we need to see a much greater acceptance of the diversity of Europe at the moment. We need to see a readiness to live and let live, accepting that some countries will want to integrate more closely but others will wish to stand apart from that and that the decisions of each group should be properly respected.

The Minister said that the agreement must be legally binding and irreversible. Will he clarify what he means by “irreversible”? Does it mean what happened in the case of the John Major opt-out on the social chapter, which was then reversed by the Tony Blair Government? Does it mean that no future democratically elected Government would be able to reverse a decision taken at this time by this Government?

Obviously, as Parliament is sovereign, not least in the fact that EU law has direct effect in the UK only because of Acts of Parliament—decisions of this House—the irreversibility of any decision any Government take on anything is limited. To answer the hon. Gentleman’s question, we are keen to avoid a repeat of the sort of thing that happened over the European financial stabilisation mechanism earlier this year, when, in the heat of a crisis in the eurozone, a deal that had been solemnly agreed by all 28 member states in December 2010 suddenly appeared to be at risk and came up for discussion in a meeting where only 19 member Governments were gathered together. That is not the way in which we can do business in Europe in the future.

My right hon. Friend must know that this is pretty thin gruel—it is much less than people had come to expect from the Government. It takes out a few words from the preamble but does nothing about the substance of the treaties; it deals with competition, for which the European Commission itself has a proposal; and it fails to restore control of our borders. It seems to me that its whole aim is to make Harold Wilson’s renegotiation look respectable. It needs to do more; it needs to have a full list of powers that will be restored to the United Kingdom and to this Parliament, not vacuously to Parliaments plural.

The problem with the idea of a unilateral national parliamentary veto, which my hon. Friend advocates, is that it would mean that, for example, the most protectionist Parliament in any one member state could veto every deregulatory and every single market measure that the United Kingdom believed was profoundly in the interests of our people and our prosperity. Such a unilateral veto would be incompatible even with the arrangements that Norway and Switzerland have with the European Union. I just say to him that if he had had the privilege and responsibility of sitting at Council of Ministers meetings in Brussels, a responsibility that he may well indeed enjoy at some future stage of his career, he would be less sanguine about what he terms the unambitious nature of what we are proposing. What we are proposing is going to require some very tough negotiating indeed.

It is ridiculous that the Prime Minister is putting the referendum to the British people but he cannot explain what the British people are voting for. If they are voting out but they are not voting for the arrangements Norway or Switzerland have, what is it that the British people are voting for?

That will be a question for those who are campaigning for out to make clear when the referendum comes. A number of studies have been published on what various options for British engagement with Europe would look like. As for the Government, we are relentlessly focused on securing a successful outcome to this negotiation and delivering the reformed Europe that the British people want.

Removing the commitment to “ever closer union” will be nothing more than a rhetorical gesture unless it is backed by a radical shake-up of the way the EU takes its decisions. Does the Minister agree that most EU legislation is stitched up between the Commission, the European Parliament and member states behind closed doors, in the impenetrable process known as “trilogue”, and is currently acting as an integrationist ratchet? What specific proposals do the Government have for halting and reversing that ratchet?

As my right hon. Friend the Prime Minister said in his speech this morning, we certainly think we need a new mechanism in the EU’s system for working that guards against that ratchet and provides for the opportunity to review and reallocate powers that do not need to be exercised at a European level. The pamphlet recently published by my hon. Friend provides some constructive and imaginative suggestions as to how we might take that forward.

The Prime Minister, in his letter, welcomes last month’s new EU trade strategy. Will the Government first carry out an assessment of how these trade deals would be affected by his wider demands for economic reform? Will the Minister confirm that it is his understanding of the recent remarks by Michael Froman, the US trade representative, that if the UK were to leave the EU, we would not be able to negotiate an independent trade deal with the United States?

I heard what Mr Froman said. Obviously, he is a senior official in the current US Administration, so one has to take what he says seriously. On the general point the hon. Lady makes, we see further moves forward in free trade deals as an important element in securing the reformed European Union that we want. The potential deal with the US is the most ambitious and most far reaching in its consequences of any of those, but I welcome the fact that the Commission’s trade strategy is also talking about forging new trade deals with some of the emerging economies and also with our good allies and partners in Australia and New Zealand.

In this year, as we mark the 750th anniversary of the first English Parliament—some of our continental partners are rather newcomers to this concept—may I suggest to my right hon. Friend that unless we return powers to this Parliament, this exercise will not be worth while, for it is in this Parliament that authority ultimately should reside, on behalf of the British people? Can he therefore explain to us how on earth this new arrangement, whereby groups of national Parliaments acting together can stop unwanted legislative proposals, is going to work?

I share my hon. Friend’s love of English history, but I caution him against seeing Simon de Montfort as a true-born Englishman. The direct answer to his question is that the treaties already provide for a mechanism whereby a group of national Parliaments can demand and secure a review by the Commission of a measure the Commission is bringing forward. We think one option we should be looking at is turning such an arrangement above a certain threshold into an outright veto—a red card rather than a yellow card.

Speaking as the chair of the parliamentary Labour party’s pro-EU group, which has more than 210 members, including the whole of the shadow Cabinet and the leader of the Labour party, I can tell the House that we are united behind staying in a Europe which is reforming and progressive. The Minister has said that if the Prime Minister does not get his own way, he rules nothing out, so if we leave Europe, what does that mean for the UK?

Clearly, when the negotiations are over the Government will make their assessment and their recommendation clear, setting out in detail their reasons for coming to that view, including their assessment of what alternative options there might be and the Government’s view on those. I do not think therefore that the hon. Gentleman has anything to fear. Our focus remains on a successful outcome to these negotiations, which we believe will deliver a reformed Europe—that is what the British people want to see.

The clarity and ambition of the reforms that the Minister have outlined demonstrate that there is a big job of work to do. They also remind us just how important British leadership of the European Union has been. I am referring here to the introduction of the single market in the 1980s under Margaret Thatcher and the extension of that market, hopefully soon, because of the conclusion of those reforms. Does the Minister agree that our real ambition is to restate Britain’s leadership of the European Union in conjunction with other nation states so that we can bring about an innovative, modern and responsive economy that will benefit us all?

I agree with my hon. Friend. If we look back at the European Union’s history, we can take pride in the fact that two of its greatest achievements—building a single market across Europe and enlarging the European Union to embrace the new democracies of eastern and central Europe—were very much brought about by British leadership and, in particular, by the personal drive of Margaret Thatcher. What he says is important and the Government very much share the spirit in which he posed his question.

I am relieved that the Prime Minister has finally outlined his negotiating stance, and I wish him every success with it, because I want him to be able to bang the drum enthusiastically for our EU membership. Will the Minister confirm that, if meaningful reform is secured, the Prime Minister and the European Union will not have to deliver fully on all the fronts set out in the Prime Minister’s letter, including on in-work benefits, for the Prime Minister to be able to campaign vigorously in favour of the UK’s continued EU membership, the benefits of which were clearly set out in the EU’s balance of competences review?

We will need to have a satisfactory outcome that meets our requirements on all four of the areas of policies that I have described. Our position on welfare and migration remains as the Prime Minister set out in November and as he repeated this morning.

I note the constraints suggested by the Prime Minister that the free movement of peoples is not working and will never work. Even Sweden and Germany are realising that today. Would not a visa system for all be fairer and safeguard our borders?

The Home Office always keeps our visa arrangements under review, but I ask my hon. Friend to think about the consequences for the way in which both business and tourism operate between us and our neighbours in other democracies in Europe were there to be individual visas of the sort that he has described. It would certainly have to apply in reverse to British tourists and business visitors as well.

Order. I am very keen to accommodate colleagues, but progress is leisurely—some might even describe it as lethargic. As I like guessing games and want to encourage Members to think, let me suggest that if they could model their contributions on those of the right hon. Members for Wokingham (John Redwood) and for Birmingham, Edgbaston (Ms Stuart), progress would be altogether speedier.

I thank the Minister for his statement and for early sight of it. In his statement, he used the phrase “salary to be subsidised by the state.” How will the Government differentiate legally between salaries subsidised by the state for foreigners and tax credits to hand out to UK citizens?

Does my right hon. Friend agree that ensuring full permanent access to the single market without joining the euro is a key objective for our future economic health and would be a key sign that our continued membership of a reformed European Union gives us the best of both worlds—prosperity and flexibility?

My right hon. Friend put that very well, and getting that best of both worlds is exactly what the Prime Minister is seeking to do.