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House of Commons Hansard
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Commons Chamber
17 January 2017
Volume 619

House of Commons

Tuesday 17 January 2017

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Treasury

The Chancellor of the Exchequer was asked—

Ayrshire Growth Deal

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1. What discussions he has had with his Cabinet colleagues on the Ayrshire Growth Deal. [908200]

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We have regular discussions with Cabinet colleagues on how the Government can boost growth and productivity across Scotland and the UK. The Government are discussing city deals for Edinburgh and Stirling, and we are looking forward to receiving proposals from the Tay cities. The Government are focused on taking those deals forward as we look to agree city deals for all of Scotland’s great cities.

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Would the Chief Secretary to the Treasury agree that the Ayrshire growth deal would generate investment and create the economic conditions to achieve a step change throughout Ayrshire, an area of huge potential? Will he commit today to working actively and constructively with the four Ayrshire MPs, the three Ayrshire local authorities and the Scottish Government to support the deal, to the benefit of the whole county of Ayrshire?

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Up to this point, growth deals have been city growth deals and, by definition, have focused on cities. As I said earlier, we have made a lot of progress on all the Scottish cities. Of course, it is open to the Scottish Government to take forward projects to enable growth in the county of Ayrshire, if they wish to do so.

Small Businesses

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2. What support the Government are providing to small businesses. [908201]

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12. What support the Government are providing to small businesses. [908211]

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The Government absolutely recognise the key role that small businesses play in the economy, which is why, for example, at the autumn statement we announced an additional £400 million for the British Business Bank to help growing firms to access finance. Of course, we have taken a number of other steps, including introducing the seed enterprise investment scheme.

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Does the Financial Secretary agree that independent retail stores, such as Chalk & Linen in my constituency, add greatly to the character and vitality of our towns and high streets, and that the Government should do all they can to support them?

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As a former co-chair of the all-party parliamentary group on retail, I could not agree more that independent retail, and retail generally, is a vital sector. My hon. Friend is right that we want to support independent retailers on our high streets, which is why, from April, 600,000 of the smallest businesses—occupiers of a third of all properties—will not have to pay business rates as part of the £6.7 billion business rates package that will kick in over the next few years. I hope that he agrees that that is a helpful bit of support for key local businesses.

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I recently attended my local chamber of commerce’s breakfast meeting in Seaford, and I met many small businesses that are pleased that the economy is doing so well and is being so expertly led by this Government. However, they have some concerns about the introduction of quarterly tax returns and the impact that would have on the costs of small businesses. They suggest the introduction of a threshold for the smallest businesses. Will the Minister consider that?

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I, too, have a good relationship with my local chamber of commerce; we get vital feedback from our chambers of commerce. Of course, we are not introducing quarterly tax returns; my hon. Friend is referring to the “making tax digital” project. Although the Treasury Committee recently said that the long-term future can, and probably should, be digital, we understand that we need to look carefully at the consultation responses and at the concerns of small businesses. Of course, we have already exempted a number of the smallest businesses from the threshold, but we are looking carefully at the consultation responses and at the Select Committee’s report. We do not recognise the figure from the Federation of Small Businesses on the cost, and we have not seen the assumptions that underpin it; if I am to address those concerns, seeing those would be helpful.

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Small businesses in Doncaster face a worrying skills shortage. Will the Minister support those businesses by impressing on her colleagues in the Department for Education the need for a speedy decision on Doncaster’s university technical college, to give the go-ahead for the money? Will she have a word, please?

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I am very happy to raise that issue with colleagues. More broadly, the Government absolutely support the skills agenda, which we have made a real priority. If we are to close the productivity gap in this country, investing in skills and high-quality apprenticeships is clearly key. We have taken a lot of action in that regard.

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The most useful thing that the Treasury could do for small manufacturers in my constituency would be to announce an objective of staying in the customs union. Up to now, the Treasury has been a beacon in saying that it wants decisions based on analysis, not on rhetoric and ideology. Can the Minister assure the House that that is still under consideration?

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Again, these are issues that we are looking at carefully; the Chancellor has had a series of roundtable meetings with different sectors and industries in recent months, as have all of us Ministers. We are looking carefully at what those detailed issues are. Of course, much more will be said on this and discussed in the House later today, but we are clear that we want to understand the detailed issues that businesses face so that as we move forward to make our future outside the European Union, we can resolve the practical issues that businesses will face in a way that helps the British economy.

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Access to capital is vital for small businesses in my constituency and across the country, and a refusal from a big bank should not be the end of the line. Will the Minister continue to support the bank referral scheme, which helps so many small businesses to access alternative sources of finance?

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Absolutely we will. The Government’s finance platform referral policy helps small and medium-sized enterprises whose finance applications have been declined by their bank to explore alternative options. It requires the major banks to refer SMEs that are rejected for finance—with their permission—to finance platforms. We can do a range of other things to support the good point that my hon. Friend makes. I encourage all Members with SMEs in their area that have had finance applications rejected to refer them to some of these schemes, because they are making a difference.

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Many small businesses in the Northern Isles are in the tourism sector. Given the Chancellor’s reported comments at the weekend, will the Government look again at the opportunities presented by the tourism industry’s proposals for a lower rate of VAT on that sector?

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The House will not be surprised to learn that the Treasury is receiving a number of suggestions as to what might happen to VAT when we are no longer members of the EU, and I am aware of the pressure from and representations made by the tourism industry. I am meeting the Northern Ireland Affairs Committee tomorrow; this is likely to be one of the issues on its mind. Of course we look at these issues carefully, but we are still members of the EU, and all our legal obligations and so on remain while that is the case.

Science and Technology: Innovation

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3. What fiscal steps he is taking to encourage investment in innovative UK science and technology projects. [908202]

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As announced at the autumn statement, the Government are significantly increasing investment in research and development, which is rising by an extra £2 billion a year by 2020-21. That is the largest increase over a Parliament since records began in 1979. This includes an industrial strategy challenge fund, which will support collaboration between businesses and the UK’s world-leading science base. That will ensure that the UK remains an attractive place for business to invest in innovative research, and that the next generation of discoveries are made, developed and produced in the UK.

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I thank the Minister for his answer. Scientifica, one of the largest employers in my constituency, won both business of the year and export business of the year for 2016 at the British Chambers of Commerce’s annual awards. I will be incredibly proud to join Scientifica when it opens the London stock exchange in March. Will he join me in congratulating Scientifica, and will he pledge to continue supporting such businesses, which export the best of British scientific innovation, collaboration and enterprise to the rest of the world?

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I am delighted to join my hon. Friend in congratulating Scientifica, and I am happy to make that pledge. At the spending review, we committed to a £175 million reinvestment in UK Trade & Investment, now part of the Department for International Trade, to drive UK exports. We remain committed to ensuring that UK exporters receive world-class support. Indeed, as the Prime Minister will make clear today, maintaining the UK as one of the best places in the world for science and innovation is a priority for us.

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On Friday, I visited Wirecard, an innovative financial technology company in the emerging payments sector; it is based in Newcastle. It is concerned that leaving the European single market, and in particular the passporting rights, will diminish investment in fintech, an area in which this country leads, and which is growing in Newcastle and the north-east. What reassurance will the Minister give Wirecard?

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As the hon. Lady will be aware, the Prime Minister will have just begun making a speech on this matter, and my right hon. Friend the Secretary of State for Exiting the European Union will make a statement to the House later. Let me just say that the UK is in a very strong position on fintech, and on ensuring that this successful sector is a priority. Indeed, the Minister for Trade and Investment, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), led a delegation of 33 companies to India, where the focus was, among other things, on this sector and promoting the best of British businesses. We will continue to ensure that the UK remains a strong place for the sector.

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Will my right hon. Friend join me in welcoming the fact that Cheltenham’s GCHQ cyber-accelerator is now up and running? Does he agree that that key element of the Government’s £1.9 billion national cyber-security programme will allow start-ups to gain access to GCHQ’s world-beating personnel and digital expertise to bring jobs and opportunity to Gloucestershire?

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Yes. I certainly welcome what my hon. Friend said about the opportunities here. He highlights an important sector that has significant potential for the UK and for Gloucestershire.

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What discussions have taken place in Northern Ireland with the Department for Business, Energy and Industrial Strategy to ensure that catapult projects will happen in Northern Ireland just as much as in the rest of the UK, to help our science and business development?

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We are, of course, determined to ensure that all of the UK is a good place for these businesses to develop, and to encourage the development of technology and businesses that are based on it. The future of the United Kingdom has to be as a highly skilled, technologically advanced, outward-looking country. We have engaged with all the devolved Administrations to further that aim.

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We Labour Members believe that encouraging investment is essential to making our economy more productive, and we recognise that that will be especially important post Brexit. Does the Treasury have a genuine indicator of how foreign direct investment has been affected by the referendum result, given that it was recently revealed that the Department for International Trade’s figures incorrectly include decisions taken before the vote for Brexit?

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We are at an early stage, in terms of the impact on foreign direct investment. On the level of business investment since the referendum, the numbers have held up pretty strongly, although, as I say, it is early days and early data. The hon. Gentleman says he welcomes business investment in this country; he should listen to some of the things his party leadership is saying, which would do nothing but drive business out of the United Kingdom.

Sovereign Debt

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4. What steps his Department is taking to reduce sovereign debt. [908203]

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The only way to reduce debt sustainably is to return the public finances to balance. Our new fiscal rules commit us to doing that as soon as possible in the next Parliament. We have already reduced borrowing as a share of GDP by almost two thirds from the post-war peak that we inherited in 2010, and we are forecast to borrow less than 1% of GDP by the end of this Parliament.

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I thank the Chancellor for his answer. Government debt interest sits at around 5% of overall Government spending, which is equivalent to nearly 20% of the overall health budget. Would my right hon. Friend consider paying down our debt more swiftly to relieve the strain that debt interest is putting on the public finances?

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We are committed to reducing debt while at the same prioritising investment in high-value infrastructure that will enhance our productivity. Of course, the only way we can pay down debt is to generate a current surplus, which means more tax or less spending. The trajectory that I set out at the autumn statement is the right one for this country in the circumstances. I intend to stick to that and ensure that we get the public finances back into balance as early as possible in the next Parliament.

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But the total of UK Government debt owned by foreign investors now sums more than half a trillion pounds for the first time ever. As the value of sterling tumbles, what assessment has the Chancellor made of the risk of the cost of servicing our debt rising unsustainably?

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The way it works is that the pricing of new Government debt is determined by the auctions around new issuance, which, clearly, is bought at current exchange rates by foreign purchasers of debt. The hon. Lady makes a good and important point: currency volatility, rather than the actual level of the currency, does introduce an additional dimension for foreign purchasers of UK Government debt. I have said many times that the process that we are embarked on of negotiating our exit from the European Union creates some uncertainty, some of which we have seen manifesting itself in the currency markets. The sooner we can get through that period of uncertainty and have clarity about our future relationships with the European Union, the better for markets, business and people in this country. The purpose of the speech that the Prime Minister is making right now is to start to give some clarity to the situation.

Leaving the EU: UK Economy

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5. What fiscal steps he is taking to improve the resilience of the economy in preparation for the UK leaving the EU. [908204]

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We have committed to returning the public finances to balance as soon as possible in the next Parliament, and to reducing the structural deficit to below 2% of GDP by the end of this Parliament. As I have said, that strikes the right balance between restoring the public finances to health and giving ourselves enough flexibility to allow us, if necessary, to support the economy in the short term as we go through this period of greater uncertainty. We have also been able to commit an additional £23 billion to a national productivity investment fund to improve our economic productivity.

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Does my right hon. Friend agree that the resilience of our economy is best served by what the Prime Minister has said today, which is that Britain will be leaving the single market with no ifs and no buts?

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For six months, we have kept open as many options as possible while we review the way forward in this negotiation with the European Union. We have heard very clearly the views and the political red lines expressed by other European leaders. We want to work with those leaders and to recognise and respect their political red lines. That is why the Prime Minister is setting out right now a position on which we will go forward, understanding that we cannot be members of the single market because of the political red lines around the four freedoms that other European leaders have set. She is expressing an ambitious agenda for a comprehensive free trade arrangement with the European Union that will allow our companies to trade in Europe, and European companies to trade in Britain, while minimising disruption to business patterns and to pan-European supply chains.

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EU banks use passport arrangements to operate in the UK, and so provide us with jobs and the Exchequer with revenue. Given what the Prime Minister is saying at this moment, those arrangements are clearly at risk. How hopeful is the Chancellor that passporting will survive the exit from the European Union?

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As the right hon. Gentleman says, EU banks use passporting to operate in the UK, and of course, vice versa: UK banks use passporting to operate in the European Union. It is important that EU banks are able to continue operating in the UK, and that UK banks are able to continue operating in the EU. He will know that City UK, the lead City pressure group on this issue, took the strategic decision last week to stop pushing for passporting rights and to focus instead on what I would describe as an enhanced equivalence regime. The important thing is not the mechanism, but the end result, and that is what the Prime Minister will set out today.

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The Treasury Committee has challenged whether the Office for Budget Responsibility’s sustainability reports—the latest such report was published just an hour ago—are worth the effort, given that they amount to 50-year forecasting. The OBR’s latest effort does not even try to take account of Brexit at all. It is required to do this work by statute. Does the Chancellor not think that it might be a good idea to revisit that commitment?

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My right hon. Friend has a point in one sense, in that economic forecasters admit that even with a five-year forecast, there will be a high degree of uncertainty about accuracy. On a 50-year forecast, there will be a very high degree of uncertainty indeed, but we will see how the debate goes on the fiscal sustainability report that is published today. I suspect that it will act as a very useful catalyst for discussing some of the really important strategic issues that we face as a nation, not in the white heat of immediate political debate, but over a much longer term—over a 50-year period—so that we can think about where we go in the balance between public spending and taxation, and how we support our vital public services.

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24. The financial services industry employs 40,000 people in Edinburgh alone. Given the Chancellor’s comments on the single market, what impact does he think leaving it will have on jobs in Scotland? [908223]

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My assessment is that by setting out our agenda and by setting out clear objectives, as the Prime Minister is right now, we are meeting the first ask of our European partners, which is to be clear about what we want. We are recognising the political red lines they have set out and saying that we will respect them. That is the first step towards sensible engagement with our European Union partners to reach an outcome that is positive for the UK and for the European Union. That of course must include freedom for financial services firms to continue doing their business.

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I was going to call the hon. Member for Coventry South (Mr Cunningham), but he does not seem to be standing—

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rose—

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Go on, get in there man.

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15. What provisions has the Chancellor made for universities in this country after 2020? Will he match pound for pound the lack of EU money? [908214]

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What we have said is that where EU funding is awarded to projects involving universities, businesses, external research institutes and farmers between now and the point of our departure from the European Union, provided those awards meet our value-for-money criteria and have the support of the UK or devolved Administration Department responsible, the Treasury will underwrite those awards. We expect that in any settlement with the European Union, the Commission will go on paying those awards after we have left, but if it does not we will stand behind them.

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Many small businesses in Kettering are supplied by other British firms and sell their goods and services to British consumers, yet all are affected by often unnecessary EU regulation. Will the Chancellor join efforts post-Brexit to reduce this burden as quickly as possible?

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The remedy to the problem my hon. Friend sets out will lie in the hands of this Parliament once we repatriate the acquis in the great repeal Bill.

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In the seven years to 2014, Scotland’s trade with the EU rose by 20%, twice the rate of growth in trade to the rest of the UK and vital for a resilient economy. Today’s hard Tory Brexit puts that at risk, but is this not also a kick in the teeth to many of those who voted leave believing that a European economic area/European Free Trade Association-type arrangement would be put in place to mitigate the damage done?

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I reject the hon. Gentleman’s analysis. We are engaging constructively with the real world and recognising the political red lines of our European Union partners. If we do not recognise them, frankly, we are banging our heads against a brick wall. They have to recognise our political red lines, we have to recognise theirs, and then we need to work together to find a pragmatic solution that works for all the people of the UK within those red lines, and that is what we are doing.

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As we are looking for a pragmatic solution, Scotland’s trade with the rest of the world over the same timeframe grew by 50%, driven by EU trade agreements. Given that it takes an average of 28 months to conclude a single agreement, how many pragmatic decades does the Chancellor believe it will take to put in place the trade agreements that we need to mitigate the damage of a hard Tory Brexit?

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I am disappointed to hear the hon. Gentleman resorting to the soundbite; he is normally better than that. The discussions I have had with third countries that have free trade agreements with the European Union suggest that there is a strong appetite for a quick and simple agreement with the UK so that, as we leave the European Union, we can immediately enter into a successor agreement with those countries—Korea, for example—that will allow us to continue trading with them on the same terms.

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At the weekend, the Chancellor told a German newspaper—not this House, you will notice, Mr Speaker—that he is prepared to turn this country into a tax haven. If that means competing with the likes of Ireland on a 12.5% corporation tax rate on top of existing Tory tax cuts it means, according to the House of Commons Library, giving away more than £100 billion to corporations over the next five. That is equivalent to almost 5p on the basic rate of income tax. How then does the Chancellor ever propose to solve the funding crisis in the NHS and social care, given that this morning the Office for Budget Responsibility thinks that public finances are on an unsustainable path?

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Let us take that question apart. There are two points. First, the OBR’s 50-year forecast sets out a possible outcome if the Government take no action. As I made very clear in the autumn statement, we are acutely aware that action will be required in order to return the public finances to balance. Secondly, with regard to my interview with Welt am Sonntag, what I said very clearly—I am sorry if this did not come across in the UK reporting, but the right hon. Gentleman should read the original—was that Britain wants to remain in the European mainstream, with its economic and social model, but that can happen only if we get a sensible Brexit deal for continued access to the European market. If we do not, the people of this country will not simply lie down and accept that they will be poorer. We will do whatever it takes to maintain our competitiveness and protect our standard of living.

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The threat is there on the record: this country will be a tax haven, according to the threats the Chancellor has issued today. We know from what the Prime Minister is saying right now that she is intent on pulling up the drawbridge and leaving the single market, and possibly the customs union, cutting us off from one of the largest markets on the planet, threatening jobs and public finances. This is not a clean Brexit; it is an extremely messy Brexit. We can already see the consequences in the rise in the rate of inflation. With real living standards squeezed by this policy announcement, is it not time for the Chancellor—I appeal to him—to reconsider his cuts to in-work benefits and withdraw them in full in the Budget in March?

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No. What the Prime Minister is setting out today is an ambitious agenda for a Britain engaged in the world, and a Britain engaged with the European Union. What she is setting out is a broad-based offer for future collaboration on trade, investment, security, education, technical and scientific areas, and many other matters. We want to remain engaged with the European Union, and I am confident that the approach the Prime Minister is setting out today will allow us successfully to negotiate a comprehensive future relationship with the European Union.

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Order. We do need to speed up, so short, sharp questions and comparably pithy replies are the order of the day.

Oxford to Cambridge Growth Corridor

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6. What steps he is taking to develop the Oxford to Cambridge growth corridor. [908205]

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At the autumn statement, the Government backed recommendations made by the National Infrastructure Commission to invest £140 million in the Cambridge/Milton Keynes/Oxford corridor. That includes development funding for the expressway road scheme and £100 million to accelerate construction of the east-west rail line. The Government support the commission’s ongoing work, looking at a range of delivery models for housing and transport in the corridor.

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How does my right hon. Friend envisage that benefiting the economy in Northamptonshire?

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It is worth pointing out that in the terms of reference for the National Infrastructure Commission’s report the Government noted that the area contained four of the UK’s fastest growing and most productive places—Oxford, Cambridge, Milton Keynes and Northampton. We agree with the commission that transport investment is key to maximising growth potential in the area. We will invest in the east-west rail line and the expressway, which will better connect parts of the region with one another and with the rest of the country, supporting growth and jobs. The commission will issue its final report later this year, including work on delivery options for housing and transport, and we will carefully consider those recommendations.

Single Market

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7. What assessment he has made of the potential effect of losing access to the single market on the chemical industry and the wider economy. [908206]

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The Government absolutely recognise the significant contritibution that the chemicals industry makes to the UK economy, and of course the complex supply chains between the UK and the EU. The hon. Gentleman will have heard the Chancellor’s words just now about the importance we attach to getting the best possible market access, and the Prime Minister is talking about that this morning. We are looking at a comprehensive range of analysis to inform our position as we go into those negotiations but, as the Prime Minister is laying out, clarity and certainty are one of the industry’s big asks.

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The Chemical Industries Association’s Brexit manifesto shows how the chemical industry could help to sustain and enhance the UK as a location for future investment in jobs while playing a leading part in addressing global environmental challenges. Has the Minister read the manifesto? What is she doing to reassure the chemical industry that its very specific needs are at the forefront of her mind as the Government develop their strategy?

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Rather than just reading the manifesto, Ministers have actually been meeting the chemical industry. The Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker), met the Chemical Industries Association on 17 November. All these issues were explored in some detail and a good, productive conversation was had.

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I welcome my hon. Friend’s typically constructive approach, but does she recall the clinical trials directive that destroyed much of the pharmaceutical industry in this country overnight, including Pfizer’s site in east Kent?

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As I recall, the original directive did have some negative effects, but it was improved on in subsequent negotiations to ensure that it did not have the same effect.

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Voters partly backed leave on the basis of the £350 million economic boost that our NHS is still waiting for. Where, therefore, is the democratic mandate for this Conservative version of hard Brexit—leaving the customs union and the single market—that the Chancellor himself has accepted damages the economy and that puts jobs in my Tooting constituency at risk?

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With particular reference to any concerns about employment in the chemical industry, preferably in—

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rose—

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No, the hon. Lady does not need to add anything. I am sure that she meant to mention it in her question. It was an error of omission—only a matter of time.

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Of course. As colleagues across the House will realise, getting the best deal for Britain means getting the best deal for all our major companies and industries. That, in turn, allows us to carry on investing the record amounts that we have in the NHS to date.

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On the chemical industry, I feel sure— Mr David Nuttall.

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Yes, indeed. Does my hon. Friend agree that when we leave the European Union, the fact that this Parliament will be free to redraft the registration, evaluation and authorisation of chemicals regulation, which has long been identified as one of the most burdensome of all EU regulations, will be of enormous benefit to small and medium-sized businesses in the chemical industry, particularly those that only operate within the UK?

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My hon. Friend makes a fair point. A discussion about the REACH regulation was on the agenda when the Under-Secretary of State for Exiting the European Union met the chemical industry and, of course, it will continue to form part of our discussions.

US Banks: UK Operations

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8. Whether he has made an assessment of the potential merits of introducing additional rules to ring-fence the operations of US banks in the UK. [908207]

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US banks operating in the UK are regulated by the Prudential Regulation Authority and the Financial Conduct Authority. The UK’s ring-fencing regime applies to all banks operating in the UK that are above the threshold of holding £25 billion of core deposits.

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Does the Minister agree that the likely rolling back of the Dodd–Frank Act in the US, combined with the watering down of banking conduct reform, could result in deregulated American banks with high-risk lending patterns operating in the UK?

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The UK and US financial sectors have significantly increased their resilience since the crisis, and the PRA has the powers it needs to regulate overseas firms operating in the UK to ensure the stability of the UK financial system.

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What steps are the Government taking to ensure that banks meet the 2019 deadline for separating retail banking from riskier investment banking activity?

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That is well under way and we are keeping a close eye on it.

Household Debt

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9. What recent assessment he has made of the effect of high levels of household debt on the economy. [908208]

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Households’ financial positions have improved. Household debt has fallen from 160% of household income in quarter 1 2008 to 144% in Q3 2016. UK households have undertaken the second-largest amount of deleveraging in the G7. However, we should be alert to signs of a recent reduction in the level of household savings. The savings ratio is now—in Q3 2016—at 5.6%, which is down from 6.6% in Q3 2015.

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Notwithstanding that, household debt is very high, and housing costs are a big proportion of households’ expenditure. Has the Chancellor made an assessment of the impact of an interest rate increase on growth, given that that growth is driven by consumer spending?

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Yes. The Bank of England makes regular assessments of the impact of changes in interest rates—that is a central part of the modelling work that it does. The hon. Gentleman is absolutely right that one of the drivers of the relatively high household debt levels in this country is our housing model, with relatively high percentages of home ownership.

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The Governor of the Bank of England has identified that two of the most serious challenges to the economy today are levels of household debt and the falling pound. Both of those are made worse by the widespread belief among the general public that interest rates are not going to go up. What more can the Government and the Governor of the Bank of England do to signal to the public that interest rates will rise, and not fall, in the near future?

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That is not a matter for the Government, because, as my hon. Friend knows very well, interest rates are a matter for the Monetary Policy Committee of the Bank of England, and it is up to the Governor and individual members of the Monetary Policy Committee to signal as they see fit.

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TUC analysis published last week showed that unsecured household debt is at a record high. Even the Bank of England voiced concern yesterday that the UK was relying on consumer spending rather than exports and investment to boost growth, which bodes poorly for the future. Does the Chancellor acknowledge that such high levels of household debt are indicative of the fact that the Government’s economic strategy simply is not working, especially for most families who are now struggling to get by on their incomes alone?

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No, I do not accept that at all. What I do accept is that the extraordinary performance of the UK economy over the last six months, which has defied many predictions, has been largely driven by consumer behaviour. As I just set out in my response to the hon. Member for Eltham (Clive Efford), the savings ratio has declined, so consumers are feeling confident, and they have been spending money rather than saving it over the last six months.

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I invite the Chancellor to meet struggling families in my constituency and, indeed, across the rest of Britain. Even the Office for National Statistics reported on 10 January that non-retired households have less money on average than before the economic crash. Chronic low pay, lack of opportunity and Government cuts to support mean that they are desperately trying to find ways to make ends meet on a monthly basis using debt. Will the Chancellor therefore confirm what protection he will offer these families should inflation rise significantly as a result of the pound’s weakness since Brexit and, indeed, in the light of the Bank of England’s suggestion yesterday that interest rates could go up?

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The hon. Lady is right, of course, that the declining value of sterling will have an impact on inflation, and we have to take that into account as it feeds through the economy. The OBR signalled in its autumn statement report how it expects that to occur. At the time of the Budget on 8 March, we will get new reports from the OBR in the light of currency movements since the autumn statement, and I will report to the House again then.

Banking: Carers

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10. What progress has been made on improving access to online and in-branch banking for carers. [908209]

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Banks are required to treat customers fairly and ensure that vulnerable customers have appropriate access to banking. My hon. Friend and I met recently to discuss this, and I am pleased to hear that both the Financial Conduct Authority and the British Bankers Association have offered to meet my hon. Friend to discuss it further.

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I am grateful to my hon. Friend for meeting my constituent Annie Dransfield, who, as a carer for her adult son, manages his finances in the hope that he will be able to live as independent a life as possible, but she has real issues trying to access his online banking. Given the increasing number of carers in the country, does my hon. Friend agree that the banking industry should do all it can for these very important customers?

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The FCA and BBA are both looking at ways to make it easier for trusted friends or family to help people to manage their money safely, and I wish my hon. Friend luck with his meetings.

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As my brother’s appointee after he suffered severe head trauma in an accident 11 years ago, I can see many avenues by which carers’ time is taken up dealing with red tape. Will the Minister outline his view on how things such as online banking can be kept safe but made simpler for carers with regard to multiple usernames?

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I can assure the hon. Gentleman that we have discussed this. It is the very issue that my hon. Friend the Member for Pudsey (Stuart Andrew) will be discussing with the BBA and the FCA, and the Government are keeping a close eye on it.

Housing Supply

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11. What fiscal steps he is taking to increase housing supply in (a) Peterborough and (b) England. [908210]

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Progress has been made since 2010, with housing starts now at an eight-year high. However, the scale of the challenge requires us to go further. That was why my right hon. Friend the Chancellor announced in the autumn statement that the Government will invest £5.3 billion in housing. This includes investing £2.3 billion in the new housing infrastructure fund, which will deliver up to 100,000 homes in high-demand areas, an additional £1.4 billion to deliver 40,000 new affordable homes, and £1.7 billion to deliver a programme of accelerated construction on public land.

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Does my right hon. Friend agree that supporting the off-site construction of new homes, as we have been doing in Peterborough, is one important way to get more good-quality homes built quickly?

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I do agree that we should explore the potential of modern methods of construction, including off-site construction. We should also ensure that the Government support new entrants into the market, particularly SME builders. The accelerated construction programme announced by my right hon. Friend the Communities and Local Government Secretary in October, which aims to speed up the build-out of homes on public land, will include an element of off-site construction. The Department for Communities and Local Government is actively considering ways of encouraging diversification in the house building market.

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Oh, we had better get the fellow in; otherwise he will be very unhappy. I do not like to see the hon. Gentleman unhappy. I call Mr Barry Sheerman.

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As someone who chairs a national charity based in Peterborough, and also as the Member of Parliament for Huddersfield, may I back the people who have been saying not only that we need a more diverse housing market and better provision, but that the future must be lower-cost housing and off-site construction, and to a highly sustainable standard?

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I thank that we can agree on all that; there is consensus on this point. We do need to build more homes. Building more homes more cheaply, but of high quality and on a sustainable basis, is something on which I hope the whole House can agree.

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In my constituency, we face high levels of proposed new housing. Can the Minister assure me that that will be matched with increased investment in our local infrastructure?

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I draw my hon. Friend’s attention to the housing infrastructure fund, which demonstrates the Government’s determination to ensure that when new housing is built in areas of high demand, we also deliver the infrastructure to support that housing. That will have a beneficial effect by getting more houses built, and also ensuring that the appropriate infrastructure is in place.

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rose—

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Order. This is about Peterborough and England, not Kilmarnock and Loudoun—or even Scotland. I am going to save the hon. Gentleman up for a later occasion. We look forward to that with eager anticipation.

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For many in my constituency, home ownership is but a pipe dream, with more people renting privately than owning their own homes. What steps is the Minister considering to encourage private landlords at least to offer longer tenancies for these very many private renters in London and in Hackney South?

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We look to put in place measures to support all sectors and all types of housing. The hon. Lady is absolutely right to say that private rented housing is a really important sector. However, I am sure that she agrees that we have to be careful about some of the proposals on rent controls that float around, which would be damaging for the private rented sector.

Value of the Pound

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13. What assessment he has made of the effect of recent trends in the value of the pound on the economy; and if he will make a statement. [908212]

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The Government do not comment on currency movements and we do not target an exchange rate, but I will tell the House that the pound has spiked in the last few minutes while the Prime Minister has been speaking. The vote to leave the EU has obviously caused some uncertainty in the movements of financial markets. More generally, the fundamentals of our economy over the last couple of years have been strong.

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I think what the Chancellor means is that he does not comment on currency movements unless he does.

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But is it not the case that No. 10’s office briefed that the pound would fall as a result of the Prime Minister’s remarks today? Did it do that in a cynical attempt to get the soundbite that the Chancellor has just sought to achieve?

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I draw a distinction between providing the House with information and commenting on that information—I would not dream of doing the latter. The other thing I would not dream of commenting on is any operations that No. 10 might undertake, which are well beyond my pay grade.

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The depreciation of the pound during the past few months has been of significant benefit to west midlands exporters, particularly those exporting outside the European Union. Does the Chancellor agree that whatever arrangements we come to for access to the single market after we leave the European Union, they must not constrain west midlands exporters from growing their trade outside the European Union?

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On the contrary, the arrangements must support west midlands exporters in that endeavour. We still have a very large current account external deficit, and we need to bring our trade into better balance. One of our objectives in concluding the exit arrangements from the European Union will be to support that.

Concentrix

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14. Whether the Government plan to publish a timetable for investigating HM Revenue and Customs’ contract with Concentrix. [908213]

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The independent National Audit Office has in fact published its report on HMRC’s contract with Concentrix today. HMRC senior managers will attend a Public Accounts Committee hearing on 25 January, at which the report will be discussed.

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Given the report released this morning, which the Minister mentioned, and the fact that the whole debacle has caused undue stress to thousands of people across the country, including in my constituency, what specific lessons has she and the Department learned?

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There are a number of things. I reflected on them during the Opposition day debate on this subject when, as Labour Front Benchers will remember, I accepted their motion. We have of course learned a number of lessons, including on how Ministers monitor colleagues’ views about the way in which we deal with their concerns on behalf of their constituents. HMRC has confirmed that it is not planning a contract of this nature for this particular operation, but it will have more to say when it responds both to the PAC and to the report.

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Given the NAO’s excoriating report on Concentrix’s failure to achieve savings targets, performance targets, serviceable staffing levels, sufficient levels of training, call handling accuracy, proficient contract management and competent decision making—while, unbelievably, increasing its commission almost threefold—would not the Chancellor’s time be better spent concentrating on getting a modicum of efficiency into HMRC, rather than popping off to Davos for a winter sojourn?

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First, I want to say that many tens of thousands of people work for HMRC. It would do their morale a power of good if people in this House reflected on their current excellent performance and the improvements they have made on customer service compared with two years ago. I want to compliment them publicly on the improvements they have made.

We have accepted that mistakes were made on Concentrix, and that is the reason why the agreement was terminated. We will reflect on that further when we respond to the National Audit Office report.

Topical Questions

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T1. If he will make a statement on his departmental responsibilities. [908190]

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My principal responsibility remains delivering near-term measures to ensure stability and resilience as the UK exits the EU, while also addressing the UK’s long-term productivity challenge. My immediate focus is on preparing the last ever spring Budget for delivery on 8 March.

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Many of my constituents are concerned about the future of the Green Investment Bank in relation to possible asset stripping, the worth of the golden share and the suitability of the buyer. What is the Department doing to ensure that the UK taxpayer is given a fair deal on the sale of the bank and the bank retains its green focus?

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Those are two of the criteria that we have set: there should be value for money for the taxpayer; and the bank’s focus for future operations should be retained and protected. We are reviewing the sale process as it goes forward, and we will make sure that those outcomes are protected.

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T2. The latest fiscal sustainability report was published by the Office for Budget Responsibility just over an hour ago. Knowing what a quick reader my right hon. Friend is, what assessment has he made of the implications for the long-term health of the public finances? [908191]

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I am not only a quick reader, but able to read the report while also answering questions in the House.

The OBR’s report shows that, under certain circumstances, the UK public finances will come under increasing pressure over the next 50 years. As I said earlier, this creates a catalyst for a discussion, which we need to have, about how we maintain the sustainability of our crucial public services, given the pressures, including demographic pressures, that they will face. I believe that the report serves a useful purpose. Given that the point 50 years out is sufficiently far away, I hope that we will be able to have a mature, cross-party discussion about how we address these issues in the long term.

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T5. The autumn statement revealed the Brexit bombshell that growth will be a massive 2.4% lower than previously predicted. What further impact does the Chancellor expect that leaving the single market will have on GDP growth in the years to come? [908194]

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The Office for Budget Responsibility set out its projections under different scenarios at the autumn statement. It is the OBR that makes the forecasts. It will, of course, produce a revised set of forecasts that will be published on 8 March—Budget day.

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T4. Businesses, including restaurants and guest houses in my constituency, curtail their business to keep within the VAT threshold, but that has a negative impact on economic activity and jobs in west Cornwall and the Isles of Scilly. Will the Chancellor consider increasing the VAT threshold as soon as the opportunity arises? [908193]

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I thank my hon. Friend for that point, which I am happy to discuss. It is worth putting on record that VAT is projected to raise £138 billion for the public finances this year. We have one of the highest thresholds in the EU, but I am always happy to listen to colleagues. I know that the concerns of the tourism industry are to the fore in the minds of many colleagues.

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T6. Last week, the Nuclear Decommissioning Authority began a statutory consultation on UK Government plans to cut final salary pensions across the nuclear estate, which will have an impact on 16,000 workers, including hundreds in my constituency. Is the Chancellor aware that this is a betrayal of promises made by Margaret Thatcher to nuclear workers when the electricity industry was privatised? [908195]

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The Government and the relevant agency recognise the importance of the employees who work in this sector, but it is necessary to have terms and conditions that reflect the modern situation that applies across the economy as a whole.

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T7. The Solent region has a deficit of 6% in its gross value added compared with the rest of the south-east. Much of that is due to the lack of investment in local transport infrastructure; for example, there has been no significant rail investment for 50 years. Can Ministers confirm that the new national productivity investment fund can be used to address that deficit? [908196]

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I can say to my hon. Friend that the very purpose of the national productivity investment fund is to support economic growth across all regions of the country. Further details specifying how and where the fund will be invested will be set out by the relevant Departments and agencies in due course. The Solent will not be forgotten, and we are taking action to improve rail services, with a new franchise expected to deliver more services and quicker journey times on South West Trains.

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It is simply not good enough to throw Concentrix under the bus. Today’s National Audit Office report finds that HMRC was at fault in the writing of the contract, in failing to monitor it, and in intervening to make things worse after a poor performance in summer 2015. Who at HMRC will be held accountable for the gross failings of this contract from beginning to end?

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The hon. Lady and I have debated this issue. We are looking at the significant criticisms in the report. We have accepted a number of the criticisms that have been made about the handling of this matter, but a lot of money has been saved by addressing error and fraud in the tax credits system. HMRC will respond in more detail at next week’s PAC hearing, and I will be considering the report in detail.

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T8. The Halifax reports that the number of first-time buyers is at its highest since 2007 and cites Government schemes such as Help to Buy as making a major contribution. What more can the Government do to back aspiration and get more people on the housing ladder? [908197]

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The Help to Buy scheme has helped more than 220,000 households to buy a home, including more than 180,000 first-time buyers. In the autumn statement, the Chancellor announced that the Government will invest an additional £1.4 billion in affordable housing to deliver 40,000 new homes for shared ownership, rent to buy and affordable rent, bringing the total funding of the affordable homes programme to £7.1 billion.

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Will the Chancellor state unequivocally the Government’s commitment to the 0.7% aid target in this and future spending rounds?

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As the hon. Gentleman knows, the 0.7% target is enshrined in primary legislation, and the Government have no intention of changing that.

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T9. The Government are investing in major infrastructure projects, including Heathrow airport, HS2 and, I hope, a new A36-A46 link road through my constituency. What is my right hon. Friend doing to ensure that we provide sufficient funds so that this work can be conducted in a timely fashion? [908198]

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The Government are committed to supporting the skills we need to deliver our national infrastructure. In the transport infrastructure skills strategy for 2016, we committed to creating 30,000 road and rail apprenticeships by the end of the Parliament. In addition, the Department for Business, Energy and Industrial Strategy is investing £40 million in the national college for high-speed rail, with additional funding for the college coming from local government and industry. Finally, Heathrow airport has committed to double the number of its apprentices to 10,000 by the time the new third runway is operational.

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Changes to the rateable value for solar panels for organisations mean that business rates for organisations with solar rooftop installations, such as schools, hospitals and SMEs, could increase dramatically—six to eightfold—in April. Do the Government recognise the huge damage that this will cause to organisations that have installed panels in good faith, as well as the solar panel industry?

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The installation of solar panels is only one of the factors that determines the rateable value. That said, a £3.4 billion transitional relief scheme will support businesses facing an increase in business rate bills, while businesses with solar panels will also benefit from the £6.7 billion package—the biggest ever—to reduce business rates.

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T10. The Government will be aware that north Wales has among the lowest productivity rates in the UK, at about 73% of the UK average. With that in mind, what plans do they have to work with the six north Wales councils, the Mersey Dee alliance and the Cheshire and Warrington local enterprise partnership to deliver a local growth deal? [908199]

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I can confirm to my hon. Friend that Treasury Ministers have regular discussions with ministerial colleagues about how the Government can boost growth and productivity across Wales and the UK. At autumn statement 2016, the Government confirmed that the door was still open for a growth deal with north Wales, and we are committed to negotiating a city deal for the Swansea Bay city region in south Wales. I look forward to receiving proposals from partners in the north Wales region over the coming months.

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The right hon. Gentleman is always very well briefed for these topical questions—reading out the screed! Very good.

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The International Monetary Fund yesterday highlighted widening inequality and stagnation as key drivers of social dislocation, while the Institute for Fiscal Studies has recently warned of the biggest pay squeeze in the UK for 70 years. What is the Chancellor’s strategy to ensure that growth in our economy benefits everybody?

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Income inequality has been falling, but of course we face challenges as the depreciation of sterling works its way into inflation in the economy. That is an issue on which we will remain very much focused, and I will address it in more detail in the Budget.

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Alongside other elements driving recent extremely successful purchasing managers’ index surveys were seven consecutive months of export growth. Does the Minister agree that this is a fine way to underpin our already record rates of employment?

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I agree. The PMI surveys show significant resilience in the UK economy since the referendum. The Prime Minister recently made it clear that we will make a success of leaving the EU.

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Given the Chief Secretary’s earlier comments about attempts to stimulate house building, can he guarantee that at the end of this Parliament the supply of rented homes will be larger than it was at the beginning?

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We are likely to build more affordable homes in this Parliament than have been built since the 1970s.

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There are currently 87,000 ultra-low emission vehicles on our roads, but the Committee on Climate Change says that we need 1.7 million by 2020. What more can the Treasury do to help us to reach that challenging target?

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I recognise my hon. Friend’s concern. This matter was on my agenda when I was Transport Secretary in 2010. The roll-out of ultra-low emission vehicles has been disappointing—it has not been as fast as I would have hoped—and that will be one of the issues we consider as we try to respond to concerns about air quality, which have been reinforced by recent court decisions requiring the Government to review their approach on that.

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In his previous Budget, the Chancellor stuck in a £7 billion investment line for the year 2021-22, which is beyond the remit of this Parliament, so will he explain what that money is for?

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It is customary to present forecasts for fiscal events over the forecast period which, as we progress through this Parliament, will stretch beyond its end. That is how it has always been done, and it would not be helpful to give the House only a shorter horizon.

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rose

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rose—

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A choice of Berries! A London Berry and a Lancashire Berry. Let us hear from London Berry.

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Thank you, Mr Speaker. This is a London-related question. Major infrastructure investment will form a vital part of our economy in post-Brexit Britain. Will my right hon. Friend confirm his support for London’s major infrastructure project—Crossrail 2?

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The Government will, of course, consider all proposals for infrastructure investment on their merits. When the industrial strategy Green Paper is published, it will set out the Government’s approach to prioritising infrastructure to support the economy.

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When the Chancellor considers the effect of bringing in quarterly reporting, will he look at the figures showing that only 25% of our smaller businesses have maintained electronic accounting records and that 38% lack basic digital skills? Will he listen to what the Chair of the Treasury Committee said when he described this as a potential “disaster”?

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I always listen to what the Chairman of the Treasury Committee says. I am considering the Committee’s very useful report carefully. Of course, it acknowledged that the digitisation of the tax service represents the direction in which we should be travelling, but we are looking carefully at the possible impacts on small businesses, many thousands of which we have already exempted through our existing announcements.

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rose—

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I think it is Lancashire’s turn.

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Thank you, Mr Speaker. On the subject of berries, does my right hon. Friend the Chancellor share my concern that too many JAMs are becoming jam tomorrow with the ballooning of household debt? What steps will he take to stop inappropriate and irresponsible lending by credit card companies and banks to low-income households?

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The Government and the regulatory authorities take appropriate measures to prevent inappropriate lending and to make sure that credit products are not mis-sold, and we will continue to do so.

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The hon. Member for East Lothian (George Kerevan) always looks so happy. We will make him happier by calling him.

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Thank you, Mr Speaker; it is your presence that makes me happy.

While the Chancellor has been answering questions, the Prime Minister has said in her Lancaster House speech that the UK will most likely continue to pay into EU budgets. Will the Chancellor acquaint the House of that?

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We have always said that if, as part of our future arrangements with our former European Union partners, we continue to collaborate in certain areas, such as scientific and technical research programmes, we will of course have to expect to contribute. All this is for the negotiations ahead. The Prime Minister has today set out a 12-point plan for Britain’s future relationship with the European Union, which is exactly what our partners have been demanding from us. I hope that this will now signal the beginning of serious engagement on Britain’s future relations.

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I heard this morning that an overseas insurance company had chosen Zurich over London as its European base because it felt that the Swiss authorities were much quicker to engage with it than the London authorities. Will the Chancellor ensure that we are the most competitive financial services market in the world and that we really take overseas investment seriously?

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Of course. I thought that my hon. Friend was going to tell me that the company had chosen an EU location over London, so I am interested to hear him say that it has chosen Zurich—the only other possible non-EU location. I will look at the issue that he raises. It is our objective to have the most attractive location on this continent for inward investment and for foreign businesses to do their business.

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Inflation is still below the Monetary Policy Committee’s official target, and the economy has long been at greater and more worrying risk of deflation than inflation. Will the Chancellor therefore be seeking to dissuade the Governor of the Bank of England from any thoughts of raising interest rates, which would simply inflict wholly unnecessary damage on the economy?

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No. It is not for me to dissuade or persuade the Governor of the Bank of England in relation to interest rate policy. However, I will say this to reassure the hon. Gentleman: although this morning’s inflation figure—1.6%, as measured on the consumer prices index—is below the Bank of England’s target rate, the forecasts of the OBR and, indeed, the Bank suggest that the figure will meet and exceed the target rate later in the year.

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Finally, I call Yvonne Fovargue.

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More than a year ago, the Treasury promised to consult on breathing space to assist people in debt and protect them from interest and other charges while they seek help. In view of the high levels of personal debt, will the Minister commit himself to proceeding with that as a matter of urgency?

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I can tell the hon. Lady that we are looking closely at the issue and will see some progress in the very near future.

Northern Ireland Assembly Election

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With permission, Mr Speaker, I shall make a statement about forthcoming elections to the Northern Ireland Assembly.

As the House knows, Martin McGuinness resigned as Deputy First Minister of Northern Ireland on Monday 9 January, as a result of which the First Minister also ceased to hold office. That began a seven-day period in which both positions had to be filled, or it would fall to me to fulfil my statutory obligation as Secretary of State to call a fresh election to the Assembly.

Over the past week, I have engaged intensively with Northern Ireland’s political parties to establish whether any basis exists to resolve the tensions within the Executive without triggering an election. I have remained in close contact with the Irish Foreign Minister, Charlie Flanagan. In addition, my right hon. Friend the Prime Minister has been kept fully informed, and has had conversations with the former First and Deputy First Ministers and the Taoiseach, Enda Kenny. Regrettably, despite all our collective efforts, it has not proved possible to find an agreed way forward in the time available. In the Northern Ireland Assembly yesterday, the Democratic Unionist party nominated Arlene Foster as First Minister, while Sinn Féin declined to nominate anyone to the post of Deputy First Minister.

I have some discretion in law over the setting of a date for an election, but, given the circumstances in which we find ourselves in Northern Ireland, I can see no case for delay. As a result, once the final deadline had passed at 5 pm yesterday, I proposed Thursday 2 March as the date of the Assembly election. The Assembly itself will be dissolved from 26 January, which means that the last sitting day will be 25 January. That will allow time for any urgent remaining business to be conducted before the election campaign begins in earnest. I am now taking forward the process of submitting an Order in Council for approval by Her Majesty the Queen, on the advice of the Privy Council, formally setting in law the dates for both the dissolution and the election. In setting those dates, I have consulted the Chief Electoral Officer for Northern Ireland, who has given me assurances on operational matters relating to the running of the election. The decisions that I have made have also been informed by my ongoing discussions with Northern Ireland’s political leadership.

As all Members will understand, elections are, by their nature, hotly contested. That is part of the essence of our democracy. No one expects debates about the key issues in Northern Ireland to be anything less than robust. I do, however, wish to stress the following.

This election is about the future of Northern Ireland and its political institutions. That means not just the Assembly, but all the arrangements that have been put in place to reflect relationships throughout these islands. That is why it will be vital for the campaign to be conducted respectfully and in ways that do not simply exacerbate tensions and division. Once the campaign is over, we need to be in a position to re-establish strong and stable devolved government in Northern Ireland.

Let me be very clear: I am not contemplating any outcome other than the re-establishment of strong and stable devolved government. For all the reasons I set out in my statement last week, devolution remains this Government’s strongly preferred option for Northern Ireland. It is about delivering a better future for the people of Northern Ireland and meeting their expectations. For our part, the UK Government will continue to stand by our commitments under the Belfast agreement and its successors, and we will do all we can to safeguard political stability.

Over the past decade Northern Ireland has enjoyed the longest run of unbroken devolved government since before the demise of the old Stormont Parliament in 1972. It has not always been easy, with more than a few bumps in the road, but, with strong leadership, issues that might once have brought the institutions down have been resolved through dialogue. And Northern Ireland has been able to present itself to the world in a way that would have been unrecognisable a few years ago: a modern, dynamic and outward-looking Northern Ireland that is a great place to live, work, invest and do business.

Northern Ireland has come so far, and we cannot allow the gains that have been made to be derailed. So, yes, we have an election, but once this election is over we need to be in a position to continue building a Northern Ireland that works for everyone. That is the responsibility on all of us, and we all need to rise to that challenge.

In that spirit, Mr Speaker, I commend this statement to the House.

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I thank the Secretary of State for his statement.

Like most of us, I am saddened that we are here today, and I know that so many good people in Northern Ireland will feel exactly the same, with deep regret that we have reached this impasse. I have personally been involved for almost three decades in Northern Ireland-related issues, and if I have learnt one thing it is that political vacuums should be avoided at all costs. So I say to the Secretary of State today that he must not only make sure that he is willing to fill that vacuum, but work with all parties to try to seek a way forward so that we avoid the nightmare scenario of six weeks of increasingly bitter campaigning which leaves us in the same place as when it started, with no solution in place to heal the huge divide and to bring together those elected to represent all the people of Northern Ireland.

I realise that the tension of an election dominates people’s minds and the news agenda may well be focused on other issues, but I suggest that for the sake of all of us on these islands we highlight the critical importance of maintaining devolved and functioning government in Northern Ireland. I want to see young men and women from Blaydon continuing to go to Belfast with rucksacks on their backs; I do not want to go back to the days when they went there with rifles over their shoulders. Anyone who thinks that this is some form of local difficulty in Northern Ireland should think again.

I want to see the continuing peace and prosperity in Northern Ireland that is helping to grow the economy and the life chances of all who live there. I want the world to look at Northern Ireland and rightly applaud the success we have witnessed over the past decades. I hope none of us wants to see a divided Northern Ireland that turns in on itself, as, sadly, we have seen so often in the past.

There are huge issues facing the people of Northern Ireland: our exit from the European Union and the real changes this will bring to everybody’s everyday lives; the uncertain position from the Government on the UK’s only land border with Europe; how to keep improving economic performance; and, critically, how we deal with Northern Ireland’s unique and painful past. Without a stable, workable Government, all these issues will be much harder to progress.

Last week, the Secretary of State and the Prime Minister assured me and the House that there would be scope for the Northern Ireland voice to be heard in the run-up to our negotiations on the EU, via a Joint Ministerial Council. If that is the case, there is no reason for the Secretary of State not to engage with the parties and communities over the next eight weeks, in order to resolve the issues that have led to this breakdown. He must not let the election be an excuse for not getting people together.

Let us be clear: what is happening in Northern Ireland is not just about who is or is not the First Minister or Deputy First Minister, or the debacle that is the renewable heat incentive scheme. There are other real underlying issues, including how we support victims of the troubles; women’s rights; equality for LGBT communities; the treatment of ethnic minorities and migrant groups; and, above all, how we deal with Northern Ireland’s past and the crucial issue of trust and mutual respect. The Secretary of State has a responsibility to ensure that the Government deal with all parties in Northern Ireland on an equal basis. That is clearly a matter of huge concern to a number of the parties there.

I give due credit to the Secretary of State for the calm and measured tone that he has adopted so far, and I will not deny myself the optimism that those of us who love Northern Ireland still feel. To that end, I can assure the House that we in Labour will do everything we can to help, but all the parties need to look at what they can do to prevent the present impasse from degenerating into total collapse. Let me make it clear that we need to avoid a return to direct rule if at all possible. We need Northern Ireland politicians to stand up and be counted, to recognise their responsibility and to accept that the vehicle for addressing the concerns and needs of their communities is the Assembly and its Executive. The need for the continuation of the Assembly should be the No. 1 priority for them all, and for us in Westminster. The imposition of direct rule will serve no one. In the weeks to come, we should not let any personal political positioning, posturing or differences get in the way of the return of a working Government in Northern Ireland.

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I welcome the hon. Gentleman’s comments and his emphasis on the need to return to shared government in Northern Ireland at the earliest possible opportunity. I welcome his support and his comments underlining the shared responsibility that we all keenly feel in seeking to achieve that outcome by using the time ahead as effectively as possible. He is aware that there is a relatively short period of time following an election—around three weeks—in which to form an Executive. We need to use all the time, up to polling day and beyond, to try to bring people together and to retain the sense of dialogue, difficult and challenging though that might be during an election period. It is important that we continue to do that.

We recognise that political stability is the primary responsibility of Governments. I have had discussions with all the parties since my last statement, and I have focused on engaging widely in order to encourage and promote a way forward. That is absolutely what I will continue to do in the time ahead. No one should prejudge the outcome of the election. We should be absolutely focused on seeking to get the right outcome, which is the continuation of devolved government in Northern Ireland. That is in the best interests of the people of Northern Ireland as it will allow things to move forward. As the hon. Gentleman said, we must work collectively to that end and approach this in a positive way if we are to achieve that outcome.

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I returned from Londonderry this morning following meetings there yesterday. I witnessed a great sense of frustration there about what is happening, and a great sense of disappointment that the Assembly is yet again under threat and has indeed fallen. Does the Secretary of State agree with me—and, indeed, with the proposal from the shadow Secretary of State—that the coming weeks should be used to explore all the possibilities? None of us wants to see a return to direct rule, but the worry is that there is a strong possibility that the election—which the Secretary of State is obliged to hold—will deliver the parties back to Stormont in roughly the same numbers as now. What is the likelihood of making progress under such similar arrangements? Surely we should use the coming weeks to put in place a plan B under which we could continue with some form of devolved government and not bring powers back to this House, because direct rule is not a satisfactory way of running Northern Ireland.

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I am grateful to my hon. Friend for his comments. He rightly identifies the maintenance of devolved government in Northern Ireland as the key issue. He is also right to say that we must use the available time to ensure that communication lines and dialogue remain open during the election period, however difficult that might appear. Equally, the issues relating to trust and confidence in the institutions, and in the ability of parties to work together in the shared government arrangement, will still need to be resolved. The question of how we can use this time to bring people together must be at the forefront of our minds.

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I thank the Secretary of State for giving me notice of his statement. I support the calls made yesterday for the election to be conducted in a manner that looks to the future and anticipates difficult but reasonable negotiations for the establishment of an effective Administration after the election. No one will get everything that they want from this election or from the formation of the new Executive, but the people whom the politicians serve deserve our best and most faithful efforts. The victory in this election should belong to the people, not to political parties.

This election has been brought about by circumstances that have their genesis in Belfast and that will also have their solutions in Belfast. We will be onlookers to a great extent, but there are some areas in which the efforts made here might help. I am pleased that dialogue between the Secretary of State and the parties in Northern Ireland will continue throughout the election period, so that the ground is prepared for the negotiations over holding office in March. Can he tell us whether he will take those opportunities to reassure the parties that funding will not be cut, particularly from the support for addressing the legacy issues? The Assembly suffers from the austerity fetish as much as the rest of the UK, but it carries additional burdens and needs those extra resources.

The past couple of months in the Assembly have been marked by some serious allegations. What support will the Secretary of State be able to offer the Assembly to have those allegations properly investigated and to find resolutions? The uncertainty of this election, with the peculiarities surrounding it, adds to the uncertainty of the Brexit mess. What support can the Government offer to people and businesses in Northern Ireland to smooth the next few months? Also, will he clarify what special arrangements he is putting in place to consult on the Brexit negotiations while the election is ongoing?

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I am grateful to the hon. Lady for highlighting the issues relating to the nature of the elections. I think we all recognise what is at stake here. I can assure her that we will be doing our part to maintain communication channels and open dialogue. We will continue to encourage the parties to think carefully about the nature of the campaign ahead and about how best to bring people back together afterwards to get on with the process of devolved government in Northern Ireland. She asked a number of more detailed questions. On the question of legacy, she will know that it remains this Government’s intent to give effect to the Stormont House agreement. Indeed, the funding commitments that were made in respect of that remain firmly in place.

In respect of support for the investigations and inquiry into the allegations that have provided the trigger, or the catalyst, for the situation we find ourselves in, I continue to believe that the best solution for this lies within Northern Ireland. This is a devolved matter, and it still seems right that the answers should come from that direction. I remain open to working with the parties on a cross-community basis to see what support can be given because, ultimately, getting answers on these issues is what matters.

On the UK’s departure from the European Union, as hon. and right hon. Members will have heard, the Prime Minister set out a very clear position on this Government’s approach. Indeed, she emphasised the issues on the common travel area and on strengthening the Union, too. Hon. and right hon. Members will have plenty of opportunity to raise further questions on that later today.

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To the extent that the Secretary of State has a locus in this matter, may I make a fervent plea that he should protect the interests of former British soldiers currently being charged by the Sinn Féin-supporting Director of Public Prosecutions for Northern Ireland with murder for events that took place more than 40 years ago? Is he aware that it appears that the Director of Public Prosecutions issued a notice to news desks, not for publication, stating:

“We would advise that if you publish an article which alleges lack of impartiality on the part of the Director or any other prosecutor that the appropriate legal action will be taken and we will make use of this correspondence in that regard and in relation to a claim for aggravated and exemplary damages”?

Is that not an attempt to muzzle Parliament and, indeed, to question the right of this House to support those soldiers who sought to bring about peace in Northern Ireland?

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In my usual way I have been, as I think the House would acknowledge, extremely generous to the hon. Gentleman. He has asked a most interesting question, and he has delivered it with his usual eloquence, but it does suffer from one disadvantage, which is that it has absolutely nothing whatsoever to do with the statement made by the Secretary of State. Nevertheless, I have indulged the hon. Gentleman, and he can thank me on a daily basis.

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My hon. Friend raises the important issue of legacy. As I indicated to the House last week, I will never tire of praising the work of our armed forces personnel in securing the peace, the stability and the arrangements that we see in Northern Ireland today. Yes, I do have some concerns about imbalance within the system, which is why I believe it is right that we move forward with the Stormont House agreement and the legacy bodies that are set up there. I will not comment on any individual decisions. Indeed, justice is devolved in Northern Ireland. It is independent, and has its own processes that remain in place in an independent way. I hear clearly his very general and very firm point on balance within the overall system, which is something that I am very keen to address.

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The Democratic Unionist party has worked tirelessly in recent years to move Northern Ireland forward, to make devolution work and to create the conditions for stable government in Northern Ireland, so we are deeply disappointed, frustrated and, indeed, angered by the decision of Sinn Féin to walk away from devolved government and to cause this election. What is the election about? It is fairly clear that it is not about the renewable heat incentive issue; had it been, we could have got on with sorting it out. Indeed, the election will serve to disrupt and delay sorting out those issues.

The election is about Sinn Féin seeking opportune political advantage, seeking to overturn the result of the election held just a few months ago, seeking to gain a list of concessions from the Government on legacy issues, such as rewriting the past and putting more soldiers and policemen in the dock, and other issues, and seeking other concessions from the DUP. Let us be very clear that we will work through this election, and afterwards, to create a stable devolved Government in Northern Ireland, but let this House and the people of Northern Ireland know that, just as we have not given in to Sinn Féin’s demands in the past, we will not bow down and give in to Sinn Féin’s unreasonable demands going forward, because that is what this election is all about.

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I recognise that there are strongly held views on all sides, and as we enter the election period, I am sure these issues will be hotly and keenly contested. From what the right hon. Gentleman says, I welcome the willingness to engage, the willingness to work things through and the desire to get back to stable, shared devolved government. We all have that focus in our minds when looking to the future of Northern Ireland and how we can get on with governing in the best interests of all Northern Ireland.

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Does the Secretary of State agree that an unencumbered, unhindered press is vital to the future elections? Does he agree that any chilling effect or threat could undermine the very democratic essence of these elections? We must have a free and fair press.

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I am sure that the issues around the election will be keenly and hotly contested. From all my experience of the press in Northern Ireland, it is fair, free and open, with wide debates contained within it. The Government certainly see those building blocks in the freedom of the press and, indeed, in the strength of our judiciary and legal processes, and we want to see that those pillars of our democracy are upheld.

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In truth, Northern Ireland has lurched from one political crisis to another in recent years. Is it not time that the Government urgently reviewed the constitutional arrangements covering power sharing, including issues such as the title of First and Deputy First Minister and a whole range of other issues? Is that not how the Government could add value in terms of long-term stability?

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We need to be very careful about the approach we take at the moment. We are now embarking on an election and, as I said, I do not want to prejudge the outcome of that election or, indeed, the discussions that take place during this period and through and beyond the short window of time that we have after the election period. We will do all we can as the UK Government, and we hold a primary responsibility to provide political stability within Northern Ireland. Clearly, the parties will need to discuss things through an open dialogue that I hope brings people back together, but at this stage, in seeking to open and widen the debate, we need to be very focused on the task at hand in bringing people back together again. Yes, the UK Government will play their part in supporting the Belfast agreement and its successors, bringing an element of stability and getting devolved government back in Northern Ireland, which is what we all want to see.

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Having served on three tours in Northern Ireland, I congratulate the Secretary of State on his calm and measured approach in these difficult circumstances. Does he share my concern that if indeed the resignation of Mr McGuinness was political and not because of the environmental issue, the intent of Sinn Féin is to hold these elections and then not to reappoint, which would put pressure on my right hon. Friend to resort to direct rule, with all the consequences of that? Does he share my concern that that is a real possibility?

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I have said that an election campaign that seeks to divide and to make it that much harder to bring people back together again afterwards is clearly a risk, and one that I am concerned about. Again, I encourage people to think about these issues very carefully. It is clear that the issues at stake here go much wider than simply the renewable heat incentive scheme, which was perhaps the catalyst that crystallised this. We need to be very careful, and we need to appreciate what is at stake here. Again, it is so important that people are able to work together and to maintain communication and dialogue so that we see the return of shared government in Northern Ireland for all communities at the earliest possible opportunity.

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The Secretary of State has quite rightly said that trust and confidence in the institutions in Northern Ireland have to be rebuilt. One of the best ways of doing that is transparency, including transparency on the renewable heat incentive scheme and, with the greatest of respect to him, on the political parties operating in Northern Ireland, and on the donations to them. Sinn Féin has precipitated this election. The people in Northern Ireland are entitled to know who is funding Sinn Féin, who is funding this premature Assembly election and, by the same token, who is sponsoring and funding the other political parties in Northern Ireland. Please do not tell me that that is a good idea and that the Secretary of State will reflect on it. What is he going to do about it?

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The hon. Lady has rightly made the point on political donations and transparency over a number of weeks and months, and I have a huge amount of sympathy for the view she rightly takes. That was why I wrote to all the party leaders a short time ago to ask them to come back to me with their views by the end of this month so that we can move things forward. It is right that we look at that reform and start to put in place changes that give that greater transparency to politics in Northern Ireland. That is why I have written, and I look forward to receiving the responses so that we can move forward.

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I commend my right hon. Friend’s calm and measured approach to this problem. Will he update the House on what he will do to facilitate the voice of Northern Ireland, from politicians, being heard in the run-up to triggering article 50? Obviously, the Assembly will be removed quickly, an election will be held and then there will be a short period before we trigger article 50. We want to make sure that the voice of Northern Ireland is heard in our approach to our future.

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It is important to recognise that although an election has been called, Ministers other than the First Minister and Deputy First Minister remain in place in the Executive, and therefore we will continue to invite the Executive to send representation to each of the meetings that will continue through the Joint Ministerial Committee or through other means. That approach will be taken as we look towards the triggering of article 50, but obviously I will continue to have engagements across the community, with business, with the voluntary and community sectors, and more broadly, to ensure that we continue to listen to and reflect upon the views of people in Northern Ireland as we look to the negotiations ahead.

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Will the Secretary of State share with us more of his thoughts on what he expects to happen after an election in Northern Ireland? Does he accept that the problems will remain? Without his calling a public inquiry on the RHI or, if he cannot find a way to do that, his making it clear that he fully supports a public inquiry, public confidence in our political settlement will sink even lower, making restoration of the Executive even more difficult. That is what people have been telling me on the streets during the past few days and the past week. They said that they need clarity, as we are having an election in a fog.

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Clearly, RHI scheme issues have been very much at the heart of what has led to the election that I have now called. It is right that we get answers on that, because it is crucial to re-establishing trust and confidence, seeing accountability and giving answers to the public about what has taken place. As I have said, it is right for that to come from Northern Ireland, as much as is possible, as this was a devolved issue and something that related to decisions within Northern Ireland. But I stand ready to work with people and consider options on a cross-community basis where support is commanded across the community. This is about how we get those answers and inject confidence back into the whole process.

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I am sure the Secretary of State and others in the House may reflect on the irony that this election has been caused by the resignation of a man who spent a lot of his life trying to use violence to overcome the democratic will of the people of Northern Ireland to be part of this United Kingdom. Will he also agree that it is vital that work is done to ensure that in dealing with the legacies of the past there is an equity once this election is out of the way, so that those who put their lives on the line to defend this democracy are not unduly hounded by these legal processes?

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It is right that we have a system that is fair, balanced and proportionate. I have been clear about that on a number of occasions and about why I strongly believe that the Stormont House agreement and the legacy institutions contemplated within that provide a real framework and way forward to achieve that. I am concerned that there is an imbalance in the system, with a focus on state-based actors, and getting answers for those who lost loved ones as a consequence of terrorist atrocities is essential. That is why I want to see this moving forward and why we strongly believe change is required.

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We all wish everyone in Northern Ireland well in trying to resolve these current difficulties. May I press the Secretary of State on what he is doing on working in partnership with the Irish Government? The British and Irish Governments are co-guarantors of the Good Friday agreement, so what plans does he have to work with the Irish Government to help to resolve these difficulties? Is he planning a summit? Is he planning talks? Is he calling everybody in? What concrete measures is he planning to take to work with the Irish Government to help to resolve these difficulties?

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As I have indicated to the House, I have had regular ongoing communication with Charlie Flanagan, the Irish Foreign Minister, and the Prime Minister and Taoiseach have had conversations. I certainly intend to meet Charlie Flanagan in the very near future so that we can assess the current situation and determine how our two Governments can seek to encourage and promote, and bring people together in a way that leads to, the maintenance and continuation of devolved government in Northern Ireland.

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What alternative to direct rule would be available if these elections did not result in an immediate power-sharing Government?

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I have said that I think it would be premature and wrong to contemplate something other than devolved government in Northern Ireland—that is where we need to have all our focus in the weeks ahead. I am talking about encouraging the parties, dialogue and communication, which is absolutely necessary. Although others will say, “What if this, what if that, what if we don’t get to a position where we have that?”, I am not contemplating that; I am contemplating how we use the time available to us to maintain devolved government, get people back into that power-sharing arrangement and get on with what the people of Northern Ireland want, which is having that settled situation, taking Northern Ireland forward and seeing that positive, optimistic Northern Ireland which I know is there and which has so much more to give.

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Central to those political institutions has been the principle of power sharing, so what efforts will the Secretary of State and the British Government, working with the Irish Government, make to ensure that the principles of power sharing, mutual understanding and respect for political difference, which have withered away over the past number of months, will be strictly adhered to following these elections? What work with the Irish Government will take place within the next few weeks to do just that?

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I have already indicated to the House the dialogue and discussion we have had with the Irish Government, the work that we will continue and the discussions that we continue to have. I stress, as I said in my statement, that this Government remain committed to the Belfast agreement and its successors—and all of what that means. Therefore, we will play our part to support the parties, discussion and dialogue, so that we move to that stable devolved government position that underpins so much of the positive work that we see in Northern Ireland. We wish to return to that period of stability which is what everybody would wish to see.

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Foreign direct investment in Northern Ireland has been a great success in recent years, so will my right hon. Friend reassure me that he and his office will do all they can to maintain that positive momentum during this period of political instability?

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Absolutely. I can give that assurance to my hon. Friend, because Northern Ireland has seen so much success in terms of foreign direct investment; I believe it is the region with the greatest foreign direct investment outside the City of London, which underlines the huge potential that I see and the huge ability for Northern Ireland to continue to flourish and do so much more. We absolutely will continue to underline that message.

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May I echo the comments made by the hon. Member for Belfast South (Dr McDonnell)? He and I, and many others in this House, have worked hard to bring the peace process to where it today, and we have taken risks, and I despair of where we are just now. May I say to the Secretary of State that if he is going to sit on his hands for the next six weeks and do nothing about the current crisis, he can forget getting devolution up and running three weeks after an election? I support the suggestion made by the hon. Gentleman, for which there is cross-community support: let this Government get on with holding the public inquiry on the RHI scheme that Sinn Féin has blocked.

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The Government will continue to do all they can to support the parties in finding their way through to a resolution. As I have indicated in answers to previous questions, I remain open to considering issues that command cross-community support in order to find answers and get to the root of the issues in respect of the RHI inquiry. I will continue to hear the points that are made on a cross-community basis because, ultimately, whatever is done must command confidence and support in Northern Ireland if it is to be successful.

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The connections between the people of Merseyside and the people of Northern Ireland are many, and they run deep. May I press the Secretary of State on what he is doing, given the current political situation and the effect on Stormont’s budget, to absolutely ensure that the people of Northern Ireland do not lose out?

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The clearest way for the people of Northern Ireland not to lose out is for devolved government to be re-established at the earliest possible opportunity. That way, work can continue, budgets can be set and programmes can be put in place to take Northern Ireland further forward. That is why I make the point in such clear terms about the focus, attention and effort that we give to working with the parties to encourage dialogue and discussion, and to bring people together. That is the most powerful and effective way to give effect to what the hon. Lady said.

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We can have as many elections as we choose to hold, but we will get the strong, stable devolved Government that the Secretary of State says he wants only when we have trust between the parties and transparency in the workings of the Executive. To get that, we need an independent examination of the conduct of the RHI scheme. Under the Inquiries Act 2005, the Secretary of State has the locus to order an inquiry; it is surely apparent that nobody else is going to do that, so he must.

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I agree with the right hon. Gentleman about that sense of trust, which has clearly broken down in Northern Ireland, hence the situation in which we find ourselves. I hear his point about the need for answers, transparency and an inquiry. As I have indicated, I strongly believe that the best way to achieve that is by Northern Ireland doing that itself, because that is where the issues arose and where devolution is holding fire. As I have already indicated to other parties, I will listen to and reflect on suggestions and proposals that come forward on a cross-community basis, because ultimately that is what will be needed not only to command confidence and respect, and ensure that any investigations or inquiries are balanced and actually get to the answers that people want, but to ensure that accountability is shown.

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The Secretary of State has my support as he charts the course set by the Good Friday and St Andrews agreements in re-establishing the devolved institutions, but the Prime Minister’s commitment today to a hard Brexit will cause widespread concern in Northern Ireland. Will he outline how he will work in full partnership with the Irish Government on this matter while the Assembly and Executive are not functioning?

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I welcome the hon. Gentleman’s support for our work to ensure the return of stable devolved government. I do not, though, recognise his characterisation of what the Prime Minister has said. She has set out a bold, positive vision of what this country can and will be outside the European Union, but yes, of course, there is a negotiation to come. We have, of course, had initial dialogue and discussion with the Irish Government on how we get the best possible outcome for Northern Ireland. That was reflected in what the Prime Minister said today about the common travel area and strengthening the Union. That is precisely the approach we will take.

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Would the Secretary of State care to outline what exactly people will be voting for if Sinn Féin refuse to work with the Democratic Unionist party, set impossible criteria, or ask for impossible concessions? How is the Secretary of State ensuring that Sinn Féin are not calling the shots, if I can use that pun, when it comes to who is elected to the Government of Northern Ireland, and that the electorate know that their vote will not be ignored because of the petty machinations of a party that simply wants its own way and does not like being challenged by a strong DUP team?

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Ultimately, the election will be about the future direction of Northern Ireland. As we are in a democracy, I am sure the issues will be debated to and fro in the coming weeks—that is absolutely the whole point of the political and democratic system that we operate under. So much is at stake here. As I said yesterday, I encourage people to take part and vote in the election.

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The people of Northern Ireland are magnificent. They have got used to living with a sense of peace over the past 18 years. They need hope going forward. I just listened to the Prime Minister’s speech, in which she talked about making practical arrangements for the border, and making that a priority. In today’s context, those are warm words. She has managed a phone call, but she should be here, and she should have been there. I have listened to the Secretary of State talk about his phone call and his activity over the past week, and with due respect, I think that is wholly inadequate. The elections are about not only the future of Northern Ireland but all our futures—those on the island of Ireland, and those who live on this island. What meetings will the Secretary of State have with the Irish Government and the Taoiseach in the next few weeks, and what will those conversations involve? What hope can he offer today to the people of Northern Ireland?

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As I have indicated, the Government’s clear intent and focus is on seeing the return of devolved government in Northern Ireland. That is what is absolutely in the best interests of Northern Ireland, which is why I will continue to do all I can to bring together the political parties. Ultimately, that political division has been part of the issues at stake. Yes, of course, as I have indicated to the House today, we have had continued dialogue and discussion with the Irish Government, and we will continue to keep them closely informed. As I indicated to the hon. Member for Gedling (Vernon Coaker), I intend to meet the Irish Foreign Minister very shortly to discuss the position and how we can work together and ultimately re-establish devolved government and the sense of the politics moving forward. We should be positive about what we can achieve. I am certainly not going into this issue in a negative way; it is all about how we can get on with it and make it happen.

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The Secretary of State has said today that he is committed to any action having cross-community support in Northern Ireland. As this crisis has been brought about by Sinn Féin’s demand for more security forces personnel to be taken to court and put in the dock, and for politically motivated inquests into deaths caused by the security forces, will he give a commitment today that there will be no money for politically motivated inquests, that no security forces files with national security implications will be released, and that he will not persuade Sinn Féin to re-enter government at the expense of soldiers being dragged through the courts?

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On the issue of legacy, the Stormont House agreement, to which all the parties signed up, provided the right framework and the right way forward. I hold stark national security responsibilities that I feel very keenly about, in terms of safety on the streets of Northern Ireland here and now, and what that means more broadly. On the issue of legacy, it is important that we are able to find a way forward that is more balanced and proportionate, and that sees Northern Ireland looking to the future, rather than the past. We must focus on providing that framework, so that we can move things forward in that way. The hon. Gentleman will well know the issues and bodies set out previously, and, indeed, the way in which engagement has taken place over many months. I believe there is a way forward, but we need to have the framework, the intent, and the balanced and proportionate approach that I continue to underline.

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What assessment has the Secretary of State made of the effect of the political instability on potential investment in Northern Ireland?

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I have had some discussions with business representatives. It is important that we get back to stable devolved government at the earliest opportunity. Again, that is the most powerful way to underline Northern Ireland’s moving forward. There is so much that we can be positive about, including the jobs that have been created and the foreign direct investment made. There are so many fantastic businesses in Northern Ireland, too. That is what we should be celebrating. It is that positive, optimistic viewpoint of Northern Ireland’s economy that we should be advancing.

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After the Assembly election in March, agreement will need to be reached on a new power-sharing Executive. However, if that does not happen, there is a very real possibility of a return to direct rule from Westminster. Does the Secretary of State think that it is acceptable for the people of Northern Ireland, who voted to remain in the European Union, to witness the triggering of article 50 while they live in total political limbo?

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That underlines my general point on the need to get back to devolved government at the earliest opportunity, but as I have indicated, we intend to trigger article 50 by no later than the end of March; that is the approach that we have taken, and that is the work that continues. Invitations to appropriate meetings will continue to be made to the Executive, notwithstanding the current situation.

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Further to the comments made by my hon. Friend the Member for East Antrim (Sammy Wilson), there are concerns in my constituency that the Government’s eagerness to set up an Assembly immediately after the elections could lead to them contemplating some form of side-deal with republicans to get it up and running. May I gently warn the Secretary of State that that will be unacceptable?

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There is a limited period under law in which to form a new Executive; it is around three weeks following a poll. That is why I make the point about maintaining open dialogue and thinking about how we can bring parties together. There has to be a sense of commanding support from across the community, which is why we need to listen very keenly and intently to the voices of the hon. Gentleman’s party and other parties on the process ahead. I stress the need to hold dialogue and discussions, and to focus on the principles in the Belfast agreement and its successors—those things to which all parties have signed up. That provides us with the framework, and we need to get on and do it.

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As we face this phase of challenges, it is right that we should mourn the passing of Dermot Gallagher, former doyen of the Department of Foreign Affairs and one of the lynchpins for so much of this process, bringing us from transfixed to transactions to transformations. We need to emulate his purposeful ethic in the time ahead. Ar dheis Dé go raibh a anam. Will the Secretary of State recognise that, after the elections, there will be negotiations, and that those negotiations will have to be more inclusive, more comprehensive and more fundamental than what passed for negotiations in Stormont House? The outcome will have to be more robust and more reliable than the political Febreze that we got with the “Fresh Start” agreement.

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I certainly pay tribute to Dermot Gallagher, and send my condolences to his friends and family and all those who remember him and his contribution. As I have said, I do not want to prejudge the outcome of this election, nor indeed of discussions that will take place. I earnestly want that to be achieved throughout this election period, in whatever way possible. I also want to see that in the discussions that take place afterwards. We must achieve a position that creates stability and a sense of shared power arrangements, as that will allow Northern Ireland to move on. That must be our focus and our intention, and it is why I make the point about being very thoughtful and conscious the nature of the campaign, so that we can bring people back together afterwards.

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Will the Secretary of State confirm that after the election, the framework of a devolved Assembly and of a shared Executive will be the settled framework for moving forward, and that joint authority with the Republic of Ireland, or wholesale renegotiation of agreements already in place, do not form part of his plan for moving forward? If he does not give expression to that certainty, further drift will occur; we must nip it in the bud now.

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I can confirm that that is absolutely my intent. It is absolutely the approach that I take. It is about getting through the election, and seeing the re-establishment of the Executive and of the devolved government that we have had. Although I hear all of the broader talk, that must be our focus: how we re-establish trust and confidence in our institutions and systems, so that Northern Ireland can move forward.

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The Ulster Unionist party wants a strong and stable devolved Government who work for everyone, but this crisis is about trust between the two main parties in Northern Ireland. The Secretary of State said that he was committed to the Belfast agreement and all its successors, yet this morning on the radio, we heard a Democratic Unionist party Executive Minister say that he had no intention of implementing the St Andrew’s agreement in full. Surely it undermines all agreements if parties are not willing to tie themselves to what they have agreed. Will the Secretary of State look at the structures of the Belfast agreement, and at how we can get back to the joint election of the First Minister and the Deputy First Minister?

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I did not hear the comments this morning, so it is difficult for me to comment directly, but as I have said, the UK Government stand by their commitments under the Belfast agreement and its successors and the framework that is set in place. The question is how we use the time ahead to look at ways to bridge gaps and put devolved power-sharing arrangements in place at the earliest opportunity. Obviously, I will continue to discuss that with all parties.

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Does the Secretary of State agree that in the past months and years, problems, even major ones, have been resolved when all parties dedicated themselves to working through them? Yesterday, a Sinn Féin Deputy First Minister refused to be re-nominated; Sinn Féin have indicated that they will not nominate even after the election. Walking away is not a solution, but working through the problems most certainly is.

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Division has existed in Northern Ireland in the past, and some people said then that it could not be bridged, yet Northern Ireland has shown what can be done. We need to reflect on Northern Ireland’s past, the political achievements reached, and the strengths of dialogue, discussion and bringing people together as we look to the future and at what can be achieved. I hope that we will see a return of devolved government.

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The Secretary of State will know that Belfast politicians regularly quote the dogs in the street, but if they were to summarise the Northern Ireland Office’s position in this, it would be “barking mad”. This is not the time for him to be a bystander in these discussions. He should not fail to recognise what the Prime Minister recognised last week, which is that no one can or should benefit from the instability, and from wrecking the progress and the political institutions that we have fought so hard to obtain for Northern Ireland.

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I am not, and will not be, a bystander in relation to these issues. It is important that the UK Government play their role in supporting the parties, and in fulfilling our obligations relating to providing political stability in Northern Ireland. That is what we will use the time ahead to achieve. The issues at stake are significant, and those relating to the political future of Northern Ireland are very clear. That is why I make these points about the collective responsibilities that we all have in taking this forward, and about getting back to that positive outlook for Northern Ireland that the people of Northern Ireland would like to see.

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The Secretary of State said in his statement that, with strong leadership, issues that might once have brought down institutions have been resolved through dialogue. Can he therefore assure the House that, with the Taoiseach, the Prime Minister will give that strong leadership? As vice-chairman of the all-party group on Ireland and the Irish in Britain, I echo the sentiment of the hon. Member for St Helens North (Conor McGinn), the chair of the all-party group, in calling on the Prime Minister to put her foot on the pedal and get that 100% support.

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I underline for the hon. Gentleman the Prime Minister’s commitment to these issues. She has been kept very closely informed and updated, and has had discussions with the former First Minister and Deputy First Minister, and indeed the Taoiseach. We are committed as a Government to a return to devolved government and a positive outcome after these elections have taken place. That is what the people of Northern Ireland want, and what we all want. We have a shared and collective drive to achieve that, and we all need to focus on achieving it.

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On a point of order relating to the next statement, Mr Speaker.

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I gather that this point of order relates to the next immediate piece of business, and therefore, exceptionally, I will take it now.

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Thank you for your generosity, Mr Speaker. As I am sure you will agree,

“In our constitution, Parliament is supposed to be sovereign…We…need a system that gives Parliament real powers over ministers…and the transparency to restore public trust”—

not my words, but those of the now Prime Minister in 2007. I will be scrutinising a Minister shortly on the implications of Brexit for Wales, but do you share my concern that on one of the most fundamental issues facing this country in a generation, the Prime Minister chose to be accountable not to the House this morning, but to the media and foreign ambassadors? Churchill would not have done it; Thatcher would not have done it; but it seems that when it comes to this House, this lady is not for turning up.

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I am grateful to the hon. Gentleman for his point of order. I do not have all the precedents in front of me, but I think that there has been a developing phenomenon in recent decades whereby, under successive Governments, important statements have sometimes been made outside the House that we would have welcomed being made first inside the House. I am pragmatic in these matters and say to the hon. Gentleman and others who might share his concern that when I heard of the Prime Minister’s important speech, scheduled for today, my first concern was that a senior member of the Government should come to the House on the same day to address us on the same matter. I had contact with the powers that be to make precisely that point. I am pleased to say that we have in our midst, and in my line of vision, the Secretary of State for Exiting the European Union, whom, I rather imagine, the hon. Gentleman will wish in due course to interrogate. Meanwhile, let us hear from the Secretary of State.

New Partnership with the EU

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I say to the hon. Member for Cardiff South and Penarth (Stephen Doughty), who has just made a point of order, that I spent many years sitting on the Opposition Benches—

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Making that point.

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Not making that point, but making a rather more pertinent one, which was that we did not have the opportunity at all to interrogate Mr Tony Blair after he had been on the radio and television. But today is a parliamentary day and I wish to share with Parliament what I think are some important points.

I would like to update the House on the Government’s plans for exiting the European Union. Today, the Prime Minister is setting out a plan for Britain. It is a plan to ensure that we embrace this moment of change to build a confident, global trading nation that seizes the new opportunities before it, and a fairer, stronger society at home, embracing bold economic and social reform. It is a plan that recognises that the referendum vote was not one to pull up drawbridges and retreat from the world, but rather a vote of confidence in the UK’s ability to prosper and succeed.

It is a plan to build a strong, new partnership with our European partners while reaching beyond the borders of Europe, too, forging deeper links with old allies and new ones. Today we set out 12 objectives for the negotiation to come. They answer the questions of those who have been asking what we intend while not undermining the UK’s negotiating position. We are clear that what we seek is that new partnership: not partial EU membership, not a model adopted by other countries, not a position that means we are half-in, half-out. Let me address each of our aims in turn.

First, we will provide certainty wherever possible while recognising that we are about to enter a two-sided negotiation. We have already made announcements about agriculture payments and student funding. Our proposal to shift the acquis—the body of EU law—into UK law at the point of exit is designed to make the process as smooth as possible. At the point of exit, the same rules and laws will apply, and it will then be for this Parliament to determine changes in the country’s interests, for we also intend to take control of our own laws and end the authority of the European Court of Justice in the UK. Laws will be made in this Parliament, and in the devolved Assemblies, and interpreted by our judges, not those in Luxembourg.

We will aim to strengthen the Union between our four nations. We will continue to engage with the devolved Administrations, and we will ensure that as powers are returned from Brussels to the UK, the right powers come to Westminster and the right powers are passed to Edinburgh, Cardiff and Belfast. Another key objective will be to maintain the common travel area between the UK and the Republic of Ireland. No one wants to see a return to the borders of the past.

In terms of immigration, we will remain an open, tolerant nation. We will continue to welcome the brightest and the best, and to ensure that immigration continues to bring benefits in terms of addressing skills shortages where they exist, but we will manage our immigration system properly, which means that free movement to the UK from the European Union cannot continue as before. We want to guarantee the rights of EU citizens who are already in this country and already make such a great contribution to our society, in tandem with similar protections for the rights of UK citizens in EU countries. We would like to resolve that issue at the earliest possible moment.

UK law already goes further in many areas than EU minimums, but as we shift the body of EU law into UK law we will ensure that workers’ rights are not just protected but enhanced. In terms of trade, we want to build a more open, outward-looking, confident nation that is a global champion for free trade. Membership of the EU’s internal market means accepting its four freedoms, in terms of the movement of goods, services, capital and people, and complying with the EU’s rules and regulations. That would, effectively, mean not leaving the EU at all, so we do not propose to maintain membership of the EU’s single market. Instead, we will seek the broadest possible access to it through a comprehensive free trade agreement with the EU. We want it to cover goods and services and to be as ambitious as possible.

This is not a zero-sum game. It should be in the interest of both the UK and the EU. It is in all our interests that financial services continue to be provided freely across borders, that integrated supply chains are not disrupted and that trade continues in as barrier-free a way as possible. Although we will seek the most open possible market with the European Union, we also want to further trade links with the rest of the world, so we will deliver the freedom for the UK to strike trade agreements with other countries. The Department for International Trade has already started to prepare the ground and it is clear there is enormous interest around the globe in forging new links with the UK.

Full membership of the EU’s customs union would prohibit new international deals, so we do not intend to remain part of the common commercial policy or to be bound by the common external tariff. Instead, we will seek a customs agreement with the EU with the aim of ensuring that cross-border trade remains as barrier-free as possible. Clearly, how that is achieved is a matter for negotiation.

The UK is one of the best places in the world for science and innovation, with some of the best universities in the world, so we must continue to collaborate with our European allies. When it comes to crime, terrorism and security, we will aim to further co-operation with EU countries. We will seek practical arrangements in these areas to ensure that we keep our continent secure and defend our shared values.

Finally, in terms of our exit, we have said repeatedly that it will be in no one’s interests for it to be disorderly, with any sort of “cliff edge”—the words used by the Opposition—as we leave the European Union. We intend to reach broad agreement about the terms of our new partnership with the EU by the end of the two-year negotiation triggered by article 50, but then we will aim to deliver an orderly process of implementation. That does not mean an unlimited transitional period where the destination is not clear, but time for both the UK and EU member states to prepare for new arrangements, whether that be in terms of customs arrangements, the regulation of financial services, co-operation over criminal justice, or immigration controls.

Those are the aims and objectives we set today for the negotiation to come. Our objectives are clear: to deliver certainty and clarity wherever we can; to take control of our own laws; to protect and strengthen the Union; to maintain the common travel area with the Republic of Ireland; to control immigration; to protect the rights of EU nationals in the UK and UK nationals in the EU; to protect workers’ rights; to allow free trade with European markets; to forge new trade deals with other countries; to boost science and innovation; to protect and enhance co-operation over crime, terrorism and security; and to make our exit smooth and orderly. That is the outline of an ambitious new partnership between the UK and the countries of the EU.

We are under no illusions: agreeing terms that work for both the UK and the 27 nations of the European Union will be challenging, and no doubt there will be bumps on the road once talks begin. We must embark on the negotiation, however, clear that no deal is better than a bad deal. As the Prime Minister has made clear today, the UK could not accept a punitive approach, so let me be clear that we do not expect that outcome.

We are confident that if we approach the talks in a spirit of good will, we can deliver a positive deal that works for the mutual benefit of all. It is absolutely in our interests that the EU succeeds, and it is absolutely in the EU’s interests that we succeed too. That will be one of our central messages: we do not want the European Union to fail; we want it to prosper politically and economically, and we will seek to convince our allies that a strong new partnership with the UK will help it to do that.

Our approach is not about cherry-picking; it is about reaching a deal that fits the aims of both sides. We understand that the EU wants to preserve its four freedoms and chart its own course. That is not a project that the UK will now be a part of, so we will leave the single market and the institutions of the European Union. We will make our own laws and decisions about immigration. Let me be crystal clear, if there has been any doubt: the final deal agreed between the UK and the EU will be put to a vote in both Houses of Parliament before it takes effect.

To conclude, we are leaving the European Union but we are not leaving Europe. We will continue to be reliable partners, willing allies and close friends with our European neighbours. We will be ready for any outcome, but we anticipate success, not failure. The UK will embrace its new place in the world with optimism, strength and confidence.

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I thank the Secretary of State for advance sight of his statement. The speech that the Prime Minister has just made is the most important she has ever given. It was about the future of our relationship with the EU and our position in the world. The place for such a speech is here, at the Dispatch Box. That is not just a convention; it is so that MPs across the House can question the Prime Minister on their constituents’ behalf about her plans for their future, and there are many questions.

For many months Labour has been demanding the fullest possible access to the single market, emphasising the risks of leaving the customs union, arguing for a collaborative relationship with our EU partners, and emphasising the need for transitional arrangements and to entrench workers’ rights. Today the Prime Minister has rightly accepted those in her plan, and I acknowledge that, but she has given little detail about how that is to be achieved, and there are some unanswered questions and big gaps. In truth, it is a half-in, half-out plan.

Let me give an example. The Prime Minister says that she does not want the jurisdiction of the European Court of Justice, but she wants a comprehensive trade agreement. Sooner or later, she and others will have to face up to the fact that any such agreement will have a disputes resolution clause, and that will have to be independent of this country; it will not be by reason and resolution in the High Court in London according to English law. She has avoided fronting up to some of these essential questions.

If the Prime Minister achieves all that she has set out to achieve, she will fall far short of the hard Brexit that many businesses and trade unions have feared—the Brexit of no deal, a bare trade agreement, out of any customs union and at arm’s length from our EU relations. It is good that she has ruled out that hard Brexit at this stage. However, as she knows, setting out ambitions is the easy bit; delivery is much more difficult. She is taking the precarious course of taking the UK out of single market membership and changing the customs arrangements. That will cause concern to businesses, as the Secretary of State knows, and trade unions. The Prime Minister should have been more ambitious.

However, I accept that form follows function, so let me set out in terms what Labour will hold the Prime Minister to account for, as far as trade is concerned: tariff-free access to the single market; access to the single market unencumbered by impediment—that is what was in the exchange of letters with Nissan, and it is what all businesses want, and what all trade unions want for those dealing in goods and services; alignment of regulatory bodies to avoid dual bureaucracy or, worse, divergence; and a deal that works for goods and services. That is the test we set out today, the test we will return to throughout the negotiations, and the test to be applied when a deal is reached. That is why the concession on a vote at the end of the negotiations is significant. We have been demanding that for months, and it has not been given before today. It is significant because it means that we can ensure that those tests are met throughout the process and at the end.

The sting in the tail in this morning’s plan was the threat to destroy the economic model that has been in place for many decades if that ambition is not reached. That is a very serious threat. That model—a shared model on which there has been consensus for decades across this House—is designed to share prosperity, protect workers’ rights and improve living standards. There is no mandate for reckless disregard of that model and of so much of what this country stands for. The Prime Minister described that as resulting in self-harm for the EU. It would be an act of huge self-harm for the UK to abandon the economic model that we have had in place for so many years. It is also totally inconsistent with any meaningful commitment to workers’ rights and a fairer society. That threat—that sting in the tail—undermines the ambition in the plan that I recognise.

Let me touch on wider issues. The UK and the EU have hugely benefited from our collaborative work in the fields of criminal justice, anti-terrorism, research, medicine, science, technology, arts and culture, and much else. We should be seeking to preserve that collaboration, not destroy it, yet the Prime Minister said today:

“We do not seek to hold onto bits of membership as we leave.”

Let me give some examples of the bits that she should seek to retain—

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Well, not many and not for long. [Interruption.] Order. The hon. Gentleman is a learned, celebrated and cerebral individual, and I do not want to interrupt him, but the convention is that the reply is normally half the length of the statement. I can indulge him modestly—there is usually a bit of latitude—but I was a bit concerned when he said “some examples”, particularly as he is a lawyer.

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Mr Speaker, let me give three examples without the details: the European Aviation Safety Agency, which deals with safety; the European Medicines Agency; and Europol, which I worked with for many years. Those are the bits of the EU that we should be seeking to retain, not throw away.

It was the previous Prime Minister who got us to this place without any forethought or planning. This Prime Minister has now chosen a risky implementation plan. She owns the consequences now, in 2019 and beyond.

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When we started down this route, I said to the House that the Government had been given a national instruction that we would attempt to interpret in the national interest. That seemed to me to be the right approach. Rather than a 52/48 approach, it is an approach that encompasses everybody’s interests. I hope that we have done that today.

The hon. and learned Member for Holborn and St Pancras (Keir Starmer) is a very talented man, and his questions were as forensic as we would expect. He asked about membership of the single market, so we answered that. We laid out the claims on the customs union, which was another of his questions. He asked for detail to scrutinise the plan to see where we are going. Within the context of not undermining our negotiation, that is entirely what we have tried to do. I had hoped to see some Opposition Members support what we think is a responsible, thoughtful but realistic plan that takes on board the instruction that we have been given by the British people to take us out of the European Union, but in a way that preserves our interests as best we can, whether security interests, economic interests or whatever.

Let me deal with some of the specific points raised by the hon. and learned Gentleman. I will put aside my disappointment at the tone. He says that a free trade agreement will need to have a disputes resolution procedure. So it will; they nearly all do. It does not have to be the European Court of Justice, though. We can agree that he has just got the thrust of it wrong. As for the other things: tariff-free, I agree; impediment-free, I agree. Alignment of regulation? That may well be necessary in some aspects, but we will see as the negotiation develops. On goods and services, I agree. The hon. and learned Gentleman is not putting up any hurdle that, frankly, we do not intend to cross ourselves.

Now, on this question of threats, this was not a threat. It was the Chancellor saying in an interview, “Well, if you go down the route of a punitive approach, this is the consequence and this is what will happen.” Nations defend themselves. Nobody says it is what we want to do. It is specifically not what we want to do. We want the freest, most friendly possible relationship we can get, and that is what we will set out to do.

The other areas, including questions on matters such as criminal justice, home affairs issues and so on, will develop as we go through the negotiation. The Prime Minister is a very distinguished ex-Home Secretary—the longest-lasting Home Secretary in modern times—and she has as good a grip of our home affairs needs as the ex-Director of Public Prosecutions has. He can take it as read that we will, over time in this House and, most particularly, in the negotiating chamber with the Europeans, address all the issues he raised. I happen to think that they will have as much interest in resolving those issues as we do. The negotiation is predicated on us doing what is in the interests of everybody: ourselves, the Europeans and all our neighbours in our part of the globe. That is what we intend to do and what we intend to deliver on.

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I am sure that my right hon. Friend will acknowledge that the Prime Minister’s speech is principled, reasonable and statesmanlike. The 27 member states’ Heads of Government said only a few weeks ago at the last Council summit that there would be no access to the single market unless we accepted all the four freedoms. Does my right hon. Friend agree that that presents a difficulty? Will he accept, therefore, that it is essential that we clear that with the other member states on the basis of principle, reasonableness and statesmanship?

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I have tried throughout the past six months not to respond to the sometimes emotional comments from various people around the continent. I am slightly surprised in my hon. Friend, however, because he of all people would pull me up if I confused access to the single market with membership of the single market. Pretty much every country in the world that is not subject to sanctions has access to the single market. We will have access to the single market. The question is about the terms. My job and the job, frankly, of everybody, including the Opposition, is to persuade our opposite numbers in Europe that it is also in their interests that we all have equal access to each other’s markets, and that is what I intend to do.

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I thank the Secretary of State for the advance copy of his speech, and for recognising the correct place to make this statement; it certainly was not at Lancaster House. Today, the Prime Minister and the Secretary of State have completed an unholy trinity of worthless Westminster promises to the people of Scotland. They promised to take account of the 62% remain vote in Scotland and to consider all options for Scotland’s future. They have broken that promise today. They promised during the referendum campaign and in their election manifesto that leaving the EU does not mean we have to leave the single market. Today they are breaking that promise. As for the promise they made in 2014 that remaining in the United Kingdom would guarantee Scotland’s place in Europe—well, we all know where that has gone. I hope the Secretary of State will pass the message back to his boss that if she insists on giving Scotland only one option to remain in the European Union, Scotland will take that option.

We know with certainty that Brexit means hard Tory Brexit. We do not know what it might be disguised as, but we know what it will be. Will the Secretary of State accept, even at this late stage, that the promises that he and Prime Minister made must be honoured? Exactly how does he propose to recognise the 62% remain vote in Scotland and the overwhelming—nay, unanimous—view in Scotland that our membership of the single market and free movement of people into and out of Scotland are essential for our wellbeing? Has he actually read the Scottish Government’s paper, “Scotland’s place in Europe”?

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indicated assent.

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Given that he is nodding, will he give an undertaking that the paper will be properly and thoroughly discussed at the Joint Ministerial Committee meeting next week? Finally, will he give an undertaking that before any non-returnable steps are taken, the Parliaments of all our devolved nations will be given a chance, even on an advisory basis, to consider the Government’s plans before they are implemented?

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It has been my privilege to chair the Joint Ministerial Committee on EU Negotiations on which Mike Russell broadly represents the Scottish Government’s position. I gave him an undertaking that we would debate that paper at the next JMC (EN), as it is known in Whitehall jargon, and that is what we will do. I have been very careful not to comment publicly on it because, as I said, we want to give it the most open debate possible. There are parts of it with which I disagree and parts with which I agree. On the question of the protection of workers’ rights or the maintenance of our terrific universities, I am entirely on side with the paper. I suspect that Mr Russell might be surprised by how pro-devolution I am. Nothing will be taken away from the devolved Administrations and, indeed, we have to decide what passes to them from the European Union. That will be a rational debate based around the interests of the United Kingdom and of Scotland. The hon. Member for Glenrothes (Peter Grant) must take it as read that we will take very seriously the idea that we do not allow any part of the United Kingdom or any nation of the United Kingdom—Scotland, Wales, Northern Ireland or England—to lose out in this process. We are determined in that.

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I will continue to campaign for our membership of the single market and to make the positive case for immigration because I believe in the free movement of people from the European Union, but may I make it very clear that I welcome the Prime Minister’s—I nearly said Her Majesty’s—speech and the statement made by the Secretary of State? It is realistic and provides much-needed clarity. The tone is to be hugely welcomed as it marks a genuine desire to bring about a consensus and to reunite our country. In that spirit, would my right hon. Friend commit—this is not unreasonable—to putting those 12 objectives into a White Paper and bringing it to this House so that we can finally debate the single market, the customs union and the free movement of people? So far, we have not and many of us feel that Parliament has been deliberately precluded from all this.

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First, on my right hon. Friend’s slip of the tongue, I often make the same mistake; it is probably why I am where I am. [Laughter.] Look, I will go to the substance of my right hon. Friend’s request. The Prime Minister and I have tried today to answer all the questions we are able to without undermining the negotiation. Regarding debates in the House and in this Chamber, I can see entirely a place for debating the very things my right hon. Friend mentioned, and that is what I will seek to get.

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The Secretary of State and the Prime Minister have both more or less admitted today what has been obvious for months—that it will take more than two years to have a trade deal with the EU ready to go. But there follows a crucial question for many businesses up and down the country, which is what the arrangements will be when we leave the EU and that trade deal is not yet complete. From listening to the Secretary of State and reading the Prime Minister’s speech, we are none the wiser what that will be. Will the Secretary of State enlighten us on that crucial point, which matters hugely to families and businesses?

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I will correct one or two things the right hon. Gentleman got wrong about what I said. He is wrong to interpret what I said as any suggestion that we will not be able to negotiate this outcome in the timetable in front of us. I said the issue was that we would look at implementation issues, because they may well take time. I cited some of them—borders, customs and various other aspects that might take time to put into effect. It will be in the joint interests of the European Union and ourselves to put those in place. But more widely, I cannot think how I could have been clearer. I have answered every single question, with one exception, that the Labour spokesman put to us. I have tried to answer as many as I can of the ones the Select Committee put to us. We have been very clear. I do not think anybody out there will believe the Labour party now when it says, “We don’t know what the negotiating strategy is.” It is as plain as a pikestaff, and the right hon. Gentleman should recognise that.

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The Prime Minister has indeed given clarity: we are leaving the single market, and we are leaving the customs union. But further to the point that has just been asked, in the implementation phase the Prime Minister has proposed after article 50—that period of adjustment to a deal—will all the detailed terms already have been finalised, or are the details of the so-called bold and ambitious deal, as she put it, to be worked out during the implementation phase?

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My right hon. Friend wrote a very wise paper, which I referred to in a previous exchange here. He will recognise that the negotiating balance changes at the end of the two-year period, so it is very important that we conclude the deal by then. The implementation is a different matter; it may take time, and it does take time, but we cannot control that, whether we are putting in place a new customs arrangement or whatever it might be. So there are practicalities there, and it is the practicalities that will drive this.

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While the Prime Minister has made things clearer today, and I welcome, in particular, the commitment that Parliament will have a vote on the final deal and that the Government will seek transitional arrangements—both things that the Select Committee called for in its first report—there is one big issue where there is still uncertainty for businesses, and that is the continuation of tariff-free and barrier-free trade. Given the Government’s unequivocal commitment today to that goal, will the Secretary of State tell the House whether, if remaining in the customs union turns out to be the only way of ensuring that—because what we ask for is not necessarily what we will get—that is what the Government will do to honour that commitment to British businesses?

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What the Government will do is abide by the instruction given to them by the British people, and that instruction was to leave the European Union. I am afraid that is inconsistent with membership of the market. But what we have said in terms is that we intend to deliver the very thing the right hon. Gentleman says British business is uncertain about, and that is tariff-free and barrier-free access to the European market.

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May I, too, welcome the increased clarity the Prime Minister has brought to the EU debate today? I just hope that the 27 remaining countries in the EU will take this opportunity to embrace the positive spirit in which this plan has been put forward. The Prime Minister said in her speech that she was putting

“the preservation of our precious Union at the heart of everything”.

In that spirit, may I ask the Secretary of State whether those parts of the country that are net beneficiaries of funds from the EU, such as Wales and Cornwall, will continue to get that level of funding so that they, too, can take advantage of the great opportunities ahead?

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The aim of our entire strategy is to improve the economic prospects of the country, and to do that for everybody. Our Prime Minister has been very forward in talking about the benefits for all. One of the things that has passed almost unremarked but was, in fact, remarkable was the speed with which the Treasury stepped in very early on—on universities, farming and structural funds. It made a decision in four weeks, in the middle of August—something I cannot remember in my lifetime in this Parliament, which is quite long. I think my right hon. Friend can take it as read that we will do everything possible to make sure that all parts of the United Kingdom benefit from this policy.

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I applaud the Prime Minister’s speech and her vision of a liberal Brexit. Can the Minister confirm that, where mutual co-operation is needed between the EU and the UK after we have left, such as on intelligence sharing, arrangements will be put in place on the basis of bilateral treaties, rather than supranational legislation with us as the supplicant?

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One of the things the Prime Minister has made plain is that we are not the supplicant, either in this negotiation or in what follows. Britain is the intelligence superpower in Europe; we are critical to the defence of Europe from terrorist threat, and we are critical to the military support of Europe and to dealing with migration, with our Navy at work. Those things will continue; they are very often on a bilateral basis anyway, but they will be done on a treaty basis that is equal to both sides.

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I think we should loyally support the Government. [Laughter.] Will the Secretary of State confirm that insisting on controlling our own borders and insisting on doing international trade deals are inconsistent not just with membership of the European Union but with the customs union and the single market? So I agree that, after the welcome tone of today’s speech, it is not hard Brexit—it is full Brexit.

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With respect to my hon. Friend’s opening remarks, my health is fragile these days, so will he be careful about making such assertions about supporting the Government? However, it is plain that we have endeavoured to put together the option that gives the best outcome for Britain while obeying the decision of the people. That is what we have done, and it will work.

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The Prime Minister, in the first part of her speech, made a welcome commitment to enhance and protect workers’ rights, but at the end she was threatening to take them away, undercut the rest of Europe and rip up the British economic model if we do not get what we want. Can the Secretary of State now withdraw that threat and be clear that Britain will not do that, because if the Government are prepared to rip up workers’ rights as soon as the negotiations get difficult, how can we trust them to ensure that the rest of Britain’s interests are protected if the negotiations get difficult?

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I will say to the right hon. Lady what I said to the head of the TUC only a couple of weeks ago: there is no circumstance under which we will rip up workers’ rights. That is my commitment from the beginning in this job, and it will be my commitment for as long as I am in it.

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The Governor of the Bank of England recently told the Treasury Committee that the financial stability risks to the eurozone are greater than those faced by the UK. Will the Secretary of State undertake to offer the European Union a full agreement to ensure that, through the withdrawal agreement, the eurozone continues to enjoy access to the City of London?

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The Governor and my hon. Friend make a very good point. The existence of the City of London ensures a pool of liquidity and an almost bottomless source of low-cost finance for most of the industries of Europe, so countries have every interest in doing the deal we have described. I reiterate that that is what we are relying on: that it is in everybody’s interests to do this—economically, socially and in terms of financial stability.

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As the Secretary of State knows, I support reforming freedom of movement, but in a way that does least damage to the economy, and particularly the regional economy. I see in the Prime Minister’s speech today that she makes specific mention of protecting the interests of Cardiff, Edinburgh, Belfast and the City of London, but there is no mention at all of the north-west of England, Greater Manchester or, indeed, any English region. Rather than leaving these crucial decisions to a London-centric, right-wing clique around the Prime Minister, is it not time now to open up this debate, give Greater Manchester a voice in it and establish a Brexit committee for the nations and regions?

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If the right hon. Gentleman is not careful, I shall invite him to jump on the M62 and come to visit me at my home in Yorkshire—that right-wing bastion in the north of England. What I would say to him is this: as he might imagine, I am acutely conscious of the needs of the north, and what I am intending to do—I had not intended to announce it today, but I will, since he has asked—after the mayoral elections is to get all the mayors of the north to come and have a meeting in York to talk about precisely that.

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It is a magnificent plan, but before the Secretary of State negotiates it, may I urge on him enormous patience, because our partners will first want to discuss the money —the division of the assets and liabilities?

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I almost reiterate the answer I gave to the previous question, which is that I am from Yorkshire, and we are known to be just like the Scots but a lot less generous.

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Today’s speech is a result of what we get when immigration policy is allowed to dictate economic policy rather than considering these crucial questions of immigration and economics together. The Prime Minister set out a plan to leave the European Union but did not set out a plan to keep anything like the current access to our biggest single market for jobs, businesses and trade. During the referendum campaign she said that pulling out of the single market would mean a loss of investors and going backwards on international trade. So what economic assessment did the Government make of the impact of today’s speech on jobs, trade and prosperity— or was the speech made without any such assessment at all?

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First, the outcome of the referendum last year was not principally about immigration, although a very large part of it was; it was principally about control of our country. If we talk to the people who voted, they would say that that is what they were concerned about, and that is what this is about. Since I was party to the writing of this speech, I can tell the right hon. Gentleman that we had the economic future of the country, the security of the country, the sovereignty of the country and our part in the world all squarely in our sights when we wrote it.

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My right hon. Friend made it clear in his statement that “no deal is better than a bad deal”. In the unlikely—I am sure—event that we were to get a bad deal and the House were to vote against it, what would be the impact on our status within the European Union?

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The referendum last year set in motion a circumstance where the UK is going to leave the European Union, and the vote will not change that. We want to have a vote so that the House can be behind and support the policy that we are quite sure it will approve of when we get there.

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I welcome the Prime Minister’s speech today in the sense that it gives certainty to the millions of Labour supporters who voted to leave and now know that, “Taking back control”, is not just a slogan but actually means something. Will the Secretary of State assure us that in this interim period before we leave the EU, we will continue to work to negotiate trade deals with other countries—some of which might be nearly finished—so that we are ready to go when we actually leave?

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Of course we will do that; the hon. Lady is entirely right. We are constrained by a thing called the duty of sincere co-operation, which requires us not to do things that jeopardise actions by the European Union, so if the European Union currently has a trade deal in negotiation, we have to be very careful about how we impact on that. Of course we cannot actually sign anything until the day we leave, but I have a very strong suspicion that there will be a lot of things ready to sign on the very next day.

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I apologise, Mr Speaker, for being unavoidably rather late in the Chamber. While I welcome the tone of the Prime Minister’s statement today and the commitments to free trade, internationalism and so on, which are very welcome, does my right hon. Friend agree that when he is negotiating free trade agreements or customs unions with any other country or group of countries, the parties both agree to be bound by sets of rules which neither of them is going to change? Any agreement involves submitting to some means of resolution of disputes, be it arbitration, a court of law, or the World Trade Organisation rules. What I do not understand when reading the Prime Minister’s statement or listening to my right hon. Friend is which country in the world is going to enter into a trade agreement with this country on the basis that the rules are entirely what the British say they are going to be on any particular day and that if there is any dispute about the rules, it is going to be sorted out by the British Government. [Hon. Members: “More!”]

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Opposition Members have a very short memory. I can forgive my right hon. and learned Friend because he did not hear the very first question, which was on exactly this point. I answered it in the same way that I am going to answer this one, which is to say that of course there will be agreements between us and they will be arbitrated by an organisation that we agree between us—not normally the European Court of Justice.

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Can the Secretary of State be absolutely crystal clear about this: do his statement and the Prime Minister’s speech today represent the totality of the plan promised to Parliament, and will there be a White Paper—yes or no?

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I was asked by the Select Committee to present a plan as quickly as possible, and that is what we have done.

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I am very pleased to hear that priorities include allowing EU citizens to stay here and allowing us still to access the vital skills that we need, especially for science and innovation. While appreciating that the Prime Minister’s negotiation cannot be open for all to see and that no running commentary will be possible, will the Secretary of State commit to listening to the globally recognised scientific organisations in my constituency, because their needs and requirements must be reflected in our negotiating aims?

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Broadly, yes. My hon. Friend is the Member for South Cambridgeshire. I was in Cambridge only just before Christmas to speak to a number of high-tech organisations—one of which was ARM, but a number of others as well, including some pharmaceutical ones—with the direct intention of informing exactly how we approach some of these complex matters in the negotiation.

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The Government took a wise decision to inform our EU partners that in the event of intransigence during our negotiations to establish a new partnership, we would not take it lying down and would use the fiscal and legislative levers at our disposal to ensure that Britain’s economic case was represented properly. Is the Secretary of State surprised at the casual way in which the Opposition have dismissed the use of these levers on the basis that it might start a trade war? Does he not accept that the sure way of getting intransigence from the EU is to throw away this economic deterrent that we have at our disposal?

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I am mildly disappointed but not surprised. What is perhaps surprising is that whenever we hear somebody threaten some sort of punishment sanction, the Opposition never say a word. This is something in the national interest, and every single member of our nation stands to gain by that.