House of Commons
Tuesday 24 October 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Chancellor of the Exchequer was asked—
In 2010, we inherited the UK’s largest deficit since the second world war, at 9.9% of GDP. We set out a clear fiscal framework to restore confidence in the economy and reduce the deficit, which has subsequently fallen by more than two thirds.
We have delivered the lowest corporation tax rate in the G20 and cut employment costs through the employment allowance. Our unemployment rate, in consequence, is at its lowest level for more than 40 years, and since 2010 we have seen 3 million more people find work. With the economy operating at near record high employment, our focus now must be to increase productivity and, thus, real wage growth.
Will my right hon. Friend confirm that despite all the fearmongering from many, including Opposition Members, since the Brexit referendum, we have the best growth rates and best inward investment rates in the whole of Europe, and the lowest unemployment rates for four decades? Is that not a ringing endorsement of this Government’s policies?
My hon. Friend is absolutely right to say that we have the lowest unemployment rate for four decades, and that is a remarkable achievement. The British economy has performed with remarkable resilience since June 2016. Last year, we had the second highest growth rate in the G7. The British economy is fundamentally strong and resilient. Yes, we have some short-term uncertainty, but underneath that is a strong and resilient economy ready to go forward and reap the benefits that are available in the future.
A fortnight ago, at the International Monetary Fund, the Chancellor was talking about the fiscal and unemployment consequences if a transition deal on Brexit is not achieved by the first quarter of next year. He was right then, so what is he doing to help secure a specific transition agreement in that first quarter of next year?
We are preparing for all outcomes in our negotiations with the European Union, but the Government’s objective is to reach a deal. As the Prime Minister made clear in her Florence speech, as part of that deal we want to agree an implementation period, during which businesses and Governments can prepare for the new relationship, and we want to agree the principles of that period as soon as possible. Last week, at the European Council, the 27 agreed to start internal preparatory discussions on guidelines in relation to an implementation period. Together with the broad support for the idea in Parliament, this should give British businesses confidence that we are going to provide them with the certainty they require.
Will the Chancellor welcome the fact that there are more women in work than ever before and set out what steps we can take to ensure that this is one of the best countries in the world for women to set up and run their own businesses?
One of the remarkable achievements of the past seven years has been the increase in participation in the workforce, particularly in the number of women participating in the workforce. That is in large part due to the family-friendly policies this Government have pursued, with huge increases in the availability of childcare—free childcare—and in the tax deductability of childcare. We will continue to drive a set of policies that encourages women into the workforce, both because it is economically sensible and because it is socially inclusive.
One of the biggest fiscal steps that can be taken to reduce unemployment is public sector investment in housing. May I therefore welcome the Communities Secretary’s statement yesterday that the Treasury has agreed to increase net borrowing by, I believe, £50 billion in order to enable this to happen? Will the Chancellor confirm that this is Government policy?
No, and that was not what my right hon. Friend said, as the right hon. Gentleman very well knows. I would, however, agree with him that increasing activity in the construction sector is a very good way of creating jobs, but he will know that at 4.3% our economy is approaching full employment and the output gap is extremely small.
Given that more people are in employment, there is more opportunity for people to take advantage of employee share ownership saving schemes. Unfortunately, the maximum amount of time someone can pause one of those schemes is six months, which means that many women on maternity leave for up to a year have to cash in their schemes and cannot take advantage of them to maximum effect. I am sure that is an out-of-date anomaly, so in the Budget will the Chancellor extend the period of time that an employee share ownership saving scheme can be paused to up to 12 months? In that way, women on maternity leave can enjoy the same benefits of those schemes as everybody else.
The hon. Gentleman used the words “employment” and “employee” and just about got his question in order.
I am sure he did, Mr Speaker. My hon. Friend raises an interesting but technical point that has been raised with me by others, including the TUC. I will take what he said as a Budget representation and look into it carefully.
Getting second earners and couples into work is one of the best ways to reduce family poverty and protect women economically for the future. Rather than putting money into continuing to increase the tax threshold, which rarely benefits low-income families, will the Chancellor consider measures in his Budget on the work allowances in universal credit, which are currently a real deterrent to second earners looking to increase their labour market participation?
The Government made commitments on the personal allowance and higher-rate threshold in their previous election manifesto. We reiterated them in the 2017 manifesto, and we remain committed to those policies. Of course, I will take into account all the representations I receive from right hon. and hon. Members, and I shall take the hon. Lady’s comments on the work allowance as such a representation.
Fiscal Devolution: London
I thank my hon. Friend for his work on the London Finance Commission, which recommended giving London a wide range of additional powers. The Government have committed to continue to work with the Greater London Authority and London Councils to ensure that London has the powers it needs to maintain its status as a world-leading city.
I am grateful for that response, but will my hon. Friend particularly and urgently consider whether an element of fiscal devolution—for example, a tourist levy or something similar—might be part of a robust funding package for Crossrail 2, which is a critical part of national infrastructure and will give a boost worth around £150 billion to the whole UK economy?
As my hon. Friend is aware, the Department for Transport is scrutinising the business case for Crossrail and discussing it with Transport for London. It is right that the London region does not retain disproportionate amounts of revenue. Some of the recommendations in the commission’s report are very broad ranging.
If the ministerial team are to deliver anything for the London Finance Commission, will the Minister at least talk to the commission about the difficulty, with Brexit coming, of recruiting anyone to come to live and work in London? The search for talent is very difficult indeed. No one wants to work in this financial capital because of Brexit—what is he going to do about it?
The hon. Gentleman needs to question whether Labour Members are fully signed up to the recommendations of the London Finance Commission. For example, many of his colleagues on the Opposition Benches may not support the retaining of almost half of all stamp duty across England.
The UK internal market benefits all the nations and regions of the United Kingdom. It is essential that no new barriers to living and doing business in the UK are created. Exports to the rest of the UK are vital to the success of Scotland’s economy, generating £50 billion in 2015. That compares with £12 billion of exports to the EU and £16 billion to the rest of the world and it accounts for 63% of Scotland’s total exports.
Small and medium-sized enterprises make a vital contribution to local economies, so I am delighted that in East Renfrewshire the number of registered enterprises has gone up by 18% since 2010. Does the Chancellor agree that as those businesses look to expand from being local to national players, it is vital to maintain the integrity of the UK internal market? Any moves to fragment it would damage the Scottish economy, place huge barriers to trade on both sides of the border, and put that vital contribution he just outlined in jeopardy.
I strongly agree with my hon. Friend that the fragmentation of the UK internal market would be damaging for the Scottish economy, particularly small businesses. This is not just an issue for Scotland, though. We all agree that protecting the UK internal market is in our shared interests, and the Government will work to make sure that there are no new barriers to doing business across the UK.
Staying in the UK internal market while the UK crashes out of the EU is set to cost Scotland £30 billion over five years, according to research by the London School of Economics published today. Aberdeen is set to lose the most, at 7% of gross value added. Will the Chancellor be clear on behalf of his Government that no deal is not an option?
As I have already said, the Government are preparing for all possible outcomes of the negotiations with the European Union, as any prudent Government would, but the Prime Minister has made it very clear that our strong preference is to achieve a deal, which is good for Britain and which protects British jobs, British businesses and British prosperity—by which I mean the jobs, businesses and prosperity of all of the United Kingdom.
On that note, 56% of EU nationals in FTSE 250 companies are highly likely, or quite likely, to leave the UK before the conclusion of the Brexit negotiations. What is the Chancellor’s assessment of the impact on the Scottish economy of all of this talent leaving the UK?
I am very confident that, whatever the outcome, all of this talent will not leave. The Prime Minister made it very clear yesterday that her top priority remains giving assurance to EU citizens living in the UK, which is why she is working hard to deliver a deal on citizens. It is the area in which our discussions with the European Union are most advanced. The hon. Lady has the Prime Minister’s personal commitment on the importance that she attaches to that area.
Financial and accounting services amounted to Scotland’s most valuable export service in 2015. Of the £8.8 billion they were worth, £7.6 billion, or 86%, went to the rest of the UK. Does my right hon. Friend agree that conserving the UK internal market is vital to protect such an important sector of the Scottish economy?
My hon. Friend is right to draw attention to the important role of financial services and insurance in the Scottish economy as a subset of the broader point that the internal market works extremely well for Scotland and is very important to Scotland’s exports. It would clearly be catastrophic for the financial and insurance services sector if businesses based in Scotland were no longer able to operate across the border into England.
If I understand this correctly, we have Scottish National party members who understand the benefits of the European single market, but not the UK single market, and we have fanatics in the Conservative party who extol the benefits of the UK single market but who would happily drive a coach and horses through the European single market. Perhaps, in his characteristic fashion, the Chancellor can set out a slightly more grown up position and tell us how he will protect both in the interests of the British economy.
The Government’s position is very clear: the benefits of the UK internal market are absolutely clear to all of us and we will not allow it to be compromised. In our negotiations with the European Union, we hope and expect to agree a deal that will allow British businesses to continue to enjoy the benefits of access to the European marketplace and European companies to continue to enjoy the benefits of access to the UK market.
The Government are investing more than £1 billion to stimulate the market to build the next generation digital infrastructure that the UK needs for the future. This includes the £400 million digital infrastructure investment fund and the £740 million for full fibre broadband and 5G mobile. That is in addition to the Government-led £1.7 billion superfast programme, which will extend coverage to 95% of UK premises by the end of the year.
The vast majority of my constituents in east Yorkshire and north Lincolnshire now enjoy superfast broadband, but a small number in rural areas still struggle with access to broadband and to good 4G, 3G or even 2G mobile coverage. What more can the Government do to give BT Openreach and the mobile networks a kick up the backside to make sure that we get the coverage that we are all paying for?
The Government are working to continue their progress on the superfast broadband roll-out. We expect to reach 95% by the end of this year. We have already seen some changes from the internal reorganisation within British Telecom, separating out Openreach. The progress will be maintained through Government expenditure in that programme and in the digital infrastructure investment fund.
The Office for Budget Responsibility has just reported on the poor productivity record in this country. Investment in broadband is crucial to improving that, so when will the Minister respond to the letter that I wrote to him on 1 September about broadband in Teesdale?
I absolutely agree that broadband and digital progress are critical to the productivity of our economy. I am not aware of that letter. I will look into it with immediate effect, and I apologise for the delay.
As the fourth industrial revolution accelerates, superfast broadband will be key to the productivity of our high-growth technology businesses. Will the Minister continue working with entrepreneurs and businesses to ensure that they get the broadband system that they need?
I most certainly will continue to work on that. My hon. Friend has consistently spoken up on behalf of entrepreneurs and enterprise since he arrived in this House. The Government’s intention to pursue our broadband investment, whether it is superfast or full fibre, is right at the heart of our efforts to improve productivity.
BT has received hundreds of millions of pounds from the Government for public investment in the digital network. But there are parts of my constituency—both rural and urban—where broadband coverage is still very poor, such as the town of Carrickfergus. BT refused to look at innovative ways of splitting the network. Is it not time that the Government looked to other bids for some of the money they are investing in broadband in order to ensure that there is better coverage?
The hon. Gentleman makes an important point. All our constituencies have some areas that are not yet fully able to access the important benefits of broadband. I will discuss his points with my colleagues in the Department for Communities and Local Government, and report back to him.
I am pleased that the Communities Secretary has been inspired by Labour’s fiscal credibility rule in relation to investment in infrastructure—including digital infrastructure and, recently, house building. But this does beg crucial questions. Does the Minister support his colleague’s bid to “borrow more to invest” or is it more a bid to steal the Chancellor’s job?
I have already outlined the Government’s progress on broadband. The hon. Gentleman mentions, I think, some kind of speculative comment regarding the forthcoming Budget. The Chancellor has already answered that question.
The digital infrastructure plans are wholly inadequate, as my hon. Friend the Member for Bishop Auckland (Helen Goodman) indicated. Is the Minister aware that productivity figures are at pre-crisis levels, and is he really aware that regional industries are up to seven times more productive than others? What is the digital investment strategy doing to close that shocking gap?
The hon. Gentleman seems to have forgotten the announcement of the national productivity investment fund—a £23 billion pot of money for investment in infrastructure, including digital infrastructure, across the country. I have already mentioned the £400 million digital infrastructure investment fund and the £740 million for full-fibre broadband and 5G. We are already approaching the figure of 95% of UK premises having access to superfast broadband by the end of the year, and that puts us in a strong place for the future.
SMEs (East Midlands)
The Government are committed to reducing the administrative burdens for small and medium-sized enterprises, including in the east midlands. That is why we delivered £272 million of net reductions in administrative burdens between 2011 and 2015, and why we continue to reduce unnecessary interaction with the tax system.
We still have one of the longest tax codes in the world. I know that the Treasury is under constant pressure to bung extra pieces of money to particular interest groups, but may I suggest to the Minister that he sticks to his last on the Treasury Bench and argues the case for less taxation, simpler taxation and less debt? That is the best service we can give to the young and to businesses.
My hon. Friend raises an important point about complexity, which is why we continue to work with the Office for Tax Simplification to ensure that our tax code is as simple as it can be. But there is no doubt that, in upholding our exemplary record of clamping down on avoidance, evasion and non-compliance— £160 billion of revenue from 2010 to 2015—we make no apologies for having a tax code that works to support our public services.
Some 130,000 small and medium-sized businesses that export to Europe currently do not have to deal with any bureaucracy at our border to do so, but they could face such bureaucracy if the Minister’s colleagues have their way. Does the Minister think that that will be good or less good for British business?
As the hon. Lady knows, we are in the middle of negotiations with our European partners. I am confident that, as the Prime Minister has expressed at every turn, we will secure a good deal for this country. In the context of our borders, that will mean that the situation will be as frictionless as possible, which will be good for trade, our country and our economy.
Does the Minister agree that the Labour party’s plans to raise corporation tax would harm small and medium-sized businesses—
Order. Just for the benefit of the hon. Gentleman, may I say that the Opposition’s plans for taxes are not a responsibility of the Government? This is a lesson we all have to learn; in my case I learned it early in my first Parliament, and the hon. Gentleman has learned that lesson today.
Across the whole United Kingdom, and not just in the east midlands, small and medium-sized businesses have created not hundreds but thousands of jobs. Small and medium-sized businesses in my constituency tell me that they are over-regulated and that bureaucracy restricts their ability to employ more people. What is the Minister doing to address that?
The hon. Gentleman is absolutely right about the critical importance of small and medium-sized enterprises. We have more than 5 million small businesses in our country, and they are right at the heart of generating the wealth that generates the taxes that support the public services we all wish to see thriving. I have already explained that we are working closely with the Office of Tax Simplification to make sure that, wherever possible, the Government get out of the way of business, rather than standing in its way.
Gender Pay Gap
The gender pay gap in the public sector is 18.3%, which is a record low, and this compares to 24.5% in the private sector.
I am grateful to my right hon. Friend for those comments. Will she explain how the new duty introduced by this Government, requiring public sector bodies to publish the differences between male and female pay, will support the trend of an ever-reducing gender pay gap, which is at a record low?
The new duty we have introduced will mean more transparency, so we will be able to find out where the particular issues are in the public sector. Are there, for example, occupations such as engineering that are well paid and that women are less likely to go into, and what can we do to encourage women to apply for roles in them?
Median public sector wages are £1,000 lower in real terms than they were in 2010. Does the Minister agree that it is about time that hard-working public sector workers got the pay rise they deserve?
We have already been clear that the pay review bodies will have the remit to look at how high-quality public sector workers can be retained and recruited right across the board, whether they are teachers, nurses or police officers.
The chief executive of Virgin Money, Jayne-Anne Gadhia, has this morning given evidence to the Treasury Committee on the Treasury’s women in finance charter—she is the Government’s women in finance champion. Ministers will know that one way of tackling the gender pay gap is to ensure that we have more women in senior roles, so will the Chief Secretary urge the Chancellor to reply to the letter I wrote to him last week about appointments to the Bank of England, where more senior women are needed, because the evidence this morning shows the importance of role models?
First, I congratulate my right hon. Friend on her work to promote these issues that she did as Women’s Minister. It would be great to see other professions, such as legal services, looking at the success of the women in finance charter and seeing what they could do. I will urge my colleague to reply to my right hon. Friend’s letter asap.
In addition to the gender pay gap, the disability pay gap remains extraordinarily high, yet disabled people are not mentioned in the Government’s industrial strategy. When will we harness the potential of disabled people in our economy and create policies that effectively show that?
The hon. Lady is absolutely right to highlight the issue of making sure that disabled people have a full opportunity to participate in the economy. The fact is that we are missing out on huge amounts of talent—the talent of disabled people, women and older people—in our economy. We need to unleash that to help our country to become more productive, and also for the sake of those people, who have so much to contribute.
Last year, public spending was 38.9% of GDP, which equates to about £28,500 per household. This is comparable with other leading countries.
Does the Minister agree that it is due to this Government’s responsible management of the public finances that we are able to spend more on education than Germany and Japan, and more on defence and policing than any other European country?
My hon. Friend is absolutely right. We spend more per student on education than Germany or Japan. Because of our management of the public finances, we have been able to push £1.3 billion more of education spending to the frontline, where it is going to make the most difference in classrooms.
Is the Chief Secretary concerned by speculation that the Bank of England will increase interest rates by 0.25% in November, which would have an adverse effect on public spending?
That is one of the reasons why we need to make sure that we are reducing our debt and reducing our deficit in order to reduce the interest payments that came as a result of the previous Labour Government leaving us with the highest deficit in history. We have an independent Bank of England, and it is very important that as a Government Minister I do not tell it what to do on interest rates.
Public Sector Pay
In 2010, there was a significant gap between wages in the public and private sectors whereby public sector workers received an average of 5.76% higher pay. Today, wages are comparable, and when we take into account more generous pension benefits, there is an additional 10% pension premium in the public sector.
Last week, the rate of inflation was announced at 3%. Public sector pay rises are at 1%. Will the Chief Secretary confirm that that is a pay cut for millions of workers, and will she take this from me as a Budget representation: “Scrap the cap”?
It seems that the right hon. Gentleman cannot take yes for an answer. There is not a public sector pay cap. We have said that individual Secretaries of State will be responsible for making proposals on their workforces dependent on specific circumstances. We are facing very different issues in the NHS and in the armed forces. What is important is that we look at the evidence and make sure that we can recruit and retain the best possible workers in the public sector, but we also need to make sure that we do not price out of the market people working in the private sector.
Will the Chief Secretary urge her Cabinet colleagues, when they are making these decisions, to bear in mind that public sector pay rises must be fair not only to public sector workers, but to the five sixths of workers in the private sector who face the same pressures and challenges?
My right hon. Friend is right. The fact is that we were left a legacy by a previous Government who spent money that they did not have. We have had to get the public finances back on track. We do recognise that there are areas in which we need to make sure that we can recruit and retain high-quality public sector workers, but we also need to make sure that we have a thriving private sector economy. That is why we have ended up with the lowest unemployment for 40 years.
We know from the Resolution Foundation that this decade, from 2010, is the worst for wage growth in 210 years, so when will the Chief Secretary to the Treasury ensure that Departments are fully funded to scrap the cap?
The reason we have not seen the wage growth that we want to see is that we have an issue with productivity in this country. In order to raise living standards for everybody, regardless of whether they work in business or in the public sector, we need to make sure that we raise productivity. That is why we are investing in infrastructure and skills—doing all the things that the previous Government did not do to make our country more productive.
Can my right hon. Friend confirm, for the avoidance of doubt, whether there is a pay premium for the public sector over the private sector?
There is not a pay premium. Public and private sector pay are roughly comparable, but in the public sector there is an average of 10% additional remuneration in terms of pension contributions.
I hope that the whole House will join me in congratulating very warmly the right hon. Member for Tatton (Ms McVey) on her significant birthday today.
I am older and, I hope, wiser. Like all the ladies who are at my age, I am just hitting my stride and coming of age.
Transport Infrastructure: Cheshire
I wish my right hon. Friend many happy returns of the day.
I confirm that the Government are taking big decisions for Britain’s future and investing in transport infrastructure in Cheshire and across the north. Just last week, my right hon. Friend the Secretary of State for Transport announced road investment of £65 million in Cheshire. That included £18 million of funding for five different local road schemes and £47 million for the Middlewich bypass. That is on top of improvements that the Government are already making to the M6, M62 and M56.
I welcome the Minister’s reply. The Cheshire and Warrington local enterprise partnership has a bold agenda for increasing business in Tatton and Chester. The local plan has an equally bold agenda for increasing the number of houses, which will bring money to the Exchequer and help to meet the country’s housing need, but we have a significant need for the mid-Cheshire rail line. May I ask the Chancellor and his team to look at that for the forthcoming Budget?
I will take that as a Budget representation. The basic point is that we are clearly very ambitious to unlock, through transport investment, both residential and commercial opportunity. That has been a feature of Government policies over the past few years, and I am sure that it will continue to be.
In Cheshire and across the north, the reality is, as the Minister says, that infrastructure investment will unlock productive capacity. Does the Minister recognise that the disproportionate investment per head between the south-east and the rest of the country is unacceptable and must change?
The hon. Gentleman’s assessment is simply mistaken: Government investment is broadly equal across the different regions of our country. I highlight to him that the central Government investment going into the north during this spending period is £13 billion, which is a record in British history.
Order. As a very distinguished chartered surveyor, the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) will know that the Cotswold is a very significant distance from the north or the north-west, but we will look forward with eager anticipation to hearing the hon. Gentleman at some later point.
The Government have reduced the deficit by well over two thirds—from a post-war high of 9.9% of GDP in 2009-10 to a low of 2.3% of GDP in 2016-17. We have done that not out of some ideological obsession, but because the key challenge is to get debt falling to increase the resilience of our country so that if the need were ever to arise, we would have the capacity to support the economy against a future shock.
I thank my right hon. Friend for that answer. May I make one simple request about the Budget: whatever measures he announces, he resists the temptation to pay for them by billing our grandchildren? Instead, will he continue the excellent work that has seen us slash by nearly three quarters, as a percentage of GDP, the record post-war deficit that we inherited from the Labour Government?
Yes. It is not responsible to make so-called hard choices by loading the price on to the next generation and the generation after that. We have to make difficult decisions and we have to bear the consequences of those decisions. At £65,000 per household, our public debt is still far too high, so I can confirm to my hon. Friend that we will continue the plans that we have announced to reduce the deficit in a measured and balanced way to ensure that debt falls as a share of GDP.
Despite this Government’s significant efforts to tackle the deficit by reducing tax avoidance, companies such as Microsoft and Apple are still saving hundreds of millions of pounds in corporation tax by booking sales in Ireland. Does my right hon. Friend agree that we need to continue to develop measures to make sure that companies that sell to UK customers pay tax in the UK?
My hon. Friend puts his finger on an important problem. Corporation tax in the UK—in fact, in all countries—is levied on profits generated by the activities of companies within the territory. The big global digital companies present us with a new challenge of attributing profits effectively to individual jurisdictions. We are continuing to work with the OECD’s taskforce on the digital economy, and we are also looking carefully at ideas emerging within the EU for interim solutions pending a full international solution.
Given that the previous Chancellor has now said that in 2008 the Labour Government
“did what was necessary in a very difficult situation”,
does the current Chancellor accept that the fact we have thousands of people going to food banks and desperately underpaid public sector workers is entirely the fault of Tory policy?
No. Of course a Government need to be able to respond to an external shock, but a prudent Government have got the economy in good shape to respond before such a shock arises. The problem in 2008-09 was that the then Labour Government were borrowing tens of billions of pounds at the top of the economic cycle—grossly irresponsibly.
The major cause of the deficit was of course the collapse in tax revenue following the global financial crisis in 2008, yet that is exactly what we will face again unless there is a transitional deal with the EU to allow our world-leading financial services sector—it contributes £66 billion a year in tax revenue—to operate legally within the single market. As my hon. Friend the Member for Nottingham East (Mr Leslie) has already said, we have been asking the Government all year to confirm that there will be a transitional deal. As today is the penultimate Treasury questions before the end of the year, the last Treasury questions before the Budget, and—if hon. Members have read the papers—perhaps the Chancellor’s last Treasury questions ever, will the Government promise UK-based firms a transitional deal guaranteeing market access before the end of this year?
As I have already said, the Government have made it clear—the Prime Minister set this out in the Florence speech—that we want to agree an implementation period as part of a deal with the European Union. We are greatly encouraged by the fact that, at last week’s European Council, the 27 agreed to start internal preparatory discussions on guidelines in relation to an implementation period. We are confident that that will give British businesses confidence that we are going to provide them with the certainty they require.
Infrastructure: Government Investment
Infrastructure is at the heart of the Government’s economic strategy, and our investment will boost productivity and growth. Since 2010, more than £250 billion has been spent on public and private sector infrastructure.
The biggest investments in transport infrastructure in generations, including the Ordsall rail curve in Greater Manchester, have been made possible by this Government. Will my hon. Friend commit to further investment in our rail network, particularly on local commuter routes through my constituency?
My hon. Friend makes a good point. This Government have committed to the largest rail investment programme since Victorian times, including a £55.7 billion investment in High Speed 2. He will be aware of the Chancellor’s announcement in Manchester last month of £300 million to improve connectivity to High Speed 2 across the northern region.
Will my hon. Friend confirm his commitment to the Tay cities and the Clackmannanshire and Stirling city deals, and will he commit to meeting the local leaders and me to discuss how we can deliver this transformational change for our region?
The Government remain fully committed to agreeing both city deals, and to working constructively with the Scottish Government and local partners. I am, of course, very happy to meet my hon. Friend to discuss this further.
A decent transport infrastructure is an essential platform for economic growth, but the Minister will be aware that public transport investment in the north-east is only £200 per head, whereas it is £2,000 per head in London. Will he now commit to investing in the north-east on the Tyne and Wear metro, and with public money, not some private finance initiative?
The Government are committed to increasing infrastructure investment across all regions, including the north-east. Indeed, investment is 30% higher than it was under the Labour Government. It would be better for Opposition Members to recognise the record investment in infrastructure, which is driving productivity and growth.
Will the Minister say how much investment is going to the west midlands, as it is very important to the British economy?
The investment going to the west midlands as part of the midlands engine and through the devolution deal is part of wider investment—the £23 billion of investment that has been announced through the national productivity investment fund. The hon. Gentleman will be aware of the Secretary of State for Transport’s announcement on rail spending between 2019 and 2024, which includes the £24 billion announced just last week.
Corporate Tax Evasion
Since 2010, HMRC has secured more than £53 billion from big businesses alone in additional tax revenue from tackling tax evasion, avoidance and non-compliance, and we have made it an offence for a corporate to fail to prevent the facilitation of tax evasion by its employees. Corporation tax revenues were £55.3 billion in 2016-17, their highest level on record.
Keeping up the pressure on multinationals to pay their fair share of tax is vital. Will my right hon. Friend join me in welcoming the additional £160 billion in tax revenue collected by HMRC since 2010 as a result of tackling avoidance and evasion, thus making the UK’s tax gap one of the lowest in the world?
My hon. Friend is absolutely right—we have collected £160 billion since 2010, far more than was raised during the 13 years under the Labour party. The latest figures show that our tax gap overall is now at 6.5%, better than any year under Labour, where in 2005-06, for example, it was as high as 8.3%.
Successive cuts to British corporation tax have manifestly not led to greater business investment, and according to the Institute for Fiscal Studies they are not responsible for the rise in receipts since 2010. So, with huge pressures on our public finances, will the Chancellor delay his proposed cuts to corporation tax?
I am surprised that the hon. Lady should raise the issue of corporation tax, because we have brought corporation tax down from 28% in 2010 to 19% and we have further plans to reduce it further, to 17%, and yet the hon. Lady’s party wishes to inflate those rates of tax to 26%, which would destroy jobs, destroy wealth, destroy growth and lower the amount of tax that we can collect to support those vital public services that we all wish to see thrive.
One way that companies avoid tax is, of course, by employing people illegally. We still have too many illegal jobs in our economy in sectors such as construction. So will my hon. Friend and his colleagues resist those calls that are floating around to place new and additional burdens on legitimate work, and instead redouble their efforts at enforcement through HMRC to root out illegal work in our economy?
My right hon. Friend is absolutely right. As the Minister responsible for strategic oversight of tax, I am always concerned to ensure that the measures that we put in place are proportionate, and do not carry extra burdens for those who are rightly carrying on their business and running their companies in exactly the correct fashion.
Intergovernmental co-operation is vital if we are to combat international corporate tax evasion. In February this year Treasury Ministers withdrew from a meeting with the EU PANA Committee, which was set up to investigate issues and prioritise reform. What sort of message does the Secretary of State think that sends to corporate tax evaders?
International co-operation with other countries is an area where we have an exemplary record. We have co-operated with the OECD on the base erosion and profit shifting project—many of the recommendations are actually going through the House at this precise moment, in the latest Finance Bill—and, of course, we have common country reporting; we were leading that move in around 2012.
Finally, Royston Smith.
Income Tax Thresholds
In 2017-18, as a result of increasing the tax-free personal allowance and the higher rate threshold, 31 million individuals will see their income tax bill reduced and 1.3 million individuals will be taken out of income tax altogether; 585,000 individuals will have been taken out of the higher rate of tax in 2017-18.
In 2017-18 and beyond, all basic rate taxpayers will pay £1,000 less per year in tax than they did in 2010. Can my right hon. Friend confirm that an employee paying the basic rate of tax would need to earn an additional £1,471 annually to take home £1,000 in extra income?
I can absolutely confirm that. I can also tell my hon. Friend the good news that a typical basic rate taxpayer will pay £1,005 less income tax in 2017-18 than in 2010-11.
This really is finally. I call Mr Nigel Huddleston.
I am always very open to receiving from colleagues around the House ideas for specifically targeted taxes. If my hon. Friend has such an idea I would be very pleased to receive it.
As we look ahead to the GDP figures out tomorrow and to the Budget in a month’s time, my focus is on the three key challenges we need to meet as we seek to build an economy that works for everyone: first, protecting the economy by managing short-term uncertainty; secondly, achieving a good Brexit outcome; and, thirdly, addressing the longer term productivity challenge to ensure that real wages, and thus living standards, can continue to rise. Everything my Department does will be focused towards those three objectives.
What revenue has the privatisation programme raised and what would be the cost of nationalising the utilities?
I refer my right hon. Friend to the analysis of the Opposition party’s proposals, if we can call them that, done by the Conservative party at the time of the general election. The Government’s policy is to sell assets when there is no longer a policy reason to retain them and to reinvest the proceeds of such sales in policy priorities. Nationalising assets would increase public sector net debt, which would increase our debt interest bill and divert public spending away from more valuable areas. It would also mean that the future investment needs of any nationalised industries would have to compete for capital with our public services.
I listened very carefully to the Chancellor’s response to the hon. Member for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for Ilford North (Wes Streeting) on the issue of no deal. May I tell him that his response was crushingly disappointing? Expressions of hope of a deal are just not good enough. The Chancellor knows the economic perils our country faces if there is no deal: he described it, rightly, as a worst-case scenario. May I urge him, in the interests of our country, to have the courage of his convictions, and stand up and face down his opponents in Cabinet and confirm today that, like us, he will not support or vote for a no-deal Brexit?
As the right hon. Gentleman very well knows, our clear objective and priority is to achieve a deal with the European Union. Our preference would be for a deal that gives a comprehensive trade, investment and security partnership between the UK and the European Union in the future. As part of such a deal, we will seek an implementation phase that gives British businesses, and indeed Government agencies, proper time to prepare for the new circumstances they will face.
If the right hon. Gentleman cannot stand up to his opponents on a no-deal Brexit, can he at least stand up to them on the transition period? Business leaders yesterday made it clear that they need certainty now on a sensible transition period, yet the Prime Minister yesterday sowed more confusion in her statement, giving the impression that the transition is to be negotiated only after we have settled on what, as she describes it, the “future partnership” with Europe will be. Businesses cannot wait: they need to plan now; jobs are in jeopardy now. If the Prime Minister is not willing to stand up to the reckless Brexiteers in her party, will the Chancellor? Will the Chancellor make it clear, in a way that the Prime Minister failed to do yesterday and as business leaders have been calling for, that we need the principles of any transition confirmed by the end of this year?
The right hon. Gentleman is correct to say that this matter is urgent and pressing, which is why we were so pleased that last week at the European Council the 27 agreed to start internal preparatory discussions for an implementation period. I am confident that we will be able to give businesses the confidence and certainty they need.
As I said earlier, we have cut corporation tax dramatically and as a consequence we raise 50% more in corporation tax today than we did in 2010.
The hon. Gentleman will see, if he looks at that revision, that the cause is lower-than-anticipated returns on UK investment stocks held overseas, principally returns on mining and petroleum-related activities.
I will most certainly join my hon. Friend in both celebrating the project and urging everybody working on it to be as ambitious as possible. In terms of support, since 2010, my hon. Friend’s area has benefited from more than £300 million in grants to support cutting-edge innovation in the west midlands through Innovate UK. The Government welcome private investment in innovative and high-tech businesses right across the economy, which is why we announced an additional £4.7 billion for research and development at the 2016 autumn statement.
As the hon. and learned Lady will know, when the Scottish Government decided to restructure their police and fire services, they went into that decision with their eyes wide open—they knew what the VAT consequences would be—so it is down to the SNP to ask those questions of itself.
I will take the matter up with my right hon. Friend the Secretary of State for Transport and get back to my hon. Friend.
We are acutely aware that inflation has spiked, but the overwhelming majority of forecasters expect it to start to fall again in the new year. The spike in inflation has been driven primarily by the depreciation in the value of sterling last year, but I will take the hon. Gentleman’s comments on VAT as a representation for the Budget and will consider them carefully.
My hon. Friend is absolutely right. We should not be giving away our negotiating position when we are entering one of the most important negotiations that the country has ever been involved in, and that is why we need to be prepared for all eventualities. I am delighted to be meeting my hon. Friend tomorrow to discuss the issue in more detail.
We are having difficulties with mobile banking in my constituency. I know of instances in which two different mobile banks have arrived in the same community while other communities have seen no mobile banks at all. We have problems with people queueing in rough weather and getting wet, and problems with paper banking. Will the Chancellor, or some other Minister, propose ways of reorganising mobile banking and making it more user-friendly, and of getting the banks to co-operate with each other to deliver a service that is vital in the highlands?
Mobile branches are vital to many communities, and I am sure that many banks will have heard the hon. Gentleman express his concerns, but these are commercial decisions. It should be recognised that since 2011 the number of branch visits has fallen by roughly a third, that more than 600,000 people aged over 80 are now registered for internet banking, and that a fifth less cash is used for payments. Those changes in the market reflect the way in which branches, including mobile branches, are being used.
My hon. Friend is right. The UK financial services industry pays more than £71 billion to the Exchequer in tax and employs more than 1 million people directly and 2.2 million through the sector as a whole, two thirds of whom are outside London. Because of his work as chair of the all-party parliamentary group for Gibraltar, my hon. Friend will be aware of the importance not just of financial services in the UK, but of our links with industries in territories including Gibraltar.
Teachers have travelled from all over the country today to lobby Parliament about severe real-terms cuts in their pay. The Chief Secretary has said that she has lifted the pay cap owing to the pressure that Labour has placed on her, but will she confirm that her Department will fund the recommendations of the pay review body rather than cash-strapped local authorities?
The fact is that teachers received, on average, a 4.6% pay rise last year, including promotions and responsibility allowances. Pay in schools involves a great deal of flexibility, and headteachers can decide how they pay teachers. However, it will be up to the Department for Education to look at the specific circumstances in schools and make those determinations.
Does the Chancellor share my frustration at the fact that since the EU referendum, a number of senior politicians have been talking down the economy? Should they not be talking it up, because we have a great future outside the European Union?
Yes. As I said earlier, the UK economy is fundamentally strong. We have the world’s second largest services export sector at a time when emerging economies across the globe are sucking in new demand for services, and we have a global lead in various areas of emerging technology that will drive the fourth industrial revolution. This country has a bright long-term future. Of course we must deal with short-term uncertainty, and of course we must tackle our productivity challenge, but we are fundamentally in good shape.
Given that support for a single Scottish police force was in the 2011 Scottish Tory manifesto, can we assume that the Government think that the £280 million VAT fee is a price worth paying, or will they finally see sense and scrap the VAT on Scotland’s fire and police services?
The hon. Gentleman’s colleague, the hon. and learned Member for Edinburgh South West (Joanna Cherry), asked exactly the same question, and I shall give exactly the same answer. When the Scottish Parliament and Government made that decision, they knew that structuring the police and fire services in the way that they chose would lead to the VAT outcome that they should have expected all along.
What does the Chancellor believe we need to do to improve productivity, which is rightly one of his three priorities?
We need to invest in our infrastructure and the skills of our people, we need to ensure that our high growth businesses have access to long-term capital, and address the regional disparity in productivity performance. If we can tackle those four things, we can start to close Britain’s productivity gap and see real wages rising sustainably over many years ahead.
Speaking to the Treasury Committee earlier this month about the transition agreement for exiting the European Union, the Chancellor said that
“it will still have a very high value at Christmas and early in the New Year. But as we move through 2018, its value to everybody will diminish significantly.”
Yesterday, however, the Prime Minister told us that we will not get a transition agreement until October next year at the earliest. Does the Chancellor stand by the very different view he expressed just a fortnight ago?
As I have said several times today, we are reassured by the fact that at the European Council the 27 agreed to start the internal preparatory discussions on an implementation period. We are absolutely aware of the needs of business in this area, and they have been reinforced again by business leaders this week. We are confident that we will be able to deliver reassurance to business in accordance with its needs.
May I urge my right hon. Friend when looking at the business case for HS2 phase 2b to consider carefully the additional £750 million cost to the Exchequer of building over the Cheshire salt fields?
We discussed this issue when I was a Transport Minister. All the topography and construction implications as the route is finalised will be taken into consideration as part of the business case.
We all remember when the hon. Gentleman was a Transport Minister and he enjoyed telling us how he travelled to work by bus; I remember thinking that the fellow passengers on the bus must have been absolutely exhilarated to know that they were accompanied at the time by the Under-Secretary of State for buses.
The Chancellor acknowledged earlier that the fall in the exchange rate following the Brexit vote has pushed up inflation. What is the Treasury’s estimate of the impact of that on people’s standard of living?
The hon. Lady will be aware of the increase in inflation—CPI inflation stands at 3%. Most forecasts suggest that it might go 0.1% higher before falling steadily from late this year. Obviously any increase in inflation will have a negative impact on real wages, and we very much look forward to CPI inflation falling and real wage growth resuming in this country next year.
We are out of time, but the temptation to hear remaining colleagues is, frankly, just too powerful.
The Chancellor, in his efforts to secure a good Brexit deal and a transition period, has the confidence and support not only of Members on the Government Benches, but from across the whole of British business, including in Broxtowe—unlike the Labour party, which inspires complete fear with the Marxist mayhem it would put into policy if elected into government. Will my right hon. Friend confirm that it is in the best interests of British business to secure a transition period as a matter of some urgency, and will he do all he can to get that transition period?
Yes, British business has made it clear that it wants the earliest possible certainty about the implementation of interim arrangements. It has also made it very clear that it does not want any Marxist mayhem.
Can either remaining Member ask a question consisting of 10 words or fewer?
May I make a plea to the Chancellor? A teacher has visited me in the House today, whose school has run out of money for photocopying and for books in the Library. If the Chancellor wants to do something about productivity, he should invest in schools and colleges now.
The hon. Gentleman seems to have missed the announcement just before the summer that we are putting £1.3 billion more into the frontline, not by taking in more taxes, but by using the money we have across government better.
The previous Chancellor of the Exchequer implemented a second homes stamp duty levy, which has delivered £5.11 million into the Cornish economy and is set to deliver 1,000 homes. May I seek an assurance from the Treasury that this money will continue into the future?
We consider all areas of taxation in the run-up to all fiscal events, but I have certainly heard my hon. Friend’s comments and I will take them as a representation.
Raqqa and Daesh
(Urgent Question): To ask the Foreign Secretary if he will make a statement on the liberation of Raqqa and the future of the counter-Daesh campaign.
I thank the hon. Gentleman for his continued engagement on this important issue. Raqqa was officially liberated on 20 October. The Syrian Democratic Forces, supported by the global coalition against Daesh, began operations to liberate Raqqa in June 2017. Military operations are ongoing. My right hon. Friend the Secretary of State for Defence has highlighted the continued leading role that the UK is playing as part of the global coalition’s counter-Daesh campaign, and we in this House pay tribute to the courage, commitment and effectiveness of the British forces overseas. The United Kingdom is the second largest military contributor to the global coalition and plays a leading role in the humanitarian response.
The liberation of Raqqa this month follows significant Daesh territorial losses in Iraq, including Mosul in July. Daesh has now lost more than 90% of the territory it once occupied in Iraq and Syria. The Foreign Secretary will in due course provide a full update to the House on the counter-Daesh campaign, including the operation to liberate Raqqa. I look forward to providing the hon. Gentleman and other Members with further information in due course.
I thank the Minister for that response. He will recall that back in November 2015 the then Prime Minister, David Cameron, made the case for the liberation of Raqqa—which has now been achieved—a central part of asking the House to endorse the RAF airstrike campaign, which has been taking place in Syria since that time. I think I speak for the whole House when I echo the Minister’s tribute to the professionalism of the Royal Air Force and how it has carried out that campaign. There are significant questions about the conduct of some of the forces in some of the actions in the campaign, but the RAF has been exemplary.
There are many questions that flow from this, but I want to cover three broad areas in the short time that I have today. First, what is the future for the region? Will the Minister tell us how the UK will engage in attempts to bring to an end the civil war that has already claimed 500,000 lives, the vast majority at the hands of the Syrian regime under President Assad? Secondly, what will be the UK’s role in the reconstruction of the region? Thirdly, what will be the next steps in the global campaign to defeat not only Daesh, which is clearly disintegrating, but the evil ideology that has perverted so many people in the region and enticed too many Brits to join it? Will the Minister also tell us what the future will be for the Brits who have been over to the region and might now be seeking to return?
The Minister has always been assiduous on this matter, but the Government’s failure to offer a statement to the House following the liberation of Raqqa suggests a lack of respect for Parliament and for the British people, on whose behalf we were asked to make the decision to send the Royal Air Force into a theatre of combat. There is a worry that it also suggests the complacency and lack of grip that have too often been the hallmark of Governments of both colours when attempting to maintain stability in a region in the aftermath of conflict.
I am not going to make any evaluative comments about the motivation or conduct of the Government. Suffice it to say, principally for the benefit of those who are not Members of the House but who are attending to our proceedings, that one of the principal motivations for the Speaker in selecting an urgent question is the judgment that the matter needs to be treated of in the House and, implicitly perhaps, that a Government offer of a statement might reasonably have been expected.
Thank you, Mr Speaker. To deal with the hon. Gentleman’s last point first, a range of statements have been made at regular periods on Iraq and Syria and counter-Daesh operations, and I indicated in my remarks that the Foreign Secretary intends to present a full statement that covers the range of recent activities. I take the hon. Gentleman’s point about the liberation of Raqqa, and a statement covering that and other things is expected and will come in due course, but he was right to ask this urgent question, and I appreciate that and am happy to respond.
The hon. Gentleman reminded us that David Cameron asked the House to support activity due to the impending civilian crisis in the area where Daesh was active and the horrendous stories of abuse that were emerging. It is to the House’s credit that it recognised and supported that action, and we have seen that carried through extraordinarily by the forces that the House asked to take part. As for the UK military contribution, the RAF has conducted 1,609 strikes to date—1,348 in Iraq and 261 in Syria—using six Typhoons, eight Tornados, and Reaper drones. We have around 1,350 military personnel committed in the region. UK troops have helped to train over 57,000 Iraqi security force personnel, which says much for the opportunity of future stabilisation. Again, we pay tribute to the forces and what they have done, and the quality and accuracy of the airstrikes in which they have been involved.
The hon. Gentleman asked three specific questions about what happens next in terms of activity, stabilisation issues and ideology. Our partner forces are closing in on Daesh’s presence in the Euphrates river valley up to the border with Iraq. There, the Syrian efforts will be met with those of the Iraqi security forces, closing in on Daesh and ensuring their ultimate military defeat. No one should underestimate the importance of Raqqa to the whole Daesh ideology, and media reports have made that clear. The fall of Raqqa and Mosul is a tremendous blow to those who would have inflicted harm upon us all. The taking of those cities is of immense importance.
As for stabilisation, we have immediately stepped up our humanitarian support. This weekend, the Secretary of State for International Development announced an additional £10 million to help restore crippled health facilities, to deliver much-needed medical support and relief and, crucially, to clear lethal land mines and explosives. In leaving the city, Daesh has left a reminder of its killing machine behind it, and we are making immediate efforts in relation to that. We will of course move towards further stabilisation in due course as the area becomes more stable.
Lastly, the hon. Gentleman is right to suggest that military action on the ground is only one part of the contest with Daesh and its ideology. We must be prepared for Daesh to change its form. It will return to its terrorist roots, luring more adherents to its evil ideology, so we will continue to tackle the extremists on simultaneous fronts, including by preventing foreign fighters from returning to their country of origin. We will continue degrading Daesh’s poisonous narrative, decreasing its ability to generate revenue and denying it a safe haven in the virtual world. Indeed, as I was able say at the United Nations recently, we will also ensure that Daesh is brought to justice. Fighters returning to the United Kingdom can expect to be questioned about their role, and it will be for the Crown Prosecution Service to consider any evidence against them. Fighters who are captured in Iraq or Syria must be treated according to the laws of armed conflict, but they can well expect to stand trial there if offences are alleged against them.
We should reject the language coming out of Russia comparing the bombing of Raqqa to the bombing of Dresden. None the less, the result is not dissimilar.
Will my right hon. Friend try to rectify a wrong that has so often affected us in the aftermath of such events by calling for a donor conference and showing British leadership, so that we can start to rebuild Raqqa and what little remains of the shattered lives of its inhabitants and those who used to live there?
My right hon. Friend is correct to point to the immediate misery of the aftermath for those who have been caught up in the conflict. The world now recognises that it has a responsibility to work with those on the ground to rebuild areas of conflict, because that is the best way to prevent conflict from happening again. We expect a political reconciliation, so that there are no sectarian difficulties in either Iraq or Syria as they return to conventional governance.
On the physical reconstruction, the Syrian Democratic Forces have been at pains to minimise the damage to the city’s infrastructure as they advance, but, in an urban battle such as this, it is impossible to advance against an enemy such as Daesh without causing any damage at all. It must be remembered that Daesh’s tactics do not adhere to the conventions of warfare. It booby-traps buildings and has taken many other desperate measures to protect its vile interests, including using schools and hospitals as tactical headquarters, denying those facilities to the innocent civilian population.
A stabilisation programme will be put forward under the auspices of the UN reconstruction effort, which will come after political decisions are made to ensure the reconstruction follows political commitments made by those involved in the governance of Syria. I do not know about a donor conference yet, but I will take that idea back to the Foreign Secretary and the Secretary of State for International Development.
Thank you, Mr Speaker, for granting this urgent question to my hon. Friend the Member for Barrow and Furness (John Woodcock). I thank the Minister for his opening remarks. I wholeheartedly agree with his sentiments. For once, we are in union that the victory against Daesh in Raqqa is a vital blow against an evil death cult, and it makes a mockery of Daesh’s pretensions to establish a caliphate in Syria or elsewhere. It shows them to be the weaklings and cowards they are.
This is a timely reminder of the battle we and our allies fought on this very day 75 years ago, the second battle of El Alamein—the battle that destroyed the Nazis’ ambition to control Egypt. As we recall Churchill’s words after that hard-fought victory, perhaps we can turn them around: this is not the end of the beginning for Daesh, it is the beginning of their end. We should be grateful for that.
I hope the Minister can address my questions in his response. If he is unable to do so and we rely on the Foreign Secretary to make a fuller statement, will he ensure the Foreign Secretary is able to answer my questions? I will not repeat the question on the Government’s response to the humanitarian crisis, but this is my second question: now that Daesh is in disarray in Syria, what is Britain’s ongoing military mission in Syria? In short, what is our strategy for the future of Syria, and what is the military’s role in that strategy? In particular, what steps will the Government now take to help rebuild some form of sustainable governance in Raqqa? What role, if any, will the armed groups that helped to liberate the city from Daesh play in its future administration? And how will the Syrian, Kurdish and Arab opposition forces, which played such a pivotal role in the campaign to retake Raqqa, be represented as part of a genuinely viable peace process for Syria as a whole? If there is one thing on which we can all agree, surely it is that the very last thing the middle east needs right now is another vacuum.
Finally, as the Minister will know, his Department recently confirmed that it has channelled £200 million since 2015 to support the so-called moderate opposition in Syria. Can he give the House a guarantee today that none of that money has ended up in the hands of al-Nusra or other jihadi groups? It would be a tragedy if, while rightly celebrating the destruction of Daesh in Raqqa, British taxpayers’ money is funnelled into organisations that are just as bad.
I warmly welcome the right hon. Lady’s remarks, which are highly appropriate and much appreciated. The whole House has engaged collectively on this subject, and it is appreciated by all that she speaks as she does. The House is demonstrating that there is nothing between us on presenting a united front against Daesh and its ideology.
I am pleased that the right hon. Lady mentions El Alamein, partly because I was there on Saturday. As a much-travelled Minister, I had the opportunity to represent Her Majesty’s Government in laying the wreath on behalf of the United Kingdom to commemorate the 75th anniversary of that extraordinary battle, which over a period of days turned the tide in north Africa and in the war. I was proud to stand alongside representatives of the Commonwealth and people from the United Kingdom who fought with the Desert Rats, as well as representatives of the German and Italian Governments, to recognise that, 75 years later, Europe has achieved much by coming together. In doing so, we demonstrated tolerance and forgiveness, which are sometimes rather lacking in other parts of the middle east, where memories are long and dates are often remembered for the wrong reasons. I was proud to represent the United Kingdom, along with representatives of the military, our ambassador and Admiral Sir Tim Laurence, who represented the Commonwealth War Graves Commission, of which he is vice-chairman.
Returning to the right hon. Lady’s questions, we recognise the need for ongoing humanitarian relief, about which we have more information if she wishes. As far as the military are concerned, we do not know what will come next. The military will remain engaged as long as there is a need for them to be there. As I have indicated, the strategy further to close off the avenues for Daesh in the Euphrates valley will be supported by United Kingdom personnel until there is no possibility that military action could recommence and no possibility that coalition forces could be put under pressure.
As the right hon. Lady rightly says, the coalition is clearly essential. The coalition comprises a large number of people from the Kurdish region of Syria and Iraq and from other areas. Discussions are ongoing about how the coalition will stay together, but it is premature to say anything about a disbandment. The coalition has to be kept in place until there is no further military threat, and that will be advised either by my right hon. Friend the Defence Secretary or my right hon. Friend the Foreign Secretary in due course.
On support going in the wrong direction, there has been a continual concern since 2011 that, in trying to provide support for legitimate opposition forces in such difficult circumstances, arms and money get traded. There has been an absolute determination to try to ensure that supplies going to support opposition forces do not go in the wrong direction. As far as possible, that is still the case. I cannot say with absolute certainty that not a single pound or element of aid has gone in the wrong direction—there are difficulties on the ground, where forces must co-operate to overcome Daesh—but the Government are absolutely determined to ensure that, as far as possible, the risk is minimised. I assure the right hon. Lady that that is the case.
The Minister of State is an extraordinarily busy and conscientious bee, and I feel sure that I speak for the whole House in saying how delighted we are that he represents us on these important occasions in all sorts of different parts of the globe.
Does the Minister accept that the reason why bombing Daesh in Syria was so much more controversial than bombing it in Iraq is the same as the reason why there have been so many more RAF airstrikes in Iraq than in Syria? Namely, we want the ground forces of the Iraqi Government to win in Iraq, but we claim not to want the ground forces of the Syrian Government to win in Syria. Does he accept that the outcome of the welcome squeezing out of Daesh in Syria is down to a combination of the Kurdish-led Syrian Democratic Forces and Syrian Government forces, whether we like it or not? The 70,000 so-called moderates are now well and truly dominated by Islamists, and as the right hon. Member for Islington South and Finsbury (Emily Thornberry) said, we ought to be careful about whom we support.
I am not going to go over previous discussions about this, and I understand the point of my right hon. Friend’s question. The coalition forces in Syria that have been backed in relation to Raqqa contain a variety of forces, but not Syrian regime forces. We still hold, and are right to hold, the Syrian regime responsible for a large proportion of the atrocities in Syria, and that should not be forgotten or glossed over. President al-Assad is responsible for launching murderous attacks on his own people, and it has been right to separate, in so far as is possible, coalition forces fighting Daesh from those of the regime.
We welcome the news that Daesh or the so-called “Islamic State” has been defeated in Raqqa by the Syrian Democratic Forces after its three-year rule over the city. We also welcome the pledge we hear today of £10 million from the Department for International Development in humanitarian aid.
Does the Minister agree that in order to sustain the military achievement in Raqqa, rebuilding efforts and the introduction of post-IS mechanisms need to start immediately in order to allow locals to develop and run their city meaningfully and in an inclusive manner that will ensure good governance and reliable public services? What funds have therefore been allocated, both to the immediate and the long-term reconstruction of Raqqa and the wider region? Does the Minister agree that British jihadists need also to be captured, where possible, and tried for their heinous war crimes, some of which, such as genocide, can only be faced in the International Criminal Court at The Hague? That would allow the whole world to witness them. Does he agree we should do that rather than, to use the words of the Minister of State, Department for International Development, the hon. Member for Penrith and The Border (Rory Stewart), follow an approach where
“the only way of dealing with them will be, in almost every case, to kill them.”?
That of course will only fuel IS recruitment.
I thank the hon. Gentleman for his support. There are two elements of reconstruction after conflict, the first of which is the stabilisation phase. My right hon. Friend the International Development Secretary addressed that the other day, and it is about providing the immediate assistance that is needed. As I indicated, that helps to clear lethal landmines and explosives, restock hospitals and mobile surgical units, provide some 145,000 medical consultations, provide immediate relief for innocent people who have been displaced, improve access to clean water and look after pregnant women who are in difficulties. The United Kingdom is contributing to that immediate work. In the longer term, resources have not yet been allocated, and that will be done in conjunction with UN and other donors who will be providing support. That will be a long-term process.
Again, the hon. Gentleman put his finger on the necessity for inclusive governance in a difficult area. That will be a matter for the Syrian people and for the political negotiations we expect to start in Geneva in November, which will look at the overall governance. They will have to take into account the situation in Raqqa and the political situation in the area, which will be difficult, but he is right to talk about inclusion.
On those returning to the United Kingdom, let me make it clear, as the Defence Secretary said on 12 October, that those who go to Syria put themselves in danger. Those who go to Syria to take action against the United Kingdom and the UK’s interest put themselves in particular danger, and if they are involved in conflict or in planning actions that will take the lives of British citizens, they run the risk of being killed themselves. Of course those who surrender to forces in the area must expect to be treated under the laws of armed conflict, and to be treated properly and humanely in terms of being brought to justice. As I have said, those who return to the UK will also be questioned about their activity and brought to justice. It is important that justice is seen as the ultimate outcome for those who have committed wrong, but those who are a present danger to the UK run a greater risk and it is right that they do.
I thank my right hon. Friend for his detailed and full answers; he has been educating the House very effectively. May I, however, press him on a couple of areas he has not yet addressed? Does he not agree that the finality of the conflict in Raqqa gives the lie to Russia’s claim that it was in any way supporting the fight against Daesh? May I therefore call upon him and on his colleagues to make representations to the Russian Government that the actions they are taking in Syria are against the interests of humanitarianism and of the civilians? Will he make representations to the Russians to say that what they are actually doing is making a new problem for themselves in the future?
I thank my hon. Friend, who is the Chair of the Foreign Affairs Committee. Russia’s engagement in this has clearly been to stabilise the Assad regime. The Russians’ primary objective has been to secure their interests in Syria, through Assad, rather than to recognise that he had turned against his own people and to join in a coalition of interests to secure peaceful transition and peaceful reform as part of the end of the conflict. Clearly there are operations against Daesh which have not been participated in by regime forces or those who have supported them, such as the Russians, and other action has been taken, but I am not sure it is true to say that in all cases Russia has not taken action against Daesh forces, because it will have done when those forces were threatening the regime. That is when Russia will have taken that action.
Moving on, the Geneva talks that will start under the guidance of Staffan de Mistura will inevitably involve Russia as a participant in trying to see what we can do now, towards the end of the conflict, to provide stabilisation. I can make it clear that the UK will echo the remarks made by the Chairman of the Foreign Affairs Committee. We recognise Russia’s responsibility in the conflict, but now it has a responsibility in the post-conflict situation to remedy some of the problems it has caused.
Some Members of this House received and continue to receive considerable abuse for the decision we took back in November 2015 to support the extension of the RAF mission to Syria. Does the liberation of Raqqa and this considerable setback to Daesh not show that we were absolutely right?
Yes, in a word. We have been learning over time the consequences of not taking action. We have all learned that there are consequences of action and of inaction, and sometimes the choices are impossible. But it is perfectly clear that decisions not to do anything will almost inevitably result in a situation becoming worse and steadily more difficult for those involved. The right decisions have to be taken on intervention or not, but the decision of the House to support David Cameron’s determination to take action in Syria was the right one.
Is the Minister aware that a young medical student from my constituency, who was radicalised at Khartoum University, went to Raqqa, via Turkey, to work in an ISIS hospital? She and dozens of other such medical students are obviously authors of their own peril, but does the Minister agree that every effort should be made to get them out safely?
We have no facility to get British citizens out of Syria. Those who have gone to Syria have not been able to access any consular support, because we cannot put British officials at any risk in trying to deal with that. At present, that is the situation. Those who have gone to Syria have done so at their own risk. Inevitably, some people will return, and I hope that those who have a story to tell about turning against Daesh are able to convince others that this was a false ideology and that they should not be seduced by them into travelling abroad; these people may have a role to play in making that story clear.
In welcoming the liberation of Raqqa from Daesh, we recognise that the city has experienced death and displacement on a huge scale. The 8,000 or so civilians left are in a devastated city without access to drinking water, sewerage, electricity, schools and hospitals, and Assad’s forces are just a few kilometres away. Where does the Minister think responsibility for the rebuilding of Raqqa lies? What will the UK Government do to minimise any delays in that arising from what he referred to as political decisions?
In a sense, it is not a question of responsibility—certainly the people of the area have not caused their own destruction—and it makes sense for the world to be supportive of efforts that will ensure a return to normality, with people having decent lives. Members can expect the UK to play a leading part in supporting those efforts to rebuild schools, hospitals and the economy. I think this is something in which the world will be engaged. On the responsibility of the state, clearly the UK holds the regime to be responsible for a significant part of what has been inflicted upon its people. There has to be a political decision about moving forward with a political process before reconstruction can begin. The decisions have to be taken and that is the view of the international community. It does not prevent the immediate humanitarian assistance in difficult situations from taking place—that is what is happening now—but longer-term reconstruction must follow a political settlement.
Does my right hon. Friend know how many Daesh terrorists have escaped from Raqqa and where they might be headed?
I do not know the answer to that question because it is just impossible to gauge. Talk seems to centre around the low thousands of foreign fighters. Over time, it will become clearer, but I am not sure I can rightly say anything more accurate than that. It is clear that some will attempt to return to other parts of the region and beyond from where they came. Some countries have supplied more fighters than others. They will be a risk until they have all been interviewed, those who are responsible for crimes have been brought to justice, and others have been dealt with in other ways.
My right hon. Friend the Member for Exeter (Mr Bradshaw) referred to the vote two years ago. Unfortunately, I was unable to take part in that vote, but I welcome the liberation of Raqqa. As the Minister said, it proves that conflicts of this kind cannot be won simply from the air. Ground forces have to be used. Will he reiterate our praise for the Syrian Democratic Forces, particularly Syria’s Kurds, who have played a pivotal role, and tell the Turkish Government to stop attacking them?
The hon. Gentleman has always been clear in his determination to take what he considers to be the right action, regardless of the political pressure on him, and he has been courageous to do so. Some battles clearly cannot be fought without ground troops being involved, as recent conflicts in Iraq and Syria have shown. There would have been no liberation of Mosul from the air, nor of Tal Afar or Raqqa. The United Kingdom did not take part in those operations; others have done so elsewhere, with our support. The hon. Gentleman is right to mention Kurdish forces’ leadership of the coalition forces that have been operating in Raqqa and the extraordinary work they have done. Whatever difficult situations may be faced back in the Kurdish region of Iraq, it is clear that those fighters and the people they represent deserve to be treated with the greatest of respect. Any political situation needs to be handled with great care, and there needs to be a lot of dialogue between states, not undue pressure or force.
I welcome the news that Raqqa has been liberated from Daesh, especially with respect to Paradise Square, where the terrorists carried out public beheadings. I thank the Minister for all his work to secure the UN resolution on locating and prosecuting Daesh. Will he update us on that, and on the Geneva process?
I thank my hon. Friend for her kind remarks. I was pleased recently to have the honour of moving the resolution at the UN, which was adopted unanimously by the Security Council, to further the work commenced the year before by the Iraqi Foreign Minister to bring to justice those responsible for the crimes of Daesh and to institute an investigative process to help that work. The United Kingdom will support that work and see the resolution carried through. I met Staffan de Mistura in New York and he is hopeful that the Geneva process will restart in November. There is clearly a long way to go, but an absence of conflict will help that process. It is essential that a process of justice emerges from the political conversations in which the people of Syria have the chance to choose their leadership, and that they do not have one imposed on them.
The Minister has said some helpful things today, not least about the cost of inaction possibly being as great as the cost of action—a point made forcefully in the paper written by the hon. Member for Tonbridge and Malling (Tom Tugendhat) and Jo Cox, “The Cost of Doing Nothing”. Does the Minister agree that it is vital that those who have committed war crimes in Syria are brought to justice? Will he update the House on the British Government’s role in making sure that the Syrian Government, who have prosecuted a brutal campaign and bombed hospitals, are brought to justice in whatever way possible?
I hope it will please the hon. Lady if I tell her that while I was in New York I met the leader of the White Helmets, along with members of the opposition. We give enormous credit to them for what they have achieved, and to the work of the hon. Lady and others in supporting them.
On bringing people to justice, it is clear that those who are responsible for war crimes in any circumstances—whether they belong to Daesh or the regime—should feel that justice is available against them. The process against Daesh is clear; I suspect that the process against the regime will be more difficult, but if there is evidence, it should be prosecuted and pursued. The United Kingdom will be determined to see that process carried through, although I do not suspect for a moment that it will be particularly easy.
Like all colleagues, I welcome the military defeat of Daesh in Raqqa. What steps is the international community taking to ensure the vacuum in that area is not filled by the Iranian militia? That region is a key link to Lebanon, where Iran has some key interests.
My hon. Friend’s knowledge of the area is considerable, and we remember his long campaign to make sure that we refer to Daesh as Daesh. We pay tribute to him for that. The militias operating in the region are not always under the control of the coalition forces or, in Iraq, of the Iraqi Government. As far as I am aware, every attempt has been made to ensure that the forces occupying the ground are under the coalition’s control and thereby to minimise any danger of sectarian activity. However, we have to remember that some of the militia have been involved in close fighting and helping to relieve some areas. It is essential that those who are responsible for them now play a part in building a consensual process of governance and do not use them for sectarian purposes. It is an opportunity for some to perhaps show new colours, take a different direction from the one they have taken in the past, and build stability rather than disruption.
The Minister rightly referred to the accuracy of the 261 British strikes on Daesh in Syria, by which I presume he also means to say that, to his knowledge, no civilians were casualties of British strikes. By contrast, the Russians said that their whole aim in Syria was to attack and put an end to Daesh, yet 95% of their attacks seem to have been on other opponents of Assad. Does that mean that the Russians are liars or militarily incompetent?
On the first part of the hon. Gentleman’s question, only 0.31% of coalition air strikes result in a credible report of civilian casualties, highlighting the care taken by the coalition to avoid such casualties. We have not seen any evidence that we have caused civilian casualties, but that is not the same as saying that we have not or will not, especially in close urban fighting against a ruthless terrorist enemy that uses civilians as human shields. Hopefully, the relief of Raqqa will make that likelihood still less.
The question about the other air strikes that have taken place and the use of other forces is one for others to answer, but the hon. Gentleman is correct about the care taken by the coalition, and particularly by the RAF. The RAF’s rules of engagement, avoiding strikes where it is known there are civilians, are very clear. Others must be responsible for their actions, but actions and air strikes that have unnecessarily taken civilian lives make the process of reconciliation afterwards so much harder and therefore fuel the causes of further conflict, which the UK has tried desperately hard not to do.
The Minister has mentioned Iran. Does he think that the role played by Iran in both Syria and Iraq presents a threat to our interests?
I wish that we had more time. My hon. Friend’s knowledge of the area is very considerable, and he brings that with him to the House. We have been clear in saying that there is evidence of Iran being a disruptor in the region. It has been involved in activities in both Iraq and Syria—in Syria, supporting the Assad regime and supporting its own interests by doing so, and being complicit with a leader who has waged war on his own people have made that region more unstable. In Iraq, it must now allow the Iraqis to run Iraq—the Iraqi Government to run a unified Iraq—and recognise that its influence should be confined to the border. It has an opportunity now to play a part in making peace in the region, but can only do so if it listens to the concerns of others and understand that its influence can be used for better in different ways than it has been up to now.
I thank the Minister for his work on this very difficult issue. Has he any idea of how many UK nationals have left the UK to fight with Daesh, and of what work the Foreign and Commonwealth Office is doing with the Home Office to identify these individuals and, where possible, repatriate them?
The short answer is that I do not know. I do not have a figure. We have worked on the number of relatively low hundreds, but we do not know. I will not put a figure on it—why pluck one out of the air? The numbers are not huge, and are not as great as some from other places. On dealing with people when they return, let me make it clear that there is no facility to return people—certainly not from Syria. We have no personnel there and we have no responsibilities in that regard. If people make their way back to the United Kingdom and are identified as having taken part in conflict in Syria or Iraq, they will be detained and will have to answer questions while it is found out exactly what they have done, which is right and proper, and those who have committed offences can expect to face justice.
My constituents in Kettering are increasingly alarmed about the number of British jihadists who have been fighting our armed forces personnel in Iraq and Syria. My understanding is that about 850 of them have been identified, of whom about 400 are already back in the UK. Please correct me if I am wrong but I do not believe that there has been a single prosecution for any offence. Will the Minister try to understand that if no effective action is taken against these people in this country, it will send a positive signal to potential jihadists to Syria to say, “We can go off and fight British services overseas because nothing will happen to us when we return.”
Many terrorist offences have extra-territorial jurisdiction, which means that people can be prosecuted in British courts for terrorist activity in Syria or anywhere else in the world. Any decision on whether to prosecute will be taken by the police and Crown Prosecution Service on a case-by-case basis. That requires evidence of what people have done. It does not require rounding up people who have been in a particular place and detaining them without any legal process for doing so. It is essential that we find out what people are doing. That will require the sort of investigative work that I announced earlier that we have promoted through the UN. The investigations unit is entirely designed to uncover the evidence that will bring people to justice. It is a question of holding this number of people in reasonable bounds so that everyone knows that they have gone there, but that the numbers are not as great as those from other countries. There is a determination in the United Kingdom to make absolutely certain that if those who put the country at risk return, they can expect to be questioned, to be brought to the notice of the security authorities and to be subject to controls thereafter according to existing law. Where prosecutions are possible, people will be prosecuted and rightly so.
I am sure that the whole House will agree with me when I offer my thanks and congratulations to all those people, and their families, who have served in Operation Shader. Given what we learned in Fallujah about the industrial use of improvised explosive devices in domestic property, can the Minister give us some more information on what efforts are being made to ensure that, on the ground, we are supporting people to clear those IEDs?
I thank the hon. Lady for her question. She is right to thank the families of those involved for their sacrifice, too. As I mentioned earlier, my right hon. Friend, the Secretary of State for DFID, deliberately targeted some of the money that has been given to deal with the IEDs, the explosive devices and booby traps that are littering Raqqa and Mosul. The United Kingdom is contributing to the landmine clearance effort, and we will continue to do so.
Further to earlier questions about returning fighters to the UK, there are a number in my constituency who have actively supported Daesh in Syria and are now back home. I appreciate the fact that a cross-Government response has been made to those individuals and that there will be prosecutions where appropriate. In addition, can I also have an assurance that, to keep the wider community safe in my constituency and across the country, the security services will be monitoring the activities of those who have returned but cannot be prosecuted because there is insufficient evidence to ensure that they are not radicalising their communities?
My hon. Friend is absolutely right. More than 60 countries are now providing data to coalition partner Interpol to build a global database of those foreign fighters who have worked with Daesh. The database has grown from 40 people in 2013 to 14,000 internationally and it continues to grow. This information, along with our other investigative efforts, helps to ensure that people in the United Kingdom are safer.
The Minister was correct earlier to pay tribute to the Kurdish peshmerga forces for their contribution in defeating Daesh on the ground in both Iraq and Syria. How concerned are the British Government, therefore, about the events of last week when the Iraqi military and Shi’a militia captured Kurdish-held territory in Kirkuk province, about the reported clashes with Kurdish forces and about a splintering of the anti-Daesh forces in future?
The Foreign Office and I are in pretty close contact both with the Iraqi Government and the Kurdish Regional Government in Iraq. Our understanding is that the process of recovering so-called disputed territory has been done not through conflict, but by agreement between the Government of Iraq, peshmerga forces and the Kurdish authorities. We have been at pains to do all we can to say to both the Regional Government and the Iraqi authorities to do nothing to risk a conflict. There are Shi’a militias in the area, but my understanding at the moment is that the responsible parties are doing everything they can to avoid conflict so that they can return to the dialogue that must take place between the Kurdish representatives and the Iraqi Government following the referendum in September.
There is a significant presence of al-Qaeda in the Arabian Peninsula and Daesh in Yemen. What assessment have the Government made of the extremist threat in Yemen, and what support are we giving to the ground troops of Saudi Arabia and United Arab Emirates and the Government forces that are trying to defeat those extremists in that country?
That is a slightly wider question, but, in relation to Daesh and others, it is absolutely pertinent. We do not take part directly in the coalition operating in Yemen. Of course UK representatives are available to ensure that international humanitarian law is adhered to by those who are taking action using munitions supplied by the United Kingdom. That work is ongoing, but it is not a direct part of the coalition. We have supported the coalition’s aims in pushing back an insurgency against an elected Government, which has opened up the risk of more ungoverned space in Yemen in which AQAP and Daesh can operate. We continue to work towards a conclusion of that conflict. We are working extremely hard on trying to get negotiations to start again so that the conflict can come to an end, because that is the only thing that will secure the area and deal with that risk of al-Qaeda in the Arabian Peninsula.
One of the most horrifying elements of this war has been the weaponisation of food. I am sure that the Minister has seen the story in The Times today, reporting that the United Nations says that 90% of its aid trying to get through the Wafideen checkpoint to East Ghouta is turned back. What are the Government doing about that particular case and, more broadly, how are they trying to fight against President Assad waging starvation?
The hon. Gentleman is right. The area has returned to medieval conditions of war and siege in which humanitarian aid, which ought to get through under international rules, is not allowed to get through because of forces on the ground. We make strenuous efforts through the UN and humanitarian agencies, which do extraordinary work in these places. We should pay tribute to those who are working on the ground in dangerous conditions to provide relief and to try to get things through, but it is difficult and we will continue to make that case. In Raqqa, however, the UK has provided more than 660,000 relief packages—including blankets, clothing, hygiene items and kitchen utensils—and more than 88,000 monthly food rations, so where we can get things through, we do. But there is no doubt that aid and the refusal of aid is used as a weapon of war, and it should not be.
It is in the interests of Assad and Putin to suggest that life is returning to normal in Syria. The Minister mentioned the meeting in Geneva in November. In light of that, what more will the UK Government be doing to ensure that Russians and other actors are aware that there can be no lasting peace in Syria while Assad continues to rule and while there is not a role for peace-loving Sunnis, as well as those of all other communities, in Syria?
The House can be absolutely clear that the points that the hon. Gentleman has made were made during conversations with the P5, including to Foreign Minister Lavrov and Staffan de Mistura. Russia is protecting its own interest in Syria and it is doing so in what we consider to be an unconscionable manner, by supporting President Assad and what he has done to his people. There can only be a political resolution that gives the people of Syria the free choice to choose their Government. This is not an easy process, and we are giving all backing to Staffan de Mistura as he restarts the Astana talks in Geneva with all parties present. It is essential that the people of Syria have the choice of their own President and Government. It cannot be the case that everything is returning to normal in Syria. That is true in some parts but, in areas of serious conflict, the situation is still miserable for civilians attacked by their own Government.
I congratulate my hon. Friend the Member for Barrow and Furness (John Woodcock) on securing this urgent question. The decision in this House in December 2015 to take military action in Syria was obviously controversial, but it was the right one in my view. As somebody who supported that decision, I pay tribute to the RAF and to the professionalism of our military servicemen and women who are in the region today. My question is about UK foreign fighters who may have left Syria and ended up in refugee camps in Turkey. What are we doing to track those people down and return them to justice?
As I mentioned earlier, the acquisition of names on to the Interpol database is extending the reach of national authorities in the more than 60 countries from which foreign fighters have gone to fight in Iraq. That will provide a basis for what happens when they return. I am not aware of any efforts that are being taken to visit camps in order to identify people before they return. I do not know about that matter, so I will find the answer and ensure that it is made available in the Foreign Secretary’s next statement.
Happily, the campaign against Daesh in Syria is coming to an end, bringing hope to millions who suffered abuse from these evil madmen. But in light of the events in Kirkuk last week, is the Minister concerned that Iraq and Iran are now turning their attention militarily towards the Kurds? Does he see that as a potential source of conflict, and what role can he and the Government play in trying to diffuse the situation?
The first role I hope that I can play is to urge the House to be cautious of reports coming out from the region. It is not always entirely clear what is happening on the ground, and those with vested interests are trying to stir up more conflict than there need be. Our understanding is that there is sufficient of a relationship between Baghdad and representatives of the Kurdish Government to enable a dialogue to take place so that the conflict is avoided. I do not believe it is true that Iraq and Iran have turned their attention to conflict in the Kurdish region. There is a risk of conflict—that is true—but everything we know about Prime Minister Abadi, and his actions and rhetoric, indicates that he does not want conflict. That has been mirrored by those in the Kurdish region. We are using all our efforts to ensure that that will remain the case, but the hon. Gentleman is right that there are spoilers who might start to urge a conflict. We should be doing all we can, in this House and at a Government level, to urge the necessary dialogue, which we think is taking place.
Points of Order
On a point of order, Mr Speaker. You will be aware of the growing level of abuse and intimidation in many parts of our political system. Such toxicity endangers a considerable progress on equalities that this country has made and that you have commendably championed. It could dissuade many decent people from taking part in legitimate political debate. Have you received any indication from the Minister for Women and Equalities that she wishes to make a statement to the House to clarify the legal obligations of political parties under the Equality Act 2010? In the absence of such an indication, could you advise me on how such matters might urgently be considered by the House?
I am grateful to the hon. Gentleman for his point of order and for his courtesy in giving me advance notice of it. The short answer is that I have received no such indication as yet from the Minister for Women and Equalities, whom, as it happens, I saw last night at an event that I hosted in Speaker’s House, at which she spoke eloquently and with conviction on the importance of inter-faith harmony. It is open to a Minister to volunteer a statement. Such has not, to date, been proffered.
The hon. Gentleman is referring to an ongoing problem, arguably of greater salience, scope and prominence than in the past. If there is no such statement, but the hon. Gentleman—possibly supported or accompanied by colleagues from across the House—wishes to debate the issues, it is open to him to seek either a one and a half hour debate in Westminster Hall or to approach the Chair of the Backbench Business Committee and seek a debate under its auspices. That is the best and most practical advice that I can give to the hon. Gentleman, who has raised a serious matter in a very measured way. [Interruption.] Is the Government Whip muttering something of importance? I am sure that he has something to say, but it does not need to be said in the Chamber; it can be held for elsewhere, where I am sure it will be of great interest.
I am not sure that there is much to add. If the hon. Lady wishes to raise a point of order on the same matter, the answer is no, to be honest.
Order. The hon. Lady raised a point of order with me yesterday. She sought my guidance, which I offered her. If the point of order is on a similar matter to that which the hon. Member for Milton Keynes South (Iain Stewart) has just raised and to which I have responded with crystal clarity, there is nothing to add.
Further to that point of order and the point of order I raised yesterday, Mr Speaker. I would like to seek some clarification. Yesterday, you suggested that I apply for an Adjournment debate. I was wondering what mechanism—
Order. Forgive me, but I think it is extremely clear that I have dealt with a serious matter raised in a very measured way by the hon. Member for Milton Keynes South and given clear advice. If there are people who are unclear on the basis of what I have said, I am frankly surprised by that, but it is open to them to approach me for further guidance. What they should not seek to do—I am sure that the hon. Lady would not knowingly seek to do this for one moment—is to abuse the procedures of the House. I have tried to help the hon. Lady, and we will leave the matter for now.
On a point of order, Mr Speaker. Where an MP is elected by Parliament to represent us on a foreign delegation and is subsequently sent home from that delegation for inappropriate behaviour, will such cases always be reported back to the body that elected them—that is, to Parliament—and have they been in the past?
What I would say to the hon. Gentleman is as follows. He has raised an extremely important matter, and, again for the avoidance of doubt, I do not consider or treat it lightly. That said, the House will note that the hon. Gentleman raised the issue in extremely broad terms—I do not knock him for doing that, but I say it by way of factual response.
I say to the hon. Gentleman, on advice, that raising a point of order in the House is not necessarily an effective way, or even necessarily a proper way, of pursuing an allegation of impropriety against anybody, whether a Member of the House or anybody else. If the hon. Gentleman has grounds for supposing that there has been impropriety by an hon. or right hon. Member, falling short of possible criminality, which would obviously be considered elsewhere, I ask the hon. Gentleman to write to me, because I am sure he is interested in the issue, rather than in, for example, securing parliamentary attention—I know that would not motivate the hon. Gentleman. [Interruption.] No, no, I have known the hon. Gentleman for over 30 years, and I know that would not motivate him in any way. If he is concerned about the issue—and I respect that—and he has a particular point that he wants to raise with me in writing, I assure him, and, more widely, I assure the House, that I will give the matter my urgent attention. I hope that is helpful to the hon. Gentleman.
Further to that point of order, Mr Speaker. No, my motivation is to clarify what is the policy and procedure of the House in a circumstance where a Member has been elected at any stage by this Parliament. Will these things be reported back?
I am very grateful to the hon. Gentleman. As I have just been advised—and it would seem to me fairly clear—where a question is hypothetical, it is actually quite difficult to provide a concrete answer. I would certainly expect that if a suspected abuse had taken place, that would be reported, in all likelihood, to the political party of which the suspect was a member. Depending upon the nature of the visit—that is to say, whether it was a visit organised by, or with sponsorship in some way from, a parliamentary body—it might well also be reported elsewhere. I would certainly hope and expect that such occurrences, or alleged occurrences or abuses, would be reported, and if they are reported, those who are reporting them can expect them to be investigated.
I hope the House can see that, far from brushing aside the hon. Gentleman’s concern, or that of any other Member, I am keen that those matters should be properly explored, but they are not necessarily best explored via the point of order procedure on the Floor of the Chamber. The hon. Member for Milton Keynes South sought my guidance. I gave him very clear and practical guidance, which I have every expectation he will follow. If practical guidance is what people want, that is what I am seeking to provide.
If there are any further points of order that are unrelated, I am happy to take them; if not, we should proceed to the ten-minute rule motion.
Affordable Home Ownership
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to make provision for affordable home ownership; to require the inclusion of rent to buy homes in the definition of affordable housing; to make provision for a minimum proportion of new affordable housing to be available on affordable rent to buy terms; to provide relief from stamp duty when an affordable rent to buy home is purchased; and for connected purposes.
It is beyond dispute that home ownership is by far and away the most popular and desirable form of housing tenure. This is confirmed by the British social attitudes survey, which shows that 86% of people aspire to own a home. Home ownership lies at the heart of a true property-owning democracy, in which young and old alike are enabled to take responsibility for their own lives. Home ownership facilitates flexibility in the size and location of accommodation, taking into account changes in a place of employment or additions to the family. Home ownership also encourages long-term financial independence from the state and, therefore, from taxpayer subsidies.
With home ownership so popular and so manifestly in the public interest, one is bound to ask why it has been allowed to decline—it is now at a 30-year low of only 63%. The answer is lack of affordability. In most parts of the country, the price of houses has been increasing far faster than earnings. The greatest impact has been on younger buyers. In the 1980s, six out of 10 of those aged under 40 were homeowners; now, fewer than four out of 10 are.
To her credit, the Prime Minister clearly wishes to correct this public policy failure, which is having such an adverse impact on the next generation of aspiring homeowners. The proposals in the Affordable Home Ownership Bill should therefore be particularly appealing to the Government—not least because they do not add to the nation’s debt, but rely instead on ensuring that some of the land set aside under section 106 planning agreements for affordable housing is earmarked for homes built for affordable rent to buy. My Bill requires the Government to put beyond legal doubt that local authorities must treat affordable rent to buy on a par with affordable rent, and it requires local authorities to specifically include affordable rent to buy schemes in their development plans.
For those not familiar with affordable rent to buy, this is how it works. It provides an accessible route to home ownership for those who cannot immediately afford a deposit. In that respect, it has an advantage over other low-cost home ownership schemes, which still require substantial up-front funding. Under affordable rent to buy, families take out a fixed five-year renewable assured shorthold tenancy and agree to pay an affordable rent—80% of the market rate, normally—for five, 10, 15 or 20 years. By paying an affordable rent, families are able to start saving towards a deposit.
In addition, under the scheme, which is being pioneered by a small number of imaginative local authorities, the tenants receive 10% of the property’s market value as a gifted deposit to add to their savings and reduce their mortgage costs at the point of purchase. On becoming 100% homeowners after five, 10, 15 or 20 years, tenants can access a wide range of mortgage products utilising the credit worthiness they will have developed during their time as tenants. The essential element of security of tenure also enables families to develop roots in their local community.
The model to which I refer is wholly funded by institutional investors. Substantial funds have already been forthcoming, but a further £40 billion will be available under this system for new affordable homes, at no cost to the Exchequer. That could provide homes at £200,000 each, and that could provide 200,000 such homes—a significant way of addressing the problem we have with housing.
However, that is all subject to one caveat, which it is the purpose of the Bill to address. Currently, affordable rent to buy does not come clearly within the definition of affordable housing, and the Bill requires that it should so do. There needs to be an explicit reference to affordable rent to buy in the national planning policy framework definition of affordable housing. Such clarity would enable many more local authorities to take forward these innovative schemes.
There should be no problem with clarifying the definition, because, in a typical affordable rent to buy scheme, one in three purchasers is moving directly from the social rented sector, and almost all the others are from the housing waiting list.
The House of Commons Library briefing paper published in late August states:
“There is no all-encompassing statutory definition of affordable housing in England. Indeed, there is a good deal of ambiguity in the way the term ‘affordable’ is used in relation to housing.”
It is to help fill that vacuum that I brought forward this Bill, which will provide a definition of affordable rent to buy. Subject to consultation, this would be the definition: “Affordable rent-to-buy housing is housing that is made available at a rent level which is at least 20% below market rent, including service charges where applicable, and later made available to the tenant living at the property to buy at a cost which may be less than market value. Provision should be made for receipts or a proportion thereof to be recycled for alternative affordable housing provision if the subsidy is withdrawn. Eligibility is determined with regard to local incomes and local house prices.”
I hope that the Minister for Housing and Planning, my hon. Friend the Member for Reading West (Alok Sharma), who I am delighted to see in his place on the Treasury Bench, will embrace that, or a very similar, definition. Unfortunately, despite parliamentary questions and letters from a number of colleagues, many of whom are co-sponsors of the Bill, we are still waiting for a result. It may be that we are waiting for the announcement to be made not by my hon. Friend but by the Chancellor of the Exchequer on 22 November. However, whether it be now or on 22 November, something must be done about this, because we need to open up the £40 billion of private institutional investment in our housing that we so desperately need.
If one looks, as some of us may, at the Government website on affordable home ownership schemes, it is a depressing sight. Indeed, there is hardly anything on it, and certainly no reference to anything as imaginative as the schemes to which I have referred. I will save anybody interested in looking at the website the need to do so by quoting from it. It has an overview saying how people can get
“help with savings, through a Help to Buy ISA”
“a home through shared ownership”.
It goes on to say:
“The Help to Buy mortgage guarantee scheme closed at the end of 2016.”
It then talks about Help to Buy equity loans and so on. However, it does not address the real problem: that so many people in this country want to embark on a road to home ownership but cannot afford even to save for a deposit because they are paying full market rent rather than an affordable rent. I therefore hope that the Government will take seriously the issues raised in this Bill.
One of the most significant fiscal changes affecting housing in the last 30 years has been the policy of the Treasury to treat stamp duty as a cash cow. Stamp duty is now a significant burden for those moving into home ownership. It is a transaction tax, which, like all such taxes, has had the consequence of reducing the number of transactions. My Bill would enable the Government to give special relief from the burden of stamp duty, in line with avowed Government policy to promote home ownership among first-time buyers. I hope that we will hear more about that in the Budget.
This Bill should enjoy the support of everybody in this House because it works with the grain of public opinion and would enable more people to reach their aspiration of becoming homeowners in the United Kingdom.
Question put and agreed to.
That Mr Christopher Chope, Mr Gary Streeter, Derek Thomas, Craig Tracey, Mr Philip Hollobone, Mr Ranil Jayawardena, Steve Double, Robert Halfon, Philip Davies, Sir Edward Leigh and Sir Desmond Swayne present the Bill.
Mr Christopher Chope accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 3 November and to be printed (Bill 115).
Universal Credit Roll-out
Emergency debate (Standing Order No. 24)
Before I call the shadow Secretary of State for Work and Pensions to open this emergency debate, I should advise the House that it can last for a maximum of three hours and that a very significant number of colleagues—in excess of 25—wish to speak. There is of course no time limit on Front-Bench speeches, but I would be grateful if Front Benchers would tailor their contributions to take account of the interest of their Back-Bench colleagues.
I beg to move,
That this House has considered the Government’s response to the decision of the House on pausing the Universal Credit full service roll-out.
Once again, Mr Speaker, I thank you for granting this emergency debate, which is so important to the people we represent. It is very important that we have this opportunity to return to the roll-out of universal credit, following last week’s Opposition day debate. Just to refresh everyone’s memory, the motion calling for a pause to the programme was unanimously approved by 299 votes to zero. Since then, we have heard nothing from the Government about what they intend to do, in response to the concerns raised last week, to fix universal credit. I always welcome the Minister for Employment to his place, but why is the Secretary of State not here to answer? Obviously I understand that emergencies do happen, but I did not get a satisfactory response from his office when I rang earlier, and apparently Downing Street is none the wiser either.
The press has reported that the Government are considering reducing the six-week wait for the first payment after making a claim. Will the Minister confirm whether that is correct and, if so, when will it happen? Will he also explain why his Government deem it acceptable to brief the media but not to make a statement to this House? Does he recognise the constitutional implications of his Government’s inaction to date?
Did my hon. Friend notice that virtually every Conservative, or Conservative representative of the Government, who spoke on this matter over the weekend seemed to suggest that the problems with universal credit were to do not with the policy but just its implementation? However, the six-week delay is actually a policy decision that was in place from the very beginning, and that is what is causing the poverty and the problems.
My hon. Friend is absolutely right. To be fair, some Conservative Members, and indeed a Conservative Assembly Member, have recognised the real problems with the structural design of universal credit, even saying that it is “indefensible”.
As it stands, there is overwhelming evidence of the harmful impacts of universal credit, including rising debt, rent arrears and even evictions. The Government must take action or face serious constitutional questions. They have had three sitting days to respond to the legislature but have failed to do so, keeping this House and the country waiting, along with the 7 million people who are expected to be using this programme.
The Government’s figures indicate that 90,000 families will be transitioned on to universal credit full service over the next 90 days. Does my hon. Friend therefore agree that while the Government delay making a decision, about 1,000 more families each day, on average, will have to wait six weeks and get further into debt?
My hon. Friend is absolutely right, and that is why this debate is so urgent—we cannot wait. Although, yes, this is still a small proportion of the full number of people who will have universal credit rolled out to them, this amounts to a 63% increase in the number of people who will be on full service over the next six months.
Does the hon. Lady accept that 50% of people who have received universal credit have actually received it early and applied for an advance payment?
It is a loan!
As my hon. Friends are saying, it is a loan. I will return to that, but I want to make that important point.
The hon. Lady nailed it in a remark that she made a moment or so ago. There have been just three sitting days since the Opposition day debate. Were we to presuppose that Her Majesty’s Government would seek to respond to that debate—let us not presume that—would it be fair, in all honesty, to expect them to do so within three sitting days?
I will come on to that in a moment. The precedent was, unfortunately, set by the current Government.
As I said, the Government have had three sitting days to respond to the legislature. It might be useful to quote the right hon. Member for Ashford (Damian Green), who is now First Secretary of State. At the last such defeat for a Government, in 2009, he raised an immediate point of order, in which he asked the then Deputy Speaker:
“In the wake of that devastating vote for the Government, have you had any indication that Ministers intend to come to the House and make an immediate statement about how they propose to change their policy, as the House has now spoken clearly?”—[Official Report, 29 April 2009; Vol. 491, c. 931.]
Within three and a half hours, the then Government made a statement.
The right hon. Gentleman had changed his tune a bit by last Thursday, when he said that all
“governments have to abide by the rules of parliament. We’re a parliamentary democracy,”
“as the Speaker said last night, motions like that are non-binding motions, so they don’t engage government activity particularly.”
He cannot have it both ways.
These events have raised a more fundamental constitutional question, given reports that the Government no longer intend to require Conservative Members to vote against Opposition day motions.
The hon. Lady said earlier that the up-front payment is, in her words, a loan. If it was not a loan, it would increase the overall quantum of benefit paid to recipients. Is that what she is proposing?
I will say exactly what I am proposing very shortly.
If the Government’s position is that Opposition day debate motions should have no binding effect on the actions of the Government, it fundamentally alters the relationship and balance of power between the Executive and Parliament. It would mean that apart from votes on legislation and matters of confidence, the Government could ignore the decisions and will of Parliament. This is very dangerous ground, and the situation needs to be seen in the context of the blatant power grab by the Executive that we witnessed on Second Reading of the European Union (Withdrawal) Bill last month.
For the hon. Lady to accuse the Government in such a way is to suggest that there has been a change from precedent, but votes on Supply days have never been binding on the Government. That is a clear precedent going back many years, and the position was entrenched by the Fixed-term Parliaments Act 2011.
The point is that we need an urgent response to this really important issue. We are calling for a clear set of proposals from the Government that will reflect the will of the House and pause universal credit roll-out while the issues that I raised—and many more that I did not have time to raise—are fixed.
I thank my hon. Friend for securing this debate. Is she as surprised as I am by Conservative Members’ denial of the seriousness of these issues? Their comments will give no succour to my constituents, such as the mother of three who is currently sleeping on her cousin’s floor after she was evicted from her home because of non-payment of rent that resulted from delays in universal credit. This is not about the Opposition versus the Government; it is about real people—our constituents—suffering.
My hon. Friend raises an important case. It is absolutely shocking that in 2017, in the fifth richest economy in the world, such cases are brought to our surgeries day in, day out. Things are only going to get worse, and that is absolutely unacceptable.
The moment for pausing universal credit—this is determined by statutory instrument, as the hon. Lady knows—has passed, but there will be another opportunity to do so in January, when another one-month pause is built into the system. If we could find a compromise with the Government and make significant changes to the policy, such as reducing the six-week wait to four weeks, would that be acceptable to the Opposition?
Something needs to happen urgently. As the hon. Lady knows, full service is being rolled out to 55 areas this month. The cold months are upon us, and Christmas is just around the corner. We need an urgent response now.
A number of cases have been brought to me. Last Christmas, one constituent waited for two months without any money to get redress. On the constitutional question, democracy can only work if everybody gets involved. It is no good the Government boycotting Parliament.
I totally agree with my hon. Friend. We must have a responsive Government who listen to the will of the House and the people we represent. It is not good enough just to say that a motion is not binding—we need action.
Does my hon. Friend agree that there is an urgent need for a pause? In Wallasey, the roll-out will begin halfway through November. Six weeks later, it will be Christmas. The Department for Work and Pensions will not be open on Christmas day, which means that many of my constituents will have to wait until the new year for assistance. That is why our local food bank is looking to collect 15 tonnes of extra food to deal with demand. Does she agree that it is time that the Government listened to Parliament and acted to alleviate such obviously avoidable hardship?
My hon. Friend makes an important point. Food banks are running out of food as the scheme is being rolled out. What will happen to families who desperately need financial support?
One of my constituents who has severe mental health problems has been signed off as sick until December. We go on to universal credit in November, and he has been advised that if he does not prove that he is looking for work, he will be sanctioned and his benefits will be stopped. Does my hon. Friend agree that it is dangerous to have assessors overriding the views of registered doctors?
My hon. Friend makes an important point about the impact of in-work conditionality. There are about 1 million people on zero-hours contracts who may not know from one week to the next whether they will be able to work 35 hours each week, and we know how much harm universal credit will do to them. Those people are doing the right thing, but they may be sanctioned if they are deemed not to be working enough hours.
My hon. Friend is being generous with her time. During last week’s debate, I raised the reluctance of private sector landlords to rent properties to people who are on universal credit. Is she aware that social landlords frequently issue a notice indicating that they will seek possession of a property if the tenant is in arrears for only a week? Is it not scandalous that an ever-increasing number of people will approach the Christmas period with such a threat hanging over them?
Absolutely. Surely what is happening is not right, so we must stop this.
I will now make some progress, although I will take more interventions later. People might not have kept up with the hundreds of stories that we have heard from colleagues on both sides of the House, but we must make sure that the Government’s flagship programme is amended to take account of the real hardship that people are experiencing. We have heard about that hardship not just from claimants, but from charities that deal with claimants, as well as many other organisations.
There are three key issues with universal credit: the programme’s design flaws, which have been there from the outset, as I mentioned last week; the cuts that were introduced in 2015; and various implementation failures. First, I will talk about the programme’s flaws. The six-week wait before new claimants receive any payment is particularly draconian, and it is having real impacts. Four weeks of the waiting period are to provide that universal credit can be backdated, but an additional week’s wait was added as policy, and claimants must wait a further week for their payment to arrive. That is believed to be one of the primary drivers of the rise in debt and arrears.
The hon. Lady talks about a six-week delay before any payments are received, but she will be aware that up-front payments are made available at the initial stage, so does she accept that that is not quite the case?
No, I do not.
It is so important to stress that half of those in rent arrears under universal credit entered arrears after making a claim. We know that one in four is waiting more than six weeks, and one in 10 is waiting more than 10 weeks.
There are 1.5 million people on housing benefit in the private rental sector, and private landlords do not have the flexibility or even the patience of housing associations and councils. Does the hon. Lady agree that if 50% of the 1.5 million people who will ultimately be on universal credit lose their homes, it would be an absolute catastrophe?
We know the real issues involved in the housing crisis at the moment, so the hon. Gentleman makes a very fair point.
The Government claim that the purpose of making payments once a month in arrears is to mimic the world of work, but that is not the case. Data published just yesterday by the Office for National Statistics shows that a quarter of the lowest-paid—those most likely to be on universal credit—are paid every week or fortnightly. As my hon. Friend the Member for Wirral West (Margaret Greenwood) has said, given that nearly 400,000 more people are due to go on to universal credit over the winter, at this rate 80,000 people will be waiting more than six weeks for a payment, with 40,000 people waiting more than 10 weeks for their first payment.
Will my hon. Friend give way?
I will take one last intervention.
My hon. Friend makes the very important point that these policies are not accidental consequences, but something that is baked into the universal credit system. That is why it is not unreasonable to ask the Government to respond within three sitting days of last week’s Opposition day debate. Does she share my concerns that universal credit payments will be made to only one member of a household and about the consequences of that policy for victims of domestic violence, on which my hon. Friend the Member for Birmingham, Yardley (Jess Phillips) has been campaigning?
Again, my hon. Friend makes a very important point. I will come on to all the different issues. I have raised the so-called advance payment, which is in fact, as I have said, a loan—it has to be paid back within six months.
Will the hon. Lady give way?
No. I am sorry, but I am not going to take any more interventions.
Other design problems I mentioned last week include: the fact that payment is made to one member of the household—predominantly men—and that the second earners, who are predominantly women, face much reduced work incentives; the fact that severe disability premium payments were not incorporated into universal credit; the fact that rent is paid to the claimant rather than the landlord; the fact that self-employed people are subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; and the fact that in-work conditionality is coming down the track, meaning that 1 million working people will have to visit jobcentres while much of the Jobcentre Plus estate is being closed, and will face financial sanctions if they fail to work the hours their job coach deems they must work. On top of that, there are the real-time information flaws, which have been mentioned by my right hon. Friend the Member for East Ham (Stephen Timms), and the fact that there is no time limit on disputes, which will lead to more delays in payments. There is also, of course, the fact that the child element of universal credit has been reduced from 20 to 19 years.
I turn to the cuts made to the programme since its introduction. Universal credit was meant to simplify the system, but it was also meant to make work pay. We have always supported those principles, and we still do, but unfortunately the 2015 summer Budget slashed the work allowances, and the rate at which support is withdrawn was dramatically increased. As the Institute for Fiscal Studies said in its response to the Budget, that meant the promise that work would always pay was lost. The cuts reduced the work allowances from £222 a month to £192 a month for a couple with two children claiming housing costs. It is estimated that that will result in an additional 340,000 people in poverty by 2020. Some families have been left as much as £2,600 a year worse off.
Families with three children face even greater difficulty, as the Government have decided that the state should play no role in supporting the life chances of the third child. A whole generation of children will be born without the support that was offered to their siblings, which is a break from the historical principle that the state should not punish children for the circumstances of their parents. Single parents have been hit particularly badly. In real terms, a single parent with two children who is working full time as a teacher will be £3,700 a year worse off.
That is even before we reach the Government’s freeze on social security rates, which the Joseph Rowntree Foundation predicts will push 500,000 more people over the poverty line. Its analysis shows that the freeze will mean that a family of four receiving universal credit will be over £800 a year worse off in 2020, and that is on top of the other cuts I have outlined. Will the Minister confirm that the Government will continue the freeze on social security payments, including universal credit, given that it was introduced when inflation was 0.3% but the rate is now 3%?
As I revealed last week, the Child Poverty Action Group’s forthcoming report estimates that these cuts will push 1 million more children into poverty, 300,000 of whom are under five. What does it say about this Government when their policies knowingly push children into poverty? The Secretary of State, the Minister for Employment and many other Conservative Members have tried to suggest that data apparently showing a 3% increase in employment outcomes under universal credit compared with the situation under the previous system is evidence that universal credit works to get people into work. However, they fail to add that the data is from 2015—before the cuts were implemented. Will the Minister now commit to updating the figures, and will he retract these particular statistics, which he has used numerous times?
It is worth pointing out that the most recent figures show an underspend—I repeat, an underspend—on tax credits of as much as 2.4% compared with the projections of the Office for Budget Responsibility. Will the Government provide an exact figure for the savings that that has created? Could not some of the underspend be put towards sorting out the problems that we are now encountering under the new programme? I will return to that point in a minute.
Will my hon. Friend give way?
I am very sorry, but I will not give way now.
I turn to the implementation failures. Leaving aside the many changes to the programme’s schedule over the past few years, the most recent roll-out has been beset by problems. I was glad that the Government listened to Labour and will replace the high-cost phone line with a free one. Will the Minister give me a timetable of when that will happen? Will he also assure me that the free phone line will be funded not by the taxpayer but by Serco, the contractor?
Other implementation issues still remain, however, including the fact that people are denied prescriptions and dental treatment because pharmacies and dental practices do not know who is eligible for free treatment. People also do not know about advance payments or alternative payment arrangements.
I have been inundated with emails and calls from people telling me their UC horror stories. For example, a self-employed Oldham woman is worried that she will lose her business and home when she goes on to universal credit. I have received so many stories from self-employed people that you would not believe it, Mr Speaker. They are really concerned about what universal credit will mean for them. A private landlord is worried that three of his tenants are thousands of pounds in rent arrears under universal credit, although they had never previously been in rent arrears. Southwark Council estimates that such arrears will be an average of £1,700 per universal credit tenant. Disabled people are isolated and alone as the support of severe disability premiums disappears, along with other disability support. As I have mentioned, food banks are running out of food. Even current and former DWP advisers are expressing their deep concerns about the programme and the fate of claimants.
I come back to my asks. First, the Government must end the six-week wait. They should bring it forward by at least one week, but if it is to be brought forward by two weeks, as has been widely reported, that will make a huge difference to people. Secondly, they must ensure that alternative payment arrangements are offered to all claimants at the time of their claim. To suggest that this already happens is more than a little disingenuous. The DWP guidance is vague to say the least. The alternative payment arrangement options include fortnightly payments, split payments and payments directly to the landlord.
Will the hon. Lady give way?
I will not; I am sorry.
My third ask is that the Government reconsider closing one in 10 jobcentres at the same time as they are rolling out the programme. It is nonsensical that those closures are happening at the same time.
Finally, given the latest assessment from the OBR, which shows a projected 5% underspend in tax credits, which is equivalent to £660 million, will the Government commit to investing that money back into the programme, for example to eliminate the two-child limit? I also remind the Minister of my earlier question about lifting the social security freeze.
All this is reason for the Government to respect the will of the House—this country’s elected representatives—and pause the universal credit full service roll-out. I stand ready to work with them in the national interest to address these problems and avert the disaster that is universal credit.
We had a very good debate last week, to which around 80 Members contributed. As I said then, there were passionate, thoughtful and insightful speeches from across the House. I am aware that many hon. Members wish to take part in today’s debate, so I shall keep my remarks brief.
The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) pressed us to respond to last week’s vote. It may help if, before coming to the substantive matters, I put that vote in context.
Will the Minister give way?
Not just yet, but I will later if I may.
We take part fully in all proceedings of the House, including Opposition day debates. Last Wednesday, the Secretary of State opened, I closed, and large numbers—
On that point.
I just said, not just yet.
Large numbers of Conservative MPs made valuable contributions. The decision on whether or not to vote is a matter for Members and their parties, and as you, Mr Speaker, noted last week, it is a legitimate decision to take. Universal credit was fully legislated for in the Welfare Reform Act 2012 and subsequent statutory instruments, and it was extensively debated by Parliament.
If the Minister thinks we had such a good debate last week, why did his party abstain from voting?
Well, I will come to many of the things that came out of the debate, and as I just said, it is a legitimate decision to vote or otherwise in such a debate, but there is much that one takes from a debate like that, and I thought, as I said, it was a very high-quality session of this House.
I have asked the Secretary of State twice, and now the Minister twice, for advice for me to take home to Birkenhead. On the Secretary of State’s advice, he says that the roll-out of universal credit in Birkenhead in November will all go hunky-dory—no need to worry: people will not actually be reduced to hunger and perhaps destitution. However, the staff of our food bank in Birkenhead are saying that, on the experience of other areas where the benefit has been rolled out, they will need to raise another 15 tonnes of food in the coming year. Should I go home and tell people not to pay any attention to the food bank staff and say that they are scaremongering? Should we put all our trust in the Minister that this will work?
The right hon. Gentleman is of course right that he has raised that point a number of times. I think last time he raised it, he put it in the context specifically of Christmas. I am aware that organisations like food banks do have an increase in their activity at Christmas-time. I think we have to be careful in ascribing the reasons for the usage of food banks to individual or simple causes, and as I said to him—
Will the Minister give way?
No. If the hon. Lady will forgive me, I am responding to the right hon. Gentleman.
Order. I understand the—[Interruption.] Order. I understand the very strong passions in this debate, but Members should respectfully wait for the Minister to deal with one intervention before immediately seeking to embark upon another. If I may very gently say so, I do think that the Minister himself is a most courteous fellow, and I think he ought to be treated with courtesy.
And, Mr Speaker, my response to the right hon. Member for Birkenhead (Frank Field) today is to say no, of course we do not expect that to happen. We want this system to work absolutely as well as it can. We have improved the process, for example, on advances, to make sure that people get the assistance that they need in a timely way.