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House of Commons Hansard

Commons Chamber

20 October 2016
Volume 615

    House of Commons

    Thursday 20 October 2016

    The House met at half-past Nine o’clock


    [Mr Speaker in the Chair]

    Oral Answers to Questions

    Exiting the European Union

    The Secretary of State was asked—

    Financial Services

  • 1. What discussions he has had with the Chancellor of the Exchequer on financial services and negotiations on the UK leaving the EU. [906687]

  • 10. What progress his Department has made in engaging with the financial services sector on the potential effect on its revenues of the UK leaving the EU. [906697]

  • The Chancellor and I are both determined to ensure we get the best possible deal for our financial services sector—a crucial part of our economy—and not just for the City of London but for the country more widely. Two thirds of financial services jobs are outside the capital, including 150,000 in Scotland. We are determined to ensure that this UK-wide industry continues to thrive. The Chancellor and I have met to discuss this, and, as one would expect, agree that financial services will be of great importance in these negotiations, that we must remain in a position to attract the brightest and the best in the global battle for talent, and that we will seek the best possible terms of trade for our financial services in the European market. We are also working together to maximise opportunities for financial services arising from our exit from the European Union. We have already met representatives of the financial services industry and expect to do so again as we shape our negotiating position.

  • Will my right hon. Friend make securing agreement on a transitional period for financial services an urgent priority for Brexit negotiations to avoid the risk that firms feel they have to start making decisions to change their businesses now based on a worst-case scenario because compliance obligations mean that they cannot wait to see what the final deal will look like?

  • We are seeking to ensure a smooth and orderly exit from the European Union, and it would not be in the interests of either side—Britain or the European Union—to see disruption. To that end, we are examining all possible options, as one would expect. We are approaching these negotiations in good faith and with good will towards our negotiating partners—we hope the same applies in reverse—focused on the mutual interests of the UK and the EU, including financial stability. I would say that having London as the No. 1 global financial centre sitting at the heart of the global capital markets is not just in the UK’s interest but in the European Union’s interest. I am confident that everyone will see the value of not undermining that.

  • In his answer to my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), the Secretary of State talked about all possible options. Yesterday in the Treasury Committee, I asked the Chancellor whether he accepted the likely need for transitional arrangements. Has my right hon. Friend met regulators to discuss systemic risk, and major financial institutions to discuss loss of business, if those transitional arrangements are not put in place?

  • The Chancellor’s response was much the same as mine will be. Yes, we have been talking to the European institutions, in particular, about this matter, and they take the same view as we do.

  • We look forward to hearing from the Secretary of State once the new Select Committee has been established. May I press him on transitional arrangements, which are absolutely fundamental to the task in hand? He will be only too well aware that uncertainty about our future trading relationships, including for the financial services industry, is the major concern of business. Can he give the House an assurance that if we have not been able to negotiate a new trade and market access agreement with the European Union by the end of the article 50 process, the Government will seek a transitional arrangement, because if they do not say that now the business uncertainty will continue, and businesses may begin to take decisions because they do not know what the future holds?

  • I congratulate the right hon. Gentleman on his new post. I am very pleased that he is the Chairman of the Brexit Committee, and look forward to a great deal of discussion with him on these subjects. He is quite right—we have to treat as absolutely central to what we do maintaining the stability of the City but also of the European financial markets, which have been a little fragile over the past few years. We will therefore do anything necessary. In the financial sector, as in other sectors, at the point of exit from the European Union, all the standards, conventions and regulations will be identical, so the transition should be capable of being managed very clinically. We will do everything necessary to maintain that stability.

  • Can the Secretary of State confirm, in relation to press reports earlier this week, that the Government may in future pay the European Union, in some form or another, for access for financial services? Is it the Government’s position that under no circumstances will they in future pay for market access for financial services?

  • I do not comment on leaks. I am not going to comment on that newspaper report or, indeed, on its veracity or otherwise. On the accountability of Government activity, I said during last week’s debate that I want to be as accountable and open as possible with the House of Commons, but the Labour party accepted enthusiastically the amendment to the motion, which said that we would do nothing to undermine or prejudge our negotiating position, and that is what we will do.

  • Rather disgracefully, the Treasury did its best to play a prominent role in the remain campaign, including the release of a highly dodgy dossier predicting economic doom and gloom. Is my right hon. Friend confident that the Treasury has now caught up with the result of the referendum and that it is singing from the same page as his Department?

  • I am afraid that I do not agree with my hon. Friend. The simple truth is that the Treasury is looking at all the options, just as we are. Forecasts of the sorts that he described are contingent entirely on the assumptions that are put under them. If a lot of deleterious assumptions are made, they will result in a deleterious outcome. If serious policies are introduced to correct any of the risks and maximise the opportunities, they will result in a very much better outcome, and that is what we will do.

  • The Secretary of State has said that he does not want to discuss leaks, but it is important that we get factual information out there. According to the Financial Times, the Government are to spend billions on keeping the City of London in the single market. Will the Secretary of State confirm what steps he is taking to ensure that the people of Scotland get a similar deal?

  • As I have said, I do not comment on leaks, but what I will say is this: I said at the beginning that a very large number of financial services jobs are outside London and many of them are concentrated in Scotland. It has been a fundamental part of Scotland’s advantage down the years to have strong financial services, and we will do every bit as much to protect Scotland as we will to protect London.

  • Tens of thousands of jobs in Britain depend on euro-denominated clearing. The United States has secured equivalence for its clearing houses. How confident is the Secretary of State that euro-denominated clearing will be permitted in the UK after we have left the European Union?

  • The right hon. Gentleman identifies a very important point, as I would expect from him, and that is certainly one of our major aims. I reiterate the point that I made to the new Chairman of the Brexit Committee: we start at the point we leave with absolute equivalence, because we meet all of the requirements at that point, and I would seek to ensure that that was maintained.

  • The discussions on financial services are intended, as I understand it, to build consensus on the Government’s plans. Eight days ago, the Government gave a clear commitment from the Dispatch Box that

    “there should be a transparent debate on the Government’s plans for leaving the EU”.—[Official Report, 12 October 2016; Vol. 615, c. 414.]

    Yesterday I wrote to the Secretary of State to ask a very simple question: when will the plans be made available? That is an important question because we need time to debate and scrutinise the plans before article 50 is invoked, and no doubt the new Brexit Committee will want to see them. The Secretary of State replied promptly to my letter, but failed to answer that central question, so I ask him again: when will the Government plans for leaving the EU be made available to this House?

  • I could not have been clearer that I consider engagement with Parliament on the process of exiting the EU to be of paramount importance. That was the whole thrust of my speech in last week’s debate and of everything I said previously to various Select Committees and to the House. That is why I supported the Opposition’s motion last week that

    “there should be a full and transparent debate on the Government’s plan for leaving the EU”.

    That was the hon. and learned Gentleman’s wording.

    It has always been our intention that Parliament should be engaged throughout. However, the House also agreed a vital caveat that such a process must respect

    “the decision of the people of the UK when they voted to leave the EU on 23 June and does not undermine the negotiating position of the Government”.

    There will be a balance to be struck between transparency and good negotiating practice, and I am confident that we can strike that balance. Over the course of the coming—[Interruption.] Whether it is six months or less, I do not know, but over the course of the coming period before the triggering of article 50, much information will be put out and I think that the House will be in no doubt about our aims and strategic objectives.

  • The question was: when will the plans be made available? For the second time, it has not been answered. The plans are important not only so that this House can hold the Government to account, but so that some certainty can be provided. There has been so much evidence of uncertainty. I met representatives of the Council, Commission and Parliament in Brussels yesterday, and it is absolutely clear that the Prime Minister’s words about Brexit at her party conference have been widely interpreted as an indication that she wants the UK to leave not just the single market, but the customs union. I have no doubt that that will come up in her discussions in Brussels this evening, but will the Secretary of State assure the House that that is not the Government’s starting position for the article 50 negotiations?

  • Actually, it is a good example of the reason why we are taking our time to come to a conclusion on this. [Laughter.] No, these matters have serious implications, whichever way we go with them. Being inside the customs union gives some advantages but cuts off, to some extent, free trade areas around the rest of the world. Being outside the customs union creates some handicaps but opens up those other benefits. That decision is not part of what the Prime Minister has said to the European Union.

  • Welsh Economy

  • 2. What assessment he has made of the potential effect on the economy in Wales of the UK leaving the EU. [906688]

  • The Government continue to undertake a wide range of analysis covering all parts of the UK to inform the UK’s position for the upcoming negotiation with the European partners. A key part of that understanding is the differences across the UK. The Welsh economy has particular strengths in aerospace, automotive, higher education, electronics, steel and agriculture, for example. It is important that we understand the impacts and the opportunities for all parts of the Welsh economy.

    I visited Cardiff on Tuesday this week, when I met the First Minister and the Finance Minister, and I am grateful to them for giving me time on their Budget day. I also met university vice-chancellors in a separate meeting. Wales has a particular reliance on a range of EU funding—more so than much of the rest of the UK—on which the Chancellor has already offered a number of guarantees.

  • As the Secretary of State will be aware, the Welsh economy produces a substantial trade surplus of more than £5 billion per annum as a result of our membership of the single market, the customs union and the associated 53 international global trade deals. The UK as a whole, on the other hand, has a massive deficit of nearly £120 billion. Does the Secretary of State acknowledge, therefore, that the Government’s favoured policy of leaving the single market, the customs union and the associated 53 international global trade deals—a hard Brexit—will have a significant effect on Wales?

  • No, because the Government’s aim is to maintain the freest and most barrier-free access to the single market that we can obtain. That is the aim, and parts of the kingdom such as Wales are very much at the forefront of our thoughts in that strategy.

  • Many businesses in Wales are wondering how EU directives that have been signed but not yet enacted—some may not be enacted until 2017 or 2018—will impact on them. At what stage will the Government say that directives are no longer applicable in the UK?

  • My hon. Friend makes an important point, which goes to the heart of the previous question about maintaining stability and confidence. We have said in terms that the great repeal Act will put into domestic law all the acquis as it exists at the point at which we depart. Everything that is in European law at that point goes into British law.

  • In Blaenau Gwent, the successful dips company Zorba Foods faces a bigger bill for bringing its ingredients into the country. With petrol prices going up, the falling pound is making every step of the journey to the dinner plate much more expensive. What are the Government doing to help businesses that are faced with a steep increase in costs and families who are faced with higher food bills?

  • It is not the place of the Government to judge what is the right and wrong exchange rate. The hon. Gentleman is quite right to say that the exchange rate has gone down quite notably, but that gives both advantages and disadvantages. It has already changed, for example, the success of various industries in exports and some other domestic industries. We hope—more than that, we intend—that the balance will work out to everybody’s advantage in the long run.

  • Yesterday, I was delighted to hear the Under-Secretary of State for Wales confirm that the Treasury will underwrite the approximately £110 million that is due to come from the EU regional development fund for the electrification of the valleys lines in Wales if that money has not come through before we exit the European Union. In his discussions with the First Minister, was the Secretary of State able to give him greater clarity about all the funds that come into Wales from the EU? Businesses require that stable background against which to operate.

  • My right hon. Friend picks up on a very important point. Wales is more dependent on European funding at the moment than many other parts of the country. One of the set of things the Government have done to protect people from any instability is to underwrite very quickly—the Treasury undertook to do this in August—the existing structural funds. The Welsh Government were cognisant of that and welcomed it, particularly as they—as I said, I visited them on budget day—were able to make their budgets balance. From that point of view, the Government will continue to look at any areas where financial risk is induced as a result of our departure and the possible severance of EU funds as we leave.

  • Business Revenue

  • 3. What progress his Department has made in engaging with businesses on the potential effect on their revenues of the UK leaving the EU. [906689]

  • 14. What progress his Department has made on engaging with the tourism industry on the potential effect on its revenues of the UK leaving the EU. [906702]

  • Since the referendum, the Government have met companies from every sector of the British economy, including tourism, to discuss the risks and opportunities. I believe that as we build an ever more outward-facing, agile economy, with firms trading more widely across the world, there is enormous potential for the UK to be an even better place to do business. We are meeting representatives of business regularly, and the detailed analysis shared with us by many of them is informing the preparations for the negotiations.

    On tourism specifically, foreign visitors contribute £22 billion to our economy, and the industry as a whole supports some 1.6 million jobs. A record 3.8 million people visited the UK in July. My right hon. Friend the Culture Secretary has met industry leaders to discuss our exit from the EU, and we debated this matter in Westminster Hall last week. As the Prime Minister has said, we are confident our exit presents opportunities for growth in tourism, and we will work closely with the industry to realise this.

  • Businesses in Amber Valley say that what would help them most in deciding what investment to make in the coming years is some clarity about what our overall trading position with the EU will be. They are nervous that waiting two and a half years for that will not be helpful. When does the Secretary of State think they will be able to understand at least what the big picture will be?

  • At the strategic level, businesses should be able to understand that very clearly now. We have some very clear strategic aims: we will respect the views of the British people—I know my hon. Friend campaigned on our side—to bring back control over our laws and bring back control of immigration; we will aim to maintain our consideration of security exactly as it is now; and on the market front, we are seeking the most open possible market with the European Union.

  • I thank the Secretary of State for his comments about engaging with the tourism industry. As he said, we are achieving record visitor numbers and record spend. To sustain this growth, should we investigate marketing the UK even more aggressively overseas, taking advantage of the weak pound, with increased budgets for VisitBritain, for example?

  • I congratulate my hon. Friend on the excellent debate he held last week, and indeed on his excellent speech on this subject. He is right that the industry continues to thrive, with 3.8 million people visiting the UK. I am quite certain—I am sure he will look at Hansard later—that my right hon. Friend the Secretary of State for International Trade will take up his point about promoting Britain abroad as a place to visit.

  • Does the Secretary of State agree with the International Trade Secretary that we should leave the European customs union, or with the Business Secretary and the Chancellor that we should not do so?

  • I gave the answer to that some moments ago.

  • The Secretary of State talks about a smooth transition, but the truth is that businesses are concerned we will have to fall back on WTO rules. Our European partners have so far refused to say that they will enter trade talks alongside our article 50 negotiations. What will the Government and the Secretary of State do to avoid the cliff edge in March 2019, when we leave the EU, of our falling out of the EU single market and back on WTO rules?

  • The hon. Lady says that our European partners have said that. Some of them have said it, but that was some time ago, and they are now starting to read what article 50 actually says. Article 50 implies that there will be parallel negotiations. That is what we will have because, as she quite rightly says, we need to conclude them within two years to avoid any cliff edge.

  • 18. My constituency is home to the Cambridge science park, a centre of innovation and technology. Last week, I met David Newble, the chief executive of TTP Labtech, who is concerned about maintaining access to overseas talent, following the vote for Brexit. What steps is the Secretary of State taking to ensure that we continue to attract the international expertise that is helping to drive our tech sector in the UK? [906707]

  • My hon. and learned Friend might remember that I said in my conference speech that to take part in the global competitive economy we have to win the global battle for talent, too. My task is to bring back to the UK the right to decide who can come to Britain; the Government’s task will be to exercise that right in the national interest. Clearly, it will not be in the national interest to restrict the movement of talent—the free movement of brainpower, as it were—so she can be confident that we will not be limiting highly intelligent, highly capable people’s access to universities.

  • Will the Secretary of State tell us what assessment his or any other Department has made of the impact of leaving the EU on the economy, and when he will make that available to this House?

  • We currently have in place an assessment of 51 sectors of the economy. We are looking at those one by one, but the aim at the end is that this will inform the negotiating approach so that no one gets hurt. Given the hon. Gentleman’s context, I should mention that we are also doing that assessment in a way that will throw up whether something has an impact on the individual nations of the United Kingdom, as well as on the UK as a whole.

  • I obviously welcome that new information from the Secretary of State, but the Fraser of Allander Institute has already told us that this will cost up to 80,000 jobs in Scotland alone. The CBI, the British Chambers of Commerce and the Institute of Directors have warned about the impact of limiting freedom of movement. They have done their homework, Secretary of State. You did not do your homework during the Vote Leave campaign, when you had a blank piece of paper to campaign on. If the Secretary of State is going to Scotland, he will need to do better than that. When will that assessment be published?

  • I have always done my homework, and I strongly resent any suggestion to the contrary.

  • I venture to suggest that if you did your homework, Mr Speaker, you would not have it marked by the hon. Gentleman.

    I have not seen the Fraser of Allander report, so would be grateful if the hon. Gentleman directed me to it. One thing about these reports is that they all base themselves on single assumptions. We need to look at those assumptions to see whether they are realistic, and that is what we will do. There have been a large number of forecasts of the effect of Brexit. Some are very pessimistic about certain aspects of policy that we do not intend to allow to happen. I will look at that particular report carefully and talk to him about it after I have done so.

  • The US Chamber of Commerce, which represents companies with investments in the UK worth almost $600 billion, warned our ambassador in Washington last week that to retain and attract those investments in the years ahead we will require access to the single market. Will the Secretary of State tell the House whether he accepts the figure I have given and, if he does not, how much US business investment he thinks will be at risk if this Government do not secure access to the single market?

  • One reason—although only one—why we are seeking to maintain the most open and barrier-free access possible to the European market is to encourage foreign direct investment. We have had discussions with a number of countries, including the US; indeed I met a US congressional delegation that came here whose members were very enthusiastic about Brexit. There are many views about this.

  • EU Regional Funding

  • 4. What discussions he has had with his Cabinet colleagues on EU regional funding as part of his preparations for negotiations on the UK leaving the EU. [906690]

  • The Chancellor has already announced that the Government will guarantee EU structural and investment funding signed before we leave the EU. In addition, when UK organisations bid directly and competitively for EU funding for projects, that funding will be guaranteed by the Treasury if the bids are won before our departure. Those guarantees will extend to 2020, effectively the end of this Parliament.

  • The Minister has quoted part of what the Chancellor said, but he also said that finance will be guaranteed to bidders

    “whose projects meet UK priorities”.

    Does that imply that the UK Government will try to change agreed priorities for EU expenditure?

  • No. Over the coming months the Government will consult all interested parties—including the devolved Administrations, who clearly have an interest in this policy—to ensure that future funding commitments represent value for money and are in line with our strategic priorities.

  • Does my right hon. Friend agree that one great advantage of the UK leaving the EU is that it will give us greater flexibility over how we spend our regional aid, and that as we will no longer be paying as a net contributor to the EU, we will have more money to spend on these schemes?

  • My hon. Friend is right. This particular area, like many other aspects of policy, gives the United Kingdom the opportunity to reassess these arrangements and ensure that they meet the UK’s priorities.

  • UK Citizens in EU Countries: Rights

  • 5. What rights he plans to secure for UK citizens living in other EU countries; and whether he plans to negotiate a reciprocal agreement with EU partners on the rights of EU citizens living in the UK. [906691]

  • 12. What rights he plans to secure for UK citizens living in other EU countries; and whether he plans to negotiate a reciprocal agreement with EU partners on the rights of EU citizens living in the UK. [906699]

  • 13. Whether it is his policy to allow EU nationals living in the UK to remain after the UK leaves the EU. [906701]

  • I congratulate my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) on his election as Chair of the Science and Technology Committee.

    We had a very good debate on this matter yesterday and it was clear that Members on both sides of the House wanted to provide reassurance. The Government fully intend to protect the status of EU nationals already living here and the Prime Minister has been clear on that point. We expect UK citizens’ rights in other EU member states to be protected in return. I find it hard to imagine a scenario where, in negotiations, that is not the outcome. At every step of the negotiations, we will seek to ensure the best possible outcomes for the British people at home and overseas.

  • To follow on from the question asked by my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), the Government have made clear their desire to control the borders and the fact that free movement cannot continue as it is now. However, will my hon. Friend reiterate that a degree of free movement will be necessary to protect key areas of our economy such as science and technology, and in particular research collaboration?

  • I absolutely recognise my hon. Friend’s point and the need to strike that balance. As the Secretary of State said in his conference speech, to which he has already referred, pulling out of the European Union does not mean pulling up the drawbridge. He said:

    “We will always welcome those with the skills, the drive and the expertise to make our nation better still. If we are to win in the global marketplace, we must win the global battle for talent. Britain has always been one of the most tolerant and welcoming places on the face of the earth. It must and it will remain so.”

    This is particularly true in areas such as science and technology. The UK is a science superpower and we intend to make sure it stays that way.

  • As well as ensuring that British pensioners living in other EU countries retain the right to remain in those countries, will the Government make sure that their pensions are protected under their current terms?

  • My hon. Friend raises an important point. Clearly, this is something that we will want to secure in the negotiations. We are working on the basis that what is fair to UK citizens in the EU should also be fair to EU citizens in the UK. We will certainly be looking to protect the interests of British pensioners as we go through this process.

  • The most recent census indicates that 1,588 of my constituents were born in other EU countries. From personal experience, I know that they include doctors, dentists, teachers, nurses, home care workers, residential care workers, pupil support assistants and many more. Why are the Government already able to give unilateral guarantees about the remaining rights of bankers but unable to give the same guarantees to my constituents?

  • We are clear that it is important to secure the rights of EU citizens in the UK and UK citizens in the EU. We will seek to do so through the negotiations.

  • The Minister is seeking to brush away concerns about this issue. Last month, the British Chambers of Commerce reported that 41% of companies said that their staff had expressed uncertainty about their future. Across the country, EU staff in our universities, who make up 15% of academics and contribute hugely to our research, are reconsidering their position. NHS England’s chief executive is so concerned that he has called for early reassurance about the future of EU workers. Will the Government simply resolve this uncertainty by committing to implement the decision of this House on 6 July and acting with urgency to give EU nationals currently living in the UK the right to remain?

  • As I said in yesterday’s debate, the Government recognise the enormous contribution that EU citizens make to our health service, our universities and business. We want to ensure that their rights are protected, but we need to do so through the process of negotiation and agreement.

  • Will the Minister now answer the question from my hon. Friend the Member for Glenrothes (Peter Grant)? Why was the Chancellor yesterday, in front of the Treasury Committee, able to give an unambiguous guarantee about the travel and residential rights of bankers that he is not prepared to give to our hard-working fellow European citizens?

  • When the right hon. Gentleman intervened on me in yesterday’s debate, I had a sneaking suspicion that he might be, perhaps inadvertently, misrepresenting the comments of the Chancellor to the Select Committee. Having read the transcript, it is clear that the Chancellor was making it clear that his role was to advocate on this in the policy discussions to come with the Home Office and other Departments. He was not doing as the right hon. Gentleman says.

  • Devolution of Immigration: Scottish Government

  • 6. If he will devolve control over immigration to the Scottish Government as part of his negotiations on the UK leaving the EU. [906692]

  • Immigration is a reserved matter. However, we are working closely with the Scottish Government and we will get the best possible deal for all parts of the United Kingdom as we leave the EU. We will give the Scottish Government every opportunity to have their say as we develop the negotiating strategy.

  • During the European Union referendum, the former Justice Secretary, the right hon. Member for Surrey Heath (Michael Gove), said that Scotland could decide its own immigration policy in the event of Brexit. Was that proposal defenestrated at the same time as the former Minister?

  • As I have indicated, immigration is a reserved matter, but as I have also indicated, we will continue to have discussions with all the devolved Administrations, including the Scottish Government, and there will in due course, as the matter develops, be discussions about where powers should lie.

  • London

  • 7. What discussions he has had with the Mayor of London on protecting London's interests during negotiations on the UK leaving the EU. [906693]

  • London is a great global city and we expect it to continue to be so. I am sure that the hon. Gentleman will join me in welcoming the record-breaking jobs figures for London that were published yesterday—I think they show the lowest rate of unemployment in London in our lifetime. The Secretary of State has already met the Mayor of London and we expect to hold meetings with regions across the UK to ensure that their views are taken into account.

  • I am sure the Minister welcomes the LondonIsOpen campaign led by the Mayor of London, so will he give a commitment today that he will look with an open mind at the case being developed by London’s business community for a work permit system for London that would enable us to continue to recruit the best and the brightest talent from around the world?

  • The precise way in which the Government will control the movement to the UK of EU nationals and people from around the world is something that we will be working on with the Home Office. We will certainly take into account representations from London and other devolved areas, but we clearly need to come up with a policy that works for the whole of the UK.

  • I am holding a Brexit forum next month with local businesses in my constituency involving interests ranging from information technology to the creative industries, retail and property. What is the Minister’s advice to those local businesses about engaging with Brexit? Is it to embrace the challenges and opportunities presented, or is it to follow the lead of the Opposition that is full of pessimism and denial?

  • My hon. Friend is absolutely right that we need to make sure that we embrace the full range of challenges and opportunities in the Brexit process, and we need to engage with business through that process. It is excellent that my hon. Friend is holding a forum and it is good that he is listening to businesses in his constituency. That is certainly something that we as the Department will be doing all around the country.

  • The Government’s shocking record on tackling air pollution is well documented, with almost 10,000 associated deaths in London in just one year. Given that the Government regularly flout EU regulations on air pollution even now, what assurance can the Minister give me that once we exit the European Union, they will not simply abandon all legal protection on air pollution in the capital and, indeed, in the country more widely?

  • The Government are firmly committed to improving the UK’s air quality and cutting harmful emissions. That is why we have committed more than £2 billion since 2011 to increase the uptake of ultra-low emission vehicles, to support greener transport schemes and to set out a national plan to tackle pollution in our towns and cities.

  • I have visited the Institute of Cancer Research. It wants to develop a London cancer hub, which I hope the Government will support, and, if that development happens, it expects to be able to develop two new cancer drugs in five years. One of its concerns is that 30% of its postgraduates come from the European Union. What guarantees can the Minister give that these essential London workers will be able to continue in post, and indeed that the institute will be able to recruit from the EU in the future?

  • I refer the right hon. Gentleman to my earlier answer to the Chair of the Science and Technology Committee. We want to continue to attract the brightest and the best, and we will certainly make sure—I have already engaged with cancer charities and a wide range of voluntary organisations—that we take concerns into account as we have conversations with the Home Office and other Departments about the UK’s future immigration policy.

  • Single Market

  • 8. If he will take steps during negotiations on the UK leaving the EU to ensure continued access to the EU single market for goods, people and services. [906695]

  • The Prime Minister is clear that we want the most open and free access possible. All countries have access to the single market; the question is on what terms and to what extent. We are seeking a bespoke outcome on terms of trading with and operating within the European market. As one of the world’s largest economies, we are confident that we will negotiate the right deal for England, Scotland, Wales and Northern Ireland. We are acutely aware of the significant trading links between Ireland and Northern Ireland, and we are determined to ensure a smooth transition. Disruption is in no one’s interest.

  • The Secretary of State’s answer suggests that nothing has yet been set in stone. With that in mind and given the importance of membership of the single market to the all-Ireland economy, will the Secretary of State commit to exploring ways in which Northern Ireland can remain in the single market, because of its importance to our business, in the eventuality that Britain leaves?

  • What I will commit myself to—I have already committed to this—is extensive work to ensure that we keep an open border between the north and the south, maintain the common travel area, and maintain the most effective open market that we can achieve. Within that, I do not intend to specify any particular outcome at this point.

  • The remain campaign was perfectly clear that we have to leave the single market. [Hon. Members: “Do you mean the leave campaign?”] No, I mean the remain campaign. Are not the really important questions whether the French wish to sell us wine without tariffs, whether the Germans wish to sell us cars without tariffs, and whether the whole of Europe wishes to continue its current level of access to the City?

  • My hon. Friend makes a very important point. When the Prime Minister is at the European Council tonight and tomorrow, she will reiterate what we have said many times already: we want an outcome that is successful for both the United Kingdom and the European Union. As my hon. Friend suggests, if the UK and the EU do not achieve an open, free and barrier-free trading relationship, it will be harmful to many European countries and harmful to European financial stability, and no one wants that.

  • Were we to leave the customs union, the businesses exporting 44% of our exports to the EU would face extra costs for compliance with the rules of origin, which the OECD estimates at 25%. Does the Secretary of State not agree that membership of the customs union is even more important than membership of the single market?

  • As I said earlier, these matters are assessed very carefully, but perhaps the hon. Lady should look at various other countries around the European Union, although they are all smaller than us, so they are not really good models. There is Turkey, which is inside the customs union and outside the single market; there is Norway, which is inside the single market and outside the customs union—actually it manages to trade with Sweden very easily—and there is Switzerland, which is outside both the customs union and the single market. What we are looking for is the best balance to achieve the best outcome.

  • Obviously the Minister cannot speculate on how the negotiations will go, but the one thing we do know is that we have already had a Brexit dividend. With the pound falling by 15.2% against the euro, our exports are so much cheaper and our imports are so much more expensive that more jobs will come into this country and more goods will be produced here, which is a very good thing.

  • It is not for this Minister, at any rate, to comment on what is the appropriate or right level of the pound. However, as my hon. Friend says, this has its disadvantages in terms of the effect on inflation, but some serious advantages in terms of our trading capability, and those are much bigger even than the tariffs that people talk about.

  • Order. I would call the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) if she were standing, but she is not, so I will not.

  • Ah! She is. Enlightenment has dawned.

  • 16. Thank you, Mr Speaker. Leaving the single market in a hard Brexit will be catastrophic, and the Treasury estimates that the cost to the UK economy could be £66 billion, that 80,000 jobs in Scotland could be lost, and that wages could be hit by up to £2,000 a year. The Tory manifesto clearly stated:“We say: yes to the Single Market”.Will the Secretary of State cast doubt aside, and undertake to make good on that commitment? [906704]

  • What I can undertake to do is to ensure that we secure the freest and most open possible trading arrangement with Europe. That is what matters, not titles such as “single market”, “hard Brexit” or “soft Brexit”—all those amazing terms that people come up with. We want the maximum possible access, which will encourage job growth, wealth growth and revenue growth in this country.

  • Membership of the single market means accepting EU laws, having to accept rulings from the European Court of Justice, probably still making contributions to the EU budget, and accepting free movement of people, all of which flies in the face of what the British people voted for in the referendum. Is not the only question of principle that is at stake the question of whether the EU wants to continue its tariff-free trade with the UK or if it wants to commit economic suicide?

  • My hon. Friend makes a good point. Let me reiterate what I said earlier. Our aim is to come up with an outcome that is good for the United Kingdom and good for the European Union, and that is a free trade area with us.

  • EU Environmental Regulations

  • 9. What plans he has for the UK to retain EU environmental regulations after it leaves the EU. [906696]

  • The UK has been a leading player on environmental policy, setting the international agenda on climate change, as demonstrated by the Prime Minister’s commitment to ratify the Paris agreement as soon as possible. As recently announced, Britain will take back control of its laws through the great repeal Bill. Any changes to our environmental regulations after that time will be for the Department for Environment, Food and Rural Affairs and this House to decide. The UK will continue to be a leader on international environmental co-operation.

  • The European directive on bathing water has actually been part of a very good environmental law—water companies have cleaned up our beaches throughout the country, including the south-west—so can we rest assured that we will not row back on environmental laws that are good? Not all environmental laws from Europe are bad.

  • I can see my hon. Friend’s point that it is in the UK’s interest to ensure that we have the cleanest possible bathing water. That issue will be something for future debates perhaps with DEFRA, but we will ensure that we maintain at least the standards that we have maintained in the past. I remind him of our manifesto commitment to be the first generation to leave the environment in a better state than we inherited.

  • Is the Minister not aware that on environmental issues—waste, water and energy—we have such close relationships throughout Europe and we are very dependent on the high level of its technology and co-operation with us? Many people in that sector have read Matthew Parris’s article describing Brexit as the worst decision this country has made since Suez. Does the Minister agree with that view?

  • I do not think now is the time to refight the referendum, on which the hon. Gentleman and I may have been on the same side, but it will be absolutely in our interest to co-operate with our neighbours on matters of the environment that affect us all.

  • 20. Among those who will be most affected by changes to environmental regulations will be the agriculture community. Is my hon. Friend aware of the significant concern among that community at the prospect of leaving the single market, with issues affecting welfare and the environment as well as tariffs? Can he assure the House that agriculture will not be used as a makeweight in the negotiations with other interests and that there will be close co-operation with DEFRA colleagues in relation to that? [906711]

  • Absolutely. I can assure my right hon. Friend that there is close co-operation between my Department and DEFRA and indeed there have been a number of productive meetings between Ministers in our Department and agricultural interests, including the National Farmers Union and agri-business representatives from the whole of the UK.

  • Employment and Workers’ Rights

  • 11. What discussions he has had with Cabinet colleagues on employment and workers’ rights deriving from EU legislation and rulings of the European Court of Justice being given domestic effect upon the UK leaving the EU. [906698]

  • A large component of the people who voted to leave the EU could be characterised as the British industrial working class. It is no part of my brief to undermine their rights—full stop. As a Government, we have been clear that we will do nothing to undermine workers’ rights. All law in this area at the time of exit will be brought under UK law as part of the great repeal Bill, ensuring continuity.

  • The 2000 part-time workers regulations implemented the EU directive that guarantees that the rights of part-time workers are equal with those of their full-time colleagues. Will the Secretary of State guarantee that those rights will not be removed or diluted in any way when the UK leaves the EU?

  • As I said, all law will be incorporated—no exceptions.

  • On that point, employment law is a devolved matter in Northern Ireland, so under the great repeal Bill will that competence be automatically devolved, or will it be held in some sort of holding room here before it is devolved?

  • The hon. Gentleman raises an important point. That is why I said last week when we were talking about the great repeal Bill that we will have extensive discussions with all the devolved Administrations to ensure that each appropriate piece of law goes to the right place.

  • Scottish Universities

  • 15. Whether he has met representatives of Scotland's universities to discuss the implications of the UK leaving the EU. [906703]

  • We have engaged with a number of higher education institutions, including groups such as Universities UK. Over the next few months, the Department will continue to engage with key stakeholders in business and civil society, including universities, through a series of round tables, bilaterals and visits throughout the UK. We have been clear we want to create an environment in which the UK as a whole can continue to be a world leader in research, science and tertiary education.

  • There are 4,512 students at the University of Edinburgh from other EU countries and several thousand other EU nationals engaged in research, teaching and administration at the university. I ask Ministers again: do they not realise that the refusal to guarantee the status of those people in our community is placing in jeopardy much of the work of that great institution and is causing unnecessary anxiety in our community?

  • I refer the hon. Gentleman to the answers I gave earlier on the Government’s full intention to secure the rights of EU citizens in the UK and UK citizens in the EU. The Government recently announced that EU students applying for a place at an English university or further education institution in 2017-18 will continue to be eligible for student loans and grants for the duration of their course, and I believe the Scottish Government have made the same guarantee.

  • Article 50

  • 17. What the timetable is for the UK triggering article 50. [906705]

  • The Prime Minister has made it clear that she will trigger article 50 by the end of March 2017. It is in everyone’s interests that we take time to establish a UK approach and clear objectives for negotiations. Equally the Prime Minister has been clear that there will be no unnecessary delay. We have also been clear that we will trigger when the time is right for Britain and we will certainly, where possible, give people and businesses in Britain and other European countries the time to consider for themselves what the outcome will amount to. That is what we are doing.

  • Does my right hon. Friend agree that this Government are absolutely right to deliver the Brexit that 17.2 million people voted for, and to do it in a responsible fashion that allows it to deliver the great deal for Britain that we know it is going to deliver?

  • That is exactly right: it is what the Prime Minister said and it is what we intend—and I have to say that I doubt it is what the Opposition intend.

  • Is my right hon. Friend aware that in the last 24 hours the House of Lords has reported that there should be a vote in this House

    “to debate and approve the negotiating guidelines, at least in outline”?

    Does he accept that Parliament as a whole, including the House of Lords, has to not only respect, but also accept, the verdict of the British people and furthermore that it is for this elected House to determine its own procedures, standing orders and votes?

  • My hon. Friend is right: we should respect the will of the British people. I have not had a chance to look at the Lords report yet, but I will comment on it when I do.

  • As my right hon. Friend will know, a very important court case has been heard in the High Court in the last week. What plans has he drawn up, including legislation, in the event that he loses that case and that therefore it will be this place, including the House of Lords, that will trigger article 50, not the Government using the royal prerogative?

  • Let me say gently to my hon. Friend that Ministers do not comment on court cases in progress.

  • Topical Questions

  • T2. If he will make a statement on his departmental responsibilities. [906678]

  • Last week I updated the House on our progress towards leaving the EU. I have been clear that the Government’s overarching aims are bringing back control of our laws to Parliament, bringing back control of decisions over immigration to the UK, maintaining the strong security co-operation we have with the EU, and establishing the freest possible market in goods and services with the EU and the rest of the world.

    The great repeal Bill will end the primacy of EU law. It will minimise uncertainty and return sovereignty to the institutions of the United Kingdom, because that is what the referendum was all about—taking control.

    We will work to ensure the UK’s exit from the EU serves the interests of the whole country, from citizens to businesses. We will reap the opportunities exit provides all over the world and deliver an orderly and smooth transition, but I have been clear, as has the Prime Minister, that we will not be providing a running commentary on the negotiations; that would not be in our interests. Parliament will however be fully and properly engaged, as will the devolved Administrations.

    We want to build a national consensus around our position and discuss our options with a range of stakeholders. Last week, I committed to a series of debates so that the House can air its views and we look forward to engaging with the new Select Committee. I congratulate again the right hon. Member for Leeds Central (Hilary Benn) on his election as Chair of that Committee.

  • From the Mill bakery next door to my constituency office to the wards of Kingston hospital, thousands of EU citizens work and live in Kingston, and they are very welcome. What process does my right hon. Friend have in mind for ensuring their rights are protected post-Brexit, as well as the rights of British ex-pats living in the EU, something that none of the 27 Heads of State is yet to guarantee?

  • As the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker) has made clear already, we want to be able to guarantee the rights of all those European migrants in the UK. Many of them are already in the position of having indefinite leave to remain, or will have by the time we leave in two and a half years’ time or thereabouts, so we are talking about a small fraction of those people, but nevertheless we take this incredibly seriously and we will seek to get the agreement with the other European countries that we will uphold their rights and British citizens’ rights abroad as soon as possible.

  • I don’t know about you, Mr Speaker, but the British people have had enough of being misled over these issues. Will the Secretary of State tell the House and the country whether his plan—as it evolves—will involve this country agreeing to continue to make payments to the European Union after we have left it?

  • The hon. Lady had a great deal of trouble keeping a straight face while she was asking that question. That is because she knows it is one that I am not going to answer.

  • I look forward to being able to ask the Secretary of State a question with a straight face in anticipation of getting a straight answer. Could he perhaps try to tell the House and the country how much he estimates will need to be spent on settling legacy commitments prior to the completion of Brexit? The Financial Times estimates—this is not a leak; it is an analysis—that our historical liabilities could cost up to £20 billion.

  • I have no trouble keeping a straight face when dealing with the Opposition. I am afraid that, from time to time, they do things that are seriously not in the country’s interests. Let me quote a rather more authoritative source than the Financial Times. The European Commission has guidelines on how it handles negotiations and what it puts in the public domain beforehand. It states:

    “The negotiations and their texts are not themselves public. This is entirely normal for trade negotiations, not just those involving the EU. There are several reasons for this. A certain level of confidentiality is necessary to protect EU interests and to keep chances for a satisfactory outcome high. When entering into a game, no-one starts by revealing his entire strategy to his counterpart from the outset: this is also the case for the EU.”

    The Opposition are trying to put us in a disadvantaged position with the European Union, and that is not in the national interest.

  • T3. Are opportunities being identified for British business that will arise from our departure? [906679]

  • My right hon. Friend raises an important point. Many hon. Members are seeking to identify the challenges associated with exiting the European Union, but there will also be a great number of opportunities, not least because we will be in charge of our own affairs and our own trade policy. For that reason, my Department and the Department for International Trade are engaging regularly with businesses not only in the United Kingdom but around the globe.

  • T4. In Camden, where I live, the Back to Business and FastForward programmes benefit enormously from the European social fund. Those programmes create a more inclusive labour market employing 400 people in my constituency, many of whom are disabled. Will the Minister outline what plans he has to protect the funding for such programmes, which promote social inclusivity? [906680]

  • Most EU funds will be guaranteed post-departure by the Treasury, as we said in August. After that, the decision will be one for the British people, the British Parliament, the British Government and the relevant Department. I am sure that they will take on board what the hon. Lady has said.

  • T5. Does the Secretary of State agree that the UK will continue to be a leading global finance centre outside the EU? [906683]

  • Absolutely. We do not think that there is any doubt about that. London has once again been ranked as the No. 1 global finance centre in 2016. The next highest ranking EU location was not even in the top 10. Being part of the EU market is partly responsible for our ranking, and we are looking to maintain the best possible terms of trade with the EU market, but that is not the only factor. London clearly leads the world with the depth and expertise of its labour force, the breadth of its knowledge, services and infrastructure and its wide array of links to markets around the world. It is in the interests of the UK and the EU that that should continue.

  • T7. I did not quite catch the Minister’s response earlier, so will he tell us again what priority he is giving to ensuring that universities and research funding more broadly will not be adversely affected by Brexit, and that current research protocols will be protected? [906685]

  • The hon. Lady makes an important point. As I said earlier, we want the UK to remain a scientific superpower. We have already seen significant guarantees from the Treasury in the lead-up to 2020. It will be in the interests of future UK Governments to ensure that we remain one of the world’s scientific leaders.

  • T6. My right hon. Friend may be aware that according to Cornwall Council’s own figures, only 1,300 jobs will be created from a £350 million EU spend between now and 2020. Does he agree that a much more tailored approach to regional funding could create more jobs more quickly for Cornwall? [906684]

  • My hon. Friend makes an extremely important point. As I indicated previously, the Chancellor has effectively guaranteed structural funding to 2020. It is important that such programmes deliver value for money and to that end the Government will liaise closely with the devolved Administrations and local authorities such as Cornwall Council.

  • Given the Secretary of State’s answer to Question 1 on financial services, I am sure he is well aware that Merrill Lynch has 1,000 staff in Chester and that Santander has more than 1,000 staff in Bootle. However, he has staff only in London and Brussels. Will he therefore commit to base staff from his Department in every region of England so that businesses can share their views directly with them?

  • This is not about the allocation of staff. If I put one staff member in every region, only one will be left in Whitehall. The simple truth is that we have been around from Belfast to Blackburn to the port of Tilbury and many other places in the UK and will continue to do so throughout the process, both up until the point at which we trigger article 50 and thereafter.

  • T8. Yesterday’s employment figures show that this Government’s successful policies are leading to more people being in employment than ever before. The NHS relies on thousands of EU nationals, not only highly skilled individuals, but cooks, consultants, cleaners and porters, so does the Secretary of State want to reassure the NHS that it will be able to continue to employ those EU nationals after Brexit? [906686]

  • I reiterate that my Department’s task is to bring decisions back to the United Kingdom so that the British Government and the British Parliament can make them in the interests of the United Kingdom. My right hon. Friend can be absolutely sure that those interests will not be interpreted into somehow denying staff to the NHS—just the reverse.

  • The Secretary of State said yet again that there will be no running commentary on the negotiations. Yesterday, the Chancellor announced plans to protect financial services workers over other EU nationals. Did the Secretary of State agree that strategy with the Chancellor or is it just proof that the Government do not have a clue what they are doing?

  • As I have said several times in debates that the hon. Gentleman has attended, I will make as much information public as possible without prejudicing our negotiating position. That is what he is witnessing.

  • The hon. Member for Stafford looks very happy. Presumably, like me, he is celebrating Arsenal’s 6-0 victory last night.

  • I am, Sir. Will the Secretary of State reassure many factories in the west midlands and my constituency that the smooth, tariff and hassle-free operation of supply chains is of the utmost importance to him?

  • I will indeed. We have been studying in some detail the effect on integrated manufacturing operations across borders to ensure that they are not jeopardised, whatever the outcome.

  • In a written answer to me yesterday, the Secretary of State for Wales talked about the full engagement of the devolved Administrations in Brexit negotiations. The best way to protect Wales’s interests would be to put the First Minister in the Government’s negotiating team. What good reason is there not to do so?

  • I met the First Minister and the Finance Minister on Tuesday to talk about Wales’s interests. That is how we will do it.

  • Companies in the supply chain to the motor industry, such as Automotive Insulations in my constituency, have benefited from multinational investment in the sector in recent years. What recent discussions have taken place to reassure the sector that the UK is a great place in which to invest?

  • The Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker) was with sector representatives just a day or two ago and Nissan went to see the Prime Minister just this week.

  • People in Scotland are scared about being left on a relatively small island without the protection of the EU and with perpetual Tory Governments in charge of employment law. Will this Government commit to fully devolving employment law so that we can better protect our workers?

  • I have to say that it was this Minister who gave the commitment that we would not undermine or in any way reduce the protection available to British workers’ employment rights in all the nations of the United Kingdom. Tomorrow, I am meeting Mike Russell, the Scottish National party’s representative, in Glasgow to discuss this sort of thing.

  • Will Ministers reassure farmers in my constituency that in reviewing agricultural and environmental regulations they will have at the forefront of their minds the need for our farmers to produce the high-quality food that they do in a profitable way, just as any other business does?

  • My hon. Friend makes an extremely important point, and of course one benefit of leaving the European Union is that not only will we be able to adhere to stringent environmental requirements, but we will be able to design those so as best to suit the needs of this country and the agricultural industry.

  • Both Nissan and Jaguar Land Rover have made it clear that access to the single market is crucial to their future investment decisions in this country. What discussions has the Minister had with those companies to give them reassurance that access to the single market is the Government’s highest priority?

  • More important than me, the Prime Minister had a meeting with Nissan only this week, and the communiqué that came out after it was extremely positive on both sides.

  • Brexit has been widely welcomed by leaders of the fishing industry in the Grimsby-Cleethorpes area. The industry was badly let down in the original negotiations in the 1970s. Can my right hon. Friend assure me that that will not be the case on this occasion?

  • My hon. Friend makes an extremely important point. The interests of the British fishing industry are at the forefront of the Government’s mind. Indeed, we have already had meetings with the Scottish fishermen and had round-table meetings at the Department for Environment, Food and Rural Affairs.

  • Finally and extremely briefly, Jim Shannon.

  • In Northern Ireland, my constituency has some of the best export businesses in agri-food and fishing, and they need attention. Minister, may I invite you to my constituency to hear what they have to say?

  • I would be delighted to visit, as I would be to go to other parts of the country that have an important fishing industry.

  • Business of the House

  • Will the Leader of the House give us the forthcoming business?

  • The business for next week will be as follows:

    Monday 24 October—Second Reading of the Health Services Medical Supplies (Costs) Bill.

    Tuesday 25 October—Second Reading of the Criminal Finances Bill.

    Wednesday 26 October—Opposition day (10th allotted day). There will be a debate on Concentrix, followed by a debate on Yemen. Both debates will arise on an Opposition motion.

    Thursday 27 October—A motion to approve the first report 2016-17 from the Committee of Privileges, followed by a debate on a motion on the Youth Parliament Select Committee report on young people’s mental health. The subject for this debate was determined by the Backbench Business Committee.

    Friday 28 October—Private Members’ Bills.

    The provisional business for the week commencing 31 October will include:

    Monday 31 October—Second Reading of the Cultural Property (Armed Conflicts) [Lords] Bill.

    Tuesday 1 November—Consideration of Lords amendments.

    Wednesday 2 November—Opposition day (11th allotted day). There will be a debate on an Opposition motion. Subject to be announced.

    Thursday 3 November—Business to be nominated by the Backbench Business Committee.

    Friday 4 November—Private Members’ Bills.

    I should also like to inform the House that the business in Westminster Hall for 17 and 24 November will be as follows:

    Thursday 17 November—A debate on the first report from the Environmental Audit Committee on soil health.

    Thursday 24 November—A debate on the first report from the International Development Committee on UK implementation of the sustainable development goals.

  • When I was first appointed to this job, I was told, “There’s no power.” I am therefore pleased that after I raised the issue of Marmite last week, we got a result by the end of the day. Bob Dylan has been awarded the Nobel prize for literature but has not contacted the academy, so we say to Bob, “Please contact the academy.” I thank the hon. Member for Perth and North Perthshire (Pete Wishart) for his kind comments last week. As a composer, perhaps he can spot the subliminal messages to Bob.

    We are governed by a Government of urgent questions and, if we are lucky, statements. Now we are to have a statement on the crisis in the funding of pharmacies. However, it took an urgent question by my hon. Friend the Member for Barnsley East (Michael Dugher), which you granted, Mr Speaker, to get the Minister to come to the House today. May I ask the Leader of the House, why a statement and not a debate? The Minister responsible has said that the Government have proposed a way to reduce the £2.8 billion currently paid to the sector, but that the Pharmaceutical Services Negotiating Committee has rejected it. In February, the Health Secretary said that

    “pharmacists have a very important part in the future of the NHS.”—[Official Report, 11 February 2016; Vol. 605, c. 1775.]

    So why the cuts?

    On 25 April, the Health Secretary commended the important role

    “that pharmacies can play in solving absolutely any problem that the NHS faces.”—[Official Report, 25 April 2016; Vol. 608, c. 1170.]

    And in July this year, he said that

    “this is the right moment to rethink the role of pharmacies, and consider whether we can be better at tapping into the incredible skills that pharmacists have as trained clinicians, which I do not think we make the most of.”—[Official Report, 5 July 2016; Vol. 612, c. 733.]

    So why the cuts? The Health Secretary is a jokerman. If it’s all good, why is he cutting the budget for the sector, much of which is made up of small businesses on which many communities rely as a lifeline?

    For the second time this week, we have government by urgent question. Only last week I mentioned the reversal of the economic policy of the right hon. Member for Tatton (Mr Osborne), and here comes another reversal. May we have a full debate, not just a statement or an urgent question, on the sale of annuities? Dragged to the House on a U-turn so spectacular that we cannot see around the bend, the poor Minister responsible said that after extensive research, it was clear that a secondary market would not be able to offer this scheme. There were many unanswered questions. For instance, when did the Government first do the extensive research? Did the former Chancellor not look at the evidence in March 2015, or was this just a means of stimulating the economy using people’s hard-earned savings while pursuing austerity measures? The answer, Mr Speaker, is blowin’ in the wind.

    Will the Leader of the House make a statement to explain what the Secretary of State for International Development meant when she said that the Government cannot reveal their hand on negotiations to exit the EU because one does not do so when one plays poker? Poker, Mr Speaker? Are the Government gambling with the lives of the British people? Even Margaret Thatcher had a negotiating position. It was “No, no, no”, or “I want a rebate”. The Government say that they cannot reveal a negotiating position; we say that that is basic accountability. The only answer from the Government is that a hard Brexit’s a-gonna fall.

    The debate or statement on airport expansion in the south-east, which was scheduled for next week, has now been postponed yet again. The Prime Minister made her intentions clear, but only in a response to the hon. Member for Bedford (Richard Fuller) at Prime Minister’s questions. She said that

    “this Government will take a decision, but then a formal process has to be undertaken. The Government will identify their preferred site option. ?That will go to a statutory consultation, and then the Government will consider the results of that consultation”.—[Official Report, 20 October 2016; Vol. 615, c. 802.]

    I think that is Davies part 2. What of the timetable for implementation—the second part of the question that was not answered—and the further work on noise pollution, environmental issues and compensation from Davies part 1? Will those take place? Members of the Cabinet are on different sides of the debate—they are all tangled up in blue.

    I want to place on record my thanks to the former Prime Minister and his wife Samantha for their unstinting support for epilepsy charities, much of which goes unnoticed.

    Tomorrow, we remember the 50th anniversary of the Aberfan disaster in which 114 children and 28 adults lost their lives. I hope that wherever a flag is flown in our one nation tomorrow, it will be at half-mast.

    Our colleague, friend and supporter of the vulnerable, Jo Cox, gave great service to her country through her public service, and so rightly deserves a plaque in this Chamber.

    Jean, Gordon and Kim Leadbeter and Brendan Cox should not have had to bury their daughter, sister and wife, and her adored children should not have had to grow up without their mother. Our love to them all. May she rest in peace.

  • May I first deal with the two very serious points that the hon. Lady raised at the end of her remarks? I am sure that every single Member of the House will want to mark the appalling tragedy in Aberfan when the anniversary is commemorated tomorrow. None of us can ever forget—even if we were fairly young children at the time—the searing impact of the photographs and news coverage of what happened there. The images and the visible grief of the families are still clear in the memory. So too, as my right hon. Friend the Prime Minister said yesterday, is the fact that those who might have been able to prevent the tragedy in the first place did not act in fulfilment of their responsibilities and did not, until forced to do so, own up to their responsibilities until we had an independent inquiry some years later.

    Solidarity with Aberfan will unite the House, as will sympathy with the family of our late colleague, Jo Cox. I know that the matter of the commemorative shield is very high on your agenda, Mr Speaker. I pay tribute to the Parliament choir, which exists as an all-party parliamentary group and, with the agreement of Jo’s family, has commissioned a new choral composition that will be performed in her memory at a forthcoming concert.

    On the political points, I was not sure whether the hon. Lady was complaining about there having been too many urgent questions. I felt that there was a certain retrospective character to her comments. On pharmacies, as she knows, there will be a statement by the Under-Secretary of State for Health, my hon. Friend the Member for Warrington South (David Mowat), after business questions this morning, in which he will set out in detail the Government’s approach to community pharmacies. It is very important that we ensure not just that the money going to the national health service is sustained and increased, as the Government are doing, but that every last penny that goes to the NHS is spent to give patients the best possible value. We need to look at community pharmacy within primary, secondary and tertiary health care to ensure that we get the best possible value out of every penny of precious NHS funding that is spent.

    On the hon. Lady’s point about the sale of annuities, as my hon. Friend the Economic Secretary to the Treasury said yesterday, the Government made a thorough and honest assessment of the prospects for a genuine market in secondary annuities, and we reluctantly came to the conclusion that to have gone ahead with the measures originally envisaged would not have been of benefit to the very group of consumers who were looking to a secondary annuities market to provide them with some relief, because the products were simply not going to be available to give them the additional safeguards and opportunities that they were seeking.

    I struggle to understand the Opposition’s position on the negotiating position that the Government are adopting for the forthcoming European Union negotiations. I would have thought that whether we are talking about politics, business or any other walk of life, if we are about to start a very important and wide-ranging negotiation, the last thing that we should do is advertise the detail of our negotiating position so that the people with whom we are negotiating can see everything spread out in front of them. The Opposition need to wake up and realise that the people who would be most delighted if they got their way are the people with whom we will be negotiating across the table.

    Finally, on the hon. Lady’s point about airports, as the Prime Minister said, the Government will make an announcement in the near future about which of the options proposed in the Davies report we will adopt. The Davies report said that any of the three options that it proposed would be deliverable and sustainable. The Government will, of course, comply with the requirement of statutory consultation following that announcement, which the Labour Government put in place. That helps to account for the delay about which she is now complaining.

    I have to say that if there is one thing that is blowin’ in the wind this morning, it is the coherence of the Labour party’s ideas about policy. I do not know whether Labour Members are sleeping well at night, but it is very clear to me that there is no place they’re going to.

  • Order. As usual, a very large number of hon. and right hon. Members are seeking to catch my eye. As colleagues will know, my normal practice is to call everybody on these occasions, but there are exceptions. Today, there is a statement on community pharmacy to follow, and there are two very heavily subscribed debates to take place under the auspices of the Backbench Business Committee. Therefore, it may not be possible to call everyone today, but if I am to have any chance of doing so, there is a premium upon brevity, which will be brilliantly exemplified by Mr Philip Davies.

  • May we have a statement urgently from the Government about the farce of allowing the child refugees into the country? The Home Office has admitted that two thirds of successful applicants as child refugees are actually adults. Today, Jack Straw has said that we need to do better on age checks, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), did when he was the Immigration Minister. That is a serious concern to many of our constituents. May we have an urgent statement on what the Government are going to do to make sure that the child refugees are actually children?

  • We do work closely with the French authorities to ensure that all those applying to the UK do actually qualify under the Dublin arrangements, which include the requirement for children to be under 18. We have to carry out the checks in a way that complies with High Court judgments on the matter. As my hon. Friend knows, the British Dental Association has taken the view that to carry out X-rays of claimants’ teeth would not be a reliable indicator of age, as well as being, in its view, unethical.

  • May I also thank the Leader of the House for announcing the business for next week? I join him and the shadow Leader of the House in the tributes to Aberfan. Today is a very special day, with the by-election in Batley and Spen, and we recall all the horrific events around the murder of Jo Cox.

    Today, we find that the Prime Minister is off to Brussels for her first trip with EU leaders since she became Prime Minister. She is advocating something I think she describes as a “smooth Brexit”. May I suggest that, in our debates, we get our terms absolutely right for Brexit? We have hard Brexit and soft Brexit. I want to suggest crispy Brexit, soggy Brexit and maybe “I can’t believe it’s not Brexit.”

    The serious point is that we still have not had a debate in Government time on their plans to leave the European Union. We have had one in SNP time and one in Labour party time. We heard the Lords EU Committee say yesterday that the issue must be properly debated and scrutinised, and even suggest that we have a debate in advance of article 50 being triggered. So can we now—I am going to ask the Leader of the House this every week—have solid plans and proposals for when this House will get to debate what the Government intend to do?

    The redrawn boundaries for Scottish Members of Parliament were produced this morning, and they would reduce the number of MPs from Scotland from 59 to 53. SNP Members would like to reduce that number to zero when we gain our independence and sovereignty, but in the meantime, while we are still here, I would like the opinion of the Leader of the House on one issue—I saw that he was in the debate briefly yesterday. How can it possibly be right that, in these Houses of Parliament, we now have more parliamentarians appointed by a Prime Minister than elected by the people? He is making that worse.

    Finally, tomorrow we have the private Member’s Bill tabled by my hon. Friend the Member for East Dunbartonshire (John Nicolson) on a very important issue. The “Turing Bill” seeks to posthumously pardon thousands of gay men who were caught up in all the anti-homosexual legislation. However, we have heard that the Government are withdrawing support for it, in favour of an amendment in the House of Lords. It should be here in the Commons that the issue is properly considered, by elected Members. All that the Government’s action will do is lead to the withdrawal of support and further undermine the credibility of private Members’ Bills. Will the Leader of the House rethink that decision and make sure that the Government support the private Member’s Bill tomorrow?

  • There have already been many opportunities to hold Ministers to account for the Government’s approach to the European negotiations. We have just had questions to my right hon. Friend the Secretary of State for Exiting the European Union, who has also made a number of oral statements to the House about that since the referendum.

    I am slightly surprised that the hon. Gentleman should appear to denigrate the importance of Select Committees in this House and the other place. It is simply wrong to believe that only a debate in plenary session qualifies as scrutiny. In my experience, having served as a Minister for more than six years, Select Committees can often be much more demanding on Ministers in terms of preparation and thinking through one’s policy. We should respect the importance of those Committee hearings. My right hon. Friend the Prime Minister will give an oral statement next week about the European Council, and that will provide yet another opportunity for such questioning.

    On the hon. Gentleman’s point about his hon. Friend’s Bill, the Government very much share his wish to see pardons given to people who were convicted of consensual homosexual acts when those were criminal offences. The Government are proposing that we should legislate both to provide posthumous pardons for people who are now deceased and to make it clear that those who are still living can apply under a statutory deregistration scheme for their conviction to be deleted from the record, so that they would then qualify for a pardon. The reason we cannot support his hon. Friend’s Bill is that it does not take account of the need, in respect of people who are now living, to check that the offence of which they were convicted was genuinely consensual and did not involve, for example, a sexual offence against a minor, which would still be a breach of the criminal law today.

  • What is now required, in each case, is a short question without preamble and a characteristically pithy reply from the Front Bench.

  • Last week, Briggs Equipment celebrated its 10th anniversary. To mark this occasion, it held an event where I got to meet 14 new apprentices. Will my right hon. Friend join me in congratulating Briggs on its anniversary and wish the new apprentices the best of luck with their new careers; and may we have a statement on the Government’s 3 million apprenticeship target?

  • I am delighted to hear the news from my hon. Friend’s constituency. The Government regard their 3 million apprenticeship target as a key element in increasing the skills and productivity of our nation. As the evidence from her constituency shows, sensible businesses realise that developing apprenticeship schemes is in their own commercial interest as well.

  • Last year, the UK received £5.6 billion from the European Investment Bank for investing in skills, housing, schools and infrastructure across the country. With the UK currently languishing at the bottom of the G7 productivity league table, may we have an urgent debate on the impact of leaving the European Union and potentially losing our stake in the European Investment Bank on the UK’s productivity, and the Government’s plans to address this?

  • All these things will of course be elements in the negotiations. The Government have made it very clear that their industrial strategy is intended to address the very deep-seated, long-running productivity problem that we have.

  • Will my right hon. Friend find time for a debate on returning veterans with mental health issues? I recently met representatives from Care after Combat, which has a very good success rate in turning round the lives of people who unfortunately end up in prison.

  • The Government want to do all within our power to make sure that those who have served, and currently serve, in the armed forces have the best possible access to treatment for mental health problems, and that appropriate action is taken to prevent people from developing them in the first place. I can assure my hon. Friend of the commitment of Defence Ministers and Health Ministers to what he advocates.

  • I thank the Leader of the House for confirming the time allocation for the Backbench Business Committee on 3 November. Is there any element of protection for the time allocated on 27 October to the debate on the Youth Parliament’s report on young people’s mental health? May I also ask for an indication of any time allocations for Monday 7 November and Tuesday 8 November? I am surprised, by the way, that the hon. Member for Perth and North Perthshire (Pete Wishart) forgot to mention ready Brexit, but not to worry.

  • The time next week will be protected. I shall write to the hon. Gentleman about the other dates.

  • I remember the days when Labour Members used to complain about how much time we spent on Europe. Really, Minister, is it not about time that we stopped banging on about Europe and just got on with it?

  • I note my hon. Friend’s advice that we should stop banging on about the subject. If that is a belated addition to his birthday wish list, I would be happy to oblige. As a Government, we need to prepare our negotiating position thoroughly and then get the best and most ambitious deal possible on behalf of all the people of the United Kingdom.

  • The Letters Page, a literary journal that invites submissions in the form of hand-written letters, is edited by the author Jon McGregor and creative writing students at the University of Nottingham. It is usually published three times a year as a downloadable PDF file, but the eighth edition is due to appear on 2 November in print as a limited edition boxset. Ahead of next Tuesday’s Nottingham in Parliament Day, will the Leader of the House join me in congratulating The Letters Page on that momentous event, and does it not further confirm Nottingham’s status as a UNESCO city of literature?

  • I am delighted to hear about the literary creativity of the hon. Lady’s constituents and of the people of Nottingham. It is good to hear that the great literary tradition of D.H. Lawrence has not been extinguished but is alive and flourishing today.

  • Sepsis currently claims about 44,000 lives in the UK every year. May we have a statement on the Government’s newly announced public awareness campaign, so that we can establish how Public Health England plans to work with experts such as the UK Sepsis Trust to make sure that the campaign is as successful as possible?

  • Everyone in this House will want to take note of recent shocking cases where people have not had sepsis diagnosed early enough for effective treatment to be given. It is, clearly, deeply unsatisfactory that there should be any such case. Health Ministers will certainly want to ensure that there are improvements where they can be achieved, and I will draw their attention to my right hon. Friend’s request for a debate.

  • May we have a debate on palliative care? Kilbryde hospice in my constituency was recently opened by the First Minister of Scotland. It is a crucial resource for those most in need at the end of their lives, and such facilities should be supported right across the United Kingdom.

  • I, like the hon. Lady, demonstrate support when I can for the palliative care services in my constituency. One of the important improvements in attitudes towards healthcare in recent years is the acceptance that people who are in the final stages of their lives are entitled to be treated not just for their physical symptoms, but with the respect and dignity that is due to the whole person.

  • Last week, I hosted a meeting of my constituents in St Michael’s Gate in Peterborough, many of whom will be evicted shortly as a result of a deal between Peterborough City Council and the north London estate agent, Stef & Philips. They will be replaced by homeless people from the council’s homeless list, so may we have a debate on housing benefit regulations and the dubious and morally repugnant business model that prioritises housing benefit income for these people, rather than the interests of my long-standing constituents?

  • I am concerned to hear about what is happening in Peterborough. If my hon. Friend would care to provide me with the details, I will draw them to the attention of the responsible Minister straightaway.

  • The total number of deaths caused in America by the side effects of opioid drugs has now grown to a larger figure than the total number of people killed there by road traffic accidents, guns and terrorism. Given that the use of those drugs is increasing in this country, and given that our usage of them amounts to a third of that throughout the continent of Europe, may we debate the terrible dangers that result from medicines that are more deadly than the maladies?

  • The hon. Gentleman has looked at drug use and drugs policy for many years, so I listen with some respect to what he says. There will be the opportunity to question Home Office Ministers about this on 31 October, and I suggest that he take advantage of that opportunity.

  • May we have time in this Chamber to debate the rural economy? There is never enough time in Back-Bench debates or in Westminster Hall to discuss the rural economy, which will be vital to the United Kingdom when we leave the European Union. May we therefore have time to do so in this Chamber?

  • Although there will be opportunities to question my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and her Ministers, my advice in the short term, given the number of hon. Members from all parts of the House who represent rural or partly rural constituencies, is to make an application to the Backbench Business Committee, because there should be strength in numbers.

  • May we have a debate on the international freedom of the press, just in case the BBC faces the closure of its Moscow bureau bank accounts by a state-owned bank in Russia—something that happens in authoritarian states but would never, ever happen in a liberal democracy such as the United Kingdom?

  • We all want to keep a close eye on action that the Russian authorities may take towards free media and, for that matter, civil society organisations inside their own territory. There is a history of the Russian authorities causing difficulties for journalists, broadcasters, civil society organisations and the British Council. That is something to be deplored at every opportunity.

  • Following my debate in Westminster Hall yesterday on the Ministry of Defence future accommodation model, I have been inundated with concerned messages from military families overnight. Will the Leader of the House therefore support my request for a wider debate in the House on the future and security of military housing provision for our armed forces families, as part of our commitment to the armed forces covenant?

  • My hon. Friend spoke, as she always does, with great vigour and on the basis of significant knowledge in the debate yesterday. She will have had an answer at the end of the debate from the Under-Secretary of State for Defence, my hon. Friend the Member for Milton Keynes North (Mark Lancaster), who has responsibility for veterans. The Government will publish its proposals for defence estates later this year, and that, I am sure, will provide Members with further opportunities to debate this subject.

  • The Swansea bay tidal lagoon project would pave the way for £15 billion of investment in tidal lagoons, including one planned for the Solway firth in my constituency that could provide electricity for 1 million homes. We need tidal power as part of our future clean energy. When the Government’s review of tidal lagoon technology reports next month, may we have a ministerial statement in support of that technology?

  • As the hon. Lady says, the results of that review are due to be reported in the next few weeks. I will make sure that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is aware of her request for a statement on the matter. I am sure that there will be opportunities in the House to debate these matters and for her to raise her concerns.

  • May we have a debate on the process used to review the green belt? In Greater Manchester, the call for developers to submit expressions of interest in building on the green belt has resulted in vast swathes of green-belt land becoming the subject of speculation. That is causing great distress and anxiety for thousands of residents.

  • The Government’s national planning policy framework makes it clear that green-belt land should be used for development only in the most exceptional circumstances. If a local authority wants to make such a case for exceptionalism, it has to provide the justification for that when it submits its draft local plan for examination in public, at which point an independent inspector tests rigorously the arguments that the local authority has made. These matters are, rightly, dealt with at arm’s length from central Government Ministers, but that is the procedure that my hon. Friend and his constituents might want to look at.

  • Will the Leader of the House find time for a debate or possibly a ministerial correction on the subject of how difficult, or otherwise, it is for EU countries to export to Norway? In an earlier exchange, the Brexit Secretary said that it was very easy for Sweden to export to Norway. However, I am indebted to L. Alan Winters, professor of economics, who has said that one of the messages from a conference held in Sweden earlier this week was that

    “Swedish exporters find exporting to Norway far more troublesome than exporting within the EU.”

  • The right hon. Gentleman will have other opportunities to challenge my right hon. Friend the Secretary of State for Exiting the European Union. I must say that I may be responsible for many things, but commercial relations between Sweden and Norway are not one of them.

  • Will the Leader of the House, in his unique role, review the Government’s approach to their responses to Select Committee reports and speed them up? The Women and Equalities Committee has been waiting since May for a response to its gender pay gap report, and before that we waited four months for a response to our important report on transgender people.

  • I am grateful to my right hon. Friend for giving me notice of her question. I have looked into this matter. The report she mentions involves the responsibilities of a number of Departments, and I think that she received a letter from the Minister for Women and Equalities to alert her to the fact that there would probably be a delay in making a response. However, I share my right hon. Friend’s disquiet, and I certainly do not regard it as defensible that her Committee should have had to wait so much longer than the normal period. I will draw her concern to the attention of the Ministers responsible, and I hope that we will be able to provide her Committee with the Government response to which it is entitled as rapidly as possible.

  • Fifty years ago, I was a newly appointed young lecturer at Swansea University, and I remember the deeply dark and wet day of Aberfan and the deaths of all those children. May I associate myself with the comments that have been made about keeping them in our thoughts? We should have a discussion in the House about how we look after the people involved—the families, the supporters and the communities—when such tragedies happen. It took a long time to respond positively to that terrible tragedy.

  • The hon. Gentleman makes a very fair and reasonable point. As he rightly says, it is often some time after the immediate period of shock and grief that the full traumatic impact of what people have lived through and what they have lost bears down on them. An effective response has to involve not just statutory services but—this is often most effective—friends and neighbours in the neighbourhoods where the people themselves live. I suspect there are lessons that can be learned from successes and failures in responding to various tragedies that have taken place over the years. I hope that he has the opportunity, possibly through the Backbench Business Committee, to raise that matter in the future.

  • May we have a debate, in this Chamber in Government time, on endangered species? Please will the Leader of the House not suggest Westminster Hall? I have tried applying for a debate there on rhino poaching for many weeks, and I have not been successful. This is a very important subject for the future of the world. I want my grandchildren and their generation to be able to see animals that are endangered.

  • I agree with my hon. Friend. With Environment, Food and Rural Affairs and Foreign Office Ministers in the lead, the Government are taking on the role of being one of the foremost international champions of better arrangements to protect not just endangered species but, crucially, the habitats necessary for their survival. As she knows, effective agreements require international consensus to work. That is what we are seeking through CITES—the convention on international trade in endangered species—and the international organisations that have a role in this area.

  • Ten of my constituents are caught up in the Concentrix debacle with the tax credit office. In the past 24 hours, the tax credit office has called me about four cases, saying that it is shutting down the complaints on those cases prior to mandatory reconsideration being complete. May we have a debate about the tax credit office complaints procedure, because such an action breaches that procedure?

  • As I have said, there will be a debate on Concentrix in Opposition time next week. On the constituency case, if the hon. Gentleman wants to get the details to me later today, I will send them straight to the Financial Secretary.

  • The UK financial services sector employs 2 million people and is our largest exporter and our largest generator of tax revenue. Will the Leader of the House find time for a debate in this Chamber on the industry’s importance to the UK economy and, indeed, to the Government’s framework for transitional arrangements, so that we can thrive post-Brexit?

  • This may be something my hon. Friend is able to raise in the forthcoming debate on industrial strategy, but I am happy to join him in recognising the importance of the sector to the UK economy. I am sure that there will be opportunities, whether under business arising through the Department for Exiting the European Union or through the Department for Business, Energy and Industrial Strategy, to reinforce the importance of the message he has given the House.

  • May we have a debate in Government time on the Government’s response to the public consultation on reforms to the civil service compensation scheme? With more than 3,000 responses and 98% against the reforms, may I impress on the Leader of the House the concerns that many Members have on behalf of constituents who have delivered public services throughout the whole of their working lives?

  • I want to put on the record the Government’s admiration for the way in which public servants of all grades and in all parts of our public services go about their duty. We have to recognise that, but we also have to recognise that pension schemes, like every other aspect of public expenditure, have to be paid for by taxpayers out of money taken by Government from their earnings. As the hon. Gentleman says, a consultation has been going on; Ministers will consider that consultation and respond in due course.

  • May we have a debate about services for vulnerable women, which I learned yesterday are being cut because they are not gender neutral? Women’s charities made the point to me that the biggest risk factor for domestic violence is being a woman—domestic violence is not gender neutral. Will the Leader of the House and the Government acknowledge that this is an issue not of access to trousers or toilets but of vulnerable women’s access to services, which must not be sacrificed on the altar of gender neutrality?

  • If my hon. Friend will let me have some of the details upon which he has based his question, I will draw them to the attention of my right hon. Friend the Secretary of State for Education, who has responsibility for the Government Equalities Office.

  • Order. What is needed now are questions in single short sentences. If those are forthcoming they will be heard; if not, they will not be.

  • I associate myself with the remarks made about Aberfan and about my late friend and colleague Jo Cox.

    On Saturday I will be attending the Remission Possible ball in honour of my young, inspirational constituent Emily Clark, who sadly died from cancer earlier this year. May we have a debate on the particular needs of young cancer patients when they suffer that terrible disease?

  • I associate myself with the expressions of sympathy and support for Emily’s family and friends over this appalling loss. As a Government we need to make sure that the NHS works hard on policies that are more effective in preventing, identifying, diagnosing and treating cancer in children and young people. That should be the case for all cancers, but we should be aware of how heartbreaking such cases are.

  • Are the Government preparing for a Division on tomorrow’s private Member’s Bill, or are the Whips lining up compliant, obsequious Back Benchers to try to talk it out?

  • On—of all subjects—private Members’ business, I have no idea whether people will seek to divide the House and whether Tellers will be appointed. The hon. Gentleman will have to indulge in the pleasures of delayed anticipation.

  • Farmers in Blaenau Gwent are being forced to deal with antisocial behaviour from packs of off-road bikers, so may we have a debate on the impact of off-road biking and people riding roughshod over our countryside?

  • I would deplore the behaviour that the hon. Gentleman has described. Many off-road bikers observe the law and accept their responsibility, when enjoying their pastime, to respect the rights and economic interests of the people who manage and live in the countryside. I hope that the particular problem he described can be sorted out locally with effective work by the police and local authorities, but I am sure that he will find opportunities to raise the matter further in the House if that is not possible.

  • Yesterday colleagues and I met the Immigration Minister to discuss plans to build a new short-term immigration detention centre in my constituency while the Dungavel facility is closing. That would result in moving detainees hundreds of miles—

  • Order. I do not want a speech read out, I want a one-sentence question.

  • May we have a debate on the UK Government’s detention policy, which results in the UK detaining more people than anywhere else in Europe?

  • There will be Home Office questions on Monday 31 October. The hon. Gentleman may have the opportunity to raise his concern then.

  • Yesterday, I met Reverend Yunusa Nmadu from Christian Solidarity Worldwide. He said that Boko Haram continues to kidnap and brutally assault thousands of young Christian girls and marry them off. Will the Leader of the House agree to a statement or debate on this matter?

  • The British Government are doing all they can to support the Nigerian authorities, both in getting the return of the girls who have been abducted and ensuring there is effective action against the scourge of Boko Haram.

  • England has witnessed a truly alarming rise in hate crimes against ethnic minorities and foreign nationals, and a 147% spike in homophobic attacks since the referendum. May we have a serious debate in Government time to discuss not only the problem but the action required to address it?

  • This matter has been raised with me during, I think, the past two business questions. I again say that I condemn, as do I think Members of all parties and on both sides of the referendum, the type of attack and abuse that the hon. Lady describes. It has no place whatever in our politics.

  • The Government have committed to a national shipbuilding strategy by the time of the autumn statement. Will the House have the opportunity to debate that, given the disgraceful delay in ordering the Type 26 frigates?

  • The Type 26 frigates are being built because there is a United Kingdom Royal Navy placing those orders in Scottish shipyards—something a separate Scotland would be unable to promise. There will of course be many opportunities in this House to debate industrial strategy and to look at shipbuilding as one element of it.

  • Will the Leader of the House tell us when he intends to schedule the promised urgent debate on the floor of the House on the proposed Canada-EU Comprehensive Economic and Trade Agreement?

  • Convicted criminal Lord Hanningfield left jail and returned to a job for life in another place. He was then back up in court in July this year for similar offences. Why did the parliamentary authorities step in and tell the court that it was a matter for them to address rather than the court? Will the Leader of the House commit to reform?

  • All this was debated yesterday, when we had a debate on the House of Lords. I do not think I have anything further to add to what my hon. Friends said on that occasion.

  • I thank the House for its co-operation.

  • Community Pharmacy in 2016-17 and Beyond

  • With permission, I would like to make a statement on the future of community pharmacy. In December 2015, the Government set out a range of proposals for reforming the sector. Our intent was to promote movement towards a clinically focused pharmacy service that is better integrated with primary care and makes better use of pharmacists’ skills. I now wish to update the House on the outcome of this consultation and the measures we intend to take forward.

    Let me be clear at the outset. The Government fully appreciate the value of the community pharmacy sector. There are now more than 11,500 pharmacies, an increase of over 18% in the past decade. Indeed, the overall pharmacy spend has increased by 40% over the past decade and now stands at £2.8 billion per annum. However, we do not believe that the current funding system does enough to promote either efficiency or quality; nor does it promote the integration with the rest of the NHS that we, and pharmacists themselves, would like to see.

    The average pharmacy receives nearly £1 million per annum for the NHS goods and services it provides, of which about £220,000 is direct income. It includes a fixed-sum payment—the establishment fee—of £25,000 per annum which is paid to most pharmacies, regardless of size and quality. This is an inefficient allocation of NHS funds when 40% of pharmacies are now in clusters of three or more, which means that two fifths are within 10 minutes’ walk of two or more other pharmacies. There are instances of clusters of up to 15 pharmacies within a 10-minute walk of each other. When the overall NHS budget is under pressure and we need to find £22 billion in efficiency savings by 2020, it is right that we examine all areas of spend and look for improvements.

    The measures that we are bringing forward today have at their heart our desire more efficiently to spend precious NHS resources. Community pharmacy must play its part as the NHS rises to this challenge. I am today announcing a two-year funding settlement. In summary, contractors providing NHS pharmaceutical services under the community pharmacy framework will receive £2.687 billion-worth of funding in 2016-17 and £2.592 billion in 2017-18. That represents a 4% reduction in 2016-17 and a further 3.4% reduction in 2017-18. Every penny saved by this re-set will be reinvested and reallocated back into our NHS to ensure the very best patient care.

    Furthermore, separately commissioned services by NHS England, clinical commissioning groups and local authorities will not be affected by this change. I want to see this commissioning of services to continue to grow. From 1 December, we will also simplify the outdated payments structure; introduce a payment for quality so that for the first time we will be paying pharmacies for the service they provide, not just for the volume of prescriptions they dispense; and relieve pressure on other parts of the NHS by properly embedding pharmacy for the first time in the urgent care pathway.

    As we continue the path of reform, we will be informed both by the review of community pharmacy services being carried out by Richard Murray of the King’s Fund and by other stakeholders such as the Royal Pharmaceutical Society. NHS England is investing £42 million in a pharmacy integration fund for 2016-17 and 2017-18, which will facilitate the movement of the sector faster into value-added services.

    Last week, for example, I announced two additional initiatives to improve our offer to patients. First, those who need urgent repeat medicines will be referred by NHS 111 directly to pharmacists—not to out-of-hours GPs as at present. Secondly, NHS England will encourage national roll-out of the minor ailment schemes already commissioned by some CCGs. This is expected to be complete by April 2018.

    We are confident that these measures can be implemented without jeopardising the quality of services. In fact, we believe the changes will improve them. To safeguard patient access, we will be introducing a pharmacy access scheme in areas with fewer pharmacies and higher health needs. We are today publishing the list of pharmacies that will be eligible for funding from this scheme. Copies are available on and from the Vote Office. The list includes all pharmacies that are more than 1 mile from another pharmacy. Those pharmacies will be protected from the full impact of the reductions.

    In addition, we will have a review process to deal with any unforeseen circumstances affecting access, such as road closure. We will also review cases where there may be a high level of deprivation, but where pharmacies are less than a mile from another pharmacy, if that pharmacy is critical for access. This will cover pharmacies that are located in the 20% most deprived areas in England, are located 0.8 miles or more from another pharmacy and are critical for access. Additional funding over and above the base settlement will be made available as needed.

    We have already announced NHS England’s proposal significantly to increase the number of pharmacists working directly in general practice. A budget of £112 million has been allocated and will deliver a further 1,500 pharmacists to general practice by 2020.

    As Members will know, the Government consulted the Pharmaceutical Services Negotiating Committee and other stakeholders, including patient and public groups. I am grateful for the responses that we received, which reinforced the value of community pharmacy and confirmed its front-line role at the heart of the NHS. The consultation also confirmed that there was a potential for the sector to add even more value. However, we are disappointed by the final response from the PSNC. We endeavoured to collaborate and listened to the committee’s many suggestions over many months, but in the end, sadly, we were unable to reach agreement. Ultimately, the committee’s role is to represent the business interests of its members, and I respect that. My role is to do the right thing for the taxpayer, the patient and the NHS.

    Let me end by stating my firm belief that the future for community pharmacy is bright. These vital reforms will protect access for patients, properly reward quality for the first time, and integrate care with GP and other services in a far better way. That is what the NHS needs, what patients expect, and, I believe, what the vast majority of community pharmacists are keen to deliver.

  • I thank the Minister for allowing me advance sight of his statement.

    Community pharmacies play a crucial role in our health and social care system: indeed, 80% of patient contact in the NHS is in community pharmacies. The Government’s decision to press ahead with damaging cuts which represent a 12% cut for the rest of the year, on current levels, and a 7% cut in the following year will therefore cause widespread concern and dismay. The public petition that was launched when the funding cuts were first proposed became the largest petition ever on a healthcare issue. It now bears 2.2 million signatures. The message is clear: people want their community pharmacies to be protected.

    In the face of unprecedented demands on health and social care services, the importance of local pharmacies is greater than ever. They help to safeguard vulnerable people and signpost them to other services; they are very important to carers; and, crucially, they reduce demand on GPs and out-of-hours services. Do Ministers not recognise the extent of the support that those pharmacies offer, and the impact that their loss will have on communities?

    As the Minister said, the Government’s latest funding offer was rejected by the Pharmaceutical Services Negotiating Committee, because it was clear that there was little substantive difference between that settlement and their original proposal in December 2015, and that the outcome would be the same. Earlier this year the Minister’s predecessor, the right hon. Member for North East Bedfordshire (Alistair Burt), said that up to 3,000, or 25%, of community pharmacies could close, and clearly the thousands of remaining pharmacies could be forced to scale down their services. If the Minister does not agree with his predecessor, will he now tell us how many community pharmacies he expects to close as a result of the Government’s cuts? Pharmacies that do survive the cuts will be under significant pressure, which will result in job losses and service reduction. That is putting patient safety and welfare at risk.

    The Government’s plans are not only deeply unpopular; they are short-sighted, and will hit the areas with the greatest health inequalities hardest. A study by Durham University has shown that pharmacy clusters occur most in areas of greater deprivation and need. Will the Minister reassure us that the areas of greatest deprivation will not lose pharmacies on which they rely, and will not be disproportionately hit by the cuts? I was not reassured by what he said in his statement.

    The cuts will have a significant impact on older people, people with disabilities or long-term illnesses, and, I reiterate, carers, who do not have time to look after their own health and often do not even seek GP appointments. The Minister has said nothing today about releasing an impact assessment. Given that the effect of the cuts is likely to be substantial, with rural, remote and deprived areas most affected, when will we see an impact assessment to justify them?

    Community pharmacies help to relieve pressure on our already overstretched health and social care services, and in recent years they have delivered more than 4% of savings for the NHS in cost reduction and quality improvement year on year.

    It seems to me that Ministers are ignoring the conclusion of a recent PricewaterhouseCoopers report showing that community pharmacies contribute a net value of £3 billion through just 12 of their services—not all of them; just 12. Therefore, if one in four community pharmacies were to close, that value would be lost and the cost to the NHS would be significantly increased. Has the Minister considered the long-term impact that that will have on other NHS services?

    We know that there is concern in many parts of the healthcare sector about these proposals. Can the Minister reassure us that all parts of the health service, including NHS England, support the proposals? Earlier in the week, he said that no community would be left without a pharmacy, but he was then unable to say which pharmacies would close and where. Will he repeat the pledge that no community will be left without a pharmacy?

    We recognise the need, as does the Minister, to integrate pharmacy services better with the rest of primary care, but introducing cuts on this scale to community pharmacy services will not improve health services—it will damage them.

  • Frankly, a lot of that was scaremongering, which does not help what we are doing here and does not help with some of the difficult decisions we have had to make. Those difficult decisions are directed at modernising the service, bringing it up to date, making it much more dynamic in terms of added value and less static in terms of dispensing and all that goes with that.

    I will answer some of the specific points that were made. There is a full impact assessment and it will be released immediately after the statement.

    The hon. Lady asked about the PwC report. I have said on the record on a number of occasions that the report is an excellent piece of work. It does drive home yet again the value of community pharmacies, which we on the Conservatives Benches and in the Government accept. What it does not address is the extent to which those services could be delivered for less cost to the NHS. That is what I have to address and that is what we have done.

    The hon. Lady asked whether NHS England supports the changes we are making. She might have heard the comments made by Simon Stevens, but I will read out, in answer to her question, a quote from the chief pharmaceutical officer of NHS England:

    “NHS England, as the national commissioner of community pharmacy services in England, can reassure the public that the efficiencies which are being asked of community pharmacy will be manageable and there is sufficient funding to ensure there are accessible and convenient NHS pharmacy services in every community in England.”

  • How many are closing?

  • The answer to that question is, I do not know. It is possible that none will close. I do not believe that 3,000 will close. However, I would say this. The average operating margin that the pharmacy makes on the numbers that I quoted earlier is 15%. That is after salaries and rent. The cuts that we are making, or the efficiencies that we are asking for, are significantly lower than that. Of course there is no such thing as an average pharmacy, which is why I cannot guarantee that there will be no changes. What I can say is that, if there are mergers and if there is some consolidation, that demand does not go away—it goes to the other pharmacies in the cluster. To say that those pharmacies will be put under more pressure is plain wrong.

    I say again that what we are doing is building an industry that is fit for the future, that is modern and that is adding value in a way it has not been able to do in the past.

  • Order. Two points. First, Members who arrived after the start of the statement should not expect to be called. Secondly, there is extensive interest in this important statement—interest that I am keen to accommodate—but as I emphasised earlier there are to follow two heavily subscribed debates under the auspices of the Backbench Business Committee. Therefore, there is a premium upon brevity. We will be led in our brevity mission by one of the most senior and illustrious Members of the House, Sir Alan Haselhurst.

  • Does my hon. Friend the Minister acknowledge that the NHS has become such a part of the nation’s DNA that doctors’ surgeries are frequently overloaded, that absolutely the right way forward is to have a rational, well-spaced network of pharmacies and that that is of particular importance in rural areas?

  • I do recognise that. My right hon. Friend made the point that the network is well spaced and that rural areas are protected. I would also make the point that, as I said in my statement, we are recruiting a further 1,500 pharmacists into the GP network. They will also play a big part in that integration.

  • Are not these cuts the latest evidence of the unprecedented financial pressure the national health service is under? Is it not the case that cutting community pharmacy services is the very last place we should begin, as they take pressure off GP surgeries and hospitals and offer an excellent service? The Government should be investing more in them, not cutting them.

  • This year we invested a further £5 billion in the NHS, three times the rate of inflation. In June the OECD noted we are now above average in terms of NHS and social care spend in the OECD. However much we spend, it is right we look to do it as efficiently and effectively as possible, to modernise this service and make it better for patients, and that is what we are doing.

  • The Minister knows my views: I do not think this 4% cut is a wise move. But I do note—and it is important that everybody reports this accurately—that that money is going to stay within the NHS, so it is not a cut. Can the Minister assure us about any incentives for pharmacies in the delivery of public health measures, notably preventive measures?

  • I thank my right hon. Friend for that comment and reassure her that for the first time we will be allowing pharmacists to access a quality fund, which means that the average pharmacy could earn up to £6,000 or £7,000 over and above what it gets just for dispensing. The fund will include specific measures around public health.

  • My apologies to the hon. Lady; I call Dr Philippa Whitford.

  • Thank you, Mr Speaker.

    We discussed this on Monday and, as I pointed out, Scotland has had a national minor ailments service, a chronic medicine service and public health prevention for many years within community pharmacies, and we have found them to be very effective. Research showed they could cut 10% of the pressure on GPs and 5% on accident and emergency.

    The problem with the Government’s proposal is that it is going to be a bit random; pharmacies are just going to be shutting on the basis that they cannot survive. Should there not be a planned system, to look at and discuss where they should be? It is not just a question of rural or deprived. It is also about transport; a mile away may be a real problem for those who are elderly and frail and for whom there is not a bus going in that direction. I welcome England taking forward these services, but my concern is the way in which it is going to be done; if it is just done due to cuts, it might not give England the answer it really wants.

  • I thank the hon. Lady for her point. She mentioned Scotland’s minor ailments programme. The announcement I made on that about a week ago was in many ways modelled on the Scottish model, because we know that pharmacies can do much more on minor ailments than at present. That will be commissioned separately from the other things we are talking about today, and paid for separately from the integration fund. We are a little behind Scotland in that regard, and we are going to catch up.

  • I congratulate the Minister on recognising what Labour failed to: that NHS money is taxpayers’ money and the priority should always be patient care, not the profits of private equity firms. May I further congratulate him on making it clear that those living in our most deprived communities will be protected and have services enhanced as a result of this change, and may I invite him to say more?

  • I will not say much more because of time constraints, but I thank my right hon. Friend for his comments. He is right to remind the House that this sector is quite concentrated towards public companies. That is not to say there are not some individual pharmacists that will be affected, but about 25% of pharmacies are owned by two or three public companies.

  • I should declare my interest as chairman of the all-party group on pharmacy. I do not want to speculate about closures, as that has been done already, but if we get to a point where it might make sense for pharmacies to merge in different communities, my understanding is that the regulations are not yet in place for that. Is that true, and, if that is needed, when will it happen?

  • The right hon. Gentleman makes an extremely good point. They are not yet in place, but they will be by 1 December.

  • I congratulate the Minister on his statement. It is worth reminding the House that many urban pharmacies are located in clusters and are very close to one another. It is therefore quite right that we should look at how they are subsidised. I am pleased that, as a result of these savings, he will be looking out for rural pharmacies, which are more dispersed. They are the ones that really need the help.

  • The access scheme to which I referred will apply to rural and urban pharmacies. Indeed, there is more urban than rural in it, but it will protect rural pharmacies in the way my right hon. Friend mentions.

  • There is no escaping the fact that this amounts to a significant cut in prevention services, which is what always happens when the finances of the NHS are under pressure. I absolutely accept the need for reform of the financial incentives involved, to ensure that we get the best outcomes from the money being spent, but surely we should be investing more in prevention in order to ensure that the NHS is sustainable.

  • The quality system that I have mentioned is about potentially investing more in prevention and linking the best pharmacies—the high quality pharmacies—more closely to local authorities, public health schemes and all that goes with that. I make the point again that there is a requirement for efficiency savings, but we do not believe that they will affect access overall. We do not believe that this will affect the public’s ability to use pharmacies as they do now. This will be part of modernising and digitising the service and providing resources for other parts of the NHS that need them very much.

  • Bearing in mind my responsibility for the difficult equation that my hon. Friend has had to solve by coming to the House this morning, I should like to thank him and welcome his statement, which finally brings clarity to these long discussions. Will he repeat very clearly the Government’s absolute commitment to a strong community pharmacy network and to doing all they can to ensure that the NHS delivers on the essential commissioning of quality services? Looking ahead to the future, now that we have got past this, will he ensure that a good review of community pharmacy services is carried out, so that we can see what value they bring to the NHS? I am sure that, like me, he will find that sector extremely valuable to work with.

  • I thank my right hon. Friend for his fantastic work with the pharmacy sector. He makes the important point that we are trying to move the sector more into services and added value. The two announcements that I made two weeks ago are part of that, as is the work currently being done by Richard Murray from the King’s Fund. That will inform how we spend the integration money and enable the sector to move more quickly into the sorts of services that my right hon. Friend is talking about.

  • Allison’s pharmacy in Cockermouth in my constituency helps to promote good health because it has a deep knowledge of the patients and their families. My concern is that, as a small pharmacy, it will be under more pressure from these cuts than the larger ones will be locally. Does the Minister recognise this pressure? Does he also recognise the vital community role that local pharmacies can play?

  • I repeat that we absolutely recognise the vital role that community pharmacies can play, and we want to make them move towards an even more vital role by providing more services, which is what pharmacies want to do, rather than getting all their money from their dispensing activities, as they do at the moment. High quality pharmacies will be in a position to really prosper in the new world that we are talking about.

  • I warmly welcome the Minister’s statement. If there are closures, what additional support will be given to the pharmacies that are left, particularly to enable them to take pressure off GPs in the community?

  • The volume of business is gradually increasing. If a pharmacy in a cluster should close, that business will be redirected to other pharmacies in the cluster. They will then be in a position to expand, take on more people and all the rest of it.

  • I declare my interest as a type 2 diabetic and as chair of the all-party parliamentary group on diabetes. The Minister is wrong to say that Leicester has too many pharmacies. The fact is that the population demands those services. Instead of making these cuts, why does he not spend that £25,000 on diabetes prevention, thus saving the national health service a huge amount of money in the future?

  • I have never said that Leicester has too many pharmacies. What I said in answer to the urgent question was that one road in Leicester—Loughborough Road, I think—has 12 pharmacies within half a mile, and that is quite hard to justify.

    As for the right hon. Gentleman’s other point about diabetes and long-term conditions, I mentioned the King’s Fund work being done by Richard Murray and addressing long-term conditions is the sort of value-added service that pharmacies need to provide in future. The £42 million integration fund that we have set aside will enable that to happen.

  • I welcome the news that this Conservative Government are spending £150 million more a year on pharmacies than the last Labour Government and will be paying pharmacies for not only dispensing prescriptions, but their quality of service. In Wealden, pharmacies have the double whammy of being rural and serving an older community, but they provide much-needed services and home deliveries. What news can the Minister share with me that I can share with pharmacies in Wealden?

  • The news that I can share is that pharmacies that are more than 1 mile apart from each other, many of which will exist in rural constituencies such as the hon. Lady’s, will be largely protected under the scheme.

  • The Minister was right to describe community pharmacies as the essential front line of the NHS. What assessment has he made of the additional pressures and costs that will be put on other parts of the NHS as a result of this decision?

  • The King’s Fund study and the £42 million integration fund are directly focused on services and on enabling pharmacies to become more integrated with GPs. In addition, I repeat that 1,500 more clinical pharmacists than we have now will be working for GPs in 2020. That is a huge difference.

  • I thank the Minister for coming to the House today and welcome his statement and update. It is right to consider improvements, but in doing so I urge him to ensure that the reforms are part of a broader policy on community pharmacies that seeks better to integrate with the NHS the vital services that they provide.

  • I give the hon. Lady that assurance. She used the word “integration”, which is right at the core of the proposals, as is modernisation. This is a patient-first initiative and we are going to make it happen.

  • It is interesting that the Minister keeps referring to the evils of major chains, because it is impossible to listen to his statement and not realise that he is talking about supporting big pharmacies. Smaller pharmacies, which do not have such a wide patient base and do not offer such a wide range of services, will suffer. Does he acknowledge that small pharmacies will close as a result of the changes? Will he say more about where the savings will come from?

  • The scheme that we are putting into place is blind to ownership, so we will not take into account whether a pharmacy is a Boots, a LloydsPharmacy or something smaller. Given the gross margins that are currently being made by the average pharmacy, including smaller ones, I do not believe that the efficiency savings that we are asking for will cause widespread closures. It is scaremongering to imply that.

  • Those of us who represent constituencies with both remote rural and urban communities understand the difficult issues that the Minister and his Department have wrestled with. Does he agree that this decision is one that would have to be taken by whichever party was in government at the moment because it is right to ensure that the service is modern, efficient and that it represents security for people in rural communities?

  • Yes—modern, efficient and oriented towards excellent patient care.

  • My constituency lies within the South Tees clinical commissioning group’s area, which is one of the pilots for the roll-out of the minor ailments service. The scheme was brought in due to the closure of minor injuries units at Guisborough and East Cleveland and medical centres at Park End, Skelton and Hemlington —all in my constituency. We are now seeing a shortfall in national vanguard funding for the minor ailments service and lack of GP provision in the region. What on earth is going on with primary care?

  • I do not wholly understand the thrust of that question. I assume that the hon. Gentleman, like others in this House, is welcoming the fact that we are rolling out a national system on ailments, delivered by pharmacists. As the hon. Member for Central Ayrshire (Dr Whitford) said, that is the future.

  • The Government are right to require pharmacies to make efficiencies, as the NHS is. I welcome the pharmacy access scheme, which I hope will help my local village pharmacies. I urge the Government and NHS England to press ahead with rolling out the minor ailments service, because it is important to make the most of the skills and capacity of pharmacies, in order to provide valuable services to patients and to relieve the burden on GPs.

  • I thank my hon. Friend for that comment, and I reinforce what I said earlier: NHS England plans to have this rolled out nationally by April 2018.

  • I recognise the difficult decisions the Minister has had to make, but rural pharmacies are going to be particularly hit. He has attempted to sweeten the pill with his access scheme, but it is only a two-year scheme. What support will be forthcoming beyond that?

  • This is the first time ever that we have given pharmacies a two-year planning horizon; usually, these negotiations relate to a one-year period. After the completion of this period, there will be further negotiations, at which point we will take forward what is right to do.

  • I congratulate the Minister on the way he has sorted out this mess. Is this unnecessary and wasteful clustering of pharmacies not a direct consequence of the former Labour Government’s broken payment model?

  • I am not sure that takes us forward, but it is right to say that spending NHS money on payments of £25,000 to many pharmacies within half a mile of one other is the wrong way to spend money when we need more in cancer drugs funds, in GP surgeries and in accident and emergency—that is what we need to be doing.

  • A large number of rural villages and small towns in my constituency are served by individual local pharmacies, which play an important role in the community. I welcome the Minister’s comments about the access scheme. Will he reassure me that small pharmacies in rural areas such as mine will be among those to benefit from the access protections he has outlined?

  • Yes, I can reassure my hon. Friend on that. Indeed, I can make the specific point that the 25% that make up the largest pharmacies will not be in the access scheme; it is directed more at smaller pharmacies.

  • The Minister is right to identify that those areas with fewer pharmacies will benefit from protection, not only because the travel time to a pharmacy will be longer, but because the travel time to all support services will be longer. Will he therefore confirm that pharmacies in my rural constituency will benefit from the access scheme?

  • I do not have the specifics for my hon. and learned Friend’s constituency in front of me. We have published the full list and it is in the Vote Office, and I am sure that when she has a look at it she will find that some pharmacies in her area are protected.

  • It is right to protect services by being more focused, but is there any other kind of commercial retail enterprise to which Government hand an establishment fee of £25,000?

  • Not that I know of, but there may well be. The facts are that the £2.8 billion that we currently spend is for services and for disbursing £8 billion-worth of drugs. It is a valuable service, but it is right that we look to see that that money is spent effectively and as effectively as in other parts of the NHS. It is the Government’s job to make sure that every penny that we give the NHS provides maximum value for patients.

  • May I declare an interest, in that my wife is a community pharmacist? I should therefore probably be cautious in welcoming this statement, for obvious reasons. Will the Minister confirm that the proposals to have a hub-and-spoke model, which would have been even more damaging to community pharmacies, are not part of this step forward?

  • I can confirm that no part of what we are talking about today is in respect of the hub-and-spoke model that my hon. Friend talks about.

  • I am most grateful to the Minister and to colleagues for their helpful co-operation in facilitating progress on this important matter.

    Bill Presented

    Housing Standards (Preparation and Storage of Food by Tenants in Receipt of Universal Credit or Housing Benefit)

    Presentation and First Reading (Standing Order No. 57)

    Frank Field, supported by Jeremy Lefroy, Caroline Flint, Dr Philippa Whitford, Sir Edward Garnier, Stephen Timms, Caroline Lucas, Sir David Amess, Tristram Hunt, Sir Peter Bottomley, Ruth Smeeth and Helen Jones presented a Bill to require landlords of tenants in receipt of universal credit or housing benefit to ensure that their rented accommodation meets minimum standards for the hygienic storage and preparation of food; contains adequate appliances, equipment and utensils for the cooking of food; and for connected purposes.

    Bill read the First time; to be read a Second time on Friday 4 November, and to be printed (Bill 79).

  • Backbench Business


    [Relevant document: First Report of the Work and Pensions Committee and Fourth Report of the Business, Innovation and Skills Committee, BHS, HC 54.]

  • I should inform the House that I have selected amendment (a), in the name of Mr Richard Fuller and others. In a moment, I shall ask the right hon. Member for Birkenhead (Frank Field) to move the motion. May I just emphasise that there are 14 Back-Bench Members who wish to contribute to the debate, and so even those who are not subject to a time constraint in any formal sense will doubtless wish to tailor their contributions to take account of the level of interest in the House?

  • I beg to move,

    That this House notes the recent joint Report by the Business, Innovation and Skills and the Work and Pensions Committees on BHS; endorses that Report’s criticisms of the governance of the company and of the holding company, Taveta Investments Limited; believes that the sale of the company to Retail Acquisitions Limited for £1 was clearly not in the interests of British Home Stores’ employees and pensioners; notes the failure of Sir Philip Green over many years to resolve the deficit in the BHS pension fund; and calls on him to fulfil his promise to do so forthwith.

    May I thank the Backbench Business Committee for giving us the opportunity to have this debate? I do so on behalf of both the Work and Pensions Committee and the Business, Innovation and Skills Committee, because we are debating a two-Committee report.

    In light of what you have just said, Mr Speaker, may I say that I know there will be lots of people wanting to intervene and, more importantly, wanting to contribute to the debate? While I am, of course, more than happy to take interventions, if those interventions could be ones that are genuinely inquiring or critical of me, I would be really happy for them to be fielded—no pun intended; sorry. On behalf of the two Committees, may I also thank our advisers and staff, including Adam Mellows-Facer and Chris Shaw, who were the two key people who guided our work?

    I am mindful of your comments, Mr Speaker, and anxious that everyone can get in during this three-hour debate. I have four themes to touch on. First, what do I see as the main findings of our joint report, which was agreed unanimously? Secondly, from the base of a successful BHS in the initial stages, what was Sir Philip Green able to achieve? Thirdly, I want to comment on what I see as this sad, slowly unfolding Greek tragedy. Fourthly, because the work of this House is never done, what lessons might we draw from the report for our future agenda? In saying that, I do not wish to say anything—I am sure that this is true of other Members who wish to contribute—that will draw attention away from the central concern of this debate: the 11,000 workers who cruelly lost their jobs; the 20,000-plus pensioners who are now in real doubt about what size pension they will get, even though they contributed to a set promised pension; and how the public’s mind is affected by these operations, if they are an accurate representation of how we earn our wealth.

    On the first theme, what do I see as the main findings of the report? Members will have their own views, and it will be great if they do as that will help us to build up a more comprehensive picture for the people who are following this debate. My first view, which was never knocked in any of our Committee proceedings, including our meeting with Sir Philip Green, is that literally nothing happened in BHS or Arcadia, and perhaps in much else besides, without Sir Philip Green deciding directly, or without people knowing what his mind was and that they would get his approval. Obviously I never knew Napoleon—given my age, Members might think that I could have touched the hem of the garment of Napoleon—but in my mind’s eye, this was a character most like the Napoleon whom I read about in history books when I was at school. As there is always pressure for history to be rewritten, particularly from those who think it treats them unfairly, it is important to remember that when Sir Philip acquired BHS, it was a relatively prosperous business that had a pension scheme in surplus. The idea that somebody, out of the goodness of their heart, was charging to the rescue of some mega-failing of British industry is not borne out by the facts in our report or those that anybody else has published.

  • In light of the fact that the pension fund was left at the end with a £571 million deficit and the conduct of Sir Philip Green that my right hon. Friend has described, must we also look more broadly at corporate governance to determine how an individual was able to behave in such a way in this country?

  • That is a wonderful point to which I shall draw attention. I hope my hon. Friend and others will catch your eye, Mr Speaker, to develop that point.

  • I pay tribute to the right hon. Gentleman for how he conducted the inquiry on a cross-party basis. Given his depiction of Mr Green as a Napoleonic figure, does the right hon. Gentleman share my concern that although Mr Green came to the Committee in June and asserted that he would fix the problem, several months later that does not appear to have taken place? Mr Green is reported in the media as saying that he will do so in the next couple of days, but the situation is very irregular, given the authority that he seems to have.

  • Again, that is an incredibly relevant point, and it links to the previous one. We were certainly left with the impression that the problem would be sorted shortly. There is no concrete proposal on the table to bring justice to the pensioners, and a question of corporate governance is raised about how someone can take over a company with its pension fund in surplus and a good order book. An interesting aspect of Sir Philip’s evidence to us was that he said he could have annuitised all the pension liabilities when he took over BHS, but decided not to do so. Had he done so, we would not be in this position today.

  • Only a small point: this Napoleon thing has reared its head. I had always thought that Sir Philip Green was more of a Maxwell. He had the money and he had the yachts. He had the workers and he robbed them of their pensions. It is almost a parallel.

  • Sir Philip has threatened to sue me over my comments about that. I am still waiting for the writ to arrive. I long to be in court to have a trial by jury, but that will be for another day.

    I return to what I see as the main findings. There was some pretty important engineering going on from the early years in respect of the profitability of the company. We were much amused in Committee when Sir Philip said that his business prowess extended to halving the cost of coat hangers. It would have been more interesting, of course, for him to have told us about his secret share dealing with one main supplier who during those early years, because they were party to BHS decisions, knew the costs of other orders for which tenders were coming in and was therefore able to bid accordingly.

    I maintain that thanks to that measure, Sir Philip was able to get perhaps artificially low supply costs, boosting BHS profits during that period, so it looked even more profitable than it was. That individual shareholder, as I say, was involved in a secret share deal. When he came to sell his shares, he managed to sell them for £90 million. Going on from there, we know that this played a key part in allowing £400 million in dividends to be taken from BHS, which most observers would not necessarily have seen as anything extraordinary.

    The next stage of this sorry saga—my second theme—is, what was Sir Philip able to achieve from that BHS base? Gaining ownership—control—of BHS allowed him to acquire the group of companies known as Arcadia. From Arcadia, he managed to sponsor a huge gearing operation. Was it £2.6 billion? Was it £2.9 billion? However, the key thing about the ownership of Arcadia, which came only from what appeared to be the adequate —or more than adequate—running of BHS, was that there were huge sums of money sloshing around Arcadia. All too soon, £1.3 billion of money geared—loans acquired—on Arcadia through a number of companies found its way up to Lady Green.

  • I thank the right hon. Gentleman for giving way on this important point. Is that not the heart of the issue? The ability of corporate bandits to asset-strip in this way, leaving employees, pensioners and deferred pensioners in the lurch, is one of the key things that needs reform. It is one of the key reasons why people feel this country works for the Philip Greens of this world, rather than the working-class kids of Dover, Deal, Doncaster and Darlington.

  • Not for the first time, the hon. Gentleman reads my mind, because I wish to go on to that issue. Despite all the razzmatazz and so on, there was nothing that the Committee could find—no evidence of this was presented to the Committee—that showed that Sir Philip Green was king of the high street. He was, and is, a very successful traditional asset stripper, and I think that many people will want to develop that aspect of the debate.

    Many of the workers in Arcadia must feel that they may stand ready to be pushed into the same hole as the BHS pensioners and workers. However, I think that a check has been put in place, and how that has happened is rather interesting. There was one of those wonderful moments during our hearings when one thinks, “Why is somebody telling me that?” Dominic Chappell—this triple bankrupt who was largely a creation of Sir Philip Green—told us that he had first refusal should the Arcadia group come up for sale, but that the only restraint was that Topshop would not be sold as part of that next sell-off. Of course, Topshop remains the crown jewels of Arcadia. It is the part of the Arcadia group that Sir Philip Green tried to take into America, and he succeeded. However, we now know that Sir Philip has had to sell part of his stake in Topshop to a company called Leonard Green—no relation whatsoever. It is inconceivable that that American financier would have agreed to buy into Arcadia without having the power to lock the tills, so the idea that the Arcadia companies, and particularly Topshop, will see moneys moving from them to the Green family has clearly been stopped.

    Why, the House might ask, if that is the only part of Sir Philip’s empire that is making money, did he sell? It comes back to those mega-loans of between £2 billion and £3 billion. Recently, they have had to be refinanced. Given what our Select Committees have brought out, I think that Sir Philip had real difficulty finding a refinancing champion and had to give access to the crown jewels—Topshop—to refinance those loans, half of which probably went very quickly through a network of companies up to Lady Green and the Green family.

    Let me move on to my third theme: the Greek tragedy that has unfolded before us. Sir Philip has many times made the criticism of me that I am biased and that in the very first interview that I gave on this issue on the “Today” programme, when I was asked the straight question of whether I thought he should lose his knighthood, I said yes. Now, perhaps I should not have been a politician—maybe I should have dissembled—but I actually answered based on what I then thought the evidence was, although I much wanted evidence to overthrow that original view. However, whether I had held that view either publicly or privately, as to the idea that the two Select Committees that this House selected to represent it on business and on work and pensions matters could somehow be manipulated by me—fine chance.

  • My right hon. Friend should consider the criticism of him made by Green as a badge of honour. He and I differ on a whole host of subjects, but he and my hon. Friend the Member for Hartlepool (Mr Wright), who chairs the other Committee, have carried out their duties with distinction, and that should be recognised by the House.

  • I do not have time to go down that road, but I am really grateful to my hon. Friend. He always emphasises how much we disagree when he is agreeing with me, but I hope that does not mean that we both have re-selection problems coming down the tracks.

    However, let me get back to this theme of Greek tragedy. We are dealing with a man who has tremendous wealth—it is difficult to comprehend what wealth he has. Yet, we know that he could have paid up—paid a modest amount, compared with that wealth base of £3.5 billion or whatever it is—and walked away smelling of roses. Not only that, but he would have helped the House, through our Committee system, to begin to set the debate about how we face the whole challenge of pension deficits—that new era into which we have come. That would have helped to answer the question raised by my hon. Friend the Member for Torfaen (Nick Thomas-Symonds): what lessons was Sir Philip drawing vis-à-vis corporate governance? In all those things, he could have been setting the debate. On pension deficits, and on the reform of private companies in particular, he has had nothing to say, but he could have helped us to lead the debate.

  • Is not that the heart of the issue? Philip Green says he is sorry, but it comes across as crocodile tears, because he will not put his money where his mouth is. He ought to make recompense.

  • Indeed. Whatever the legal issues, there is a mega, mega, mega-moral responsibility.

    Let me conclude my third theme of this Greek tragedy. Here we see—we have seen him before us in this place—a man who has everything in life and risks losing everything important in life: his standing and how his friends regard him. He does so because he seems somehow unwilling to surrender a modest part of his mega-fortune, but that modest part would make such a difference to those pensioners who are still awaiting their fate.

    I turn to my fourth theme: what is being tested through our report, starting with our debate today? First, Members will have a chance to comment on how two of their Committees have carried out their work. I really hope that Lord Pannick’s rather appropriately named report, which would begin the Americanisation of our Committee system in which we would have no role, because all the lawyers would just take over and we would sit there like puppets, will be strongly resisted. I know other Members will want to talk about this “judgment”, but Lord Pannick’s report has shown that if you pay a lawyer, and they are friends of yours, they will come up with the opinion you want. That report does nothing for the legal profession. It is interesting that within moments of publishing this supposed report, Lord Pannick had to admit that he was very close friends with two of the key players whom we examined in this undertaking.

    There are clearly questions about the Pensions Regulator that people will touch on today and the Work and Pensions Committee will look at. Are the organisation’s legal powers up to the increasing challenge that it faces? Does it have the right staff? Is it run with the right culture, and if not, what needs to change? Of course, the latter would be much more difficult to deal with than changing legal powers or getting the right staff.

    What are the lessons for the Government? My hon. Friend the Member for Torfaen (Nick Thomas-Symonds) has already mentioned one lesson, which I have now learned—perhaps I should have done so long ago. I had somehow thought that private companies govern the future destinies of only a few employees at a time. Wow, was I wrong about that, considering Sir Philip Green’s empire in BHS, with all those 11,000 jobs destroyed, and the jobs at stake in Arcadia? My hon. Friend’s point about corporate governance is mega. It is a theme that fits in with the Prime Minister’s wish that in trying better to protect the vulnerable, soft underbelly of British society, we must look at how capitalism behaves in this country.

    I have two more brief points. First, how do we ensure the independence of the bodies that are put into operation to try to recover the assets of a company that has gone down like BHS? Very important questions have been raised in respect of the recovery operation for BHS. Secondly, if we needed to address the staffing, powers and approach of the Serious Fraud Office, given that we are still waiting to know how it is going to respond, how would the appropriate Committee, and then this House, do so in a non-threatening way?

  • My right hon. Friend is making a very good speech. He touched on the professional advice that was given to Sir Philip Green. Part of that issue is the ongoing problem that we have with how the big consultancies operate in our country—Grant Thornton in this case, and in others—and the fact that the Serious Fraud Office increasingly depends on those consultancies.

  • The quicker I finish, the quicker my hon. Friend the Member for Hartlepool (Mr Wright) will be able to deal with that matter and how his work on it has evolved.

    This is the first time that I have stood before the House since I was elected Chairman of one of its Select Committees. I thank the House for electing me to that position. Despite the hard work, it has been a pleasure, particularly in relation to the work in which we, as comrades, have been involved during this inquiry.

  • I beg to move an amendment, at the end of the Question to add,

    ‘; and, noting that Philip Green received his knighthood for his services for the retail industry, believes his actions raise the question of whether he should be allowed to continue to be a holder of the honour and calls on the Honours Forfeiture Committee to recommend his knighthood be cancelled and annulled.’

    I am fortunate to follow such a gracious speech by the right hon. Member for Birkenhead (Frank Field), and to move the amendment standing in my name and the names of 113 other Members of this House.

    I took part in the inquiry into British Home Stores not only as a member of the Business, Innovation and Skills Committee but as someone who believes passionately in the good that business can do. I have seen in my own life, and in countries around the world, that the force of market economies helps everyone. It helps people who want to earn a living and build a future for themselves and their families, and it creates a stable basis for broader freedoms in society to take hold.

    However, in the course of our weeks of inquiry it became apparent to me that when we look at British Home Stores in particular, and at corporate governance in this country more generally, we see that all the rules that help set the stage for our market economy presume that with the freedoms given to people who have enormous power over thousands of their fellow citizens, when times are tough, or when push comes to shove, those people will do not just the legal thing but the right thing—the honourable thing. To some people, “honour” may seem an unusual word to use with regard to business, but in an effective business, ultimately, honour is all that one has. A person can amass a great fortune, but in such turbulent times for the market, they can lose it in a day, and all they are left with is their honour. Underpinning the amendment is the need to gauge, from the specifics of our parliamentary inquiry into British Home Stores, not whether Sir Philip Green’s actions were legal but whether they were honourable. That is pertinent because he received his honour for services to retail.

    In the course of our inquiry, a core issue was pensions. The right hon. Member for Birkenhead spoke in detail, as will other Members, about the shortcomings that have led to British Home Stores pensioners facing the prospect of lower pensions and the taxpayer facing the prospect of having to pick up the tab for the difference.

    Another issue was the role of advisers. It was bizarre that among a fleet of well-paid advisers on a transaction, apparently the only voice that mattered was that of the adviser who said they were not an adviser. That may be okay if a person is dealing with just themselves and their family, but when they are dealing with people who are going to get up on Monday to try to earn a living in a shop, advice is important. We saw many times that the role of advisers was not just in giving advice; it was also in conveying an impression that this person was a person of substance. In an enterprise with £600 million of revenue, 11,000 employees, and responsibility for putting money into the pensions of 20,000 people, surely those running it should be people of substance—people with experience. What goes through the mind of a knight of the realm in saying that those livelihoods and those futures should be consigned to a three-time bankrupt? What goes through the mind of the owner of such a substantial business in thinking that the problems that he has faced, and found quite challenging, can more easily be solved by someone with zero experience of the industry that they are about to take on?

  • I was contacted by email by a constituent, Irene, who shared the following:

    “I have two friends that worked in BHS in Glasgow and they are devastated at what has happened to them and their pensions. They worked there for years and don’t have much chance of getting another job or being able to build up works pension...This has happened to my friends and their colleagues all because he risked his worker’s pensions while he made huge profits. I feel that we most certainly should not be honouring people like that.”

    Does the hon. Gentleman agree with Irene, and me, that this man does not deserve his honour after what thousands of hard-working people across the UK have endured?

  • I am very grateful for the hon. Lady’s intervention, and I absolutely agree. I would say to people who worked for British Home Stores and want to be sure that we are dealing with issues that are tangible for them, and who are perhaps worried that the knighthood is a separate question, that we are debating those tangible issues. We are talking about what happened to their pensions and the fact that many people lost their jobs. Nevertheless, a symbolic, but still quite tangible, step that we can take in this House is to conclude that, as the hon. Lady says, such behaviours do not merit the continuation of an honour.

    In their response this week, Lord Pannick and his colleague talked about governance issues. We were shocked to see that the response said that it was technically not the responsibility of the board of a holding company to attend even a meeting that disposed of a subsidiary, with all those livelihoods attached to it. Not doing so may not have been illegal, but for Lord Grabiner not even to have attended the meeting where the business was disposed of to a three-time bankrupt strikes me as calling into question the character of the members of the board. What went through their minds so that they did not think that was the right thing to do? They were not supposed to sign people into the wilderness with the brush of a pen, and for a Lord to do that points again to the fact that honour has to mean something in the behaviour of our businesses.

    I want the Government to consider some further points. I do not have an answer on the question of the payment of dividends when there are pension deficits, but we need to look at it. Another issue to consider is transparency in large private companies, compared with that in public companies. Should the role of chairman continue to be precisely the same as that of other directors, or should the chairman have a greater role and responsibilities? What are the responsibilities of advisers?

    Colleagues in the House have spoken to me privately and said that they may well agree that Sir Philip Green is no longer deserving of the knighthood, but they are not sure that the House has a role to play in that. Respectfully, I disagree. We are here to assert a view on the opinion of the people, and I think it is perfectly valid that we should consider the issue in the context of our report. It is on our work that we are expressing a view. We do not make the final decision, but it is worthy and honourable for this House to have a view about Sir Philip Green. Over the summer, Sir Philip has had the opportunity to find his moral compass and do the right thing. In the absence of that, the House has no option but to support the amendment and the motion.

  • It is a genuine pleasure to follow the hon. Member for Bedford (Richard Fuller), who played such an important part not only in the BHS inquiry but in all other inquiries carried out by the Business, Innovation and Skills Committee. I am really proud of the work carried out by the members of my Committee and the Work and Pensions Committee. We came together extremely well to work forensically and diligently on the hundreds of hours of oral evidence and to consider thousands of pages of written evidence. It is significant that the final report was agreed unanimously, without a single vote being required. Such work was made possible only because of the professionalism and hard work not only of the members of the Committees but of their Clerks. I am very proud of the report and stand by every single word.

    What came out of the evidence was a story of massive contrasts and of huge inequality—of tens of thousands of low-paid workers, and those trying to get by in retirement on a small pension, losing out because of the greed of a very small number of people who enriched themselves and gorged on BHS to the tune of millions of pounds.

    BHS folded this year, a year after Sir Philip Green sold it to Dominic Chappell, but its demise was on the cards a lot earlier than that. In the three-year period between 2002 and 2004, BHS Group paid dividends of £423 million, even though operating profit for that period was significantly less than that amount, at £325 million. In 2004, BHS Group had dividends of £199.5 million, which exceeded the group’s operating profit of £137 million for that year. The dividends of £199.5 million also coincided with a long-term loan of £200 million being taken out that year.

    That dividend policy is revealing, and it set the scene for the eventual demise of the company. The payout to shareholders—predominantly the Green family—did not reflect a corporate turnaround and good transformation in business. BHS did not have the cash flow or the profits to fund the dividend. It denuded the company’s reserves and, in the case of that final dividend in 2004, had to be funded by a long-term loan.

    Sir Philip could say, quite reasonably, as he did to the Committee, that he received dividends for only a short period of time early on in his period of ownership. It was a long time ago, that is true, but the dividend policy is crucial to understanding the whole sorry business of BHS and the wider lessons that we need to learn.

    Green was to enrich himself, his family and his friends at the expense of long-term and sustainable growth for the company. Certainly profits were made, but they were more akin to a short-term sugar boost than a nutritious diet that aided the long-term health and strength of the business. Upon taking over the company, he was able to cut costs—an achievement that should not be easily dismissed—but he was never able to boost turnover throughout his ownership of BHS. So much for the king of retail.

    It is true that Sir Philip Green owned the company for a total of nearly 15 years, and that he retained ownership a full decade after taking the last dividends. In that regard, he cannot be described as a short-term corporate raider. But raid the company he did, and his ability to do so meant that he was then in a financial position to obtain the debt to acquire Arcadia and, through the same modus operandi that he operated at BHS, pay his family the biggest corporate dividend in British history. He took the rings from BHS’s fingers, beat it black and blue, starved it of food and water and put it on life support, and then he wanted credit for keeping it alive.

    BHS’s balance sheet was made considerably weaker during Sir Philip Green’s tenure of the company. His extraction of value early on in his ownership made the company less able to innovate, to retain a market share or to have a competitive place in the retail market that would allow the firm to generate profits and be in a better position to survive the growing pension deficit. That drip-drip decline provided the backdrop to Sir Philip’s wish to sell the business.

    It would be difficult to come up with a more unlikely or incredible knight in shining armour than Dominic Chappell. He was a former bankrupt, with no experience either in retail or in running a company of any sort of comparable size to BHS. He was introduced to the deal by a convicted fraudster for whom he was carrying out driving duties. He boasted that he had senior retail figures on board for key roles in the new business, when that was not the case. He stated that he would be investing his own money in the deal and that he had £120 million of working capital available, when that was not true. His own investment bankers walked away when they discovered that he had lied about the nature of the deal.

    Yet the due diligence carried out by the myriad advisers on the transaction did nothing to stop or even pause the deal. There was a remarkable amount of group-think among the supposedly independent advisers. Grant Thornton received four times the fee that it normally receives from similar transactions. Retail Acquisitions Ltd did not have the means to pay advisers for their services unless the deal with BHS went through. The fact that RAL did not have the cash to pay the invoices, let alone to provide the working capital for a loss-making £600 million business with a half-a-billion-pound pension deficit, should have rung alarm bells up and down the City as to whether the engagement should have been taken on. The fact that it did not clearly gives rise to questions about whether impartial advice was provided, or whether blind eyes were turned to ensure that the fees would be paid through a successful transaction, regardless of whether the company toppled over soon after that.

    Goldman Sachs provided Sir Philip with “preliminary observations” and was not paid. The lack of any clear letter of engagement showed appalling levels of informality, given that tens of thousands of jobs were at stake. As the hon. Member for Bedford said, the fact that Dominic Chappell was able to say that Goldman Sachs was on board gave his bid credibility. There is a certain irony in the fact that the firm that was not paid, that had an ambiguous role in the transaction and that claimed that it was merely providing preliminary observations was the only one that really expressed concern about the transaction, noting that

    “there were risks attached to the proposal in light of the lack of retail experience, the bankruptcy and the highly preliminary nature of the proposals and so on and so forth”.

    Goldman Sachs’ attitude to document management seemed to be on a par with that of a dodgy and ramshackle cowboy operation, rather than that of supposedly the world’s premier consulting firm. If that approach was deliberate, in the belief that an informal approach to the transaction would exonerate it of any involvement, it was wrong. Although it was ultimately not responsible for the decisions taken—that was the responsibility of Sir Philip Green—its involvement mattered. It was up to its neck in it, even to the extent of offering a £40 million credit facility.

    The risk to their reputation should have made those advisers think again. Much store is placed on the high-quality advice given by such advisers—certainly, in the case of BHS, the use of such prestigious names gave parties credibility and legitimacy when they should have had none.

    This was all made possible by weak and incompetent corporate governance. We on the Committee saw opaque structures, overlapping board membership of a complex web of companies and ineffective leadership at board level. Lord Grabiner, chairman of the ultimate selling company, played no effective part. He was not present at, or even invited to, a meeting of the Taveta board that took the ultimate decision to approve the sale of BHS to Chappell. Lord Grabiner showed no curiosity in the deal. He was docile and demonstrated no effective scrutiny, challenge or leadership. That was indicative of a culture, common in corporate governance scandals, in which a domineering, overbearing and bullying individual was able to get away with things with little, if any, challenge.

    That is a key reason for the Select Committee’s decision to undertake an inquiry into corporate governance. Given our experience with BHS, we want to look at whether company law is sufficiently clear on the role of executive and non-executive directors and whether their duties are the right ones. We are examining how the interests of shareholders and other stakeholders are balanced, and how decisions of boards could be better scrutinised and open to challenge. Given BHS’s status as a private, non-listed company, how should we align the corporate governance arrangements and requirements between listed and private companies more clearly, so that it is not in the interests of chief executives or directors to take firms private to hide them from effective scrutiny and transparency?

    It may be argued that the Green family, as ultimate shareholders, could do whatever they wanted with BHS, and they did. But a company with tens of thousands of workers and former employees dependent on its long-term viability cannot be run as a personal fiefdom or a massive piggybank—even though BHS was run in that way—and corporate governance rules and regulations should, no doubt, be adapted to reflect that.

    The duties of directors are somewhat vaguely defined. Section 172 of the Companies Act 2006 states that a director of a company must promote the success of that company in such a way as to have regard for

    “the likely consequences of any decision in the long term…the interests of the company’s employees…the need to foster the company’s business relationships with suppliers, customers and others”


    “the desirability of the company maintaining a reputation for high standards of business conduct”.

  • The BHS employees who lost their jobs in towns such as Huddersfield say to me, “Why is it that the advisers, consultants and auditors who did not do their job in the banking crisis are, all this time later, still not doing their job as auditors and professional people?”

  • As the hon. Member for Bedford mentioned, we need to look at more than just reputational risk. A lot of deals go through simply because such advisers are involved. Is that good enough?

    To return to my point about directors, can anybody look at BHS and say that the spirit and the intention of section 172 of the 2006 Act were being enforced? In companies legislation, directors are equal in status, but in the corporate governance code, chairs and leadership are given much more priority. Given the shocking absence of leadership or challenge from Lord Grabiner, who was truly hopeless, and the weak and impotent corporate governance operating here, there is a strong case for enshrining the requirements of the code in legislation.

    As the hon. Member for Bedford said, Sir Philip received his knighthood for services to retail. During our inquiry, however, it became increasingly evident that he was not particularly good at retail at all. True, he was able, in the early days, to sniff out a corporate bargain and cut costs to boost profit. There is nothing wrong with that; that is not a criticism. But during his ownership, he did not boost BHS’s turnover, he lost market share to more nimble and even to not-so-nimble competitors and he failed to anticipate the online retail revolution. By failing to innovate and invest in the brand, he made BHS—an important anchor in the high street—look like a remnant of the 1970s and 1980s in a cut-throat, competitive sector, where grabbing the customer’s attention and retaining their loyalty are paramount.

    Sir Philip lacked the success, the ingenuity and the business acumen of the likes of Charlie Mayfield, whose John Lewis group responded well to the internet and whose employee ownership model genuinely motivates staff. He could not match the virtues of Zara, which has increased market share through its superfast turnaround from design to manufacture and shop, which is based on the use of customer data and local suppliers, the rapid turnover of stock and an innovative online platform. Based on company performance, people such as Charlie Mayfield and the founder of Zara, Amancio Ortega, should, it seems to me, be classed as the true kings of modern retail—not Sir Philip Green.

    BHS is one of the biggest corporate scandals of modern times. I am sure that the whole House has sympathy for the thousands of workers and pensioners who have lost their jobs and seen their pension benefits reduced as a result of greed, incompetence and hubris. The reputation of business has been tarnished as a result of that greed. The vast majority of businesses are not run and managed in such a way. It would be wrong to tar all businesses with the same brush, but it is vital that this mess is sorted.

  • I am grateful to my hon. Friend for the cogent way in which he has presented his argument. I have no difficulty in supporting the motion, which is in his name and the name of my right hon. Friend the Member for Birkenhead (Frank Field) and others. In principle, I agree with the amendment in the name of the hon. Member for Bedford (Richard Fuller) and others. My only question—my hon. Friend may be able to help me with this—is whether now is the right time to accept the amendment, or whether it should be left in abeyance until some of the other issues have been sorted out.

  • Parliament will have its view on the knighthood. There is an urgent need to make sure that the pension problem is sorted. Sir Philip Green appeared before us on 15 June and said that he would sort it, but we are now four months beyond that. He is meant to be the consummate deal maker, who can buy and sell companies worth billions of pounds in a couple of days. If he is intent on sorting this, why has it not been done already? Regardless of what Parliament decides today, and regardless of the route taken by the honours forfeiture committee in respect of the knighthood, he has got a duty to sort this. Even at this late stage, Sir Philip should make amends for this whole sorry story and put right the wrongs that he engineered.

  • Order. Before we proceed with the debate, it is obvious to the House that we have a short time this afternoon. I expect this debate to finish at about half-past 2. I do not want to put a time limit on such an earnest, decent and well-mannered debate, and I hope that Members will restrict themselves to some seven minutes. If everyone who has indicated that they wish to speak does so for about seven minutes, everyone will get a fair and equal chance. If not, I will impose a time limit.

  • It is a pleasure to follow the wise words of the hon. Member for Hartlepool (Mr Wright), and it was a pleasure to serve with him on the joint Committees. May I associate myself with the remarks that he and the right hon. Member for Birkenhead (Frank Field) have made about our hard-working Committee Clerks throughout the process?

    When the news of BHS broke, I felt bad about the loss of a high street icon, desperate for the employees affected—including those in my constituency—and very concerned about the pensioners involved. I have a confession to make to the House, however. My gut reaction was that a Committee inquiry would simply rake over the ashes of a sad event, with little to be gained. I was initially not convinced that the inquiry would be productive, but I was persuaded to take part. I am glad that I did, and I am glad that this inquiry has taken place, because we can lay concerns before the House.

    The largest concerns, for me, are not particularly about the trading circumstances leading to the demise of BHS—although it seems, as the hon. Member for Hartlepool has said, as though there was little magic around the revitalisation of BHS’s margins in the early years of its ownership by Sir Philip Green. Dividend payments, generous as they were and exceeding profits as they did, may or may not have undermined BHS through underinvestment. That would be hard to prove, but it is a perfectly sensible question to pose.

  • Should we not be raising questions if any company pays out dividends in excess of its free cash flow? That should ring alarm bells, and perhaps there should be a test that companies need to meet if they behave in such a way.

  • The hon. Gentleman, as so often, reads my mind. If he is a little patient, he will hear me make a similar point later in my speech.

    On the period during which very generous dividends were paid, directors cannot be expected to have the gift of prophecy, but they can be expected to understand the fundamental trends driving the underlying profitability and sustainability of their business. I am far from convinced that that was the case in this situation. The most serious questions, as raised by the hon. Members for Hartlepool and for Torfaen (Nick Thomas-Symonds), are about the corporate governance of large private companies with millions of employees and pensioners.

    Unlike my feisty friend, my hon. Friend the Member for Bedford (Richard Fuller), I intended not to refer to the individuals directly concerned in the sad demise of BHS, but to focus on the more general lessons to be learned. I am afraid that I have been drawn back to the circumstances of BHS after reading the joint legal opinion produced for Taveta Investments Ltd by learned counsel last night. As the right hon. Member for Birkenhead said, the two lead QCs make a point of saying that they are friends of the chairman of TIL. I hope that their report, which is considerably longer than the report of the joint Committees that it analyses, was not unduly costly. The report basically starts by saying, “Let’s pretend this is not a parliamentary inquiry, but some other kind of inquiry. Would that type of inquiry be set aside by the courts?” Having set up an irrelevant question, the opinion produces an irrelevant answer.

  • Does the hon. Gentleman agree that it is somewhat ironic for Sir Philip, who has complained bitterly about an outcome with which he does not agree, to be able to pay handsomely for an 81-page report from two eminent QCs, given that I imagine the pensioners and employees are not, unfortunately, able to resort to such a tactic?

  • I suppose the answer depends on the quality of the report. Frankly, having read it, I find that it contains a series of straw men that have been set up for demolition. In my view, it does not help Members, the pensioners or anyone to understand the circumstances of the demise of BHS.

    To put at rest the minds of learned counsel, the joint Committees did not object to a dowry being provided on the sale of BHS, and certainly did not question its legality. However, we questioned the sufficiency of the cash and the choice of partner in the circumstances that BHS faced. We did not question the concept of a company being sold for £1. Clearly, that is a matter for Taveta Investments (No. 2) Ltd, the selling company, which received the £1. It is unfortunate that TIL2, which is ultimately controlled by Lady Green, is still paying back to Lady Green the £200 million consideration for its acquisition of BHS in 2009. This consideration was satisfied by £200 million of loan stock provided to three overseas companies controlled by Lady Green, with a coupon of 8%.

    We would need a much longer debate—I am very mindful that other Members wish to participate—to draw out all the straw men contained in the joint opinion of learned counsel, but several others are produced in the context of corporate governance. A rare point on which the joint Committees’ perspective seems to be shared by learned counsel is on the—in our view, lax—governance of the sale, as was so eloquently described by my hon. Friend the Member for Bedford. However, learned counsel state that that is an irrelevance, because the shareholders in TIL could in any event provide a direction, so the directors were in no position to prevent the sale of BHS to any party. That may be true legally, but it should raise questions for this House. Learned counsel tell us that TIL is 88%-owned by Taveta Ltd, a company registered in Jersey, and 12% by six minority shareholders. We are informed that the ultimate beneficial owner of the Jersey company is Lady Green, and that under the articles, Lady Green, acting with any one of the minority shareholders, could have directed the sale of BHS at any time and on any terms.

    The right to own and dispose of property under English law is absolutely fundamental, and Parliament would be wise to tread very softly, but I am concerned in this context about checks and balances—not only on the sale, but more generally. What is the value of a section 172 provision, telling directors to have regard to other stakeholders, in these circumstances? What is the role and purpose of non-executive directors, especially when the 88% shareholder is not present around the boardroom table?

    To my mind, it is not appropriate for directors serving private companies to decide that they can take an approach different from what is good corporate governance, purely because they can ultimately be directed. That would make it more important, especially on major or related transactions and on honouring commitments to pensioners, that they should bend over backwards to adhere to strong and demanding codes and be prepared to call out owners if they feel actions are taken that do not have sufficient regard to other stakeholders. There are thousands of very successful large and medium-sized private companies employing millions, and for those millions, ownership should be as transparent as good corporate governance.

    There are other issues, from which I fear I have been sidetracked by the legal opinion, that the House should consider. As the hon. Member for Hartlepool mentioned, corporate governance codes should be applied not only to listed companies, but to those owned privately. On related party transactions, independent valuations or independent opinions are important when such transactions exceed de minimis levels. There is the issue of the utility of the requirement to have regard to other stakeholders in section 172 and how directors can be expected to do so when they owe responsibility elsewhere. There is the question of the appropriateness of dividend payments above certain thresholds, particularly if a pension scheme is in serious deficit. I was challenged on that point by the hon. Member for Ross, Skye and Lochaber (Ian Blackford).

    There is the issue of the requirement for courts to be cognisant of pension deficits, as well as of creditors, when considering applications for corporate restructurings and capital reductions. In private mergers and acquisitions, where pension problems may be less transparent than in the listed market, consideration should be given to compulsory engagement with the Pensions Regulator and with the trustees. For both directors and advisers engaged in sale processes in respect of a company in which the Pensions Regulator has already expressed concern and a sale is not being pre-cleared by the Pensions Regulator, all parties should be very aware of the actuality of the counterparty to whom they are selling. English law requires no due diligence to be done on the buyer—nor, in my mind, should it do so—but common sense suggests a certain wariness to be wise.

    In conclusion, there are lessons to be learned from this sad story. Above all, however, we are all focused on the loss of a well-loved icon, the employees who have been made redundant and the pensioners who are rightly worried, but whose plight may yet be mitigated by Sir Philip. Such an act would, indeed, be honourable and very welcome. I understand from the radio this morning that he is, not for the first time, planning to meet the regulators in the next few days. Time will tell whether pensioners have been waiting for a result or have been made to endure a particularly poorly directed “Waiting for Godot”.

  • This is, indeed, a miserable business that we are discussing. We should not forget for one moment those who have been adversely affected—the 11,000 employees and the 22,000 pensioners, who do not know whether they will receive the sort of pension that they had the right to expect. One of the BHS stores was in the Walsall borough and, like the others, it has of course closed. The least that can be done is for Philip Green to act along the lines stated in the conclusion of this report—a satisfactory resolution to the problems of the BHS pension fund. As the report makes clear, there is no doubt that his massive private wealth should not in any way make that difficult for him.

    I have risen to speak because I am very keen to support the amendment, which has been selected for debate by the Speaker. It is of course true that taking away Green’s knighthood, should it be recommended by the appropriate committee, will not make any financial difference to those adversely affected—they will not receive a penny more because the knighthood has been taken away—so why, if there is a vote, should we vote in its favour? I argue that for that honour to be taken away from Green would be a form of censure on him and, moreover, one that he would intensely dislike. As far as he is concerned, the removal of his knighthood would be far more of an indictment than all the words in the report we are discussing.

    Mention is made in the report of the arrangements in Monaco concerning the business and tax. I am not entirely a stranger to those matters, because I raised the issue in a debate on taxes in the House in September 2012. I made the point then that although Philip Green undoubtedly pays his taxes in the usual way in this country—that is not in doubt and is not being questioned; he is not one of those who are not domiciled for tax reasons—that does not alter the fact that, in the main, the business is in his wife’s name, and his wife is resident in Monaco. That means that, in effect, the amount of tax paid on the vast business empire that Green is closely involved in—which, in common-sense terms, means he owns those businesses—is minimal. I find it difficult to understand how a person with tax arrangements like that, which are well known, well publicised and no secret at all, should receive a knighthood in the first place. That is a pretty damning indictment of what occurred, in my view.

    As for Green’s vast amount of wealth, at that time I pointed out that he had paid himself a modest sum in bonuses that came to £1.2 billion—billion, not million. I do not know what other bonuses he has received since. Hardly a week goes by—some would say, hardly a day—when we do not pick up a newspaper and find details of his lavish lifestyle, which is a billionaire’s lifestyle if ever there was one. Is that not a form of provocation, apart from anything else, to the people who have been adversely affected, namely the employees and pensioners who have lost out and have a future of financial insecurity?

    I will keep my remarks brief, and so say this in conclusion: I see Green as a billionaire spiv who should never have received a knighthood and who has shamed British capitalism. The least we can do today is to make our views clear and strong. Moreover, let us apply enough pressure, if that is not an inappropriate word, to try to persuade the appropriate committee that if there is one person who does not deserve a knighthood, it is Philip Green.

  • This debate has been called in several of our names, and I take particular pleasure in following the speeches of many earlier contributors, but especially those of the Chairman of our Select Committee, the right hon. Member for Birkenhead (Frank Field), and my colleagues on the joint Committees, the hon. Member for Hartlepool (Mr Wright) and my hon. Friends the Members for Bedford (Richard Fuller) and for Horsham (Jeremy Quin).

    I will start by saying what the debate is not about. It is not an attempt to suggest that the deficit of any pension scheme in this land is entirely the fault of one individual, or, indeed, the responsibility of the owner of any sponsoring scheme. It is also worth noting that, of the some 6,000 defined-benefit pension schemes in the United Kingdom, about 1,000 are in difficulties of various kinds and very few indeed have surpluses. The situation of the BHS pension scheme is not particularly unique, but the circumstances around it are.

    That brings me to my second point. The deficits of pension funds go up and down. They do so particularly quickly at a time when interest rates are moving fast. The value of assets is driven by bond yields; when those are depressed, and that is exacerbated by quantitative easing and monetary policy, pension deficits will clearly rise. All sorts of people are responsible for that, including the scheme’s investment policy makers and investment managers; the costs of all those involved make a significant difference to the scheme deficit as well. I totally accept the argument in the 80-page report by Sir Philip Green’s lawyers that longevity and the macro-economic environment make it difficult for schemes to improve their funding situation.

  • I agree with every comment that the hon. Gentleman has made, but does he not accept that part of the difficulty we are in with defined-benefit schemes has been the Government’s policy of giving responsibility to the Bank of England in the quantitative easing programme, which is now at £435 billion? If we look at what has happened recently, the 50 basis point reduction in yields means about £120 billion on the defined-benefit pension deficit. The Government have created that by refusing to balance fiscal and monetary policy.