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Commons Chamber

Volume 612: debated on Monday 27 June 2016

House of Commons

Monday 27 June 2016

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Defence

The Secretary of State was asked—

Allies and Partners: Co-operation

I hope you will allow me, Mr Speaker, to add my tribute to Jo Cox and her work on behalf of the Syrian people, which she pressed very hard on and which must never be forgotten.

Our strategic defence review set out ambitious plans to strengthen our work with allies and partners to promote our security and prosperity. We will continue to lead in NATO, the G7 and the United Nations, and maintain strong and enduring relationships with the United States and our other friends and allies around the world.

My constituency, my country and people of my generation voted against Brexit, yet we are going to be dragged out of the European Union against our will. This is the same European Union that plays an important security role in Afghanistan, in Ukraine and across swathes of Africa, as well as the vital role played by Frontex in the Mediterranean. What reassurance does the Secretary of State have for Scotland and for young people that this vital work will not be undermined by last Thursday’s vote?

The bedrock of our defence in the United Kingdom rests on NATO, and the United Kingdom of England, Scotland, Wales and Northern Ireland is committed to strengthening co-operation within NATO and collective defence across the alliance. We will be adding further reassurance to that at the NATO summit that is coming up in Warsaw the week after next.

What an utter shambles this is. I am afraid that that is not good enough from the Defence Secretary. We do not have a plan A for Brexit, let alone a plan B. The position of the Government and the Brexiters is confused. There is no plan on the table. Are we going to do a Norway? May I suggest to the Defence Secretary that we look at doing a Norway when it comes to defence, and we perhaps go for the opt-in that Norway has to EU defence schemes?

Norway remains and is a very valued member of the NATO alliance. We will be intensifying our co-operation with such countries. It is true that membership of the European Union complements our membership of NATO, and we are engaged in an EU operation in the central Mediterranean, continuing to save lives there and to disrupt the business model of the migrant smugglers from Libya to Europe. The Royal Navy will continue that task.

Does the Secretary of State agree that our relationship with members of the EU will remain as strong as it is today even when we are not a member? Given that nearly all members of the European Union are members of NATO, and that most members of NATO, leaving aside Turkey and the United States, are members of the EU, surely the fact that we are that cornerstone of NATO stands for our strong defence, and being a member of both involves some degree of duplication.

We have continued to argue against duplication between the European Union and NATO, but my hon. Friend is right. We have the very important bilateral relationships with other European countries—the Lancaster House treaty with France, and our growing co-operation with Germany—and I reassured both the French and German Defence Ministers last Friday that we will continue to work at those relationships and to strengthen them.

In the light of the result last week, will the Secretary of State reassure me that the United Kingdom as a united kingdom remains as committed in both the conventional and nuclear sense to article 5 of the North Atlantic treaty, for our allies in the eastern parts of Europe?

Absolutely. That article is one of the central commitments of NATO. We have, as my hon. Friend knows, committed to the 2% NATO defence spending target and we will be offering further reassurance, particularly to members on the eastern flank of NATO, at the Warsaw summit on Friday week.

Given the intensified bombing of Aleppo by President Putin over the weekend, and the important role that Britain played in stiffening European resolve on sanctions against the Putin regime, how concerned is the Secretary of State about the impact of the referendum result on European solidarity in standing up to Putin?

It is very important, not least because of the way in which Russia has intervened in the Syrian civil war, that Russia is held to account for its actions. We took the lead in not only proposing the sanctions imposed on Russia for its actions in the Crimea—in the Ukraine—but ensuring that they were continued. They are being continued for the moment, but, obviously, once we are outside the European Union, our influence over that will be slightly diminished.

Does my right hon. Friend agree that the upcoming negotiation on leaving the EU presents a huge opportunity to redouble our efforts at co-operation with our EU friends and allies? What plans does he have to support UK defence industries and cross-border investments, such as those in helicopter manufacturing in Yeovil?

We will continue the co-operation that I have already set out—our co-operation with France under the Lancaster House treaty, and the growing co-operation we have with Germany and, indeed, with other European countries. Our recent strategic defence review is international by design and prioritises working more closely with our allies. European companies that are invested here see a rising defence budget, and we hope they will continue to invest here and to compete for the various tenders we are making available.

Our military alliances rely on strong diplomatic ties, especially with our European neighbours. What steps is the Secretary of State taking to ensure our Brexit negotiations do not sour these relationships and weaken our alliances?

As I say, I have spoken to all my fellow Defence Ministers in these key relationships, and we will have to work hard to ensure that these bilateral relationships are kept in good repair. We have strong defence relationships and defence sections in these embassies across Europe, and we will have to look at them independently and make sure in the Brexit negotiations that none of that co-operation—the joint training, the exercising and the co-operation on capabilities—is put at risk.

What representations has my right hon. Friend received from our allies and defence partners about renewing Trident, which the new shadow Defence Secretary described as

“a monumental mistake our country and planet can ill afford”?

As my hon. Friend knows, we are committed in our manifesto to replacing the four Trident submarines, and I hope Parliament will be able to endorse the principle of that replacement shortly. Our allies can rest assured that our commitment to NATO and our commitment as a nuclear power to NATO are not altered by the result of the referendum.

The Secretary of State will be aware that, as the pound plummets against the dollar, the cost of procuring the maritime patrol aircraft and the F-35s we were promised will undoubtedly soar. There will be inevitable consequences for forward procurement, including on the already delayed Type 26 programme. The Government warned that, in the case of a Brexit, there would be swift and savage cuts to the defence budget. Where will that axe fall, and when is it likely to fall? What will the Secretary of State tell our allies at the Warsaw summit, every one of whom was convinced unambiguously that we should remain in the European Union?

It is a fact that all the other Defence Ministers around the world were anxious to see us remain in the European Union, but the British people have made their decision. So far as the equipment programme is concerned, we are now negotiating for the maritime patrol aircraft and for the first F-35s to fly off the carriers, and I hope the negotiations will be concluded reasonably soon.

Scotland faces the very real prospect of being taken out of the European Union against its will. May I remind the Secretary of State of the first page of the 2015 SDSR, which says:

“Economic security goes hand-in-hand with national security”?

The UK’s membership of the European Union was an integral part of our defence policy. It was strategically valuable in promoting the UK’s policies and implementing our defence and security obligations. Given that the Brexiteers have won their referendum and the economy is now in freefall, what plans does the Secretary of State have to review the 2015 SDSR?

I am disappointed that the hon. Gentleman should be talking down the British economy, on which so many jobs in Scotland depend. I would caution his party against talking down an economy on which all our constituents depend. Our national security is of course the security of the United Kingdom, including that of Scotland.

At what will be my last Defence questions before I take up my new post, may I start by thanking the Secretary of State, and his office, for all the co-operation that he has given in the six months that I have been in this role? Whether it has been, for example, in arranging trips to Army bases or providing briefings on the fight against Daesh, he has been a generous opponent and I regret that I will no longer be his shadow.

At this time, the only thoughts of anyone in this House should be on how we can reassure the British people that we can keep our country safe and secure in the wake of the Brexit vote. We all need to pull together and work together on that, not just within our own parties but across the House as a whole. Will the Secretary of State please reassure us that leaving the EU will not put an end to participation in joint security missions with our European partners? He has mentioned the mission in the Mediterranean, but may I also ask him particularly about the highly successful counter-piracy mission off the Horn of Africa?

I am grateful to the hon. Lady for her generous remarks, and I congratulate her on her move. I think the new shadow Defence Secretary is AWOL on his first parade, but we will welcome him and pay tribute to his service in uniform. He will, I note, be the fourth shadow Defence Secretary I have seen in under two years, but I hope he lasts.

Yes, it is very important that we reassure our allies in Europe and around the world that Britain is not turning its back on them. On the contrary, we are still playing a leading role in the world, and that includes work in some of the vital operations in the Mediterranean and off the Horn of Africa, some of which are led by NATO and others of which are led by the European Union.

I thank the Secretary of State for his answer and his generous words. I shall pass on his comments to the new shadow Secretary of State for Defence when he takes up his post this afternoon; they are typical of the way in which he and his office have worked.

One particular concern that many people have is the implications of Brexit for our border controls. What will happen to our border control at Calais, what will happen to the common travel area with Ireland, and will the co-operation we currently receive from our European counterparts in respect of tackling illegal immigration be maintained? How will we go about resolving these issues? Will the armed forces play a role in that, and in what way can we keep our borders safe and secure?

My arithmetic may be faulty, but I counted six questions, to which I know the right hon. Gentleman will give a single pithy response, because we must make progress to other hon. Members who also have questions on the Order Paper—something it would have been good to remember earlier.

I will do my best, Mr Speaker, noting that the hon. Lady has postponed her defence review because she said it was

“important that the Labour party sticks together and is united”.

I leave it at that.

The Royal Navy will continue to play its part in assisting Border Force and other organisations—the European Union and NATO—in dealing with people smuggling and illegal migration, as the hon. Lady asks.

Type 26 Frigates

2. What steps he is taking to mitigate the effect of the extended timetable for construction of Type 26 frigates on maintaining skills in the defence industry. (905474)

This Government are committed to sustaining shipbuilding skills on the Clyde. As we confirmed in the strategic defence and security review last November, we will build two additional offshore patrol vessels before build work starts on the Type 26. This will help sustain shipbuilding skills between the completion of major blocks of the Queen Elizabeth class carriers and commencement of the Type 26 build. That remains the case; the plan has not changed. Over the next decade we will spend about £8 billion on Royal Navy warships.

As my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) pointed out, the pound is in freefall and every cent it falls against the dollar makes purchasing either the maritime patrol aircraft or the F-35 more expensive. The workers at the Clyde yards have already seen apprenticeship numbers cut by 80%, and the current crisis makes the situation worse. Can the Minister assure me and those on the shop floor in Govan and Scotstoun that the Type 26 programme will begin as soon as possible and not in 2019, as some have suggested?

We have already invested £1.6 billion in Type 26, including £472 million this March. I say to the hon. Lady as gently as I can that that commitment could not have been made if her friends had had their way and become independent, because shipbuilding would have ceased two months ago.

The Minister will remember that previous shipbuilding projects, in particular the carriers and the Type 45 destroyers, ended up being much more expensive because of delays. Does he accept that BAE Systems is ready to start cutting steel on the Type 26 programme relatively soon and that delays will cause our total number of warships to dip and the ones we eventually get to be more expensive?

I say to my right hon. Friend, who is knowledgeable about these matters, that this will be one of the largest defence programmes that this Government will enter. I am sure that he will agree that it is absolutely right to enter into a contract once we are confident of the delivery schedule and the ability of the contractors to meet that schedule on a cost-effective basis. Once we are in that position, we will be ready to contract.

The Clyde was promised a world-class frigate factory to build 13 new frigates for the UK. However, today we hear that work has been delayed by a year. Thousands of members of staff are on secondment around the country because there is not enough work in the shipyards, and the word “betrayal” rings around those shipyards because no factory has appeared and no work has started.

We have asked in the past for plans for the frigate-building programme, and for promises that all work will be carried out on the Clyde, but those questions have gone unanswered—[Interruption.]

When precisely will the Secretary of State present a committed plan to build the new frigates we need, with cast-iron timescales to bring some security to the workforce in Glasgow and around the country, and will leaving the EU affect the building—

As I have already indicated, this Government have already contracted significant sums into the programme. Once we are in a position to sign a contract, we will say what the duration of the build programme will be. We are not there yet.

Daesh

3. What recent discussions he has had with his international counterparts on progress in the campaign against Daesh. (905475)

14. What recent assessment he has made of the progress of the international campaign to defeat ISIS/Daesh. (905486)

The next meeting of coalition Defence Ministers will take place on 20 July. The campaign against Daesh is making progress. With coalition support, Iraqi forces now hold Ramadi and Hit, are engaged in clearing Daesh from Fallujah and have begun preparatory operations for retaking Mosul. The Syrian democratic forces are currently conducting operations around Manbij.

Will my right hon. Friend confirm that Britain is playing the second biggest part in the coalition after the United States of America, and that our involvement is making a real difference to the fight against Daesh?

I am pleased to confirm that the United Kingdom is playing a significant role in the coalition. The RAF has undertaken more strikes in Iraq and, since December, in Syria than any coalition nation apart from the United States. We now have more than 1,100 service personnel supporting operations in the region, and that is making a real difference to the momentum of the campaign.

What assistance are the Government providing to the Jordanian authorities in the light of the recent deterioration in security there, and especially in the light of the recent suicide attack that killed six soldiers outside a refugee camp?

We have a very strong defence relationship with Jordan that includes work on training forces together. We will obviously continue to keep that under review, not least because of the pressure on the Jordanian-Syrian border.

Last week it was reported that US fighter jets were scrambled to intercept Russian bombers attacking American-backed rebels in Syria. What steps is the Secretary of State taking to de-conflict competing allied air forces in the campaign against Daesh?

There is a memorandum of understanding between the United States and Russia about the conduct of air operations. We do not co-operate with Russia, but there is a mechanism by which we can avoid that kind of conflict. The easiest way to avoid it would be for Russia to stop assisting the regime and to stop bombing innocent civilians.

Opposition activists and Kurdish officials have said that hundreds of Kurds are fleeing Manbij, and that the Syrian defence forces are engaged in clashes there with Daesh. If Manbij is captured, it will be the biggest strategic defeat for Daesh in Syria. Can the Secretary of State comment on the situation, and particularly that of the Kurdish civilians, who are being abducted in their hundreds?

They are, and that is why we need to bring this terrible conflict in Syria to an end. Progress is being made by the Syrian Democratic Forces in closing off what is called the Manbij pocket and breaking the supply line between Raqqa and the Turkish border, which restricts the ability of Daesh to trade oil illegally across the border or to recruit foreign fighters the other way. Progress is being made around Manbij, and I hope that one day, when Manbij is recaptured, those same forces can move on towards Raqqa itself.

To carry out its activities, Daesh requires funding. What discussions is my right hon. Friend having with our allies to cut off the funding for Daesh?

International efforts are under way to restrict the ability of Daesh to raise money from selling oil, artefacts or anything else, or to access other funding on the international markets. That is work that requires co-operation right across the coalition, and it is work in which the United Kingdom is playing a leading part.

While we have been otherwise preoccupied, the atrocities that have been carried out by Daesh over the last few weeks remain deeply worrying. Will the Secretary of State give an undertaking that he will co-operate through NATO bilaterally with other European allies and take strategic action unilaterally to make sure that everything possible is done to try to stop these appalling atrocities?

Yes, we are facing a most barbarous enemy, which is not simply torturing and killing innocent civilians in Syria and Iraq, but still poses a very direct threat to us here in western Europe—on the first anniversary of the slaughter of 30 of our subjects in Sousse by an equivalent extremist. Whether it is through the international coalition, through the use of NATO assets or through other bilateral frameworks, let me reassure the right hon. Gentleman that we are absolutely committed to this fight and to the eventual defeat and degradation of Daesh.

At-sea Nuclear Deterrent

4. What assessment he has made of the viability of alternatives to a continuous at-sea nuclear deterrent for protecting national security. (905476)

The 2013 Trident alternatives review considered alternative systems and postures for the United Kingdom’s nuclear deterrent and concluded that no alternative is as capable, or offers the same degree of resilience, as continuous at-sea deterrence.

Some have expressed concern that with advancing technology, our submarines can now be detected and discovered by underwater drones. Can my right hon. Friend assure me that that is not the case?

Yes, we are confident that our submarine fleet remains safe and secure. We devote considerable resources to assessing capabilities and new technologies that could threaten the operation of our deterrent, including potential threats from the development of cyber and unmanned underwater vehicles. I am happy to reassure my hon. Friend on precisely that point.

Whoever stands at the Opposition Dispatch Box or at the Government’s, there is a cast iron majority in the House to do the right thing by Trident’s successor and to reach outwards to defend our nation, rather than to turn inwards. Will the vote still happen before the summer recess?

I am grateful to the hon. Gentleman for what he has said. There is clearly a majority—[Interruption.] There are those who are opposed in principle, but there is clearly such a majority in this House. I believe that it is right that this House should vote on the principle of the renewal of the deterrent, and I very much hope that he will not have too much longer to wait.

With the Type 26 frigates well behind schedule, it has been said that the Navy has “run out of money” to progress these contracts. Given the perilous state of the economy since Friday morning, will the Secretary of State give us an assurance that we will—please, please—run out of money for Trident as well?

The schedule for the Type 26s has not yet been set. These ships are likely to cost between £500 million and £1 billion each, and I will not sign a contract for these ships until I am satisfied that they represent good value for the Royal Navy and good value for the taxpayer.

Armed Forces Welfare

In January, the Department published the first ever armed forces families strategy, embracing seven key themes—partner employment, accommodation, children’s education and childcare, community support, specialist support, health and wellbeing, and transition. We have reviewed our casualty and compassionate processes, and this autumn we are introducing a pilot for a new welfare scheme for reservists. We continue to work to ensure that our armed forces and their families are treated fairly through the covenant.

Economic and military security assurances, as laid out in the strategic defence and security review, have been significantly weakened by the events of the last week, and this could not have come at a worse time for armed forces personnel. To give just two examples—

Order. I am awfully sorry, but we have not got time for two examples. I need a single, short supplementary question, with a question mark at the end.

The armed forces satisfaction survey has caused considerable concern in this regard. Does the Minister agree that the continuing welfare of our personnel should be the priority at this tumultuous time?

The short answer is yes. The huge number of local authorities, companies and other parts of the nation that have signed up to the armed forces covenant shows that the country as a whole is responding with a resounding yes.

17. I have been working with Neath veterans support group to ensure that those leaving the armed forces receive the support they need. Will the Minister explain what his Government are doing to extend the support offered, through projects such as Change Step, so that the welfare of serving personnel is viewed through a model of prevention, rather than of cure? (905489)

I am grateful to a whole range of charities in Neath and other areas for the work they are doing with the armed forces. We are giving considerable priority to this and to ensuring that people’s transition, which is one of the seven aspects of the strategy I have mentioned, is successful. From the stories one hears of companies that have signed covenants successfully taking on people for new careers after they leave the armed forces and of the work we are doing with local authorities on housing, I can say that all this work is bearing fruit.

Defence Spending

I will answer pithily. This Government are delivering stronger defence. The defence budget will rise by 0.5% above inflation every year to 2020-21, and we will access up to £1.5 billion a year from the joint security fund by the end of this Parliament. This is the first time in six years that the defence budget will increase in real terms.

Given the vote last week, does the Minister agree that Britain should remain a key player on the international stage? Will Britain continue to use its influence to encourage our NATO allies to spend 2% of their GDP on defence?

As my right hon. Friend the Secretary of State said earlier, NATO is the cornerstone of our defence, and we are leading players in influencing fellow NATO members to meet the spending commitment. Allies have made welcome progress since 2014; five now spend 2% of GDP on defence, eight spend 20% of their defence budgets on major equipment and research, 16 have increased defence spending in real terms and 24 are now spending more of their defence budgets on equipment.

With the increasing budget comes increasing responsibility for ensuring value for money for taxpayers. Has my hon. Friend learned the lessons of failed procurement under Labour of maritime patrol aircraft, which had to be cancelled because the programme was 10 years behind and £800 million over budget?

My hon. Friend and constituency neighbour is right that the Nimrod programme suffered repeated and unacceptable delays and cost overruns. The decision in 2010 to cancel it was difficult but the planned purchase of nine P-8 Poseidon aircraft for maritime patrol will give us the capability we need in the timeframe we want, and at best value for the taxpayer.

Part of making sure defence spending is adequate is making sure that we get value for money. The Public Accounts Committee was very disturbed when we looked recently at housing management for service families, which seems to be woeful. The contractor, Carillion, has not stepped up to the job. Will the Minister tell me how he will ensure that we get value for money and, more importantly, a better service for our service families?

I am pleased to confirm to the right hon. Lady that in the area of defence equipment procurement, for which I am responsible, the Public Accounts Committee has found that we have consistently brought programmes in within budget and with minimal time overruns. I accept we have more to do on housing.

Where the defence budget is spent is absolutely crucial. Given the gross uncertainty for the British steel industry as a result of the EU referendum vote, what assurances on defence spending can the Minister give to steel manufacturers in this country to boost them at this crucial time?

We have adopted the Government’s policy to ensure that defence contractors make all steel procurement opportunities available to UK producers. The amount of steel expected to be available for tender for future work is much reduced, because the most substantial amounts have been in the aircraft carrier programme and we will not be building vessels as big as that for the foreseeable future.

I warmly welcome the Government’s commitment to spend at least 2% of GDP on defence, but will my hon. Friend confirm that this year and next there will be no increase in cash terms, and assure me that we will not find ourselves in the same situation as we did this year, where in order to meet our 2% commitment money was transferred to the Ministry of Defence from other Departments?

As was made clear in last year’s comprehensive spending review at the same time as the strategic defence and security review, and as I have already said this afternoon, the defence budget is going up in real terms in each year of this Parliament.

There has been much loose talk about the increase in the defence budget, but to be able to hit the target of 2% of GDP we now have to be very careful, as there may well be a recession given the Brexit vote. Will the Minister reassure the House, the public and the armed forces that the Government’s commitment on defence spending will be maintained not just in terms of GDP but in cash terms?

I am not going to join those in the Opposition who seek to talk the economy down. We have a clear commitment to meet the NATO defence spending pledge and that is what we will do.

Naval Procurement

The Department continues to develop our naval force structure, as we set out in the defence review. That will include completion of two new Queen Elizabeth class aircraft carriers, eight Type 26 global combat ships, new solid support ships and two new offshore patrol vessels.

Can the Minister confirm press reports today that leaked correspondence shows that the Ministry of Defence is looking for savings of £500 million in the Type 26 programme, and has refused an offer from BAE Systems that would bring savings of £270 million while starting the programme on time?

As I said in answer to other questions on the Type 26 programme, we will enter into a contract once we have established best value for the taxpayer, and a delivery schedule that can be met by the contractor.

After last week’s vote, these are uncertain times for UK manufacturing. One thing that the Government could do now to boost manufacturing and protect British jobs and skills would be to make a decision on Successor and bring it forward. Will the Minister say when that vote will be?

The hon. Gentleman will have heard the Secretary of State confirm that that will not take too long.

NATO Warsaw Summit

The National Security Council has considered the UK’s preparations for the Warsaw summit next week, which is an opportunity to build on the success of the summit that we hosted in Wales in 2014. Our intention at Warsaw is to demonstrate a united alliance that is adaptable, transparent, and capable of planning for and responding to the full range of threats that we face today.

Today the United Kingdom is seen as an ineffective, unreliable partner in global affairs, as highlighted not by Opposition Members, but by a former general and supreme commander of NATO, Admiral Stavridis. Reflecting on the admiral’s words, what does the Secretary of State think that his Government can achieve in Warsaw?

I hope that we can further reassure NATO members on the eastern flank that we stand by our commitment in the face of Russian aggression. I hope that we continue to make the alliance more flexible to deal with the new threats we face, particularly from cyber and hybrid warfare, and that through British leadership we will encourage other allies to meet the 2% commitment that we are already meeting this year.

I hope the Secretary of State is aware that we cannot hide behind the fig leaf of a percentage of GDP, and that we need NATO membership and partnership more than ever before, given last Thursday’s dreadful result in the referendum. We have only 100,000 people in our defence forces—we could get them all in Wembley. Let us have a stronger NATO and a greater partnership against Russia with Europe.

We have more than 100,000 members in our armed forces, but I agree with the hon. Gentleman about the importance of NATO. Because we are withdrawing from the European Union, it will be all the more important to reinforce our commitment to NATO and the obligations of NATO membership. That is why we lead in complying with the 2% commitment, and he will hear from the Warsaw summit about additional deployments that we are now likely to make to the eastern flank.

Libya

Forces aligned to the Libyan Government of National Accord are making progress against Daesh, but while Daesh may have suffered setbacks in its stronghold in Sirte and in the east, it has not yet been defeated and may look to re-establish itself elsewhere in Libya. In Tripoli, the security situation is relatively calm but fragile, with increasing support for the Presidency Council from militias.

Before last Friday morning, Libya was seen as this Government’s worst foreign policy disaster. In light of that, will the Secretary of State say what discussions he has had with EU counterparts about continued involvement in Operation Sophia off the coast of Libya?

I continue to discuss Operation Sophia with my European counterparts, and we have agreed to deploy an additional vessel, a Royal Navy ship, as part of that. We are working with the new Libyan Government —I recently spoke to the Defence Minister there—to support them in their fight against Daesh. It is vital that we continue to work with other allies along the coastline, and we are extending the counter-IED training that we provide to Tunisian forces for a further year.

Defence Spending: Small Firms

13. What steps he is taking to increase the proportion of defence spending that goes to small firms. (905485)

Small businesses are a crucial engine for growth and innovation in this country, and we are determined that they should play an increasing part in supplying defence. We are committed to achieving 25% of our procurement spend with small and medium-sized enterprises by 2020, and that target is 10% higher than the one set during the last Parliament. We recently refreshed our SME policy to show how we will work to achieve that.

What steps is my hon. Friend taking to make it as simple as possible for small firms to benefit from this increased spend?

We have already appointed a new network of supply chain advocates to provide a named point of contact for potential suppliers. We are providing a new online tool for suppliers to highlight opportunities, and we are simplifying our standard terms and conditions.

I should maybe come to questions more often.

A former First Sea Lord told the Defence Committee that the delay in the Type 26 frigate programme was due to money problems in the Ministry of Defence budget. Will the Minister tell the House, and more importantly tell the workers on the Clyde, how many jobs will be lost and what the impact will be on its world-class apprenticeship programme?

Apprentices are very important to maintain the skills on the Clyde to complete the Type 26 programme. The intention is that once we have signed the contract we will have clarity on the best value for money for the taxpayer. That is our priority.

Drones

With regard to targeting or other rules of engagement, the use of remotely piloted air systems is no different to that of any other aircraft. Therefore, there is no separate policy for their use in this respect.

With respect, it is evident that the Government intend to use lethal force outside armed conflict for counter-terrorism purposes, despite the legal basis for that being unclear. Will the Government clarify the legal basis on the use of drones for targeted killing outside of armed conflict?

We have been very clear that this is guided by international law. Where there is an identified, direct and immediate threat to the United Kingdom, and where we have no other means of dealing with it, we reserve the right to use force.

The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) has a question on the Order Paper on this very same subject. Does he wish to intervene and give the House the benefit of his thoughts?

Topical Questions

My immediate priorities remain success in our operations against Daesh, and implementing our strategic defence and security review commitments. On Friday week, I will join the Prime Minister for the NATO summit in Warsaw, where we will review progress since the Wales summit, agree further reassurance to our eastern allies, and take further steps to demonstrate the alliance’s strength and unity.

Given the unfortunate success of the Brexit campaign and the subsequent downward spiral of the value of the pound, which now sits at a 31-year low, will the Minister tell me the additional cost of the Trident renewal programme on top of the current estimate of £205 billion?

In the strategic defence and security review, we published our most up-to-date assessment of the cost of the Trident replacement programme at £31 billion, plus a contingency of a further £10 billion.

T3. In the light of the momentous decision taken by the nation last Thursday, will the Minister explain to the House what implications that decision will have on working with military intelligence from not only European countries but other countries around the world? (905500)

Defence in the UK is grounded on the strength of our relationships with our closest allies and partners. We work extensively with them, principally through NATO but also bilaterally. The UK’s decision to leave the European Union does not change that approach.

In the first year of this Government, over 1,800 properties within the married quarters estate were left empty for the majority of the year. Since then, the number has more than quadrupled. Can the Minister explain why that has been allowed to happen and why the properties are not being used?

My understanding is that there are just over 10,000 void properties at the moment under the service family accommodation estate. We need to have void properties to ensure that when people trickle post they have a property to go to. Equally, the hon. Lady will be aware that we are moving the Army back from Germany at the moment so we need spare properties, but up to half of those properties are currently up for disposal.

The fact is that departmental policy is for about 10% of such properties to remain vacant. In fact, there are more than 20%. The reality is that there is such a high proportion of empty properties because they are not in a fit state for people to live in. They cannot be released for sale by the leaseholder, Annington Homes, because it would cost too much for the Government to repair. The taxpayer is having to spend more than £30 million every year for the MOD to rent these properties. Will the Minister explain why his Department is wasting £30 million?

I am not sure whether the hon. Lady heard my answer. It is not every year that we seek to bring back the Army from Germany, which is why we need extra properties. However, more than half the properties are currently up for disposal and we have also invested more than £200 million in building 1,200 new service family accommodation units to ensure that we get the best quality accommodation for our troops.

T4. While I welcome the recent announcement that Lincolnshire will still have an air show—now at RAF Scampton—what steps is my hon. Friend taking to increase home ownership among members of the armed forces? (905501)

I am delighted to say that since the forces’ Help to Buy scheme was introduced, more than 7,260 service families have taken up the opportunity to buy their own home.

T2. Will the Minister undertake an urgent review of the awards of the Légion d’Honneur? I have many constituents who were awarded the Légion d’Honneur by the French authorities and who notified the Ministry of Defence more than a year ago, but have still not received their medals. Will the Minister look at that urgently? (905499)

I am more than happy to do so. The right hon. Gentleman will be aware that there was a review. It is fair to say that the French authorities have simply been overwhelmed by the number of applications, but we have a system in place now whereby 200 are sent each week to the French. Of the original applications that were made, I understand that all have now been awarded.[Official Report, 28 June 2016, Vol. 612, c. 1MC.]

T6. My hon. Friend will be aware of the valuable and essential work done by African Union troops to prevent and ameliorate conflicts all over Africa—work that is also essential for this country. Will she update the House on the support being provided to the AU by the UK to assist with its peacekeeping role? (905503)

My hon. and learned Friend affords me the opportunity to pay tribute to our armed forces who are training the Rwandan defence force as well as the African Union’s Eastern Africa Standby Force. The training that we are providing is there to help security sector reform and enhance their capabilities for peace operations and disaster relief.

T5. Following the questioning of Ministry of Defence officials at the Public Accounts Committee on infantry management, will the Minister tell us about the current state of the logistics commodities and services’ transformation programme? Is the super shed built, and how confident are the Government that the privatisation of logistics to support our armed services will not result in equipment shortages on the ground? (905502)

T7. Will the Department update the House on the progress being made in increasing the number of cadet units in state schools so that more young people can benefit from the skills and experiences of those cadet units? (905504)

We are receiving a healthy number of applications to set up new units. These are processed through a six-monthly run. Twenty five new state school units have been approved since last November, and 350 school cadet units are currently parading. The programme is on track to achieve its target of 500 in schools by 2020.

T9. Thousands of Kurdish peshmerga killed or seriously injured fighting Daesh could have been helped by good front-line facilities. Can we now rush in a field hospital to reduce avoidable deaths and allow at least 100 of the most seriously injured to benefit from specialist beds here in the UK? It is the least we can do. (905506)

We have done a huge amount to support Kurdish fighters. To date, we have trained 3,900 and that includes not just dealing with improvised explosive devices, but providing first aid and that first-line medical support.

T10. On Saturday, I met my constituent Benjamin Greaves who was injured by a thunder flash in 1979, but whose injury was not diagnosed until 2011. Will Ministers look at his case to ensure that he is receiving all the compensation and pension that he deserves? (905507)

What percentage of the P-8 contracts will be offset to British companies and what maintenance work will take place in the UK? Will the Minister confirm that the sonobuoys and missiles will be procured from British companies?

The P-8 contract has not yet been let. We announced at the time our intention to procure P-8, and some $4.5 million per aircraft is UK-sourced. The support contracts will be let in due course.

Will my hon. Friend assure us that, despite Airbus trying to bully its employees to vote remain in the referendum last week, the wings of the magnificent A400 aircraft will still be made in Filton?

Airbus is an important defence contractor and a significant employer in my hon. Friend’s constituency for both civil and defence work. Where it chooses to locate wings in the civil contracts in the future will be a matter for Airbus.

Depressingly, UNICEF reported that 25 children were killed by airstrikes in Syria yesterday. Will the Secretary of State tell us what conversations he is having with our international partners to make sure that we take every necessary step to defend civilians?

The hon. Lady raises an important point. On that operation to date, we know that UK strikes have produced no reports of civilian casualties. That is because of the care we take and the investigations we carry out after every strike. We are working with our allies to develop joint policy in this area.

Thank you, Mr Speaker.

The Royal Military School of Music has been in Whitton for 150 years. Will the Minister work with me to ensure that the Ministry of Defence keeps a physical military presence “remaining” in Whitton?

I commend my hon. Friend, whose constituents could not ask for a greater champion on this issue. Since last month’s Adjournment debate, the situation has not changed. However, I am convinced that we will continue to have military concerts there in the future.

Exactly what actions are the Government taking to protest about the use of phosphorous bombs and barrel bombs against the people of Aleppo?

We have a very clear policy in this country on the export of cluster munitions and the like. We have not sold cluster munitions since 1989. The right hon. Lady asks about phosphorous, and I will write to her about it later.

I was grateful for the Minister’s earlier answer on the cadet expansion programme. Will he tell us at what point, if at all, expressions of interest from schools in non-priority areas will be accepted if insufficient applications are made from priority areas?

My hon. Friend reflects on the problems of success. We have many applications from priority areas, according to the three criteria that were set out a number of times. I cannot make any firm promises, I am afraid, for those who do not meet the priority criteria. We are firmly on track to deliver the schools we need.

Last Friday, I was privileged to be invited to Burma company 4th Battalion The Yorkshire Regiment, based in Barnsley, to thank them for the service ahead of armed forces day. Will the Secretary of State join me in paying tribute to the superb men and women there, who are superbly led by Major Darren Schofield?

Let me congratulate all those from the armed forces, including those from reserve units, who participated in the key events in Cleethorpes, Plymouth, Glasgow, Woolwich and many other locations up and down the country. We are proud of them, and we gave the public the opportunity to show their support.

Will the Secretary of State reassure us that, by contrast with the Labour party, morale in our armed forces remains high and the desertion rate is very low?

I am happy to confirm, on the basis of the attitude surveys that we conduct each year, that morale is high, and the armed forces appreciate that, given a defence budget that is growing every single year, they have much to look forward to.

I thank the veterans Minister for taking account of the plight of war widows who have been penalised for remarrying. Can he give us some idea of how long his review of the matter will take?

NEW MEMBER

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

Rosena Chantelle Allin-Khan, for Tooting.

Outcome of the EU Referendum

With permission, Mr Speaker, I will make a statement on the result of the EU referendum.

Last week saw one of the biggest democratic exercises in our history, with more than 33 million people from England, Scotland, Wales, Northern Ireland and Gibraltar all having their say. We should be proud of our parliamentary democracy, but it is right that, when we consider questions of this magnitude, we do not just leave it to politicians but listen directly to the people. That is why Members on both sides of the House voted for a referendum by a margin of six to one.

As I have mentioned the House, let me welcome the new hon. Member for Tooting (Rosena Allin-Khan). I advise her to keep her mobile phone turned on: she might be in the shadow Cabinet by the end of the day. [Laughter.] And I thought I was having a bad day.

Let me set out for the House what this vote means, the steps we are taking immediately to stabilise the UK economy, the preparatory work for the negotiation to leave the EU, our plans for fully engaging the devolved Administrations, and the next steps at tomorrow's European Council.

The British people have voted to leave the European Union. It was not the result that I wanted, or the outcome that I believe is best for the country I love, but there can be no doubt about the result. Of course, I do not take back what I said about the risks. It is going to be difficult. We have already seen that there are going to be adjustments within our economy, complex constitutional issues, and a challenging new negotiation to undertake with Europe. However, I am clear—and the Cabinet agreed this morning—that the decision must be accepted, and the process of implementing the decision in the best possible way must now begin.

At the same time, we have a fundamental responsibility to bring our country together. In the past few days, we have seen despicable graffiti daubed on a Polish community centre, and verbal abuse hurled against individuals because they are members of ethnic minorities. Let us remember that these people have come here and made a wonderful contribution to our country. We will not stand for hate crime or attacks of this kind. They must be stamped out.

We can reassure European citizens living here, and Brits living in European countries, that there will be no immediate changes in their circumstances; nor will there be any initial change in the way our people can travel, the way our goods can move, or the way our services can be sold. The deal we negotiated at the European Council in February will now be discarded and a new negotiation to leave the EU will begin under a new Prime Minister.

Turning to our economy, it is clear that markets are volatile and that some companies are considering their investments; we know that this is going to be far from plain sailing. However, we should take confidence from the fact that Britain is ready to confront what the future holds for us from a position of strength. As a result of our long-term plan, we have today one of the strongest major advanced economies in the world, and we are well placed to face the challenges ahead. We have low, stable inflation. The employment rate remains the highest it has ever been. The budget deficit is down from 11% of national income and forecast to be below 3% this year. The financial system is also substantially more resilient than it was six years ago, with capital requirements for the largest banks now 10 times higher than before the banking crisis.

The markets may not have been expecting the referendum result but, as the Chancellor set out this morning, the Treasury, the Bank of England and our other financial authorities have spent the last few months putting in place robust contingency plans. As the Governor of the Bank of England said on Friday, the Bank’s stress tests have shown that UK institutions have enough capital and liquidity reserves to withstand a scenario more severe than the one the country currently faces; and the Bank can make available £250 billion of additional funds if it needs to support banks and markets. In the coming days, the Treasury, the Bank of England and the Financial Conduct Authority will continue to be in very close contact. They have contingency plans in place to maintain financial stability and they will not hesitate to take further measures if required.

Turning to preparations for negotiating our exit from the EU, the Cabinet met this morning and agreed the creation of a new EU unit in Whitehall. This will bring together officials and policy expertise from across the Cabinet Office, the Treasury, the Foreign Office and the Business Department. Clearly this will be the most complex and most important task that the British civil service has undertaken in decades, so the new unit will sit at the heart of government and be led and staffed by the best and brightest from across our civil service. It will report to the whole Cabinet on delivering the outcome of the referendum, advising on transitional issues and objectively exploring options for our future relationship with Europe and the rest of the world from outside the EU. It will also be responsible for ensuring that the new Prime Minister has the best possible advice from the moment of their arrival.

I know that colleagues on all sides of the House will want to contribute to how we prepare and execute the new negotiation to leave the EU, and the Chancellor of the Duchy of Lancaster, my right hon. Friend the Member for West Dorset (Mr Letwin), will listen to all views and representations and make sure that they are fully put into this exercise. He will be playing no part in the leadership election.

Turning to the devolved Administrations, we must ensure that the interests of all parts of our United Kingdom are protected and advanced, so as we prepare for a new negotiation with the European Union we will fully involve the Scottish, Welsh and Northern Ireland Governments. We will also consult Gibraltar, the Crown dependencies and overseas territories, and all regional centres of power including the London Assembly. I have spoken to the First Ministers of Scotland and Wales, as well as the First and Deputy First Ministers in Northern Ireland and the Taoiseach, and our officials will be working intensively together over the coming weeks to bring our devolved Administrations into the process for determining the decisions that need to be taken. While all the key decisions will have to wait for the arrival of the new Prime Minister, there is a lot of work that can be started now. For instance, the British and Irish Governments begin meeting this week to work through the challenges relating to the common border area.

Tomorrow I will attend the European Council. In the last few days I have spoken to Chancellor Merkel, President Hollande and a number of other European leaders. We have discussed the need to prepare for the negotiations and in particular the fact that the British Government will not be triggering article 50 at this stage. Before we do that, we need to determine the kind of relationship we want with the EU, and that is rightly something for the next Prime Minister and their Cabinet to decide. I have also made this point to the Presidents of the European Council and the European Commission, and I will make it clear again at the European Council tomorrow. This is our sovereign decision and it will be for Britain, and Britain alone, to take.

Tomorrow will also provide an opportunity to make the point that although Britain is leaving the European Union, we must not turn our back on Europe or on the rest of the world. The nature of the relationship we secure with the EU will be determined by the next Government, but I think everyone is agreed that we will want the strongest possible economic links with our European neighbours, as well as with our close friends in North America and the Commonwealth and with important partners such as India and China. I am also sure that whatever the precise nature of our future relationship, we will want to continue with a great deal of our extensive security co-operation and to do all we can to influence decisions that will affect the prosperity and safety of our people here at home.

This negotiation will require strong, determined, and committed leadership. As I have said, I think the country requires a new Prime Minister and Cabinet to take it in this direction. This is not a decision I have taken lightly, but I am absolutely convinced that it is in the national interest. Although leaving the EU was not the path I recommended, I am the first to praise our incredible strengths as a country. As we proceed with implementing this decision and facing the challenges that it will undoubtedly bring, I believe we should hold fast to a vision of Britain that wants to be respected abroad, tolerant at home, engaged in the world and working with our international partners to advance the prosperity and security of our nation for generations to come. I have fought for these things every day of my political life and I will always do so. I commend this statement to the House.

First, I thank the British people for turning out to vote in the referendum in such high numbers. The vote was a reflection of the significance of the issue, but it was a close vote on the back of a campaign that was too often divisive and negative. The Opposition Benches put forward a positive case to remain part of the European Union and convinced more than two thirds of our own supporters, but the majority of people voted to leave and we have listened to and accepted what they have said. Many people feel disfranchised and powerless, especially in parts of the country that have been left behind for far too long—communities that have been let down not by the European Union but by Tory Governments. Those communities do not trust politicians to deliver, because for too long they have not. Instead of more extreme cuts to local services, which have hit those areas the hardest, the Government need to invest in those communities. Many such areas are deeply concerned about the security of pledged EU funding. That money is desperately needed, so can the Prime Minister give us any guarantees on those issues?

Secondly, there is the issue of trust. The tenor of the referendum was disheartening. Half-truths and untruths were told, many of which key leave figures spent the weekend distancing themselves from—not least the claim that a vote to leave would hand the NHS an extra £350 million a week. It is quite shameful that politicians made claims they knew to be false and promises they knew could not be delivered.

Thirdly, real concern exists about immigration, but too much of the discussion during the referendum campaign was intemperate and divisive. In the days following the result, it appears that we have seen a rise in racist incidents, such as the attack on the Polish centre in Hammersmith, to which the Prime Minister quite rightly referred, and sadly many other such incidents all over this country. I hope that the Prime Minister and the Home Secretary will take all the action they can to halt the attacks and halt this disgraceful racist behaviour on the streets of this country.

As political leaders, we have a duty to calm our language and our tone, especially after the shocking events of 10 days ago. Our country is divided, and the country will thank neither the Government Benches in front of me nor the Opposition Benches behind for indulging in internal factional manoeuvring at this time. We have serious matters to discuss in this House and in the country—[Interruption.]

Order. I want to accommodate as many as possible of those colleagues who wish to question the Prime Minister. Matters are just slowed up if people make a lot of noise. I have plenty of time; I do not know whether other people have.

Thank you, Mr Speaker. It does appear that neither wing of the Tory Government has an exit plan, which is why we are insisting that the Labour party be fully engaged in the negotiations that lie ahead. We need the freedom to shape our economy for the future and protect social and employment rights, while building new policies on trade, migration, environmental protection and investment.

I fully understand that the Prime Minister is standing down in three months’ time, but we cannot be in a state of paralysis until then. He is meeting the European Council tomorrow, and I hope he will say that negotiations will begin, so that we know what is going on, rather than being delayed until October. We, as a House, have a duty to act in the national interest and ensure we get the best agreements for our constituents. Will the Prime Minister today confirm that, in the light of the economic turmoil, the Chancellor will announce at least a suspension—preferably, the termination—of his now even more counterproductive fiscal rule? What the economy needs now is a clear plan for investment, particularly in those communities that have been so damaged by this Government and that have sent such a very strong message to all of us last week. Will he specifically rule out tax rises or further cuts to public services, which were threatened pre-referendum?

I welcome the Prime Minister’s reassurances on the uncertainty felt by many EU nationals currently working in our economy, including the 52,000 who work so well to help our national health service provide the service we all need. It is welcome that the Prime Minister is consulting the leaders of the devolved Administrations, and I hope he will also be consulting the Mayor of London, a city for which the implications are huge. We must act in the public interest and support measures to reduce volatility. I welcome market protections, but what about protections for people’s jobs, wages and pensions? Can the Prime Minister make clear what plans are in place? The Chancellor spoke this morning to reassure the stock markets, though they clearly remain very uncertain. We understand that some measures cannot be discussed in the House, so will the Prime Minister give me an assurance that the Chancellor will provide private briefings to his opposite numbers on this matter?

Finally, on a personal note, may I say that although I have many fundamental disagreements with the policies of the Prime Minister and his Governments, as he announces the end of his premiership it is right to reflect that he led a Government that delivered equal marriage, against the majority of his own MPs, and he was right to do so. I want to thank him, too, for his response to the Bloody Sunday inquiry and how he reacted to the tragic murder of Jo Cox. We thank him for his service, although I am sure we will enjoy many more debates and disagreements while he continues as Prime Minister.

Let me agree with the Leader of the Opposition that it was positive that turnout was so high. I also agree with him that we need to reach out to those people who have not benefited from economic growth and make sure that they feel that their economic security is important to us as well. But I do not agree with him that it is right to start to try to refight the campaign all over again. All I know for my part is that I put everything I could into the campaign that I believed in—head, heart and soul—and I left nothing out, and I think that was the right thing to do.

Let me answer the right hon. Gentleman’s questions. On money that different areas of the country get, until we leave the EU none of those arrangements change; so what has been set out in the Budget, and payments and the rest of it, all continue. But as the negotiation begins properly for leaving, the next Government will want to set out what arrangements they will put in place for farmers, for local authorities and for regions of our country.

On intolerance and fighting intolerance, I absolutely agree with the right hon. Gentleman that we must take all action we can to stamp this out. He asked about the Chancellor’s fiscal rule and future plans. What I would say is that we have not worked so hard to get the budget deficit from 11% down to below 3% just to see that go to waste, and we must continue to make sure that we have a sound and strong economic plan in our country. For the coming months that is my responsibility and the Chancellor’s responsibility, but in time it will be the responsibility of a new Government, and they will have to decide how to react if there are economic difficulties along the way.

The right hon. Gentleman asked whether there could be private briefings for members of the shadow Front-Bench team with the Chancellor of the Exchequer. As always in these arrangements, if shadow Cabinet members want those sorts of briefings, they can have them.

Finally, I thank the right hon. Gentleman for his kind remarks and the fact that he hopes we will be debating with each other for some weeks and possibly months to come.

When we acquire a new Government who have decided what they mean by leaving and draw up some detailed policy instructions for the committee of officials the Prime Minister has set up, a great deal of detailed legislation covering a whole variety of fields will be submitted to this Parliament. Does my right hon. Friend agree that we still have a parliamentary democracy and it would be the duty of each Member of Parliament to judge each measure in the light of what each man and woman regards as the national interest, and not to take broad guidance from a plebiscite which has produced a small majority on a broad question after a bad-tempered and ill-informed debate? [Interruption.] And does he agree that we will face months of uncertainty if we are not careful—[Interruption.]

Order. It is not acceptable for people to make that level of noise. The right hon. and learned Gentleman will be heard and every Member of this House will be heard. Let us accord the right hon. and learned Gentleman the respect to which he is entitled.

Thank you, Mr Speaker.

Does my right hon. Friend agree that, as there is a risk of uncertainty for a few months, causing very considerable difficulty, he should consider the possible first step of joining the European economic area, which was designed in the first place for countries like Norway and Iceland, where the great bulk of politicians wished to join the European Union but could not get past the ridiculous hurdle of a referendum in order to get there? That could at least be negotiated, with modifications and changes if anybody can decide what they want once we get to that point, and it would give some reassuring order and stability to our economy and might begin to attract a little investment and future prospects for our country.

I thank my right hon. and learned Friend for his remarks. My view is simple: this House should not block the will of the British people to leave the European Union, but of course we have now got to look at all the detailed arrangements, and Parliament will clearly have a role in that in making sure that we find the best way forward. That will be principally the job for the next Government, but I do believe in parliamentary sovereignty and the sovereignty of this Parliament. A lot of detail will have to be discussed and debated, but decisions such as whether or not to join the EEA must be for a future Government.

Scotland voted overwhelmingly to remain in the European Union. Sixty-two per cent. of voters cast their votes to remain in the EU, and every single local government area in the country voted to remain in the EU. In Scotland we voted to remain because it really matters that we are in the single European market, because we value the free movement of people, goods and services, and because our EU citizenship rights matter, as do our legal safeguards for workers, for women and for parents. In Scotland we voted to remain because we are a European nation, and it really matters to us that we live in an outward-looking country, not a diminished little Britain.

In Scotland we are now being told from Westminster that despite the majority against leave, we are going to have to do as we are told: we are going to be taken out of Europe against our will. Mr Speaker, let me tell this House and our friends across Europe: we have no intention whatsoever of seeing Scotland taken out of Europe. That would be totally democratically unacceptable. We are a European country and we will stay a European country, and if that means we have to have an independence referendum to protect Scotland’s place, then so be it. Thank goodness that we have a Scottish Government and a First Minister who are prepared to lead and seek to protect Scotland’s place, and it is very welcome that this approach is being supported by Opposition political parties across the Scottish Parliament.

Meanwhile, “Project Fear” has turned to “Project Farce”. Apparently those who propose that we should leave Europe have no plan. A senior leave MP said:

“There is no plan. The leave campaign don’t have a post-Brexit plan.”

The MP went on to say:

“No. 10 should have had a plan.”

Meanwhile, UK share prices are so volatile that some stocks have temporarily been suspended and sterling has hit a 31-year low.

On one thing I hope we are all agreed: that we take serious note of the very disturbing series of racist incidents directed against our fellow citizens who happen to come from other European countries. I hope that we all, on all sides, totally repudiate these despicable acts and encourage the police and prosecuting authorities to do all they can.

Given the economic damage and uncertainty that is currently being caused, may I ask the Prime Minister the following financial questions? We welcome the actions of the Governor of the Bank of England to help provide certainty in difficult times. Can the Prime Minister confirm that the Governor has no plans at present to change his forward guidance on interest rates? The SNP will continue to support any sensible measures to deliver stability and confidence in the UK economy at this time. However, we want to be explicitly clear that this will not be used to deepen further the programme of austerity.

In conclusion, the lack of leadership from Whitehall over the past few days has been unprecedented. We recognise that any further drift or vacuum simply exacerbates uncertainty. We know that the Prime Minister is planning to leave and we wish him well, but may we have an absolute assurance that his Government will finally start to take a firm grip of the situation in which we all, sadly, find ourselves?

First, our focus should be to get the very best deal for the United Kingdom outside the European Union, and that should be the very best deal for Scotland as well.

I entirely agree with the right hon. Gentleman about the despicable acts of racism that have taken place. Let me reassure him as well that we will take every step that we can. He asked questions specifically about interest rates; that is a matter for the Governor of the Bank of England and the Monetary Policy Committee, and they set out their views in advance of the referendum. The right hon. Gentleman asked about budgets; that will be a matter for a future Government, but let me say this to him: Scotland benefits from being in two single markets—the United Kingdom and the European single market. In my view, the best outcome is to try to keep Scotland in both.

May I pay tribute to the Prime Minister for the dignity with which he addressed the nation from 10 Downing Street on Friday? Will my right hon. Friend take a positive and simple message to the leaders of the other 27 member states of the European Council tomorrow—namely, that the voters of the United Kingdom have demonstrated the value of that great principle, the principle of democracy, for which people fought and died?

Let me thank my hon. Friend for his comment. Of course, when I go to the European Council tomorrow, I will report directly on the result and the decision of the British people. No one should be in any doubt about that, but it is important that we set off on this path of exiting from the European Union by trying to build as much good will as possible on both sides.

May I pay tribute to the Prime Minister, following the announcement of his resignation on Friday? We have not often agreed, but his commitment to the historic bipartisanship during the coalition Government and his energetic commitment to the remain campaign contrast favourably with the tribalism of others. He has my respect and my thanks.

I respect the outcome of the referendum, but I still feel passionately that Britain’s interests are best served at the heart of Europe, in the European Union. I can accept defeat, but I will not give up. I have not changed my beliefs. With the promises of the leave campaign unravelling and no leadership being shown by the Opposition, will the Prime Minister confirm that free movement of people and access to the single market are paramount to the economic stability of Britain, and will he launch an investigation as to the whereabouts of the hon. Member for Uxbridge and South Ruislip (Boris Johnson) and of the Lord Chancellor and Secretary of State for Justice?

It is not up to me to ensure attendance in the Chamber—I have many responsibilities, but that is not one of them. Let me thank the hon. Gentleman for what he said about my leadership, and let me say how much I enjoyed appearing on a platform with him at the final rally, outside Birmingham University, which brought together him, me and Gordon Brown in a unique but obviously unpersuasive trilogy, although I have to say that he and Gordon Brown gave fantastic speeches.

The hon. Gentleman is right that the decision that we are going to have to take—and it will be for the next Government—about how we get the best possible access to the single market is going to be one of the single most important decisions that the Government will take on, because we must bear in mind the importance of safeguarding our economy, its trade links and its jobs. I think that will be a very serious consideration.

Much of the distress expressed by those who voted remain on Thursday has been about the fact that they believe that their country has turned its back on their values. Does the Prime Minister agree that they can be reassured that the tolerance, openness and western liberal internationalism that we supported in the European Union will continue to be the hallmark of the United Kingdom as we seek a new role in the world?

I very much hope my hon. Friend is right. Britain is at its strongest when we stand up for our values and work with others. Let me stress that, while we are leaving the European Union, we will still be full members of NATO, the UN Security Council, the Commonwealth, the G7 and the G20. Britain does best when we make our voice heard through these organisations, and we should continue to do so.

I never thought I would see the day when I wished a Tory Prime Minister would win a vote, but last Thursday I did, and I think the country will pay a bitter price for the fact that he lost this one. Leaving aside the constitutional turmoil, the damage to the economy and the uncertainty that hangs over Britain’s place in the world, the leaders of the Brexit campaign have engendered an atmosphere where some people believe it is open season for racism and xenophobia. Will the Prime Minister say very clearly that, when it comes to the difficulties of getting a job or problems with the NHS, housing or schools, those things are the responsibility of his Government to sort out and not the fault of migrants from the EU or indeed anywhere else?

May I first praise the right hon. and learned Lady for her decision to cross party lines and to appear with others on platforms to make the argument? She made it very persuasively, and I think it is right that she did. She is absolutely right that we must be very clear about our commitment to tolerance and diversity, and about our complete intolerance of racism and the hateful hate crimes that we have seen in recent days. I know that that is the view of hon. Members in this House, whatever side of the debate they were on, but that message needs to go out loud and clear.

Does the Prime Minister recall that, when we held the vote in September last year on the European Union Referendum Bill, not a single Conservative, and only one Labour Member, voted against it, so is it not a bit late now for people to talk about blocking the implementation of the result just because they disagree with it? Finally—it is always good to end on a positive note—would the Prime Minister care to bring in the vote on the Trident successor submarines before he leaves office?

It is very clear: when it comes to numbers, my right hon. Friend wants four submarines and one referendum—I have got the message very clearly. He makes a good point, which is that when the House voted on the referendum, it voted by a margin of six to one to hold that referendum. We will obviously be coming forward with our plan for all the other decisions that can be made during the remainder of this parliamentary Session, and I would hope that it would include the one he mentions.

I would like to add my thanks to the Prime Minister for his service to the nation as the Prime Minister of a stable, successful coalition Government for five years. Throughout that time, there were many things that he and I disagreed on, but I always appreciated his civility, his good humour—on display here again today—and his ability, which is rare in politics, to see politics from other people’s points of view. All those qualities ensured the stability that was so necessary as the country was recovering from the economic shocks of 2008, and, for that, he should be warmly thanked.

I have heard a lot about democratic principle. Would the Prime Minister agree that it surely cannot be right, as a matter of democratic principle, that only members of the Conservative party, constituting 0.003% of the total electorate, should have a say in electing a new Prime Minister of a new Government with new priorities utterly different from those he got elected on last year? Does he agree that there should be an early general election?

First of all, let me thank the right hon. Gentleman for his kind words. We did work together very successfully. I know that he paid a very large personal and political price for the support he gave to that Government. That helped to deliver economic stability and make real progress in our country, and I thank him for it.

On the leadership election that will now take place and the other points the right hon. Gentleman put, all parties have their rules for electing leaders that are arrived at democratically; we have ours, and they will be followed. In the coalition agreement, we agreed the Fixed-term Parliaments Act 2011, which many of my colleagues have misgivings about. I happen to think it is a good measure, so as a result I think the right thing is for a new Prime Minister to take office, and it will be for them to decide whether to fulfil the terms of the Act or something else.

My right hon. Friend will know that a large number of people in my constituency work in the service industries, particularly financial services industries. This weekend they have seen jobs leave this country. They are worried about their future. They need not access to the single market but to be a participating part of the single market, and so does this country, as we currently have a £20 billion surplus. Will he ensure that that is given the highest priority, in the national interest, in our negotiations?

My right hon. Friend makes an important point. Let me stress that nothing changes in the UK’s trading relations with Europe until we actually leave the European Union, so there is a period when service companies—financial services—maintain the passport. One of the most important tasks for the new Government will be to negotiate the best possible arrangements with the single market, and that will be debated endlessly in this House. There is obviously a very strong case for trying to remain in that single market in some form, but that will be a decision for the new Government and for Parliament.

As the process of leaving the European Union unfolds, we will continue to face a large number of international challenges—the crisis in Syria, climate change, and the threat of terrorism among them—and yet we risk seeing our voice in the world diminished. Does the Prime Minister agree that in the negotiations every effort should be made to ensure that we continue to have practical co-operation with our European allies so that we can maintain the kind of influence in the world that is so important to our prosperity and our security?

The right hon. Gentleman and I agree on this issue, and we spent some time on the campaign discussing it. It is important to use all these forums to maximise Britain’s influence. We will obviously have to find a way, under the new Government, to work out how to work with the European Union to get the maximum effect for the British stance on climate change, on Syria, on how we try to prevent refugees from leaving Libya, and all the rest of it. Those will all be issues for a future Government. I know from all that happened in the campaign that this is not about Britain withdrawing from the world or playing less of a role in the world, and we will have to work out the way forward.

I would like to add my voice to the tributes to the Prime Minister from across this House. He is a true statesman who has made Oxfordshire proud, and we will miss him. Will he take this opportunity to reassure the science and innovation sector that the Government will fight to protect access not just to Horizon 2020 funding but to valuable research collaborations, and also to effective recruitment and retention of the brightest and best of EU researchers? They are essential to our knowledge economy and deserve to know that they will be a priority in ongoing negotiations.

I thank my hon. Friend for her kind remarks. It has been a great pleasure and privilege being her constituency neighbour and working together. How we maintain the advances in British science and competitiveness in our universities will be one of the issues that the EU unit will want to look at. Clearly we have done very well out of this bit of the European Union, and so it will be for the new Government to look at the evidence on that and how we can continue to move forward.

I commend the Prime Minister for the way in which he handled Friday and for the very diplomatic and kind speech he has made today. I ask him to continue to show that leadership over the next month or two, to ensure that some of the hysteria about what is going to happen to our country is kept under control. Will he also condemn very clearly those people who are almost implying that decent people all over this country who voted to leave the European Union are somehow closet racists?

I have been on the opposite side to the hon. Lady in this debate, but I know that it takes a lot of courage to stand out in the way that she has done. One of my first jobs in politics was as the Conservative candidate’s researcher in the Vauxhall by-election. If I had known then that the hon. Lady would be part of my nemesis, maybe I would have worked even harder. She is right: there are many people on both sides of this debate who have very strong views about tolerance, diversity and all the rest of it, and we need to make sure that that shines through in the coming days.

As the Prime Minister knows, I have not always agreed with him on issues, but, as he equally knows, I have always been very supportive of him personally and did not want him to make the announcement that he made last week. In saying that the country needs to come together—he is right to do so—does he accept that the first part of that is that everybody has to accept the result of the referendum, whether they like it or not, and that talk of a second referendum is for the birds? When he goes to see his European counterparts, will he pass on the message that the British people have said that we are very happy to continue with our £68 billion trade deficit with the European Union by trading with it, but in return for that we are not prepared to accept free movement of people or contributing to the EU budget?

My hon. Friend is absolutely right to say that we must accept the result—the Cabinet has and I think that everybody should—but what has to happen now is translating that result into action and choosing the correct pathway to leave the European Union and the correct relationship to have with it. That is going to take a lot of complex decision making by the new Government, and my hon. Friend obviously has a very clear view about what that should involve. It will involve a lot of separate and different decisions, but he is absolutely right to say that the decision must be accepted.

Many of my constituents are European citizens and they are fearful for their future. The Prime Minister has talked about a group of officials set up to determine what Brexit will mean. Can he give any comfort to these people? If not now, will he give a timetable for when they will know how they can apply to remain in the UK?

I think that many people will be watching this with exactly the same question that the hon. Lady has asked. The technically correct answer is that while we are members of the European Union there is no change in the rights or the circumstances of people coming to live and work in Britain, or in those of Britons going to live and work in other European Union countries. I would add to that that the leave campaigners were fairly clear that they wanted to protect the rights of people who are already here who have come to live, work and study, but obviously the final clarification of that and of the rights of British people living in other parts of the European Union will have to wait for the complex negotiations.

May I thank the Prime Minister for giving the British people the opportunity to vote on this issue for the first time in decades, and may I thank those who voted to leave for giving me a remarkable birthday present on Friday? I also welcome the establishment of the new unit under the Chancellor of the Duchy of Lancaster. Does the Prime Minister intend to publish a White Paper on the next steps?

No, I do not think that will be possible. The new unit has to get up and running and go through all of the complex issues that need to be sorted out, whether they be agriculture payments, borders, the situation in Northern Ireland or which British laws need to be rewritten because they mention a lot of EU law and all the rest of it. What I envisage happening is a series of papers being worked through, being discussed by the Cabinet and being prepared for the new Government as they come in.

Given the enormity of this decision and the repercussions of the negotiation process, the arrangements that the Prime Minister has described sound extremely weak. He is effectively saying that Members of Parliament should just go and have an informal chat with the right hon. Member for West Dorset (Mr Letwin). The Prime Minister is leaving a dangerous political vacuum. I urge him to consider much broader arrangements to build a wider consensus, including setting up a cross-party Joint Committee of both Houses of Parliament to look at wider arrangements to involve voices from all across the country in what the negotiations about our future Britain, alongside the EU, should be. Britain feels very divided now and all of us have a responsibility to build a new consensus for the future.

I do not disagree with a lot of what the right hon. Lady is saying. Obviously, Parliament and Select Committees will want to consider how they can best produce evidence and take research and interviews to add to this process. I see the role of the Government as this. It is clear that we are moving from one situation—membership of the EU—to leaving the EU. We need to describe in a dispassionate, neutral and objective way what all the different outcomes look like and what are the advantages and disadvantages of all the different outcomes—the trade deal like Canada, the situation like Norway, and the pros and cons of being in the single market or out of the single market—so that our constituents can see the disadvantages and advantages in each case. That is what the Government should do, but Parliament—the House of Commons—can also play its part.

May I also pay tribute to my right hon. Friend for giving the British people the chance to take this historic decision? I share his view that Britain will continue to be engaged with the rest of the world—I hope in a more positive fashion. May I also express the view that I am very disappointed that my right hon. Friend has decided to stand down? I wonder whether, at this difficult time, he might like to reconsider that decision. I say so because he is a star at the Dispatch Box and, furthermore, as he has demonstrated today, he will rather miss it if he is not here to do it.

I am sure there are many things that I will miss, and statements that go on for at least three hours are perhaps one of them. What on earth will I do to fill my time?

The reason for my decision to resign is that the country has made a very clear decision to go in a particular direction, and I really do believe it needs someone—fresh leadership, and a fresh pair of eyes—committed to that path and to getting it right for Britain. I think that does require change. That is why I made the decision I did, and I am certainly not changing my mind.

Talking of which, at 9 o’clock this morning, the hon. Member for Uxbridge and South Ruislip (Boris Johnson) welcomed the stabilisation of the pound. At lunchtime, sterling fell to a 31-year low against the dollar. If you break it, you own it, so who owns this particular adjustment? Is it the Prime Minister, who called the referendum, or the hon. Member for Uxbridge and South Ruislip, who exploited it?

I will be very frank. The Government were elected on a manifesto promise to hold a referendum. We have held that referendum, the country has made its decision and this Government are responsible now for setting out the steps that we need to take and for doing all that is necessary to stabilise the economy. We took a choice to ask the people this very big question, because I believe in our parliamentary democracy but when it comes to the very big decisions I think it is right to consult the people. But this Government take responsibility.

In respecting with dignity the wishes of the electorate, does the Prime Minister accept that he has an absolutely pivotal role to play in encouraging all sides to come together and talk the country up? Calm optimism is now required. We are a great country, and we have a very bright future ahead of us.

I certainly believe that we all have a responsibility to bring the country together and to make this new pathway work as well as it does, but we have to do it from a position of realism. We do not know exactly what some of the economic and other effects will be, so we are going to have to take great caution and care in the coming days and the coming weeks to respond to that, as well as coming together to get the best pathway for our country to leave this organisation.

On Friday, the Leader of the Opposition suggested we should rush to invoke article 50 renegotiations now. I disagree. I believe that it would be in good, sound order for our economy, to secure a stable transition, to make sure that article 50 is not triggered until at least the new year.

The triggering of article 50 is a matter for the British Government, and it is important we establish that. What matters is that we do as much work as possible to determine the best possible model that we want to try to negotiate for, which must be a matter for the new Prime Minister, and then he or she will make the decision to trigger article 50.

Boston in my constituency voted more than any other place in the country to leave the European Union, and it has seen the highest level of immigration from eastern Europe to this country. I am keenly aware that those migrants are my constituents too, but does the Prime Minister agree that we owe it to the will of the people who live in my constituency to deliver on the promises to reform immigration and increase spending on the NHS if we are to retain their faith in this place?

We must continue to enact our manifesto promises, one of which was to set up an immigration impact fund. We need to set up and establish that on, I hope, an all-party basis. We should continue to deliver for the NHS, as we promised in our manifesto and as we have done. Clearly, one of the key issues in this negotiation is how to balance the difficult decisions about access to the single market and better control of immigration, and I think that goes to the heart of what the country needs to do.

The Prime Minister and I were on different sides of this argument, but when he spoke on Friday, he did so with his dignity, his principles and his honour intact. I am very grateful to the Prime Minister for indicating that discussions will commence this week on the common travel area. May I, however, ask him to dismiss the notion that there could be a border poll in Northern Ireland, to dismiss the notion that the devolved institutions can wield a veto in this process and to resolve that only with the collective will to do what is in our national interest will we maintain this United Kingdom?

I thank the hon. Gentleman for his kind remarks. He is right to say that it is important to get it right on the common travel area issues, which are complex and difficult, if Northern Ireland is going to be the frontier between the United Kingdom outside the European Union and the European Union. On the border poll issue, the rules are set out very clearly in the Good Friday agreement, and I do not believe they have been triggered. In terms of the decision to leave the EU and how we do it, that is principally a matter for this Westminster—the United Kingdom—Parliament.

The Prime Minister has shown the decency and courage that one of my predecessors, Harold Macmillan, would have respected. I think Harold Macmillan would have wept on the day this has happened and on the day the Prime Minister departs. Will the Prime Minister concede that it is very clear legally that article 50 is the only proper means of exiting the European Union and that any attempt to circumvent it would be wrong and would involve this country in a breach of its international obligations, which no decent leader of this country should ever contemplate?