House of Commons
Monday 9 October 2017
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Work and Pensions
The Secretary of State was asked—
The roll-out of universal credit is proceeding to plan, gradually and sensibly. People are moving into work faster and staying in work for longer. The most recent phase of expansion will only take the proportion of the forecast claimant population receiving universal credit from 8% currently to 10% by the end of January.
There is a great deal of support for the principles of universal credit. However, the roll-out has been characterised as
“operationally messy, socially unfair and unforgiving”.
These are not my words, but those of Sir John Major. If the Secretary of State will not postpone the roll-out—along with many other right hon. and hon. Members, I would like him to consider that again—will he consider two other remedies: to drop the waiting period, and to allow the benefit to be paid fortnightly?
Let me be clear: as I touched on earlier, the evidence so far shows that those who go on to universal credit are more likely to be working six months later than they would be had they been on the legacy benefits, and they are also more likely to be progressing in work. That is really important, and it is not something that I want to deny people. I believe that we should roll out something like this gradually and sensibly, and make changes as and when necessary, but that is exactly what we are doing.
Those of us who remember the chaos around the introduction of tax credits can see the good sense in a phased, gradual introduction to universal credit. However, I have to say to the Secretary of State that if we do not learn the lessons from the pilots, we frankly risk losing any advantage that we will gain. Some 57% of applicants for universal credit are having to borrow money before their first payment. Is not that alone enough to justify a pause?
The system of advances is an integral part of the system. It has always been there, but we want to make that properly available. Nobody who needs support should have to wait six weeks before they receive any support. What we are doing is making it clear that people can receive an advance of their first month’s payment, which is then deducted over the next six-month period. That is helping people deal with cash-flow issues in that first month, which I think is a sensible and pragmatic response.
A recently bereaved constituent of mine, a working single parent, has seen her income reduced by £300 a month since transferring to universal credit. For her, work does not pay. Will the Secretary of State urgently review the link between agreement to support payments and universal credit, and will he stop the roll-out until he has done so?
The hon. Gentleman says that work does not pay. Let us be clear: universal credit always means that it is worth working an extra hour and worth taking a pay rise. It is always worth working more under universal credit, which was not the case with the legacy benefits. That is why the evidence is suggesting that people do work more and do work more hours than they do under the legacy systems.
Does my right hon. Friend agree that one of the reasons why more people have gone out to work this morning than ever before in our nation’s history is that we as a Government have not ducked the challenge of welfare reform, we do not let people languish for years on out-of-work benefits, and universal credit is an essential part of the welfare reform programme?
My right hon. Friend is absolutely right. It has been the consistent policy of this Government—including under my predecessors, such as my right hon. Friend—to ensure that we have a welfare system that puts work at the heart of it. That is one of the reasons why we have record levels of employment, as he so rightly says.
No. 7, Mr Speaker.
No, the hon. Gentleman was standing up on No. 1 and he has a very similar question, so he can unburden himself of his important thoughts now.
My hon. Friend is right to highlight that point. As I said last week, we are refreshing the guidance to DWP staff to ensure that people who need support—who will struggle to get through to the end of the assessment period without financial support—have access to that money quickly. Increasing the eligibility for advance payments is one of the best ways in which we can address some of the concerns that have been raised and learn from that experience.
Although I believe that advance payments are treating the symptoms rather than the cause, I welcome the Secretary of State’s additional guidance to make sure that jobcentres offer them. Advance payments cover roughly two weeks’ worth of money: what support is in place for people waiting three, four, five, six or seven weeks?
The level of advance payments of 50% is, we believe, the right balance between getting support to people early in the process—they can get it very quickly—and ensuring a reasonable level of deduction for that advance payment in subsequent months. Clearly, this is an issue that we will continue to look at, but 50% strikes the balance. I welcome my hon. Friend’s support for that announcement.
Rent arrears, food poverty and in-work poverty have all rocketed in areas where universal credit has been rolled out. The third sector has united to join in our call for universal credit to be halted, and we know that pressure is mounting on the Conservative Back Benches for that to happen. Is not the Secretary of State’s apparent climb-down on crisis loans and advance payments an admission that universal credit is failing?
Not at all. I come back to the point that universal credit is giving more people the opportunity to get into work and progress in work. The personalised support that is provided by jobcentres where universal credit has been rolled out is proving to be effective. To those people who call on me to stop the process, I say that once fully rolled out, universal credit is likely to mean that 250,000 more people will be in work than would otherwise have been the case. I will not deny those people that opportunity.
The Secretary of State is either desperately deluded or ignorantly incompetent. In one of the areas in which universal credit has been rolled out, East Lothian Citizens Advice reports that more than half of its clients on universal credit are worse off by an average of £45 a week. The just under a third who are better off have gained just 34p a week. How much more evidence of social destruction will it take for the Secretary of State to have the strength to halt the roll-out?
Universal credit is adding to what the Government have already been doing—ensuring that work is at the heart of welfare. That is why we have 3 million more jobs than we did in 2010. Welfare reform is part of the reason for that, and it is part of the reason why we will continue to press on with reforming the welfare state to encourage work and help people to progress in work.
May I warmly welcome advance payments within five days and immediate needs payments the same day as a definite step forward? Given the reasonably high levels of adult illiteracy and poor computer skills in some areas, can the Secretary of State say something about how volunteers might be able to work alongside personal advisers to help people fill in the application form in the first place?
It is important that people filling in forms receive the necessary support, but jobcentre staff provide that support. Voluntary organisations may be able to assist, but Jobcentre Plus staff are already giving the intensive support necessary to help people to complete the applications.
Given the Secretary of State’s confidence in the roll-out of universal credit to another 150 Jobcentres Plus, can he give the House a guarantee that none of our constituents will face hunger or near destitution through lack of money over the Christmas period?
Universal credit is about ensuring that our constituents are in a stronger financial position. That is what we are trying to deliver by enabling them to work and providing the support they need. As I said earlier, if we look at where we want to get to by 2022, 8% of claimants are already on universal credit and by January it will be 10%. The process is gradual and measured, and that is enabling us to learn from the experience and make improvements, which we will continue to do all the time.
I support universal credit and its roll-out, but I am concerned about applicants with zero savings who, if they lose money for one or two weeks, have nothing to fall back on. Will the Department consider the possibility of jobcentres writing supportive letters to landlords to explain the situation in which benefit claimants find themselves, because the worst outcome for applicants is that they lose their home?
My hon. Friend makes a very good point. There is an obligation on social landlords, given the source of income through universal credit, to work constructively with tenants. If a tenant has a reasonable expectation of receiving housing costs as part of their universal credit payment but has not yet received them, the landlord should not take action and the tenant should not face risk of eviction.
As we have heard, universal credit is causing debt, rent arrears, and even homelessness up and down the country, with many claimants already in work. Given that housing associations are saying that over 80% of rent arrears are down to UC, and that the Mayor of Greater Manchester is predicting that rough sleeping will double as a result of UC roll-out, how many more families does the Minister estimate will be made homeless this winter as a result of the Government’s refusal to pause UC roll-out?
Let us be clear: no one needs to go six weeks without financial support when there is a system of advances in place. I make the point to all right hon. and hon. Members that if they are aware of constituents who have not received an advance, they can make it clear to them. Let us be realistic: the fact is that we are now moving towards a welfare system that does not put in place barriers to work and does enable people to make progress. It is no good Labour Members saying they are in favour of the principles, but then trying to obstruct the delivery of a reform that will give 250,000 more people a job.
Investment and Pension Scheme Charges
The Secretary of State has regular discussions with the Chancellor on a range of issues. The Department has had specific discussions with both the Treasury and the Financial Conduct Authority on the FCA’s proposed remedies in this area, and our plans to ensure that details of these costs and charges are published and given to pension scheme members.
Is not the reality that for millions of ordinary people the only way to guarantee a sufficient income in retirement is a good state pension together with a state earnings-related pension scheme for all, with defined contributions and defined benefits?
I am grateful to the hon. Gentleman for his question. He will be aware that auto-enrolment has reversed the decline in work-based pension saving, with 8.5 million people signed up and further progress to be made. The reality is that, by reason of the coalition and this Government, we have a new state pension that is worth £1,250 more than in 2010.
Pension Arrangements for Women
The Secretary of State has regular discussions with the Chancellor, but the Government will not be revisiting the state pension age arrangements for women born in the 1950s that are affected by the Pensions Acts of 1995, 2007 and 2011.
My hon. Friend the Member for Swansea East (Carolyn Harris) and I, Members of the Minister’s own party, and all Opposition parties in this House, including the Democratic Unionist party, have introduced a Bill, to be debated on 27 April, to provide for transitional arrangements to be put in place. Will the Minister support the Bill? If not, will he tell the House why not?
I can only repeat the answer I just gave: the Government do not intend to revisit the state pension age arrangements for women born in the 1950s who are affected by the Pensions Acts of 1995, 2007 and 2011. The cost would be in excess of £70 billion.
The Minister will be aware that, following the Brexit vote, bond yields dropped by 30%, increasing the public sector pensions bill by a hefty 30% to £1.8 trillion over the last year. Is this latest example of Government ineptitude the real reason WASPI women are being ignored, penalised and denied their pensions?
I am grateful to the hon. Lady for her question, but if her Government in Scotland disagree with any aspect of the UK Government’s welfare reforms, they have the powers to do something about it. I refer her to the letter of 22 June from Jeane Freeman, my opposite number, which specifically discusses the uses of Scotland Act powers to address individual cases.
Will the Minister clarify whether, if the law on the state pension age were changed to favour women over men, it would be discriminatory or illegal?
The reasons for the original changes were the changes in life expectancy and equality law. If the law proposed by Labour were to approach men and women differently, it would—with respect—be highly dubious as a matter of law.
Will the Minister further clarify that point? Labour says that the previous pension age could come back and that we could return to a situation where men are discriminated against. Does he agree that such discrimination might be profoundly against the law?
Those who seek to make the case for such a law would need to satisfy themselves that men would not bring a case against the proposers, because it would unquestionably create a new inequality between men and women.
The ombudsman’s first rulings on whether the Government are guilty of maladministration for failing to give 50s-born women sufficient notice of their earlier retirement age are due soon. Maladministration or not—it will take years to resolve that matter—can I ask the new Minister to take this back, think again, tell us what he is prepared to do, and what research he is prepared to do, to alleviate their misery, and perhaps even consider our proposals on pension credit and allowing them to retire up to two years earlier?
The Government strongly believe that there has been no maladministration by the Department for Work and Pensions, including during the 13 years when Labour was in charge of the Department.
Is the new state pension not in fact removing injustices that have persisted for far too long, and are not the main beneficiaries women and low earners?
My hon. Friend is correct. The new state pension is much more generous for the many women who were historically worse off under the old system. More than 3 million women stand to gain an average of £550 extra per year by 2030 as a result of these changes.
Employment and Disabled People
The employment rate among disabled people has increased to 49%, and the Government are committed to getting 1 million more disabled people into work over the next 10 years.
In 2015, the Minister said the Government’s aim was to halve the disability employment gap by 2020, and in 2016 the Social Market Foundation said that that meant an extra 1.2 million disabled people in employment, but now the Minister tells us that the ambition is for an extra 1 million disabled people in work within 10 years. Why are Ministers becoming less ambitious for disability employment?
When Labour was in office, it did very well in closing the disability employment gap—by raising the unemployment level among the general population. We will take a different approach. As I have said in this place before, we will look in great detail at the local numbers—for example, the numbers of people with a learning disability coming out of education; that is what we need to get people focused on.
I warmly welcome the latest employment figures, particularly the youth employment figures. We are within touching distance of record youth unemployment. On young disabled people, will the Minister comment on Leonard Cheshire Disability and the great work it does, particularly its Can Do scheme? I think she recently met ambassadors of that scheme.
I thank my hon. Friend for allowing me to pay tribute to Leonard Cheshire. It has launched a number of interesting and effective initiatives, which are very much part of our Work and Health programme.
A constituent suffering from mental health problems who came to my surgery at the weekend has been denied employment and support allowance. Her sister came with her to tell me that my constituent had attempted suicide four days earlier. What is the Department going to do to identify and help vulnerable people like her?
In recent years the Department has introduced a number of measures to ensure that those who carry out assessments for either personal independence payments or ESA have had training so that they can recognise a mental health condition and flag up that condition or any concerns they may have. However, the work capability assessment itself is not working. It was introduced by the Labour party—[Interruption]—with the best intentions, but it has elements that do not work. Given the opportunities that will result from the work and health road map, I hope that Labour will work with us to reform those elements.
I am organising a Disability Confident event in my constituency to try to encourage more employers to take on people with disabilities, and I am grateful to the jobcentre for its support. Would the Minister like to come along so that she can, in person, encourage employees in my constituency to take on more disabled people?
I congratulate my hon. Friend and other Members on both sides of the House who have run Disability Confident events and signed up employers. Our 5,000th employer has just been signed up. If I cannot attend my hon. Friend’s event, I shall be happy to send a video instead.
But I am sure that it is a personal ambition of the hon. Lady to go to her hon. Friend’s constituency. We look forward to getting an update in due course.
May I address my question to the Minister who speaks for a party that has been in power for more than seven years? This morning my constituent, Debbie A, came to tell me that she had failed her ESA assessment, first because she had been told that she could hear her name being called from the waiting room, when in fact she had been told that it was being called by her son, who was sitting next to her; and, secondly, because the report had said that she had been hit by a bus, when in fact she had been hit on a bus. Does not the Minister accept that there are profound systemic problems in the assessment process?
There are things that we can do to improve the assessment process dramatically and also, more critically, to prevent people from having to go through those assessments. The thrust of the health and work consultation paper that we issued this year is to bring about early intervention in healthcare and to use healthcare information to populate the welfare system, and that is what we are trying to do.
What steps are the Government taking to use technology to help their equality agenda, specifically in respect of disabilities?
We have just launched a platform called OpenLab, which brings together those working in technology and disability, and focuses primarily on accessibility issues. It will enable us to publicise problems that we are trying to solve, but will also enable that community to work together to arrive at solutions faster.
Payment in arrears has been in the design of universal credit since 2010, and was implemented by the coalition Government in 2014. Our latest data show that more than 80% of new claimants are being paid in full and on time, which is a significant improvement on the position earlier this year, and that more than 90% receive some payment before the end of their first assessment period.
Universal credit is due to be rolled out in Torbay in May 2018. What further assurances can the Secretary of State give that resources will be made available to ensure that people in my constituency who make claims under the scheme will receive their payments on time?
We are ensuring that sufficient resources are available in jobcentres. It is worth pointing out that we have made significant progress on universal credit timeliness this year—as I have mentioned, more than 80% of new claimants received their full payment on time, and more than 90% received part of their payment—and we expect to build on that positive trend. I am sure that my hon. Friend will join me in welcoming universal credit roll-out to Torbay next May.
The problem is that “on time” means after a six-week delay, and that delay, as the Secretary of State knows well, is causing immense hardship up and down the country. Last week I met Maria Amos, who came within an inch of suicide because she had to live literally on nothing but water for six weeks, irreparably damaging her health. The Secretary of State can choose to ignore organisations such as Citizens Advice, but will he at least take some notice when Sir John Major calls for a pause?
What I would say—this is exactly the point I made earlier—is that I do not believe that anybody should be left without any support for six weeks when they do not have savings or an alternative source of income, which is why it is important that advances are available within the system. The majority of claimants now make use of advances. We need to ensure that that is properly communicated to claimants. I will certainly do that, as I am sure will all Members of this House.
My constituency was one of the first to introduce universal credit, and it went on to full service in 2016. Staff in my constituency tell me that they are very familiar with the new system. Does the Secretary of State agree that we need to ensure that what we have learnt from the pathfinder jobcentres is quickly rolled out to those now taking up the new system?
We must constantly learn from experience—this is about testing, learning and improving. We must ensure that awareness of the advances system is high, and clearly that has increased in recent months. My hon. Friend makes a point about jobcentre staff, and my experience of meeting such people up and down the country is that they are enthused by what universal credit can do for claimants to help them to get into work.
Twenty-four per cent. of new universal credit claimants wait longer than six weeks to be paid in full. Only one advance payment is allowed for a new universal credit claim, and the maximum award is 50% of the claimant’s estimated benefit, so how will advance payments really prevent families from getting into debt while waiting for their first universal credit payment?
The timeliness of payments has improved since the figures that the hon. Lady cites were compiled, and we continue to improve it. As I have said, 90% of claimants receive some support within the six-week period. Advances are an important part of the system to ensure that people get the support they need. It is incumbent on all of us not to worry people that they will be left without any support whatsoever, but to draw their attention to the fact that they can access funds when they need to—generally waiting no more than five working days or, if necessary, receiving them straight away.
According to the Trussell Trust, food bank referrals have increased at more than double the national average in areas where the universal credit full service has been rolled out. Does the Secretary of State agree that the social security system should prevent people from having to visit food banks, rather than exacerbating need?
We are very keen to ensure that the advances system means that people can access funds so that they do not have to visit food banks. In recent months we have seen an increased use of that system, because we have done more to publicise it, and I want to go further on that. I think that is an important part of a system that, when we step back and look at it, is ensuring that more people are able to work and to progress in work, and that should not be forgotten.
Personal Independence Payments
We are committed to ensuring that people receive high-quality, fair and accurate assessments. The Department robustly monitors providers’ performance and independently audits assessments. Both providers are now increasing clinical support across their centres and providing more personalised coaching for their healthcare professionals.
The Department seems to conclude that everything is hunky-dory with PIP assessments, just as it did—erroneously—with work capability assessments. The Disability News Service says it has more than 200 cases of inaccurate PIP assessments, and I have come across plenty in Southwark, including that of my constituent, Tarik Ali. Tarik was assessed as having no evidence of hearing loss, despite being deaf in one ear. He was awarded no points for needing support to manage medication, despite the fact that he sees a GP every three weeks and that his carer manages his medication on a daily basis. There was no mention of Behçet’s syndrome in his assessment, despite its having been included in five hospital reports, his GP records and his medication prescription. When will the Minister stop cutting vital help to genuinely disabled people, stop wasting taxpayers’ money on inaccurate assessments and fake mandatory reconsiderations, and finally end the glaring inaccuracies in PIP assessments?
Currently, 3% of caseload is overturned on appeal, and in the last quarter the number of cases having to go to appeal dropped by 22%. We have introduced changes to get evidence in earlier and to improve the quality of assessments, but we will respond to all the things that Paul Gray has set out in his review this autumn.
Two thirds of disabled people are successful at tribunal when they appeal PIP decisions. Given that the system is so clearly flawed, will the Minister commit to a full overhaul of the assessment process?
We have opportunities to reduce the burden on individuals going through assessments through what we are trying to do with the work capability assessment and by enabling information used in health care and in ESA assessments to reduce the burden on people getting PIP assessments—and, hopefully, doing away with the volume of assessments that people have. However, I say to the hon. Lady that currently 3% of cases are overturned on appeal. We are doing our best to ensure that the right decision is made earlier, and that seems to be bearing fruit in the numbers of people going to appeal.
In my experience as a GP, the impact of the conditions of people with anxiety and even agoraphobia is often not adequately assessed within PIP. I welcome the introduction of mental health nurses to the process, but how will the culture of the assessment be changed so that people’s physical and mental health capabilities are assessed holistically?
One of the changes that we have recently made with both providers is that before they turn to the healthcare evidence and the other things that have traditionally formed part of the assessment, they talk with the individual about the impact of the condition on their day-to-day life. That, I think, has improved the assessment dramatically.
PIP is causing misery for thousands of disabled people. Two disabled people who were in my surgery this Saturday are threatened with destitution because the money that they got as part of their lifetime award under the disability living allowance was stopped following their PIP assessment. The conditions they have had since birth have not and will not change. Why will the Government not exempt people with lifelong or progressive conditions from ongoing PIP assessments, as they are doing with the work capability assessments?
The hon. Lady is right that we have made that change in employment and support allowance. I give her one example: about 84% of people with motor neurone disease are on the highest rates for PIP, but 16% are not. It is therefore perfectly possible that someone will not be receiving the maximum amount of support but that as their condition progresses, they will need additional support. As I said earlier, we are trying to reduce the burden on individuals going through assessments, but some people will still need to have assessments for PIP because their need becomes greater.
Disabled People: Independent Living
Supporting someone to live independently is an essential part of enabling that person to pursue their goals, whether they are personal or career goals. Education and independent living support are the two highest priorities for the Office for Disability Issues.
Every week around 800 Motability vehicles are taken away from disabled people across the UK as a result of the transition to PIP and, according to the most recent DWP statistic on reassessments, 48% of claimants receive a lower level or no award when transferring from DLA to PIP. Does the Minister really believe that taking money away from disabled people on low incomes will help them to live independently?
The hon. Gentleman will know that in spring we announced changes to Motability to enable people to keep their cars pending appeal. We are looking to make changes to Motability, and I am pleased to say that many in this House have supported the campaign led by Together for Short Lives to extend the Motability scheme to under-threes. We have been in discussions with Motability and the Family Fund about extending Motability to under-threes. Individual constituents will not need to apply; they will be referred by the Family Fund. This is a big step forward in enabling families with small children who have heavy equipment to socialise and go out together.
My constituent Jacci Woodcock has been campaigning for some time for Dying to Work. She has a terminal illness and was hounded out by her employer. She would like more employers to sign up—employers such as Derbyshire County Council and Rolls-Royce Aero Engines, which have just done so. Will the Minister say what steps she would like to see to ensure that people have more dignity when they have a terminal diagnosis?
I thank my hon. Friend for what she has done on the campaign and also Rolls-Royce and her local authority for signing up. I also thank her for bringing Jacci Woodcock to the Department for Work and Pensions to meet me. I think that all Members owe Jacci Woodcock a great debt of gratitude for the campaign that she has run in very trying and difficult circumstances. I have listened to her with great care, and we will take on board her recommendations as part of the health and work road map, which we will publish later this autumn.
The stress and exhaustion caused to my constituent by the removal of her Motability car led to her losing her professional post and being redeployed to a role on half the salary. Will the Minister look again at the ridiculous situation whereby the Government are prepared to spend more on Access to Work payments for taxis—in this case nearly £4,500—than on PIP mobility support, which would offer real independence to disabled workers?
The hon. Lady makes a very good point; indeed, we are looking at precisely that. There are lots of pots of money out there—PIP and Access to Work, which she mentioned, are just two—but very little reference between them. We have been working on that and we hope to make some announcements shortly.
Health and Work Programme
I am pleased to announce to the House that six contracts between the Department and the successful suppliers to the Health and Work Programme were signed on 29 September.
It is clear that the Health and Work programme presents an opportunity to bring a lot more disabled people into work. Will the Minister tell the House what requirements are being put on contract providers?
The key to the programme is that participants will receive much more personalised and tailored support. We need to provide bespoke things to individuals who have complex needs if we want them to be successful. We will be looking for providers to forge links with employers, nationally and locally, but also with health and social care and other local services.
The Government have backtracked on their commitment to halve the disability employment gap, and the funding for the Work and Health programme will be as little as £130 million a year, which is a fraction of what was set aside for the Work programme. Given the recent report from the UN committee on the rights of persons with disabilities, which condemned the Government’s progress, can the Minister advise when they will finally publish their response to the “Work, health and disability” Green Paper? Will the Government respond to the UN’s concerns and include high-quality, impairment-specific support, which disabled people have been calling for?
May I start by welcoming the hon. Lady to her post?
Despite the weeks of the general election, we are still going to meet our original timetable to publish the health and work road map, which will set out in detail not just the Health and Work programme, which is only one small part of what we are planning, but a full comprehensive package to deliver personalised, tailored support for disabled people, support for employers, healthcare reforms and welfare reforms.
The Office for Disability Issues is looking at the UN report; we volunteered to put ourselves through this process, and there is more we can do to lever in some of the things in that report to help achieve some of our ambitions, particularly on accessibility.
We have already made the taper rate more generous by reducing it from 65% to 63% in April this year, which means that recipients can keep more of every pound they earn.
A taper rate of 63p in the pound is, in effect, a tax rate of 63% on net income. Surely the Minister accepts that that is a punitive rate and a barrier to work.
This all has to be seen in the context of our reducing the benefit withdrawal rates and making it more attractive to go into work. Of course I understand the attraction of reducing the taper rate, which is why we have done it, but there is also always a trade-off with costs; reducing the rate from 65% to 63%, as we have done, carries a cost—an investment in the system of £1.8 billion.
Is not the whole point of a pilot to test a system and then change it before it is rolled out further? Many of my constituents are in the universal credit pilot scheme. Given my caseload from them, I was horrified today to receive letters about all the rest of the jobcentres in my constituency getting universal credit roll-out. This needs to be looked at, along with the taper and many other issues, before it is rolled out further.
In days of yore, such big changes used to be done via a big Gantt chart on the wall and then one day things going live. That is not how universal credit has been designed or rolled out; it is a very gradual process and has been being rolled out since 2013. The full service is now in more than 100 jobcentres, and we continue to update, evolve and improve it at every turn.
If the hon. Member for Thirsk and Malton (Kevin Hollinrake), who has a similar inquiry at Question 17, were standing, I would call him, but if he is not, I will not—
He is now, so I will.
Although most people these days are paid monthly, quite a lot of people are still paid weekly. When people move into a new job, they could then be getting paid weekly or monthly. There are two important things to mention here: advances, which have been extensively discussed during today’s questions, and the personal budgeting supports we offer to people to help them deal with changes in their cash flow.
Universal credit claimants must wait a minimum of six weeks for their first payment, which does not reflect the world of work. Advance payments are not a remedy for that, because they are a loan, entrenching poverty and debt. Is the Department really going to ignore the unanimous plea from support and advice agencies to pause this roll-out?
It would be wrong to pause the roll-out, because that would mean fewer people would have the benefit of universal credit, more people would be stuck on 16-hour jobs and fewer people would be able to claim the higher rate of childcare reimbursement. Universal credit is working; we know that people are getting into work quicker and that, once they are there, they can see clearly that working more will always pay.
Personal Independence Payments
Personal independence payment assessments require specialist skills, which is why they are undertaken by qualified health professionals, who are experts in disability analysis, and focus on the effects of health conditions and impairments on an individual’s daily life.
That is not the experience of some of my constituents, including one who has a rare condition and is on the highest level of DLA, and so should automatically be entitled to PIP, but whose assessor had no knowledge of the condition and refused the PIP application. Will the Minister specify the exact training, experience and competence requirements an applicant would have to demonstrate to qualify as a healthcare professional who could undertake PIP assessments for the DWP?
I have stated many times in the House the categories of healthcare professionals who can work as PIP assessors—it is a long list—but I should point out that these people are not carrying out health assessments. They are not there to diagnose; they are there to record the impact of someone’s condition on their personal life, which is quite different. As I have said in answer to previous questions, we will introduce some new measures on PIP as part of our response to Paul Gray’s second review.
We are well out of time, but we will take the last question because I do not want the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) to feel left out. Let us hear him.
Comparative Unemployment Rates
The UK has the joint fourth lowest unemployment rate in the European Union. At 4.3%, UK unemployment is the lowest in 42 years. It is 3.3 percentage points below the EU 28 average and half that of the euro area.
Our unemployment rates continue to fall faster than the EU mean. How is universal credit helping that?
Universal credit is an absolutely integral part of our overall approach to employment. It not only simplifies the system but makes it easier for people to go into work, because they do not have to think about whether subsequently they might have to restart their benefit claim. Once people are in work, it means that they can make progress more easily because there are none of the cliff edges of the old system.
We are delivering our promise to reform welfare provision in this country. Universal credit replaces the outdated and complex benefits system of the past, which too often stifled people’s potential. Universal credit is a flexible and personalised system that offers unprecedented support. It ensures that people are always better off in work, with payment gradually reducing as earnings increase. It is working: under universal credit, people are moving into work faster and staying in work for longer. We are fully committed to the scheduled roll-out for universal credit full service. It will be expanded throughout the country to the planned timescale, delivering a simpler system that encourages work and supports aspiration.
Several of my constituents have raised with me the importance of ensuring that assessment centres are as accessible as possible. What steps is the Department taking to ensure that, on an ongoing basis, accessibility is checked regularly and improvements are made where necessary?
My hon. Friend makes a good point. DWP officials visit assessment centres to check them against accessibility standards. He flagged up concerns about the parking drop-off points at the Peterborough centre; following his raising of those concerns, improvements have been made.
On jobcentres, the Department is sensibly making use of the fact that a contract has ended to make a number of improvements to the service provided. Yes, that does mean that some jobcentres will close, but it also means that the provision of services throughout the country will be done in a modernised and effective way. On employment, the fact is that more people are employed than ever before, including older members of the workforce.
We have implemented a wide range of initiatives across the whole claim process, including speeding up the process to clear more claims, increasing the number of healthcare professionals and extending working hours, and making improvements to IT systems.
I visit jobcentres all the time and what I hear is that universal credit is providing a more personalised support that is helping to get more people into work and that it is an important reform. Those who stand in the way of it are failing to help the people who need support.
I am sorry to hear about the experience of my right hon. Friend’s constituent. As she will know, the Prime Minister commissioned a review of mental health in the workplace led by Paul Farmer and Dennis Stevenson. Their findings will be reported to this House shortly.
The benefits freeze was a measure that this Government took to contribute to reducing the deficit. On the point about people having to wait 10 weeks before receiving universal credit, 80% get paid in full and on time after six weeks. The system of arrears is inherent in universal credit because the payment is based on how much a person has earned over the previous month. That has always been part of the design, and it was part of the design that, presumably, the hon. Gentleman voted for when the coalition Government passed the legislation.
Outreach is a vital front-facing service to claimants across a whole range of employability and related services. Of course it needs to be tailored to the needs of each area. The DWP is looking at partnerships with organisations in my hon. Friend’s constituency, including with the local authority. Throughout the course of that, we will be working with his constituents, and we will be happy to work with him, to ensure that those needs are met following the closure of the Shipley office.
On 12 July, universal credit was rolled out in York. Many of the families affected also receive free school meals and therefore had a devastating time of food poverty over the summer. Will the Minister learn lessons from the pilot scheme and ensure that universal credit is not rolled out in advance of school holidays?
Universal credit was rolled out in 29 job- centres in July. It is important that we continue to make progress in the roll-out. We are doing it gradually and sensibly, but we are moving towards a system that helps more people get into work. Of course we are constantly learning lessons and finding ways to improve things, but it is a system that is helping to deliver more people into work.
I return to what I said earlier: with universal credit, we are improving the incentives to work. This has to be seen in the context of the previous system, where far more people would face considerably higher marginal withdrawal rates. This important reform means that people can always see that they are better off going into work and, once there, they can see that they are better off always progressing in work.
I find the Minister’s previous response surprising because a response to a recent written question showed that about two thirds of decisions against awarding PIP and ESA in Barnsley East are eventually overturned on appeal, with these appeals taking an average of 15 weeks to be decided. Does the Minister believe that it is acceptable to make my constituents who are eligible for vital financial assistance wait nearly four extra months?
No. That is why we are trying to get better decisions earlier in the process. We have made progress. As I said, the number of PIP cases going to appeal has fallen by 22% over the last quarter. We will continue—
Will you publish those figures?
They are published; they were published a few weeks ago. We will shortly bring forward our response to Paul Gray’s second review, which will contain further things that I hope the hon. Member for Barnsley East (Stephanie Peacock) will welcome.
The severe conditions criteria are a big step forward and will save people from having to go through reassessments. I have already stated that we intend to do more on PIP and the work capability assessment. The severe conditions criteria also allow us to save bureaucracy at local government level. If we can passport that information to local government, it will help with things such as the blue badge scheme and other forms that people have to fill in that are not directly supplied by DWP or the Government.
I would invite the Employment Minister to visit my local jobcentre, but he is busy circumventing his own criteria to shut it down. In view of the problems with universal credit, why does he not revisit those decisions, keep jobcentres open and stop forcing some of the most vulnerable people to travel for hours just to get the benefits that they are entitled to?
We had an estate that was underutilised. As the Secretary of State said, coming to the end of the large contract that covered very much of the estate, there was an opportunity—indeed, a requirement—to review all our needs to ensure that we had the best possible estate for the future. We had clear criteria for determining which of those sites should be open to public consultation. Where those criteria were met, of course there was a consultation.
I am sure that the Secretary of State and everyone in this House would agree that parents should fulfil their financial obligations to their children. But do they agree that much more should be done to combat those who are shamefully using legal loopholes to avoid paying child maintenance?
Where a parent fails to pay on time or in full, we aim to take immediate action to recover that debt and to re-establish compliance. Where someone’s personal income appears suspicious in any way, caseworkers may refer that case to our newly beefed-up financial investigations unit.
I wrote to the Secretary of State on Friday about my constituent, Danielle Brown, who lost her leg at the age of two. She has now lost her PIP and her Motability car. Will the Minister look into this case and assure me that I will get a reply as soon as possible?
I would be happy to look at the hon. Lady’s case. We changed the rules on Motability to ensure that people could go to appeal and not lose their car in the meantime. It sounds as if something has gone wrong in this particular case. I cannot make a decision, but I can look at the case and see what we can do to help.
I am grateful to the Government for the assistance given to my constituent, who had to leave Dominica because of the terrible damage caused by the hurricane. But on her return back to this country with her 22-month-old son, she has discovered that she is not entitled to any benefits whatever for three months. Will the Minister meet me to discuss how we can ensure that we have a right and proper system to make sure that people in such circumstances really are entitled to benefits?
I am grateful to my right hon. Friend for raising that point. We will certainly look at it and ensure that she has the opportunity to meet us to discuss it.
East Lothian is a pilot area for universal credit, and the third sector—particularly the citizens advice bureau and East Lothian’s local authority welfare service—has kept universal credit going by supporting a very high percentage of applicants. Will the Minister confirm when there will be additional funding for the third sector, so that it can carry on supporting the DWP with universal credit?
We obviously continue to engage with the voluntary sector. I know what the CAB was campaigning for, but it did welcome what I said last week about advances; indeed, I am meeting the CAB later this week to further discuss how we can work together to deliver a very important welfare reform.
While the increase in advance payments is welcome, does the Secretary of State not share my concern that the CAB has said that, on average, claimants have only less than £4 a month to pay back creditors? Therefore, advance payments are simply storing up problems for the future. Will he commit to giving the House a statement on the numbers who are coming into universal credit, the time it takes to pay them and the numbers who are forced into debt, rent arrears or hardship because of this policy?
We do update the House on information, as we have it, about the number of claimants for universal credit, the timeliness details and other details, and we will continue to do that. When it comes to advances, there is a concern across the House that people are left six weeks without receiving any support. Ensuring that advances are there and that they are made known to people is really important, and I hope all Members will do that.
A constituent who relies on agency work from the shipyards finds himself in rent arrears of over £900 as a result of being on universal credit. Does that not show that the concerns of social housing providers should be listened to, or does a social housing provider have to go under before its concerns are addressed?
The DWP has been working closely with social housing providers on putting in place what is described as the landlord portal, which enables information to flow between social landlords and the DWP. It has already been piloted and will be in operation later this month. That is one of the things we are doing to ensure that this process is constantly improving and that we can verify identity and get the right money to the right people as quickly as possible.
How much does the Secretary of State estimate is being paid out through housing benefit, or will be paid out under the housing-related costs of universal credit, for unfit accommodation in the private rented sector? All too often, I meet vulnerable tenants living in completely unfit accommodation. A huge amount of taxpayers’ money is being used to line the pockets of dodgy landlords. It is a complete and utter disgrace, and I would like to know what the Secretary of State’s estimate is of the size of the problem and what he is going to do about it.
We are always concerned about substandard rental accommodation, and we do keep in touch with the relevant bodies. This is something that is generally of concern to the Department, and it is something we will keep an eye on moving forward.
The all-party parliamentary group on deafness recently heard compelling evidence about the disproportionate and damaging impact the cap on awards under the Access to Work scheme is having on people who use British sign language as their first language, with deaf people having job offers withdrawn, withdrawing from their roles and giving up on their careers. The Government say they are committed to improving disabled people’s opportunities at work, but this policy is destroying them. Will the Minister think again?
We have looked in great detail at many aspects of Access to Work, and although it is a popular scheme, there are many things we want to change in it. I very much recognise that the scheme is not just about giving someone a piece of technology to enable them to communicate; it is about giving them the services they need to be their best—to thrive and to be their most creative in the workplace. For some, that will involve British sign language interpreters. This is very much an area we are looking at, and it will be something we bring forward and report back on in the health and work road map.
Are levels of child poverty falling or rising?
When one compares rates of poverty with those before the change of Government in 2010, we see that none of the four main measures has worsened and, in fact, three have improved.
As of November 2016, youth unemployment in my constituency of Wolverhampton South West was 27%. Now, we are due to have the roll-out in December and this will see the enforcement of the youth obligation. What steps has the Minister taken to ensure that young people who reside in constituencies such as mine are provided with support into employment, while the transition to the full UC service is implemented?
I had the pleasure of visiting Wolverhampton just last week and had the opportunity to speak to my colleagues in jobcentres in the area about youth unemployment. Of course, the figure for young people who have left full-time education and are unemployed has dropped below 5% for the first time since that data series began. As we know about the scarring effect of any period out of work for a young person, we continue to work hard through things such as work experience and sector-based work academies, and that is showing great success.
Order. We have run out of time, but I shall call one further questioner, a Member with an insatiable appetite for these matters and a detailed, some would say anorakish, knowledge of all the most complex formulae. I am referring, of course, to the right hon. Member for East Ham (Stephen Timms).
I am very grateful, Mr Speaker. Apart from shocking delays, Citizens Advice highlights two big problems with universal credit. One is that it is too complicated; people cannot understand it. The second is that when there is a problem, there is nobody there to help people. I am glad that the Secretary of State is meeting Citizens Advice, but will he have anything to say to them on those two specific problems?
The personalised support available in jobcentres to people claiming universal credit is much more advanced than that which we have had in the past. In terms of complexity, universal credit is a much simpler system than that which has existed up to now, with six different benefits, leaving us in the absurd position in which people were unwilling to take a job that required them to work more than 16 hours because they would move from one benefit system to another, knowing that their hours might fall in the future, so they would move back to a different system. That complexity has discouraged people from working more hours and we should all seek to tackle that. That is exactly what universal credit does.
With your permission, Mr Speaker, I would like to make a statement about the steps the Government have been taking to support those affected by the collapse of Monarch Airlines, in particular the 110,000 passengers left abroad without a flight back to the UK and the almost 2,000 people who have lost their jobs.
This situation is highly regrettable and all parties considered options to avoid the collapse of the company. Ultimately, however, Monarch’s board took the decision to place it into administration and it ceased trading at around 4 am on Monday 2 October. The engineering arm of the group remains a viable business and continues to trade. Ahead of the collapse, my Department had been working closely with the Civil Aviation Authority and several Departments across Whitehall to prepare contingency plans, and the response since last week has been swift and substantial.
To put the situation into context, this operation is the largest of its kind ever undertaken. The CAA has essentially set up one of the UK’s largest airlines to conduct it. Let me give Members a sense of the scale. We have put arrangements in place to bring back 110,000 people to the UK, with 700 flights over a two-week period. We have had a maximum of 35 aircraft in operation at any one time. The CAA is working to secure planes from 27 different airlines. More than 200 CAA staff are working on the project with thousands more in partner organisations taking part. There are 40 airports involved in the UK, around the Mediterranean and beyond. That has required 267 coaches carrying more than 13,000 passengers, and so far there have been more than 39,000 calls to our customer service centres, all swiftly answered by more than 250 call centre staff. There have been more than 1 million unique visitors to a dedicated website— monarch.caa.co.uk—and 7 million page views. Furthermore, more than 1 million people have been reached through our Facebook promotion. Ten Government Departments and agencies have been involved, including the Foreign and Commonwealth Office in London and our extensive diplomatic and consular network in the affected countries.
I have seen at first hand the work being done across Government and the CAA to make this operation a success. I have spoken to some of the passengers who have returned to the UK on Government flights. I have been hugely impressed by what I have seen, and we have had a very strong, supportive response from the passengers affected, many of whom deservedly praised the CAA and all the Departments involved in this enormous operation.
Normally, the CAA’s responsibility for bringing passengers back would extend only to customers whose trips are covered by the air travel organisers’ licence scheme, but this is the largest airline failure in UK history and there would have been insufficient capacity in the commercial aviation market to enable passengers to get home on other airlines. The danger was that tens of thousands of passengers abroad would have no easy means of returning to the UK. That is why I instructed the CAA to ensure that all those abroad were offered an alternative flight home. As of last night, around 80,000 passengers had returned to the UK; that is almost three quarters of the total number who were abroad at the time of the collapse. We have had teams of Government officials at overseas airports providing advice and assistance to passengers.
Despite those robust plans and the smoothness of the operation so far, the situation is hugely distressing for all concerned. Obviously, it has been a priority to get people back to the UK, and our hearts go out to those who have lost bookings as a result of the collapse, but in addition to supporting passengers we have been focused on working to ensure that the almost 2,000 former Monarch employees receive the support they need. I am pleased to report that airlines have already directly appealed to those former employees. For example, Virgin Atlantic is offering a fast-track recruitment process for cabin crew and pilots, and easyJet has invited applications for 500 cabin crew vacancies. I and members of my team spoke to the airlines when it became clear what was happening to try to secure their help in getting those opportunities for staff, and I am pleased to see that coming to fruition. easyJet is also calling for direct-entry captains or first officers who meet captain qualifications.
All former Monarch employees will have received information from Jobcentre Plus outlining the support available to them. In total, Jobcentre Plus has pulled together a list of more than 6,300 vacancies across the major UK-based airlines—that is more than three times the number of people being made redundant—which I hope will help those former employees to remain in the airline business. The Minister with responsibility for aviation has been in contact with Members whose constituencies have been hardest hit by these job losses. They have our assurance that we will work with them and the industry to offer what support we can.
I am also aware of the Government’s duty to the taxpayer. Although affected passengers have been told they will not have to pay to be flown back to the UK, we have entered into discussions with several third parties with the aim of recovering the costs of the operation. The ATOL scheme of course provides financial cover for those with ATOL protection. We are currently engaged in constructive discussions with the relevant credit and debit card providers so that we can recoup from them some of the cost to taxpayers of the repatriation flights. We are having similar discussions with other travel providers through which passengers may have booked a Monarch holiday, and I thank all those with whom we have held discussions for their constructive and realistic approach.
The initial response to this unprecedented situation would not have been so successful without the support and co-operation of many players. I am sure we would all say that the loss of a major British brand that was close to celebrating its half-century is a really sad moment. However, it should not be seen as a reflection on the general health of the UK aviation sector, which continues to thrive. We have never had the collapse of an airline or holiday company on this scale before, and we have responded swiftly and decisively.
Of course, right now our efforts are rightly focused on getting employees into new jobs and getting passengers home. After that, our effort will turn to working through any reforms necessary to ensure that passengers do not find themselves in this position again. We need to look at all the options—not just ATOL, but whether it is possible to enable airlines to wind down in an orderly manner and look after their customers themselves, without the need for the Government to step in. We will be putting a lot of effort into that in the months ahead. Our prime task has been to get people home, and I am immensely grateful to all who have taken part in what has proved, so far, to be a smooth and successful operation.
I thank the Secretary of State for advance sight of his statement.
Britain’s fifth largest airline, Monarch, collapsed because of a litany of failures by the Government, the regulator and the company’s financial backers and advisers. Its demise must also be seen in the context of a ferociously competitive aviation sector, which is adjusting to major overcapacity problems and the loss of services because of terrorism. A further backdrop to the industry is the foggy skies of Brexit, and the total lack of certainty from this Government for the British aviation industry after March 2019.
The airline’s bankruptcy has left huge losses on the shoulders of the public, rather than of the parent company or the regulator. It is the staff, customers, the taxpayer and pensioners who will pay the price. Creditor bills include the £60 million paid by the Government to repatriate holidaymakers, not forgetting the £26 million paid last year when Monarch previously came close to collapse; the £7.5 million to the Pension Protection Fund; the 45 days’ pay owed to the 2,000 staff who were made redundant; and the ticket refunds for the 750,000 outstanding bookings at the time of the collapse.
Why did the Government not do more to support Monarch and ensure that the company was viable, if only for the short term? The German Government recently stepped in to assist Air Berlin and the Italian Government have supported Alitalia. At the very least, an orderly wind-down of the airline would have been preferable to sudden administration.
Monarch is reported to have had £50 million in the bank. Why was the airline not granted a short-term ATOL licence extension, which would have allowed it to continue trading and at least bring its passengers back? Who decided not to grant Monarch an ATOL licence extension? More time would have allowed Monarch to be sold in parts. For example, Monarch’s landing slots are reported to be worth £60 million. Such assets could have been realised in an orderly wind-down. Instead, moneys from the sale of these assets will go to the secured creditor and former owner Greybull Capital, while the public purse gets nothing.
The statutory role of the CAA is to provide choice and value for money for passengers. British consumers now have one less airline to choose from. On its watch, there has been a surge in the cost of UK air fares following Ryanair’s cancellation of flights last month. Monarch’s demise will only push up flight costs further. There is an estimated £200 million in the CAA-administered ATOL compensation fund, yet it only covers about one in 20 of Monarch’s customers. Why is the public purse paying while the outdated ATOL pot sits largely untouched? Monarch Airlines continued to sell flights until Sunday 1 October, even though the airline knew it was going into administration the following day. Why did the CAA not act to stop that?
Greybull Capital’s takeover of Monarch in 2014 was the beginning of the end for the airline. Greybull is a private investment firm that has already presided over the collapse of My Local convenience stores and Comet, among others. Serious questions must now be asked about the conduct of firms such as Greybull, the way they invest and their wider stewardship.
A report in yesterday’s edition of The Sunday Times suggested that the £165 million rescue package for Monarch last year was largely funded by Boeing, as part of a cut-price deal for an order of 737 aircraft. What is the Secretary of State’s assessment of the role of Boeing in the financial engineering of Monarch? The Prime Minister recently criticised the conduct of Boeing against Bombardier in Belfast, in support of her Democratic Unionist party allies. Why is there no criticism of Boeing’s role in the loss of 2,000 jobs in Luton?
The role of KPMG must also be called into question. The firm was appointed to seek buyers for Monarch’s short-haul business prior to its collapse. It was actively doing so. Why is the same firm now acting as Monarch’s administrator? Does the Secretary of State agree with me that that is a glaring conflict of interest?
Finally, the way in which Monarch met its demise should set alarm bells ringing, so will the Secretary of State confirm that there will be a full investigation into the concerns that have been raised?
I am sorry the hon. Gentleman did not have a good word to say for all the efforts put in place to bring people back. I would just remind him that, interestingly, in 2008—the last time we had an aviation failure in this country, Excel Airways—the Labour Government followed a very similar path to the one we have followed, with taxpayer-funded repatriation. They did the right thing then, and we are doing the right thing now. I am simply sorry that Labour Members have forgotten that they did the right thing in government, and cannot now say that our doing the right thing this time is indeed the right thing to do. [Interruption.] They did the right thing then, and we are doing the right thing now, and I am just sorry that he could not say a good word about those involved.
The hon. Gentleman talked about the reasons for the collapse. First, this is not an issue about Brexit. The airline had been struggling for three years, and the first concerns were raised about it long before the referendum was even held.
I had hoped that this summer, after the rescue package last year, the airline would see its way through. As its chief executive said, it has been a victim of the anxieties about tourism in the east Mediterranean for security reasons. Those have led to a concentration of business in the west Mediterranean and the traditional resorts of Spain and Portugal and a price war from which the company was ill equipped to recover. That is what has happened, no more no less.
The hon. Gentleman asked about the licence, and there was no issue about its renewal. What happened was never about the renewal of the licence—the business had simply reached the end of the road. Its board came to the conclusion that it could not carry on.
The hon. Gentleman asked why the company carried on selling tickets the day before. The reality is that any airline that runs into difficulties will carry on selling tickets until it can no longer do so. The moment it stops doing so, it collapses, and that is what happened. It would happen any time an airline ran into such difficulties. There is no other way to do it. The moment it stops selling tickets, it stops doing business, and that is precisely what happened.
The hon. Gentleman talked about competition, and other airlines are already stepping into the breach. Jet2, one of our fast-growing, emerging airlines, has already said that it will step in and run some of the routes. That is what a market does. If one business fails, others step in. The tragedy of the Labour party in the last few years is that it has moved away from understanding markets to being utterly hostile to markets and the private sector.
We have a thriving aviation sector with competition between airlines delivering a good deal for consumers, and occasionally—once under a Labour Government and once under ours—something has gone wrong. In both of those situations, the Government of the day stepped in to try to make sure that we looked after the travelling public. I have no doubt that if it ever happens again, someone will do the same.
We do have to learn the lessons. We have to understand whether we can make sensible changes to the laws to ensure that this does not happen again. We are already legislating to extend the ATOL scheme to provide better protection for people who book over the internet in a different way from how they have in the past. I am clear that the job of the Government is to look after the travelling public and step in when things go wrong. We have done that, and we are seeking to get back as much money as possible, as Labour did in 2008. Above all, our job is to do our best for the travelling public and the employees. That is what we are doing. I am proud of what we are doing, and I am just disappointed that the Opposition cannot even say well done to the people who have worked so hard in support.
The chief executive of Monarch has attributed the principal reason for the demise of the airline to terrorism and the resulting flight bans to both Tunisia and Sharm El Sheikh. Can the Secretary of State give his assessment of the merits of that argument?
There is no doubt that that was a significant factor, and not only because of changes in consumer patterns. Many other airlines chose to concentrate their resources this summer in the traditional resorts of Spain and Portugal. Alicante airport and others were full of planes this summer, and Monarch got squeezed out in a price war for which it was not financially strong enough. Ironically, it carried more passengers than two years ago, but with far lower revenues, and that more than anything else is what has caused its demise. It is a consequence of the security situation and of people taking a cautious approach to their holidays.
The sad fate of Monarch Airlines is a stark example of the realities of Brexit beginning to bite. There is no denying that the fall in the pound has led to significant increases in the operating costs for the airline over the past year. The weak pound has also affected consumers and led to a drop in bookings. Add to that the uncertainties over the future of British carriers in Europe that served as a significant deterrent for any potential buyer who might otherwise have been found, and Monarch’s fate was sealed. Does the Secretary of State agree that as long as uncertainties over Brexit continue there is a danger of similar high-profile collapses?
Can the Secretary of State say with certainty today that the rights of UK passengers will not be eroded or diluted after Brexit? Will he confirm that the Government will work with administrators and the unions to ensure that employee rights are fully respected during the process, and that—where applicable—compensation is made available in a timely manner, in view of the fact that the manner of the administration raises real concerns about employee rights?
I am really sorry the hon. Lady has taken that approach. Let me be absolutely clear: this airline did not fail because of Brexit; this airline failed because it had a business model that was not capable of dealing with a price war in the Mediterranean. That is the reality of the situation and that is what its chief executive said. The hon. Lady talks about Brexit causing a lack of investment, but in the past few weeks we have seen a big expansion. Jet2 has set up a new base at Stansted and there has been a huge investment in the UK by Norwegian, which is becoming a real player in the low-cost marketplace. The market is changing and sadly Monarch, a business that has been around for 50 years, was not able to adapt to those changes. I am afraid she is just doing a disservice to the economy of the United Kingdom when she claims that this was a consequence of Brexit. She talks about employees. The biggest favour we can do for the employees of Monarch is to work to ensure they get another job quickly, and that is what we are seeking to do.
Following on from the many letters I have received from constituents, will the Secretary of State join me in thanking and congratulating the staff of the CAA, the Department for Transport and my local airport, Manchester airport, on the work they have done on the biggest evacuation in peacetime?
I am very happy to do that. I pay tribute to the staff of Manchester airport—I met the first plane back at Manchester airport—who rowed in behind the challenge. They were notified only late on the previous day, but by Monday morning staff were out greeting passengers, telling them what had happened and sorting out all the issues arising from the administration. I owe a big debt of gratitude to the staff of Manchester airport, Gatwick airport, Birmingham airport, Luton airport and Leeds Bradford airport, all of whom rose to the occasion, and to all the other people and organisations involved in the exercise.
In 2014, the CAA recognised the fragility of Monarch’s finances and insisted on ATOL protection of flight-only bookings, but that requirement was dropped in December 2016. Monarch’s administrators cite cost pressures and increasingly competitive market conditions as contributors to its collapse. Given that the fall in the value of the pound and the loss of tourism in Egypt and Tunisia predate that decision, passengers will rightly ask why the requirement for ATOL protection was removed. Will the Secretary of State explain the process for deciding to drop ATOL protection of flights, the Department’s part in that decision, and how much the decision will ultimately cost UK taxpayers?
The ATOL scheme counts as public expenditure whatever happens. The impact on public finances, whether or not this was covered entirely by the ATOL scheme, remains the same because of how Government accounting works. I take advice from the CAA on the steps we need to take. Last year, Monarch had a big injection of cash, and in the first part of this year it looked like things were back on the straight and narrow. What changed this summer was the price war, which undermined the company’s revenues and led to a position where its losses were mounting week by week. That was the real issue. I have no doubt that the hon. Lady and her Committee will want to deal with these matters in greater detail, and I look forward to talking to her. She has every right to scrutinise what we have done. We sought to do our best for the travelling public and to take the decisions we were advised to take at the right time.
As a former Business Minister before the EU referendum, and apparently as one of the chief “remoaners”, may I make it absolutely clear that the unfortunate demise of Monarch has absolutely nothing to do with Brexit? Those who seek to make it an issue based on Brexit do not do anybody any favours. I commend the Secretary of State not only for his statement but for his hard work and that of his Ministers in doing their utmost to bring everybody back to this country. Will he confirm that Transport Ministers and Business Ministers have been doing their absolute best for Monarch for years? Will he continue to work with Foreign and Commonwealth Office Ministers to look at how we can open up airports, such as Sharm El Sheik and those in Tunisia, to support the rest of our aviation industry?
I am very grateful to my right hon. Friend for her words. She is absolutely right. This is a sad tale of an airline that has been struggling for years. A lot of effort has been put in by many people to try to keep it afloat. It is a real disappointment that they were not able to succeed. She is absolutely right about the Brexit issue. If we want another example, it is only a few weeks since Air France and KLM spent hundreds of millions of pounds on a stake in Virgin Atlantic. Those are not the actions of commercial organisations that believe that Brexit is destroying the British aviation sector. Those who suggest it are simply talking down our country and that is not acceptable. I am therefore very grateful to her for what she says. She is absolutely right. I give her an assurance that the Government will do everything we can to support the sector, to support the people who lost out as a result of Monarch’s collapse, and to continue to ensure we have a strong sector for the future.
As the MP for Luton North, I represent many of those who have lost their jobs, and I have to say that, had the company been in public ownership—with proper transparency and accountability to Parliament—I suspect that this would not have happened. [Interruption.]
My concern is that, when the company collapsed, the assets had almost all disappeared, so there was very little financial value in the assets of the company. Was this to benefit shareholders and owners, and how much money has the state effectively paid out that the owners and shareholders should have been accountable for?
The hon. Gentleman is right that the airline did not have the assets at the end—airlines today do not own their planes but lease them. One reason it is difficult to continue to operate an airline like this is that the planes are the property of the lease companies, which take them back immediately afterwards. We clearly have to look at whether there is a better way of doing things, but it is not easy.
It would be relatively easy for an airline abroad that is owed money simply to impound an airliner and make it impossible for us to get people back, so these are not straightforward issues. But is the hon. Gentleman really suggesting that we go back to a time when the state owned everything? Do we want the state to own British Airways, easyJet, Jet2 and Thomas Cook? It is nonsense. Even the most socialist Labour Government of the past would never have suggested that the state own every holiday airline. It is a sign of how extreme its policies have become that anybody on its Benches can seriously suggest it.
I congratulate the Government on the speedy response to the Monarch situation and on highlighting the resilience of the UK aviation industry—in the private sector—but the Secretary of State will be aware that there has been confusion over who is ATOL protected. Does he agree that more could be done to communicate the benefits of ATOL membership?
This is definitely one area we need to look at again. We are already legislating to ensure that people who pay for a flight and hotel separately through an internet organisation can be covered through ATOL insurance. This is an area where we have to do more work. There is, however, a fundamental issue: if we were to put a levy on the cost of an air ticket, we would have to do it on every air ticket in the UK, but many of us on the Conservative Benches get regular representations from regional airports, for example, saying they want air passenger duty cut. This would increase APD, and that is why it is not a straightforward decision, but one we must consider very carefully.
I agree with the Secretary of State that in future situations like this one the Government should look for an orderly wind down, but is that not pie in the sky given the evidence of a conspiracy between Greybull and Boeing to protect their own capital interests against the pension rights of former employees and the people who bought tickets when it was already clear that the airline was bankrupt?
The hon. Gentleman should remember that the pension scheme was transferred to the Pension Protection Fund in 2014, when it was sold by the Swiss family that had owned the business since the 1960s, so it is not straightforward to talk about pension rights now. He should not second guess any details of how, why or where the financing package was secured a year ago. It is a matter of record that it involved rescheduling or reorganising the leasing of the aircraft, but had it been able to secure the future of the airline, as we all hoped at the time, we would all be grateful it had happened. It is tragic that that was not the case.
Almost 500 Monarch staff are based at Manchester airport, and many are my constituents, so I am grateful to hear the assurances that the Government will work with the industry to support staff back into work. Will the Secretary of State outline what more support will be given to our regional jobcentres to assist my constituents who have lost their Monarch jobs?
Before it became clear that the collapse was happening, we had pre-meetings across Whitehall between the Departments that needed to be involved, including the Department for Work and Pensions, and Jobcentre Plus has been working with all those affected. That work will continue where necessary. I am glad that if such terribly difficult circumstances had to arise, they arose in a thriving sector with lots of job opportunities. The fact that Jobcentre Plus was able quickly to identify more than 6,000 vacancies for 1,700 people looking for jobs is a good step in the right direction and a tribute to the success of that sector, off the back of what has been a successful economy in recent years.
Four hundred employees, including skilled engineering workers, are set to lose their jobs at Birmingham airport,. The region can ill afford to lose those skills and the contribution that they make to the regional economy. Will the Secretary of State ensure that his Department redoubles its efforts, and does everything possible to ensure that those people can find equally skilled work elsewhere in the region as soon as possible?
I absolutely give the hon. Gentleman that assurance. Securing strong futures for those people has been, is and will remain a priority for us, along with getting the passengers back. As I have said, however, I am encouraged by the number of other airlines that are actively seeking to recruit. As slots become vacant at Birmingham, Luton, Gatwick, Leeds and Manchester, other airlines are already seeking to move in and take those slots, and they will need staff to work on the business as they arrive.
Will the Secretary of State give further details of what the Government are doing to assist former employees of Monarch Airlines who have lost their jobs as a result of the airline’s collapse?
We have had a very early promise on a lot of things. A few hours before the administration came into effect, I spoke to the chief executive of easyJet, who was very helpful. I should express thanks to easyJet for helping us with some problematic routes; for instance, only specialised pilots can fly into or out of Funchal airport.
The chief executive gave me an assurance, and easyJet has given us assurances subsequently, that the airline will hire a substantial proportion of those staff. It is likely to hire 500 very quickly to meet its future demands, because its business is growing rapidly, and I know that other airlines plan to step in and do the same. Jobcentre Plus has already been holding job fairs and airlines have already been going through recruitment exercises, so it is my hope that all those affected will find jobs quickly.
The Secretary of State emphasised that Monarch passengers abroad would be covered until 15 October, but constituents of mine who are due to return on 16 October are worried because there is no information available online. Will the Secretary of State please let me know where they can obtain information, and whether their return is protected or not?
The full repatriation exercise lasts for two weeks, and at the end of that time there will be a very small number of people left abroad. We know that, at that point, the sector as a whole will be able to absorb those passengers; it could not have done so a week ago, given the numbers involved. The Civil Aviation Authority will be contacting those people this week and keep its helpline available for a considerable time after the repatriation effort has been completed, and we will work to ensure that they can return home straightforwardly. They will be entitled to refunds through credit cards, through the ATOL scheme, and so forth. The crucial difference is that when the company went into administration the sector could not have coped with the number of people involved, but by next week absorbing the small number of passengers who remain will not be a problem.
Jobs and opportunities that come from access to regional airports and flights mean a lot to Members in all parts of the House, and, indeed, to my constituents who can access Southampton airport. Will the Secretary of State thank Barclays for supporting my constituents and their families? Members of the Hamble Aquatics Swim Team who were due to go to Lanzarote were reimbursed more than £9,000 so that they could train for county, national and regional championships. Their head coach, Amy Rodger, ensured that more than 20 swimmers and their coaches were able to get over there by working with local television stations and Barclays. Will the Secretary of State also thank the many other companies that have done so much to help our constituents?
My hon. Friend’s words speak for themselves. I am very grateful to Barclays for providing that help, and I know that a number of other businesses have done the same. The credit card companies in particular have been very constructive in their dialogue about sharing the cost of the repatriation with us, and Lloyds was especially good at getting out of the traps and working with us. I think that this was a moment when corporate Britain behaved in the right way, and worked alongside us to do the right thing.
Having spent five years working for the Association of British Travel Agents and lobbying for greater holiday protection, may I extend my thanks to the people working hard for that and ask the Secretary of State to extend it to travel agents and tour operators? What hit does he expect the Air Travel Trust fund to take as a result of Monarch’s collapse, and can he give an assurance that the ATOL protection contribution will not go up, which would mean holidaymakers having to pay more in future?
We will not know exactly how much until we have gone through the numbers in detail with the administrator. We do know that only a relatively small proportion of Monarch customers were ATOL protected, because the nature of the business was mostly flight-only. I will happily inform the House once we have gone through all the details, which will take a bit of time, but it will not be a substantial proportion of the total, because of the small proportion of customers who are covered.
Will my right hon. Friend join me in paying tribute to Gatwick-based airlines such as easyJet and Virgin Atlantic for stepping up and offering alternative employment to Monarch employees who now find themselves out of work?
I am very grateful to the airlines for the way they have responded, and they have done so in a variety of ways. It was a real team effort at Gatwick, with airline staff, airport staff and others coming together to deal with the immediate issues for passengers, and then really working to get Monarch employees sorted out as quickly as possible. I am very grateful to the staff at Gatwick, as I am to those at all the five airports affected.
The Secretary of State said in his statement that the collapse of Monarch Airlines was deeply regrettable, so I wonder whether he will support the call by the pilots’ union for a probe into what exactly happened around the collapse.
I suspect that there will be exactly such a probe, but I also suspect that it will be led by the hon. Member for Nottingham South (Lilian Greenwood) and her Transport Committee. I do not want to gainsay what the Committee will do, but I would expect a rigorous inquiry, and my Department and the CAA will be very happy to co-operate with it.
Yes, Mr Speaker. I join my friends in congratulating the Secretary of State, the CAA and others on a magnificent operation to repatriate so many people who would otherwise be marooned overseas. However, I remain concerned, because I have a number of constituents who had booked holidays but not yet travelled. Will they be covered under the ATOL scheme, or under credit card insurance schemes, and how many people have been affected in that way?
That was a very speedy recovery from the intoxicating effects of conversation with the right hon. Member for North Shropshire (Mr Paterson), and a very useful guide to new Members on how to perform at a moment’s notice in the way that the hon. Gentleman has done. He did signal earlier that he wished to be called, so I was not picking on him.
Of all those involved, I feel most deeply for those who made bookings but have now lost trips and holidays. I very much hope that we can get Monarch staff into employment quickly. I hope that we can get all the passengers back safely and well. For those who have lost bookings, it is a deeply traumatic time, and we heard some very sad stories last week. Anyone who booked with ATOL protection or who booked using a credit or debit card will be able to get a refund. My advice to anyone in that position is always to ensure that they have at least one of those cover options available in case something like this happens again—let us keep our fingers crossed that it does not for a very long time.
Monarch has failed to consult its 1,800 employees on redundancy. What estimate has the Secretary of State made of the costs of compensation for those affected workers?
As the hon. Lady will know, there are statutory provisions for when businesses go into administration, because they tend not to be able to consult employees about redundancy. It falls to us to try to sort them out, and that is what we will seek to do. There are statutory provisions for compensation for people in these circumstances, but my hope is that the financial impact on them will be limited, given the number of companies looking to recruit as quickly as possible.
Although the distance between Stansted, my local regional airport, and Luton, which is Monarch’s home airport, is relatively small, some people will be displaced much further afield. What plans has the Department put in place to ensure that those who are displaced during the recovery phase can get back to their most local home airport?
That will become a particular issue this week. We have brought 80,000 people back, but there are still about 30,000 left. We have emptier planes this week and greater consolidation of planes. We have 747s operating, and clearly a 747 replacing a short-haul Monarch aircraft leaves a gap for seats, so we are bringing flights together and more people will arrive back at a different airport. There will be a coach waiting for them that will take them straight back to their original airport, and the airports are making special arrangements on carpark access and fees to ensure that people do not lose out as a result. The CAA is managing a big bus operation and those people will get back to the place where they started.
Actually, the fall in the value of the pound was a factor in the collapse, although I agree with the Secretary of State that another factor was the UK ban on flights to Sharm el-Sheikh. Since that ban was introduced, the Egyptian authorities, with UK support, have gone to enormous lengths to improve security at that airport. I believe that every other western country has now lifted its ban. Could we now lift ours before even more people lose their jobs?
The right hon. Gentleman will know from his experience in Government that we take security issues very seriously. We have looked exhaustively at the issues around Sharm el-Sheikh. We have not yet taken the decision to resume flying there. I would love us to be able to take it, but we have to be mindful of the security concerns and the risks to the travelling public of the United Kingdom. I assure the right hon. Gentleman that as soon as we feel that we can take that step, we will. We hold back only for good security reasons.
This has been a massive exercise in repatriating citizens and our thanks should go to the Civil Aviation Authority and others that made it happen. Will the Secretary of State please confirm the cost of the repatriation exercise? Are insurers, credit card companies and banks playing their part in reimbursing the taxpayer?
We expect the total gross costs of the repatriation to be around £60 million. We will recover money from all those different groups, and I will in due course be able to tell the House exactly how much the taxpayer has contributed. However, my hon. Friend can be reassured that we are very focused on making sure that there is clear burden sharing, and that it is not only the taxpayer who pays.
I applaud the Government’s efforts in bringing back passengers who were not protected by ATOL. In the modern era of mass travel by air, would it not be sensible to look at legislation around ATOL and cover both hotels and air fares in case something similar happens in future?
That will clearly be debated again and has been considered before. The issue is that we would have to apply a levy to every single air fare sold in the UK, whether for a UK airline or otherwise. We could not simply apply a charge to a UK-based airline for which we were responsible—we would have to charge Ryanair, Air France and Emirates passengers as well. Effectively, we would be putting up air passenger duty. I am not saying that we should not do that, but if we were to we would need to use great thought and care beforehand.
My constituents in Redditch are incredibly hard working—thanks, no doubt, to the Government’s amazing record of job creation. However, they look forward to their well-deserved holidays, and price competition has contributed to their being able to take those breaks. Will the Secretary of State confirm that he sees no risks in the airline market that he ought to be considering?
That concern has been raised by the Opposition as well. The first thing to say is that our aviation sector is very strong. If people visit our airports, as I do, they will find that virtually every one will say that this has been a record year in terms of the number of passengers carried and that there have been record days in their history. Passengers are not stopping flying—more and more passengers are flying, and I am confident that that will continue.
I am also confident that we have good airlines that are growing fast: look at the success of easyJet and Jet2. Tour operators are also doing well. I am confident that the sector will grow and develop; there is demand for slots and runway space and there are acquisitions and new investments in new centres such as Jet2’s investment in Stansted. We should be confident about the sector. We can never rule out problems in the future or be certain that no airline will ever run into difficulties again. That is why we have to think through whether we need to take steps to make sure that there is proper protection for consumers. But we should be confident in our sector.
I thank my right hon. Friend, his Department and the CAA for delivering the largest ever peacetime repatriation. As he will be aware, the UK insolvency framework does not allow insolvent airlines to continue flying, unlike what happened with Alitalia in Italy and Air Berlin in Germany. Will my right hon. Friend consider looking at the insolvency framework again in that light?
We will certainly give some thought to that. It is very noticeable that other airlines have been able to carry on flying in administration. The risk, of course, is that an aircraft could easily be impounded by an international airline. One of the reasons we sought to hire our own fleet was to remove that risk. If we had used the Monarch planes, there was a danger that, if they arrived at an airport and a local creditor decided to take action, the plane might have been unable to return. That is something we always need to weigh in the balance. We need to look at what happened with Air Berlin and Alitalia and see whether there are lessons to be learned, but first and foremost our task should always be to protect passengers whose journeys might otherwise be at risk.
Price wars, stiff competition and a change in travel habits all contributed to Monarch’s failure. My constituents in Wealden have been in touch about their holidays and business trips being ruined. Can the Secretary of State confirm that he and his ministerial colleagues have visited returning passengers at UK airports and say what feedback he has received?
I met the first flight back at Manchester airport last Monday and my noble Friend Lord Callanan visited Leeds Bradford airport on the same day to meet people coming back. I have had a lot of letters from people who were able to travel back on the repatriation flights saying how grateful they were and how smooth it had been. There are bound to be some hiccups on the way—we had weather problems in Funchal, which led to some cancellations—but in overall terms this has been a very smooth effort and a great tribute to a team of people in the CAA who are not airline specialists, but who have come together to run an airline in a way that was, frankly, enormously impressive.
I do not think the hon. Gentleman realised how popular he was—and I do not think anyone else did either.
Thank you, Mr Speaker. Does the Secretary of State agree that, although every lost job is a human tragedy, the British aviation industry remains robust and resilient? I am reminded of 2012, when British Midland International collapsed, with the loss of 1,200 jobs at East Midlands airport in my constituency. These are very highly skilled people who are quickly absorbed back into the economy. Unemployment in North West Leicestershire remains at a record low of 1%.
My hon. Friend is absolutely right. I am delighted that we have a thriving sector, with more than 6,000 vacancies, for which the 1,800 people who have lost their jobs can apply. I am also delighted by the fact that easyJet is saying, “We want to hire 500 of them straightaway. They’re good people; we want them.” I am very confident for their future. All the support they need in the short term is being provided, but I am pretty clear that in a thriving sector those people will have a strong future.
Quite clearly this has been a huge repatriation and logistical task. Can the Secretary of State confirm, though, what entitlement passengers who have not yet travelled—I am sure most of us have them in our constituencies—have to a refund?
We will be continuing to give advice and guidance to those people for some considerable time. We will also be contacting people this week to see who wants and has a need to return, as part of the repatriation exercise. All those who have booked through credit card companies or who have ATOL protection, regardless of how long they are out there for—I am sure a small number will be out there for an extended period—will be able to secure a refund when the time comes.
As well as reviewing the effectiveness of the ATOL scheme in the light of this incident, will the Secretary of State take the opportunity to look at the providers of travel insurance? Many people travelling thought that they were covered for the collapse of an airline under their travel insurance policy, only to find that they were not.
This is something that I will want to take up with the insurance industry. It does seem unfortunate that cover should not include something that happens once in 10 years. This is one area where there is a case for change. It would have made life a lot easier had that been the case.
I welcome the statement and the detail of what the Government have been doing, in particular the fact that 80,000 of 110,000 people abroad are now back in the UK. Can the Secretary of State confirm, though, that we will apply the lessons learned to the legislation currently going through the House to reform the ATOL scheme?
We have the advantage of having legislation before Parliament at the moment. If there are short-term measures that we could take, we would certainly be open to doing that, but I do not want us to rush into doing something without doing the ground work properly. We need to look carefully at what has happened, learn the lessons and make any modifications necessary. I assure the House that that is what we will do.
We should give credit where credit is due; it has been a simply remarkable achievement to repatriate such a large number of passengers in such a short period, and I congratulate my right hon. Friend the Secretary of State, his Department and the CAA on putting this together. Here we are on the first Monday back after the conference recess, and we could have been faced with having 110,000 British citizens stranded overseas. Instead, thanks to his actions, 80% of them are already back and the rest can be confident of coming back on time.
I am grateful to my hon. Friend for those kind words. They are a tribute to the work done by people right across Whitehall—nine different Departments and organisations were involved—by those who have gone out to man the departure lounges at airports around Europe and by the people operating the airline. This has been a fantastic effort, they have done a brilliant job for all of us and I am very grateful to them.
What steps is my right hon. Friend taking to make sure that there is no loss in capacity and that excess slots that have now emerged are allocated as quickly as possible?
The fact that there is now some debate over the value of the slots as they are taken up by other airlines shows that there is a queue of operators waiting to move in where Monarch has been. We have already heard from Jet2 that it is looking to pick up some of the slack that Monarch has left behind, and I have no doubt that we will see others moving in very quickly as well. Our sector is thriving, those gaps will be filled and there will be lots of flight opportunities in future.
UK Plans for Leaving the EU
With permission, Mr Speaker, I would like to update the House on our plans for leaving the European Union. Today, the fifth round of negotiations begins in Brussels and this Government are getting on with the job of delivering the democratic will of the British people. As I set out in my speech in Florence, we want to take a creative and pragmatic approach to securing a new, deep and special partnership with the European Union which spans both a new economic relationship and a new security relationship. So let me set out what each of these relationships could look like, before turning to how we get there.
I have been clear that when we leave the European Union we will no longer be members of its single market or its customs union. The British people voted for control of their borders, their laws and their money, and that is what this Government are going to deliver. At the same time, we want to find a creative solution to a new economic relationship—[Interruption.]
Order. Members must calm themselves; a little hush, please. The hon. Member for Bermondsey and Old Southwark (Neil Coyle) has had something for breakfast which I counsel colleagues to avoid.
At the same time, we want to find a creative solution to a new economic relationship that can support prosperity for all our peoples. We do not want to settle for adopting a model enjoyed by other countries. So we have rejected the idea of something based on European economic area membership, for this would mean having to adopt—automatically and in their entirety—new EU rules over which, in future, we will have little influence and no vote. Neither are we seeking a Canadian-style free trade agreement, for compared with what exists today, this would represent such a restriction on our mutual market access that it would benefit none of our economies.
Instead, I am proposing a unique and ambitious economic partnership. It will reflect our unprecedented position of starting with the same rules and regulations. We will maintain our unequivocal commitment to free trade and high standards, and we will need a framework to manage where we continue to align and where we choose to differ. There will be areas of policy and regulation which are outside the scope of our trade and economic relations where this should be straightforward. There will be areas which do affect our economic relations where we and our European friends may have different goals, or where we share the same goals but want to achieve them through different means. And there will be areas where we want to achieve the same goals in the same ways, because it makes sense for our economies. Because rights and obligations must be held in balance, the decisions we both take will have consequences for the UK’s access to the EU market and for EU access to our market. But this dynamic, creative and unique economic partnership will enable the UK and the EU to work side by side in bringing shared prosperity to our peoples.
Let me turn to the new security relationship. As I said when I visited our troops serving on the NATO mission in Estonia last month, the United Kingdom is unconditionally committed to maintaining Europe’s security. We will continue to offer aid and assistance to EU member states that are the victims of armed aggression, terrorism and natural or man-made disasters. We are proposing a bold new strategic agreement that provides a comprehensive framework for future security, law enforcement and criminal justice co-operation: a treaty between the UK and the EU. We are also proposing a far-reaching partnership on how, together, we protect Europe from the threats we face in the world today. That partnership will be unprecedented in its breadth and depth, taking in co-operation on diplomacy, defence and security, and development.
Let me turn to how we build a bridge from where we are now to the new relationship that we want to see. When we leave the European Union on 29 March 2019, neither the UK nor the EU and its member states will be in a position to implement smoothly many of the detailed arrangements that will underpin the new relationship we seek. Businesses will need time to adjust and Governments will need to put new systems in place, and businesses want certainty about the position in the interim. That is why I suggested in my speech at Lancaster House that there should be a period of implementation, and that is why I proposed such a period in my speech in Florence last month. During this strictly time-limited period, we will have left the EU and its institutions, but we are proposing that, for this period, access to one another’s markets should continue on current terms and Britain should also continue to take part in existing security measures.
The framework for the period, which can be agreed under article 50, would be the existing structure of EU rules and regulations. I know that some people may have some concerns about that, but there are two reasons why it makes sense. First, we want our departure from the EU to be as smooth as possible, so it would not make sense to make people and businesses plan for two sets of changes in the relationship between the UK and the EU. Secondly, we should concentrate our negotiating time and capital on what really matters: the future long-term relationship we will have with the EU after the temporary period ends.
During the implementation period, people will continue to be able to come and live and work in the UK, but there will be a registration system—an essential preparation for the new immigration system required to re-take control of our borders. Our intention is that new arrivals would be subject to new rules for EU citizens on long-term settlement. We will also push forward on our future independent trade policy, talking to trading partners across the globe and preparing to introduce deals once the implementation period is over. How long the period should be will be determined simply by how long it will take to prepare and implement the new systems we need. As of today, those considerations point to an implementation period of around two years.
As I said in Florence, because I do not believe that either the EU or the British people will want us to stay in the existing structures for longer than necessary, we could also agree to bring forward aspects of the future framework—such as new dispute resolution mechanisms—more quickly, if that can be done smoothly. At the heart of the arrangements, there should be a double lock: to guarantee a period of implementation, giving businesses and people the certainty that they will be able to prepare for the change, and to guarantee that that implementation period will be time-limited, giving everyone the certainty that it will not go on forever.
The purpose of the Florence speech was to move the negotiations forward, and that is exactly what has happened. As Michel Barnier said after the last round of talks, there is a “new dynamic” in the negotiations. I pay tribute to the Secretary of State for Exiting the European Union, my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), for all he has done to drive through real and tangible progress in a number of vital areas.
On citizens’ rights, as I have said many times, this Government greatly value the contributions of all EU citizens who have made their lives in our country. We want them to stay. In Florence, I gave further commitments that the rights of EU citizens in the UK—and UK citizens in the EU—will not diverge over time, and committed to incorporating our agreement on citizens’ rights fully into UK law and to making sure that the UK courts can refer directly to it.
Since Florence, there has been more progress, including reaching agreement on reciprocal healthcare and pensions, and encouraging further alignment on a range of important social security rights. I hope that our negotiating teams can now reach full agreement quickly.
On Northern Ireland, we have begun drafting joint principles on preserving the Common Travel Area and associated rights, and we have both stated explicitly that we will not accept any physical infrastructure at the border. We owe it to the people of Northern Ireland—and indeed to everyone on the island of Ireland—to get this right.
Then there is the question of the EU budget. As I have said, this can only be resolved as part of a settlement of all the issues through which we are working. I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour the commitments that we have made during the period of our membership. As we move forwards, we will also want to continue working together in ways that promote the long-term economic development of our continent. That includes continuing to take part in those specific policies and programmes that are greatly to our joint advantage, such as those that promote science, education and culture and our mutual security. As I set out in my speech at Lancaster House, in doing so, we would want to make a contribution to cover our fair share of the costs involved.
I continued discussions on many of these issues when I met European leaders in Tallinn at the end of last month. In bilateral discussions that I have had with Chancellor Merkel, Prime Minister Szydlo, President Tusk and the Taoiseach Leo Varadkar, there was a welcome to the tone set in Florence and the impact that it was having on moving the negotiations forwards.
Preparing for life outside the EU is also about the legislative steps that we take. Our European Union (Withdrawal) Bill will shortly enter Committee, carrying over EU rules and regulations into our domestic law from the moment that we leave the EU. Today, we are publishing two White Papers on trade and customs, which pave the way for legislation to allow the UK to operate as an independent trading nation and to create an innovative customs system that will help us achieve the greatest possible tariff and barrier-free trade as we leave the EU. Although it is profoundly in all our interests for the negotiations to succeed, it is also our responsibility as a Government to prepare for every eventuality, so that is exactly what we are doing. The White Papers also support that work, including setting out steps to minimise disruption for businesses and travellers.
A new, deep and special partnership between a sovereign United Kingdom and a strong and successful European Union is our ambition and our offer to our European friends. Achieving that partnership will require leadership and flexibility not just from us, but from our friends—the 27 nations of the EU. As we look forward to the next stage, the ball is in their court, but I am optimistic that we will receive a positive response, because what we are seeking is the best possible deal not just for us, but for our European friends too. Progress will not always be smooth, but by approaching these negotiations in a constructive way—in a spirit of friendship and co-operation and with our sights firmly set on the future—we can prove the doomsayers wrong, and we can seize the opportunities of this defining moment in the history of our nation.
Much of the day-to-day coverage is about process, but this, on the other hand, is vital. I am determined to deliver what the British people voted for and to get it right. That is my duty as Prime Minister. It is our duty as a Government, and it is what we will do. I commend this statement to the House.
I thank the Prime Minister for the advance copy of her statement.
Sixteen months on from the referendum, no real progress has been made. The Prime Minister delivered yet another definitive speech designed to herald a breakthrough that instead only confirmed the confusion at the heart of Government. If we want to judge the progress the Government have made since triggering article 50, we should not just look at the latest Florence speech. We should also look back at the Prime Minister’s last big Brexit speech in January, where she outlined 12 objectives for Brexit negotiations. How many of those objectives have the Government met 10 months down the line? The answer—none.
The Florence speech in fact demonstrated the scale of the mess the Government are making of these negotiations. Fifteen months on from the referendum, we are still no clearer what the future of this country will look like. The question must be asked: what on earth have the Government been doing all this time? They called an election in which voters refused to give the Prime Minister the mandate she wanted. Since then, Cabinet Ministers have been squabbling among themselves; all that time— 15 months—wasted.
I am sure that the Prime Minister wanted her speech in Florence to bring life to these critical negotiations. On the substance of the speech itself, I am pleased that the Prime Minister has taken Labour’s lead and accepted the need for transition as we leave the EU. However, it is still unclear what she envisages for a transitional period or how long it will last. The Prime Minister said the implementation period would last “around two years”, yet the Foreign Secretary interprets that as two years and not a second more and the Chancellor hints it might be more. He is here; he could correct us on that. The Prime Minister told us that, during a transition,
“access to one another’s markets should continue on current terms”.
Yet at the Conservative party conference, the Secretary of State for International Trade contradicted that and said:
“We will leave…the single market and the customs union, at the end of March 2019.”
The Immigration Minister told his party conference that freedom of movement “as we know it” will end in March 2019, so how does this square with the Prime Minister’s assertion that we “continue on current terms” during the transition? It cannot be both. Will the Prime Minister clear up the confusion and tell the House exactly what her implementation period means in terms of the single market, customs union and freedom of movement?
On the financial settlement with the EU, the Prime Minister has offered to commit funds to ensure that no EU member state has to pay more into the EU budget until the end of the current framework. We welcome this sensible offer. However, can she confirm whether the UK will be willing to pay money to the EU post-transition to access programmes that benefit this country? It is an important issue for many parts of Britain.
On the issue of citizens’ rights, the Prime Minister says this is an area where progress has been made with the EU. I am sure that many colleagues in this House will testify to the level of concern and, indeed, desperation of many of our constituents who come to our surgeries across the country in fear that families and friendships will soon be ripped apart. [Interruption.] No, it is not scaremongering. This is a serious issue that affects many people in this country—day in, day out—who are, frankly, frightened of the future. So I call on the Prime Minister again today to listen to the TUC and the CBI, and unilaterally guarantee the rights of EU nationals living in the UK. Given that this House voted in July 2016 to unilaterally guarantee the rights of EU citizens, can the Prime Minister finally reflect the will of the House and give people and businesses the assurances they need?
On Northern Ireland, we welcome the drafting of joint principles, but, 15 months on from the referendum, we should be beyond platitudes, and negotiating the practicalities.
The speech in Florence was supposed to put “momentum” into the Brexit negotiations. It is staggering that after—[Interruption.]
Order. There was a lot of noise when the Prime Minister began her statement, and I indicated that people should calm down. The same applies now: the right hon. Gentleman will be heard, he will be heard with courtesy and he will be heard in full.
Thank you, Mr Speaker.
It is staggering that, eight months after triggering article 50, the Government have made so little progress. The Secretary of State for International Trade said a deal with the EU should be the “easiest in human history” —[Interruption.] That is what he said. Now, the reality for this Tory Government is beginning to bite, but if things do not improve, the reality may soon begin to bite for the jobs and living standards of the people of this country.
These negotiations are the most important in Britain’s recent history—vital to our future and vital to our economy. Just at the moment when Britain needs a strong negotiating team, we have a Cabinet at each other’s throats. Half the Conservative party want the Foreign Secretary sacked, the other half want the Chancellor sacked. [Interruption.]
Order. I say to the hon. Member for Braintree (James Cleverly) that I am advised that he is being groomed for statesmanship. I say to the aspiring statesman that it is, in the circumstances, impolitic at best, and rude at worst, for him to point. I am trying to help the hon. Gentleman.
Rather than fighting over their own jobs, the reality is that millions of people’s jobs and living standards depend on the success of these negotiations. If this Government cannot negotiate a deal for Britain, they should make way for a team that can.
The right hon. Gentleman talks about what has happened over the last 15 months. Well, I will tell him what has happened: this Government have triggered article 50 and are negotiating the leaving of the European Union. We are negotiating the practical details that need to be in place to ensure that, first of all, we get the best possible deal for the UK and that, secondly, we get a deal where the withdrawal is as smooth and orderly as possible.
The right hon. Gentleman talks about a number of the issues. He says that the Florence speech was due to give momentum to the talks; indeed, it has given momentum to the talks. But I happily say to him that the last thing we need in these talks is his Momentum.
The right hon. Gentleman said, “Will we leave the single market and the customs union in March 2019?” Yes, and I have said that we will. He said, “Will freedom of movement as we know it end?” and I have said yes. I have set out in the statement I made today—if he had read it—the point about the difference that will come in during that period.
The right hon. Gentleman talked about citizens’ rights. There is considerable agreement between us and the European Union on this issue; there are some remaining issues to be dealt with. I have been very clear at every stage that we want EU citizens in this country to stay. We welcome the contribution that they have made. But I am also clear that we want UK citizens in the 27 member states of the European Union to be given their rights too. Everybody in this House of Commons should have a care for UK citizens as well as for EU citizens.
Finally, he says that this is an historic moment. It is indeed an important moment for this country. This is an important and significant set of negotiations that will set this country’s future for generations to come and I am optimistic and ambitious about what we can achieve for our country. He said that we need to negotiate carefully. Yes, we do. That is why the article 50 letter reflected the principles I set out in the Lancaster House speech. The Florence speech updates that and reflects the principles of the Lancaster House speech. What a contrast with a Labour party that said that it would respect the result of the referendum, then voted against the withdrawal Bill. The Opposition said that they wanted to leave the single market; now they might stay in the single market. They said that staying in the customs union was deeply unattractive; now they want to stay in the customs union forever. They used to be against a second referendum, but now they have refused to rule it out. With such a confused position on Brexit, no wonder it is said that there will be a run on the pound if Labour gets into power.
Will the Prime Minister reassure me that the statement clarifies that it is not the Government’s policy to seek, on the one hand, to remove all trading barriers with countries such as Japan and the United States, while on the other hand, to create new regulatory customs and tariff barriers with the European Union, with which we have free trade at the moment and which is our largest trading partner in the world? If that is correct and consistent with what she has just said, she will no doubt recall that ultra-Brexiteers, including the present Foreign Secretary, assured citizens during the referendum campaign that there would be no difference at all with our trading relationships with Europe, because they needed to sell us their Mercedes and their prosecco. Would it not be best to proceed with the negotiations on the basis that our ideal solution would be to stay in the single market and the customs union? She could then seek to negotiate changes to the conditions attached to that, which are the things to which she refers when she tries to explain where she is at the moment.
My right hon. and learned Friend has always been consistent on the issue of membership of the European Union. When people voted in the referendum for the UK to leave the European Union, I think they were voting for us to take control of our borders, our laws and our money. If we were to remain full members of the customs union and the single market, that would bring with it the continuing jurisdiction of the European Court of Justice forever and would also bring a requirement for free movement. I set out in the Florence speech and in the offer we made to the European Union what I have described previously as a deep and special partnership with the EU. He is right that we want to ensure that our trading relationship with the European Union can be as tariff free and as frictionless as possible, but we also see advantage in being able to negotiate new trading agreements around the rest of the world. I think that that is to the advantage of the United Kingdom, and that is what the Government will be pursuing.
I thank the Prime Minister for a copy in advance of her statement, although I must say that for a statement to take 13 minutes to deliver with not one mention of the devolved Administrations shows the lack of respect—[Interruption.]
Order. I say to the hon. Member for North West Leicestershire (Andrew Bridgen) that it is a considerable discourtesy to walk out of the Chamber past the Member who is on his feet in the middle of his attempted intervention. It is a point that is so blindingly obvious that the hon. Gentleman should not need to be notified of it, but as he apparently was not aware of the discourtesy involved he now is. When the House has settled down, perhaps we can hear the leader of the Scottish National party who, I remind the House, must be heard.
Thank you, Mr Speaker. We respect the fact that the UK has voted to come out of Europe, but we were told during our referendum in 2014 that if we stayed in the UK, our future in Europe would be preserved. Scotland has voted to remain and, in particular, wants to stay in the single market and the customs union, so it is about time that we got some respect from the Government. The situation is now critical. [Interruption.] I can hear Conservative Members chuntering; if they want to catch the Speaker’s eye, they are entitled to do so, but perhaps they might show a little respect. These are important matters, and the public are watching this behaviour.
We stand on the brink of being dragged out of the European Union with no deal in place and facing the automatic introduction of World Trade Organisation rules. That would be a catastrophe for Scotland, threatening up to 80,000 jobs in our country alone. The President of the European Commission has said that “miracles” need to happen for there to be any progress in the negotiations. Meanwhile, the European Parliament voted last week to stop negotiations moving on to the next phase, citing lack of progress. The clock is running against the Prime Minister in more ways than one.
On EU citizens’ rights, the Government continue to drag their heels. There must now be a universal declaration from the Prime Minister that EU citizens in the UK can have their current citizenship and rights protected after exit day. No ifs, no buts—do it today. I urge the Prime Minister to listen to the voices of the devolved Administrations. We will not accept the legislation as it stands; it is a complete violation of the Scotland Act and the biggest power grab since devolution. Indeed, just last week the author of Article 50, Lord Kerr, said that Westminster was trying to break the founding principle of the devolution settlement.
The SNP has set out three key tests on Brexit for this Government: first, as an absolute minimum, we want continued membership of the single market and the customs union; secondly, the Government must declare now, without delay, that EU citizens’ rights are guaranteed; and, thirdly, the Government must accept that the withdrawal Bill cannot proceed in its current form. Will the Prime Minister live up to those asks, and will she end the immoral floundering over EU citizens’ rights now?
As I am sure the right hon. Gentleman knows, there will be a meeting next week of the Joint Ministerial Committee, which brings the devolved Administrations together with Ministers here in the Government. There have also been bilateral discussions between the First Secretary of State and Ministers in the Scottish and Welsh Governments on an ongoing basis over the summer.
The right hon. Gentleman refers to citizens’ rights. I remind him that during the Scottish independence referendum in 2014, which he referred to, the First Minister told EU nationals that if the EU did not allow an independent Scotland to rejoin—it was clear that the EU would not do so—EU nationals would
“lose the right to stay here.”
[Interruption.] SNP Members are shaking their heads, but that is what the First Minister said at the time.
The right hon. Gentleman referenced what I said in my statement. My statement was about the position of the United Kingdom Government in the UK’s negotiations with the European Union, and Scotland is part of the United Kingdom.
I warmly welcome the statement by my right hon. Friend and very good friend, our Prime Minister, on her plans for the negotiations. May I press her and ask her to elaborate a little further? In her statement, she made it clear that the ball was back in the EU’s court. Is it not reasonable to expect that, given all the negotiations and discussions and the progress that has been made, the EU should now engage the United Kingdom on something that is beneficial to it and us—namely, an ongoing free trade arrangement, to be completed by March 2019?
My right hon. Friend is absolutely right, and we see increasing interest in moving on to talk about that issue. That will absolutely be, as he says, not just in our interests but in the interests of the European Union; that is what is right for us both. We want the matter to be negotiated by March 2019, so that the UK comes out of the European Union knowing what the new partnership and trade agreement will be.
The Prime Minister has said very clearly she believes that, on her plans, we will be out of the customs union and the single market by March 2019. That was not the impression I got from the Florence speech. Will she therefore explain how the arrangements she is seeking for the transition differ from being a member of the single market and the customs union for the period of the transition?
I have to say to the right hon. Gentleman that, as we leave the European Union in March 2019, we will leave full membership of the customs union and full membership of the single market. What we then want is a period of time when practical changes can be made, as we move towards the end state—the trade agreement—that we will have agreed with the European Union. We have to negotiate for the implementation period what the arrangements would be. We have suggested that that should be a new agreement—an agreement that we should be able to operate on the same basis and on the same rules and regulations.
My right hon. Friend’s Florence speech stressed the fundamental principles of UK democracy and accountability in this House, upon which all else depends. The Opposition voted against the withdrawal and repeal Bill, and the repeal of the European Communities Act 1972. Does she agree that our voters have every right to hear a public explanation from the Opposition—remainers and reversers—about why, despite the referendum vote, they still subscribe, under the EU’s undemocratic system of lawmaking, to the closed-door Council of Ministers, where decisions are taken behind closed doors and largely in secrecy, which contrasts so vividly with what goes on in this House, with Bills and amendments, and with speeches and votes recorded?
My hon. Friend is absolutely right to point the finger at the Opposition on this particular issue. They claim they are going to support the result of the referendum, yet they vote against the very Bill that will put that in place. Not only do they do that, but in voting against the European Union (Withdrawal) Bill, they have voted against bringing environmental regulations into UK law and bringing workers’ rights into UK law. The Labour party voting against bringing workers’ rights into UK law; it is this Government who are supporting them.
Four days ago, the deputy governor of the Bank of England said that the UK financial services industry needs a transitional deal by Christmas, or else it will begin implementing its contingency plans—the Chancellor is well aware of them—to shift jobs and activities across the channel. Telling the House that the ball is now in the EU’s court, as the Prime Minister did today, does not exactly give those businesses the comfort and certainty they require, so will she tell the House what her plan now is to break the negotiating logjam and achieve such a deal in time for it to do its job for a sector of the economy that employs over 1 million people?
I say to the right hon. Gentleman that the Florence speech set out some details on an implementation period and how we think that that could operate. We now wait for the European Union to respond to the detail that we have set out. I recognise the concerns that business has for an implementation period, but I would say, finally, to the right hon. Gentleman that this whole process is not helped by the vast majority of Labour MEPs voting against moving on to the next phase of talks.
I welcome the Prime Minister’s statement that the Government will press on with working out the details for no deal. That is a very prudent thing to do and means there will be no cliff edge for British business. Does she agree that it will send the very good message to the European Union that we can do that, but that she is offering something so much better and more positive that it is in their interests to accept, and that any deal they counter with has to be better than no deal?
Yes, my right hon. Friend is absolutely right. I think we have offered a very good arrangement for the future to the European Union—I think it is not only in our interests, but in their interests as well—but as any prudent Government would, we continue to make plans for every eventuality. I think that is the only sensible thing for us to do.
Is it the Prime Minister’s understanding that, if necessary, it is possible to halt the article 50 process?
The position was made clear in a case that went through the Supreme Court in relation to article 50. The Government have made it clear that we have no intention of revoking that. We will be delivering on the vote of the British people.
As my right hon. Friend wrestles with the inevitable compromises essential to securing the opportunities of Brexit in the national interest, and in view of this enormous administrative challenge, will she consider refining the machinery of government by creating an inner Cabinet to drive forward the work across the Government and thus retain greater grip and control over the whole process?
Ministers meet in a variety of forms to consider these issues. Before the Florence speech, I was pleased that the whole Cabinet came together and signed up to that speech. Of course, we have various discussions about the various elements of the negotiations, but I can assure my right hon. Friend that we are aware of the need to be able to ensure that we can make swift decisions when that is necessary in the negotiating process.
May I press the Prime Minister to clarify her answer to my right hon. Friend the Member for Exeter (Mr Bradshaw)? He was not asking about Government policy: he was asking a straightforward question. Have the Government received any legal advice that the article 50 notice can be revoked?
I said to the right hon. Member for Exeter (Mr Bradshaw) that the position in relation to the revocation of article 50 was addressed by the Supreme Court in a case that went before it. It was very clear about that. We were clear as a Government that we were not revoking and it was clear in its consideration of the case of no revocation of article 50.
I congratulate the Prime Minister on her excellent Florence speech. It was widely welcomed, not just by British business but by people across the country, and it marked a real attempt by her to form a consensus on Brexit between the 48% and the 52% that everyone is crying out for. Forgive my throat, Mr Speaker—women with bad throats will not be silenced. [Hon. Members: “Hear, hear.”]
I may not have heard properly or understood, but did the Prime Minister say that if by the end of March 2019 we do not have a deal on the final Brexit arrangements, we will jump off the cliff and there will be no deal? Or did she say that we will go into a period of transition and during that time those vital negotiations can continue?
The period after March 2019 is an implementation period to implement the practical changes necessary to move to the final arrangement and the new partnership we will have with the European Union. As the article 50 process sets out, the expectation is that it is a two-year process to negotiate the arrangements—to negotiate withdrawal and take into account, and therefore know, what the future relationship is going to be. I expect, and we are working on, having that future arrangement negotiated by 29 March 2019, but because the chances are that the details of that may come quite late in the process, it will not have been possible for anyone—Governments, businesses or individuals—to have taken the practical steps necessary to move to that position. To get as smooth as possible a withdrawal, so that there is not a cliff edge, we have that period of implementation. That moves us to the final arrangement that has been negotiated by March 2019.
Further to the question asked by my hon. Friend the Member for Nottingham East (Mr Leslie), which—with respect to the Prime Minister—was not about the Gina Miller case but about Government legal advice, can she tell the House whether the Government have received legal advice that article 50 is revocable?
I have to say to the right hon. Gentleman—perhaps I should have said this initially to the right hon. Member for Exeter—that of course we do not comment on legal advice that has been received, but the position was very clear in the case that he mentioned. The Supreme Court was clear that it operated on the basis that article 50 would not be revoked.
I thank my right hon. Friend for her most encouraging statement. Recently in Washington, I found widespread enthusiasm among our American friends at the prospect of signing a free trade deal—[Interruption.]
Order. The House is in a very excitable state. I have always enjoyed listening to the right hon. Member for North Shropshire (Mr Paterson). I have been doing so for 20 years and I want to continue to do so. He can normally be heard, but the braying and banter was so loud I could not hear the fellow. Let us hear him.
I will say it again, Mr Speaker, for your benefit: I found widespread enthusiasm right across the American political firmament for the prospect of signing a free trade deal with the United Kingdom. Our American friends will welcome my right hon. Friend’s statement, yet again, that we will leave the customs union, as that is a prerequisite for signing a deal. Will she give them her best estimate of when, after March 2019, we can sign a deal with third countries of a friendly nature, like the United States of America?
I echo the comments that my right hon. Friend has made. That is exactly what we found in our dealings with the American Government. We have a working group on issues relating to trade working with the American Government. The exact arrangements during the implementation period will be a matter for the negotiations, but we are clear that during the implementation period it should be possible for us to continue to negotiate trade agreements. We would not enter into anything that was contrary to the agreement we had come to with the European Union.
The Prime Minister has been asked several times about implementation of transition and has not made any sense at all in the answers she has given. She has said today that she foresees a framework for transition of around two years along the existing structure of EU rules and regulations. The existing structure has the single market and customs union at its heart. How can what she is proposing for her implementation period be anything other than continued membership of the customs union and the single market, which our companies require?
I thought that I had explained this in response to one of the hon. Gentleman’s hon. Friends. As of 29 March 2019, we leave the European Union. That means we leave full membership of the customs union and full membership of the single market. We will, as part of that—this is our proposal to the EU—have negotiated an implementation period to take us in a smooth and orderly process, so that the practical changes can be made towards the end agreement with the European Union. How long that needs to last will depend significantly on the nature of that agreement and how different it is from the current arrangements, but during that period what we are proposing is that it is in the interests of individuals and businesses on all sides to be able to continue to operate on the same basis as they do today. That would be part of the withdrawal agreement that we propose to negotiate with the European Union, so that negotiation would be about the basis on which we operate during the implementation period.
I was going to call a fellow, but he has beetled out of the curtilage of the Chamber so I cannot. He may beetle back again, but we will see.
Will my right hon. Friend confirm unequivocally that after 29 March 2019 the European Court of Justice’s writ will no longer run in any way in this country and that any new laws agreed under the acquis communautaire after that date will not have effect here unless agreed specifically by Parliament?
My hon. Friend has actually raised two separate issues but elided them together. The first is about the European Court of Justice. As I have just said in answer to a number of questions, we want to have a smooth and orderly process of withdrawal with minimum disruption. That is why we want the implementation period. We will have to negotiate what will operate during the implementation period. Yes, that may mean that we start off with the ECJ still governing the rules we are part of for that period, but we are also clear that we can bring forward discussions and agreements on issues such as a dispute resolution mechanism. If we can bring that forward at an earlier stage, we would wish to do so.
The second issue my hon. Friend referred to was the question of new rules brought in during the implementation period. Given the way things operate, it is highly unlikely that anything will be brought forward during that period that has not already started discussions through the European Union to which we are party until we leave and about which we would have been able to say they were a rule we would sign up to or one we would not. Any new rules put on the table during the implementation period, given the way these things operate, are highly unlikely to be implemented during the implementation period.
Our European friends are aghast at the chaos the Cabinet is creating. The Prime Minister has to put an end to the back-stabbing, briefing and counter-briefing from her Ministers and their surrogates. Will she show real leadership by ring-fencing the issue of EU citizens’ rights; by confirming that the UK will stay in the single market and customs union—because I am not aware of anyone who believes that the border between Ireland and Northern Ireland is safe without it; and by sacking the Foreign Secretary, whose leadership ambitions blind him to the sustained damage his back-seat driving is doing to the UK’s negotiating credibility and are increasing the chances of our crashing out of the EU?
The right hon. Gentleman is absolutely correct that we want the right resolution to the issue of the border between Northern Ireland and the Republic of Ireland. As I have said, we are all clear that we do not want physical infrastructure on the border or a return to a hard border or the borders of the past. I am interested in his approach, however, as I seem to remember that at one stage the Liberal Democrats were actively promoting the idea of a referendum on EU membership. Now we have had one, they do not seem to want to accept it.
Will my right hon. Friend simply point out to people complaining that the negotiations are going too slowly that after the referendum on 23 June last year the EU refused to negotiate until we had triggered article 50; that even when we had, it refused to discuss the long-term relationship it wanted with the UK; and that even after her emollient and conciliatory speech, it is still refusing to discuss that long-term relationship? When does she call time?
My hon. Friend is right that it was clear early on that we had to trigger article 50 before the negotiations could start. We waited to do that until we had done considerable work in government to prepare us for triggering article 50, which we did, and the extent of that work has now been shown in the negotiations and position papers we published over the summer. On his last point, I simply say, as I have said before, that public pronouncements are of course sometimes made about the negotiations, but we are in a negotiation, and very often our discussions behind the scenes in private are more positive and constructive than some of the public pronouncements suggest.
The Prime Minister’s statement has been confusing. Can I get to the heart of that confusion? She says she wants the benefits of exactly the same terms of trade with the EU as we have now, for which we need regulatory equivalence. She also says we want the benefits of not being bound by EU rules in perpetuity, for which we need regulatory divergence. It is a simple matter of logic that equivalence is the opposite of divergence. She says we want a thing and its opposite. How will she resolve this obvious contradiction?
When two countries enter into a trade agreement, both sides agree the set of rules and regulations pertaining to it, but they also agree how disputes will be resolved and what will happen if either side chooses to change or diverge from the rules and regulations. That is the position regarding our trade agreement with the EU, except that we already operate on the basis of the same rules and regulations. The European Union (Withdrawal) Bill will bring the EU acquis into UK law, so the key question, which will be part of the negotiations, is how we manage divergence on either side after that. It is the same as with any trade agreement.
Does my right hon. Friend believe that the EU genuinely wants a dynamic and creative future trade relationship with the UK in accordance with her vision? If so, where is the evidence for it?
Yes, I believe that such a relationship is in the interests of the remaining 27 members states of the EU and that as they come to look at this issue—they were not previously focusing on it, but Florence has now triggered their thinking on it—they will see the benefits of such a relationship not just to us but to them as well.
The European Commission talks continually about the need for Her Majesty’s Government to provide certainty and clarity. Is there not one area in which we could provide that certainty and clarity very plainly, today and in our negotiations? Could we not make it clear that in March 2019 we will withdraw from the common fisheries policy, take back all our fisheries, and ensure that our fishing communities actually take back control of who fishes in British waters?
The hon. Lady is right to suggest that when we leave the European Union one of the aspects of leaving it will be leaving the common fisheries policy. Of course, we will need to consider the arrangements that we want to put in place here in the United Kingdom for the operation of our coastal waters and the operation of fishing around them.
I thank the Prime Minister for the positive tone of her Florence speech, and for the constructive meetings that have taken place since then. Does she agree that it is in the interests of consumers on both sides of the channel for us to have a deep, special and bespoke partnership that covers goods and services? In that regard, I am thinking particularly of the hundreds and thousands of German consumers who have bought life insurance products from British insurance companies, and who will find that unless there is agreement, their pension plan savings are lost.
My hon. Friend has made an important point. People often assume that only UK businesses and UK individuals will be affected, but actually people living in the remaining 27 countries of the European Union will also be affected, which is precisely why I think that the deep and special partnership to which my hon. Friend has referred is in the interests of both sides.
The shambles and division on the Front Bench would be funny if there were not such serious consequences for our economy, for jobs, and for the future of this country and the world. The Prime Minister is simply not being honest about a whole series of consequences for this country. [Interruption.] Excuse me, Mr Speaker. The Prime Minister is not being transparent with the public about the consequences for our economy. Will she say how much money she has put aside to deal with a disastrous “no deal”, and will she publish the economic assessments made by the Department for Exiting the European Union—whose Secretary of State is sitting next to her—of the impact on 50 sectors in our economy?
The hon. Gentleman talks about the position of the Government. The position of the Government is very clear, and was set out in the Florence speech. It is our offer to the European Union, and we await discussions with the EU about that particular issue. I have also made it clear, from Lancaster House onwards, that when it is possible for us to give information and updates on the negotiations, we will do so, but we will do nothing that would undermine our position in the negotiations.
Given that Germany and France export more to us than we export to them, what discussions has the Prime Minister had with her French and German counterparts? Has she asked them to pressurise the EU institutions to secure a good deal for those countries, which means negotiating faster, more effectively, and with a shared understanding of what we can both gain from this deal?
I assure my hon. Friend that I do have discussions with the leaders of France and Germany, and, indeed, with the leaders of other EU member states. Others, such as the Dutch and the Belgians, also have a significant economic interest in our future relationship because of the economic activity at their ports. We discuss arrangements for the future with the leaders of those countries, and, as I said a little earlier, there is a growing sense and recognition of the importance of that deep and special trading relationship to the future of both sides.