House of Commons
Wednesday 1 November 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Business Before Questions
That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of the Report, entitled ‘The patronising disposition of unaccountable power’—A report to ensure the pain and suffering of the Hillsborough families is not repeated, dated 1 November 2017.—(Guto Bebb.)
Oral Answers to Questions
The Secretary of State was asked—
Swansea Main Line: Electrification
Before I respond to questions, I would like to convey the thoughts and prayers of the whole House to the families and community in Llangammarch Wells following the tragic fire earlier this week.
The Government are delivering the biggest rail investment programme for more than a century. The Great Western modernisation programme includes £5.7 billion of investment in new trains. It will cut journey times from south Wales to London by 15 minutes, which will make south Wales more attractive to investors, and bring significant benefits to our economy and passengers alike.
May I associate myself with the Secretary of State’s comments? I offer my deepest condolences.
The Government’s decision not to go ahead with electrifying the main line to Swansea has been a bitter blow to south Wales. My constituency is less than 20 miles from north Wales, and many of my constituents have written to ask me what steps the Government are taking to electrify the north Wales coast line. Can the Secretary of State provide any clarification today?
The hon. Lady will be well aware that advances in bimodal technology mean that electrification between Cardiff and Swansea would not save passengers any significant journey time. She makes an interesting point about north Wales, and I hope that she is aware of the £43 million of signalling improvement that has taken place in north Wales to improve speed and reliability along the line. In addition, the Crewe hub offers great potential for bringing the benefits of HS2, a major UK rail investment programme, to north Wales as well as to the north of England.
A major multibillion investment programme is benefiting rail passengers in Wales. Earlier this year, the Public Accounts Committee asked us to reassess the electrification programme on a stage-by-stage basis, and that was what we did. We are therefore using the latest advances in modern technology to ensure that passengers in Swansea and west Wales get the benefits of the most modern trains on the network immediately, rather than perhaps waiting for the traditional technology of electric-only trains.
On 16 May, the Transport Secretary said that electrification was definitely happening and that he wanted to see an end to “smelly diesel trains”, so there was widespread disappointment on 20 July when electrification was cancelled between Cardiff and Swansea, and also for the midland main line, with Ministers citing the fact that new technology made electrification unnecessary. Can the Secretary of State satisfy the House that this is not another cynical broken election promise by outlining what technological breakthrough was made after the ballot boxes closed?
One of the strong advocates for electrification was Professor Mark Barry, but he said that the bimodal fleet neutralised the case. The hon. Gentleman makes an interesting point about diesel trains because these bimodal trains will use the latest and most environmentally friendly diesel generators. The latest trains can even exceed the maximum speed that could be achieved between Cardiff and Swansea. Of course they will stick to the maximum speed along that route, but that demonstrates their flexibility.
The benefits of the Crewe hub station rely on a business case of five trains an hour to deliver improvements to not only to my constituents in Eddisbury, but north Wales. What is the Secretary of State doing to support that case?
My right hon. Friend the Secretary of State for Transport and I meet regularly to discuss the whole range of rail infrastructure programmes in Wales. The integrated way in which the network works via the Crewe hub offers potential not only to my hon. Friend’s constituency, but to north Wales, because bringing the benefits of high-speed rail to Crewe will benefit north Wales as well.
I was a member of the Public Accounts Committee when it came up with its cross-party recommendations in February, so I am pleased to hear the Secretary of State cite them. Does he agree that any future electrification needs to be based on a robust assessment? It is worth bearing in mind that the bimodal trains that he proposes for Swansea are exactly what most other parts of the Great Western network, including Plymouth and Torbay, will be getting anyway.
My hon. Friend makes a logical, reasonable and helpful point in recognising that by using the latest technology we are offering more capacity and much faster trains, which is a major benefit to Swansea and to west Wales. Criticising the decision to use the latest technology on the line to Swansea does nothing more than undermine investment in the city.
Clearly the Swansea metro is a different proposal, but I am keen to meet Professor Mark Barry to discuss its potential. It is an interesting addition to a wide-ranging debate in which there are also proposals to improve the frequency of trains to Carmarthenshire and Pembrokeshire. At the moment, passengers from west Wales often drive to Port Talbot to get on the train, but I think that we can come up with much more imaginative solutions. The metro is an additional solution to consider as part of that debate.
The Secretary of State will be aware that in addition to deep concerns about the failure to electrify beyond Cardiff, there is a worry that Great Western Railway will apparently not offer a bilingual service on main line trains operating into Wales. Has he had a discussion with GWR about that? Other rail companies, such as Arriva, have been offering a bilingual service even on trains that go between Wales and England.
I have noted the public statements that have been made by the Welsh Government and the comments that the hon. Gentleman has made, and I suggest that he raises the matter with First Great Western. Arriva is also making a change. Clearly this is a matter for the operators, but I think that the proposal is positive.
I associate myself and the Opposition with the condolences paid by the Secretary of State to those affected by the fire—our thoughts are with them.
Does the Secretary of State for Wales agree with Andrew R. T. Davies, the leader of the Welsh Conservative party, who said this week that electrification of the line to Swansea would be beneficial to Wales and should still take place? He said that he had not
“given up the ghost of fighting that campaign”,
and I assure the Secretary of State that neither have Labour Members.
I hope that the hon. Lady recognises that we are using the latest technology so that we have more capacity and faster trains going to Swansea. She needs to consider the fact that the original plans involved 15-minute savings between Swansea and Paddington, but the bimodal trains will still bring about 15-minute savings. We are bringing in the most modern technology and the most modern bimodal trains on the network now, rather than waiting another couple of years and causing Swansea additional disruption.
With reports that HS2 will cost more than £100 billion, alongside £15 billion for HS3 and another £30 billion for Crossrail 2, it is an absolute scandal that the British Government have broken their promise to electrify the main line to Swansea, despite the fact that that would cost only £400 million. Given the priorities of the British Government, is it not the case that the only way to ensure that Wales gets its fair share of rail investment is to devolve full responsibility for rail infrastructure?
I am surprised by the hon. Gentleman’s tone because the bimodal trains will improve connectivity to his constituency and west Wales. His constituents would not have benefited from the previous proposal for electric-only trains to Swansea. Of course, the network in Wales is part of the UK network, and when he compares spending, he needs to think logically. For example, he has been supportive of the Halton curve, which is in England but will bring major benefits to the network between north Wales and Liverpool.
My right hon. Friend the Secretary of State has regular discussions with Cabinet colleagues on a range of different UK investment projects, including the proposed expansion of Heathrow airport. Estimates suggest that Heathrow’s proposed expansion would require 370,000 tonnes of UK steel, securing 700 British steel jobs, which would be welcome news for communities such as Port Talbot.
In addition to the benefits to Wales from construction related to the expansion of Heathrow, does my hon. Friend agree that there are opportunities for Welsh industry to support the ongoing operation of Heathrow when the expansion is complete, as many of my constituents in East Ren do for nearby Glasgow airport?
I agree entirely with my hon. Friend. The development of Heathrow offers significant opportunities for Wales and for the supply chain in Wales. That is why the Wales Office, working with the Welsh Government, have been involved in ensuring that we have roundtable discussions and “meet the buyer” events with Heathrow in Wales—south Wales and north Wales—so that Welsh companies will be in a position to benefit from investment in Heathrow.
Hub airports are more important than ever, so will the Minister join me in congratulating the Welsh Government on purchasing Cardiff airport, which has led to a great increase in passenger numbers? Should not the Tory party back that as well?
The hon. Gentleman raises an interesting point. The Wales Office is very proud of its involvement in the Qatar decision to have direct flights from Cardiff airport. The hon. Gentleman is right about the importance of hub airports, and a recent meeting I had with Heathrow highlighted the possibility of direct flights from Liverpool to Heathrow, which would be a significant advantage for businesses in north Wales.
Again, I agree with my hon. Friend. The importance of hub airports is understood by businesses across the United Kingdom. It is therefore imperative to have regular flights into Heathrow, which is one of the reasons why we need the expansion of Heathrow. That expansion will be good not only for the United Kingdom, but for regional economies, as connectivity into a major hub airport such as Heathrow will be beneficial to our local economies.
Trade unions, the CBI and local authorities all support the potential £6.2 billion of investment that Heathrow expansion will bring, but that depends on two things: the extension of HS2 to the Crewe hub; and a final decision on Heathrow. When are they both going to happen?
The right hon. Gentleman makes a really important point. I hope that the decision on Heathrow will be forthcoming very soon. I agree entirely with him about the Crewe hub. A development in Crewe that links HS2 services into the north Wales main line represents a real opportunity for north Wales. We in the Wales Office have been involved in that with our colleagues in the Department for Transport.
I hold regular discussions with Government Departments and the Welsh Government about infrastructure investment in Wales. We have invested £212 million in the new HMP Berwyn and committed more than £600 million to city deals in Cardiff and Swansea. Just last week, my right hon. Friend the Secretary of State was in Swansea to announce our £800,000 investment in important innovative infrastructure—the UK’s first energy-positive office, which is capable of generating more energy than it uses.
Lasting economic success will come only from a long-term approach to major economic decisions, which is why it is so great that the Welsh Labour Government are supporting strategic investment in infrastructure. A Labour Government will ensure that they work with rather than against the devolved Governments. Is that the same for the Conservatives and, if so, will the Minister assure the House that Wales will get its full Barnett consequentials funding from HS2?
The hon. Lady raises an interesting point, but I regret to say that it probably shows that she does not really understand the relationship between the Wales Office and the Welsh Government. It is fair to say that infrastructure investment in Wales does depend on a partnership approach, which is why the growth deals secured for Swansea and Cardiff have been crucial examples of co-operation, and why I am working so closely with the Economy Minister to develop a north Wales growth deal.
Like many constituencies across Wales, Merthyr Tydfil and Rhymney has seen huge benefits from European structural funds, but there is great uncertainty about the future. Will the Minister assure the House that the level of financial benefits that we currently enjoy from structural funds will be replicated when we leave the European Union?
The hon. Gentleman makes a point about structural funds, but the reality is that structural funds in Wales did not make the difference that we anticipated. This Government are committed to a shared prosperity fund for the entire United Kingdom. Communities such as Merthyr Tydfil want good long-term jobs—the type of jobs I saw when I visited General Dynamics, which is recruiting apprentices and creating quality jobs in Merthyr Tydfil. That is exactly what the south Wales economy needs.
The excellent History of Parliament website yesterday tweeted a link to a 1606 Bill to build a new bridge at Chepstow. Does my hon. Friend agree that it is a pity that those involved did not add an amendment calling for a M4 relief road, because by now the Welsh Assembly Government might have got their act together and actually built one?
I thank my hon. Friend for that comment. It is indeed disappointing that we are still waiting for a relief road for Newport. I understand that the Welsh Government are going for another consultation, but it is imperative for the sake of the economy of south Wales and the south Wales valleys that we see action on a relief road for Newport sooner rather than later.
The hon. Gentleman is a key supporter of better transport links in north Wales, and his work on Growth Track 360 is appreciated by the Department. The north Wales growth deal is a key priority for the Wales Office. Cross-border connectivity is crucial to that growth deal, and I agree that we need to improve transport links, whether road or rail, as part of the development of the north Wales growth deal.
I would like to add my condolences, and those of Labour Members, to all those affected by the heartbreaking tragedy at Llangammarch.
Wales is one of many areas in Europe that have received EU structural funds to help to improve their infrastructure. After 2020, will Wales receive the same funding as those comparator regions of Europe or will there be a reduction in funding to Wales by this Conservative Government?
The hon. Gentleman raises the question of EU structural funds as if they were a success story in the Welsh context. They were actually a failure: £4 billion of investment, yet our comparative economic performance fell. This Government are committed to the UK shared prosperity fund, which will work for the benefit of the Welsh economy, rather than being wasted in the way in which the Welsh Government wasted our structural funds over the past 18 years.
I am afraid that the Minister did not answer my question, so I will come back to it. There is a lack of clarity about what will happen in Wales after 2020. I thank the Secretary of State for meeting me to discuss these issues, but will he and the Minister convene a meeting of the Wales team, the shadow Wales team and the Chancellor of the Exchequer to sort these issues out so that there is absolute clarity for the people of Wales?
The offer of a meeting is something I would always be happy to accept, but it has to be at the right time. In the context of structural funding, the key thing is that, for example, a strategic approach across north Wales was not possible because four counties were receiving European structural funds and two were not. We now have an opportunity for a strategic approach across north Wales, which will be supported by a UK shared prosperity fund in due course.
Leaving the EU: Inward Investment
Wales remains a great place to invest. As we leave the EU, we will continue to support existing investment relationships and work to attract new projects. I am working closely with the Department for International Trade to deliver this.
The Secretary of State will know that the Welsh Labour Government have been very successful in attracting businesses such as TVR, Aston Martin and General Dynamics. All that foreign investment could be at risk if there is a no-deal Brexit. What is he specifically doing to reassure the business community that Wales is still open for business?
The hon. Gentleman is absolutely right that Wales is a great place to invest. Last year, 85 foreign direct investment projects came to Wales, 95% of which were supported and facilitated by the Department for International Trade. I have been to Qatar and Japan to talk to investors, and I am encouraged by their optimism and the flexibility that the Welsh economy can bring.
As I mentioned to the hon. Member for Islwyn (Chris Evans), I am encouraged by their interest and commitment. Japanese companies, by tradition, make long-term investments. The first was in Bridgend—Sony was one of the first—in 1973, and they have similarly committed that they want to remain with us for the long term to come. [Interruption.]
Order. There are very many private conversations taking place, but I think it is fair to the Secretary of State if we are able to enjoy the product of his lucubrations. He spent a lot of time preparing for this session; it seems a very great sadness if his observations cannot be properly heard. Liz Saville Roberts.
Diolch yn fawr. A report earlier this year found that foreign direct investment to Wales declined by 44% during the EU referendum year, with what are described as “geographically peripheral” regions lagging even further behind. What will it take for the Secretary of State to admit that the only way to protect jobs and wages is to maintain economic links with the EU by staying in the single market and customs union permanently?
As I mentioned, last year was another successful year: 85 projects came to Wales, creating 2,500 new jobs. I would also point to the latest export data: exports to the EU were increased by 15%, but exports outside the European Union increased by 20%. That demonstrates the great flexibility of businesses in Wales, keen to explore the new opportunities that exiting the European Union brings.
For a meaningful vote on the final deal to be exactly that—meaningful—we must not allow Parliament to be threatened with the prospect of condemning the UK to a no-deal scenario, should that final deal prove unsatisfactory. Would it not be more prudently conservative and economically wise of the Government to explore any legal flexibilities surrounding article 50, to appease businesses across Wales and avoid a damaging cliff edge?
I hope the hon. Lady will take great reassurance from the fact that we are doing everything we can to get a good deal for the whole United Kingdom as we leave the European Union. Of course, it is also prudent—that is the word that she used—to prepare for all outcomes, and we have to prepare for every potential eventuality because we need to preserve the integrity of the UK market, a relationship with Europe and the new opportunities, as we leave the EU, with markets around the world.
I am grateful to my right hon. Friend for her question. I think the Department for International Trade is already doing that, but there is always more that we can do. My right hon. Friend the Secretary of State for International Trade and I met the First Minister on Friday to consider the trade White Paper, as well as the new opportunities, and the establishment of the UK Board of Trade, which includes strong representation from Wales, is an important part of that work.
Leaving the EU
Since the referendum, the Secretary of State and I have discussed the impact of the UK’s exit from the European Union in meetings with stakeholders across Wales. We have met businesses, universities and farming unions, among others, and the next meeting, the Secretary of State’s expert panel on EU exit, will take place on Monday.
I thank the Minister for his answer, but does my hon. Friend agree that this needs to go even further as negotiations with the EU continue? Will he encourage other Cabinet Ministers to come to Wales to hear the views of Welsh business, Welsh farmers and Welsh universities first hand?
I thank my hon. Friend for his question. He is a champion for the agricultural industry, which is no surprise in view of the constituency he represents. I can assure him that the discussions with the farming unions will intensify, and I am very pleased to announce that the Secretary of State for International Trade will be in Wales this week.
I am very pleased that the Prime Minister is here to listen to my question, because on a number of occasions I have asked her about the importance of the port of Holyhead in my constituency to Irish trade. Last week, a company from Ireland suggested a new route to Holland and Belgium, circumnavigating Britain. Stakeholders in my constituency are concerned about that. The Irish Government are concerned about that; so are the Welsh Government. When will the UK Government wake up?
The hon. Gentleman raises an important point about the port of Holyhead and the concern is shared by my right hon. Friend the Secretary of State for Wales, who visited the port with him. These concerns have been heard in the Wales Office; we have met stakeholders and Irish businesses. I can assure him that our intention is to ensure a frictionless border in Holyhead, in the same way as in Ireland.
EU students contribute upwards of £130 million to the Welsh economy, and thousands of academic staff from across Europe have been vital to the success of Welsh institutions. Given that we already know of an 8% decline in applications from EU students to Welsh universities, what discussions has the Minister had with Cabinet colleagues to ensure that visa arrangements do not further harm our higher education sector?
The hon. Gentleman makes an important point about the universities sector in Wales. I recently visited Bangor University and Aberystwyth University and discussed these matters. I can assure him that the Wales Office is in constant discussions with other Departments on the issues raised by the sector, including EU visas.
I welcome the fact that the UK and devolved Administrations have agreed the principles on which the common frameworks will be constructed, which will be of particular interest to business groups, universities and the National Farmers Union of Wales. I encourage the Minister to continue these exchanges with the devolved Administrations, so that we can reach agreement on how the common frameworks should be established.
Leaving the EU: Balance of Powers
Following the last Joint Ministerial Committee on EU Negotiations meeting of Welsh, Scottish and UK Governments, an agreed set of principles on areas where EU law currently intersects with that of devolved competence was published. Will the Secretary of State please update the House on what tangible actions the UK Government have taken to institute those principles?
There are 64 areas of law that intersect with the Welsh Government, and I think that there are 111 that relate to Scotland. There is an awful lot of technical work going on between officials in the Scottish and Welsh Governments and the UK Administration. There are many functions beneath that, but we are working positively to establish which of them can be devolved as quickly as possible when powers are returned from the European Union to the UK.
I have mentioned that officials are working on 64 areas, and we want to move forward so that the powers of the Scottish and Welsh Governments will be extended, but we also need to maintain the integrity of the UK market. We need to remember that everything we are doing needs to suit business, because we want business in Scotland to continue to export and work throughout the UK, but we also want business in Wales to have the opportunity perhaps to take some of the Scottish market.
The Prime Minister was asked—
I know that Members across the House will have been appalled by last night’s cowardly terrorist attack in New York. Our thoughts are with all those affected, and we stand united with the people of New York.
Members on both sides of the House have been deeply concerned about allegations of harassment and mistreatment here in Westminster. This demands a response, which is why my right hon. Friend the Leader of the House has been meeting with her counterparts, and we are hopeful that all sides can work together quickly to resolve this. I have written to all party leaders to invite them to a meeting early next week so that we can discuss a common, transparent and independent grievance procedure for all those working in Parliament. We have a duty to ensure that everyone coming here to contribute to public life is treated with respect.
This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
Is the Prime Minister aware that some very powerful research has been done on the question of High Speed 2? It shows that for the first 140 miles, in the leafy suburbs of the south, nearly 30% of the line will be in tunnels to avoid knocking down houses, yet now we are told that the figure is only 2% for the whole of the north. Why? It is because HS2 says, “It is too costly; knock the houses down.” Will she arrange for a meeting with people from my area, to avoid another 30 houses being knocked down in Newton, which is part of Bolsover? Is it not high time that this Government stopped treating our people like second-class citizens?
I am sure that the Department for Transport will be happy to look into the question the hon. Gentleman has raised, but of course the reason why we are doing HS2 is that it is important to increase the capacity of the railway lines going through to the north. This will be a very important contribution to the United Kingdom economy, and I assure him that if he looks at everything this Government have done, with the northern powerhouse, the midlands engine and the significant investment in infrastructure across all parts of the country, he will see that this is a Government who want to ensure that this is a country that works for everyone.
My hon. Friend raises a very important point, and it is important that we ensure that we have a complete response to this issue of the threat of terrorism. That involves dealing with the problem at source, and it also involves dealing with terrorism wherever it occurs. But our message is very clear: our values will prevail and the terrorists will not win. However, as we do this, we need to ensure that, as my hon. Friend has said, we work with international partners. We want to develop safe spaces in Syria and Iraq as they re-emerge from this terrorist threat that has been on their streets, but that has also, obviously, affected us here and others elsewhere across the world. Crucially, we have done a lot of work in helping those in situ to gain evidence that can be used to ensure that anybody who is involved in the horrors of the attacks that we see can be properly brought to justice.
I put on record that I am happy to meet with the Prime Minister and all party leaders to discuss the sex harassment allegations that the right hon. Lady rightly referred to. We need better protections for all in this House, and the House must involve workplace trade unions in that, but it is also incumbent on all parties to have robust procedures in place to protect and support victims of sexual abuse and harassment.
I also join the Prime Minister in sending our solidarity to the people of New York and their mayor Bill de Blasio following yesterday’s appalling terrorist attack.
I hope the whole House will join me in paying tribute to two former Labour colleagues who, sadly, passed away this week: Candy Atherton, the former Member for Falmouth and Camborne, and Frank Doran, former Member for Aberdeen North. Both did enormous good work, at opposite ends of the UK, to diligently represent their communities and constituencies. They will be sadly missed by us all, particularly in the Labour party, which they served so well for their entire lives.
In 2010, the Labour Government intervened through Her Majesty’s Revenue and Customs to shut down an Isle of Man scheme used to import yachts into the European Union and thus avoid tax. A similar scheme has recently been exposed relating to the import of business jets into the Isle of Man, so can the Prime Minister assure the House that HMRC will investigate these new allegations diligently?
The right hon. Gentleman referred to a number of points in his question, and I will address them all.
On the first point, the right hon. Gentleman is right that it is absolutely essential that political parties have processes to deal with allegations of misconduct. We also have the ministerial code, and proper investigations must take place against it where that is appropriate. But I believe that it is also crucial for everybody working in this Parliament—be they working for a Member of Parliament or the House authorities, or a journalist working in this Parliament—that there are proper processes in this Parliament for people to be able to report misconduct and for that to be dealt with. That is very important and I am grateful to the right hon. Gentleman for saying he will meet with me, and I hope with other party leaders, to look at this issue; I see that the leader of the Scottish National party, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), is nodding.
I join the right hon. Gentleman in paying tribute to Frank Doran and Candy Atherton. Frank Doran was first elected in 1987 and served two separate terms as the MP for Aberdeen. He chaired the Administration Committee for five years and was a tireless campaigner for safety in the oil and gas industry. I am sure that everybody will recall the commitment with which he served in this House, and join me in offering condolences to his family and friends. Candy Atherton was first elected in 1997, when I was first elected. She served for eight years as a Member of Parliament and was a strong campaigner for women’s rights and disability issues. She continued to champion those causes on Cornwall Council after she had left this House. Once again, I am sure that Members across the House will join me in offering condolences to her family and friends.
The right hon. Gentleman also talked about tax avoidance. I can assure him that, when cases are referred to HMRC in relation to tax avoidance, it takes them seriously and looks into them seriously. We have taken action collectively as a Government over the last few years since 2010, when we first came in, and we have secured almost £160 billion in additional compliance revenues since 2010 through a number of measures that we have taken to ensure that we clamp down on tax evasion and avoidance.
There are 957 business jets in the Isle of Man, and that seems a bit excessive for any island, anywhere. I hope that that will be investigated and that due tax is collected from those people who are trying to avoid it. Estimates of the scale of tax dodging range from £34 billion, which is around the size of our schools budget, to £119 billion, which is the size of the NHS budget. The Isle of Man VAT avoidance allegations are part of a wider leak from a Bermuda-based law firm said to be on a similar scale to the Panama papers. Will the Prime Minister commit HMRC to fully investigate all evidence of UK tax avoidance and evasion from this leak, and prosecute where feasible?
I have given the right hon. Gentleman an assurance in my first answer that HMRC does take these issues very seriously, does investigate and does take action, and that, where appropriate, tax loopholes are closed. What is important is to look at the record, and I have mentioned the additional £160 billion of compliance revenues since 2010. We have announced or implemented more than 75 measures since 2010 to tackle tax avoidance and evasion. The right hon. Gentleman referred to one that had been done by the Labour Government, and we have continued to act on this issue. We will be raising billions of pounds more as a result of that. I want to reassure him: I think most people would recognise that HMRC actually wants to collect tax. That is its job, and it looks to make sure that it can do so as much as possible.
Well, it is rather strange then that Britain has reportedly blocked a French-led proposal that would have placed Bermuda on the European Union tax haven blacklist. Perhaps the Prime Minister could explain why that would be the case. The Panama papers exposed many wealthy individuals and big businesses who avoided tax through offshore trusts. Labour backs any necessary changes to toughen our laws against aggressive tax avoidance. Just yesterday, we tried to strengthen legislation on the beneficial ownership of trusts, through amendments that we tabled to the Finance Bill. Why did the Government vote against them?
The right hon. Gentleman raises the issue of the British overseas territories. In fact, this Government have taken action in relation to those territories—action that was not taken by the previous Labour Government. If he is saying to me that the whole question of tax evasion needs constantly to be looked at and that the Government need to be prepared to act, my answer is, yes, we are and we will.
There is a strange pattern here. In 2015 alone, Conservative Members of the European Parliament voted against five reports that would introduce methods of fighting tax avoidance and evasion, and HMRC admitted last week that multinational companies avoided paying £5.8 billion in taxes in 2016. Despite that, HMRC is currently cutting another 8,000 staff. So will the Prime Minister assure the House that, instead of more cuts, HMRC will get more resources in the upcoming Budget to tackle the scourge of aggressive tax avoidance and evasion?
I have reassured the right hon. Gentleman that HMRC is acting, has been acting since this Conservative party came into government in 2010, and will continue to act. In asking these questions, the right hon. Gentleman might want to reflect on why, before the Dissolution of Parliament earlier this year, the Labour party refused to support anti-tax avoidance and evasion measures brought forward by this Government. His party stopped them.
My question was about why Conservative MPs opposed what Labour was proposing yesterday. Last month’s European Parliament committee of inquiry, set up in the wake of the Panama papers scandal, claimed that the UK is obstructing the fight against tax dodging and money laundering. Just last week, the EU’s Competition Commissioner announced an inquiry into UK taxation rules that may have institutionalised tax avoidance by multinational corporations. Is the Prime Minister not concerned that vital revenue to fund schools and hospitals is being lost? Will she change the rules in the Budget?
We have taken an extra £160 billion in compliance revenue since 2010. The right hon. Gentleman comments on measures that were proposed this week but, as I said in my previous answer, we would have had more anti-tax evasion measures in place if the Labour party had not blocked them before the last election. This party in government has not just been acting in the UK; we have been working with the Crown dependencies and with the British overseas territories, and we have been leading the world. It was a Conservative Prime Minister who put this on the agenda at the G7 and the G20 for international action against tax avoidance and evasion.
If we are leading the world, perhaps the Prime Minister could explain how the amount of income tax paid by the super-rich has fallen from £4.4 billion to £3.5 billion since 2009. Earlier this year, the Public Accounts Committee said that HMRC’s record of getting multi-millionaires to pay their taxes was “dismal” and that the super-rich were getting
“help with their tax affairs that is not available to other taxpayers.”
Our schools’ budgets are being cut, more people are waiting longer for treatment—[Interruption.]
Order. We tend to have large doses of this over-excitement every week, but I just give notice that, as usual, I would like to get to the end of the questions on the Order Paper and to facilitate Back-Bench inquiries as well. Members are eating only into their own time; I have all the time in the world.
Since Conservative Members get so excited, I must say it again: our schools’ budgets are being cut, more people are waiting longer for treatment on the NHS, and more elderly and disabled people are not getting the social care they need. When it comes to paying taxes, does the Prime Minister think it is acceptable that there is one rule for the super-rich and another for the rest of us?
The top 1% of earners in this country are paying 28% of the tax burden. That is the highest percentage ever, under any Government. Once again, the right hon. Gentleman is wrong. Over the next two years, £2.5 billion extra is being put into our schools as a result of decisions taken by this Conservative Government.
The right hon. Gentleman talks about spending on schools and hospitals, and I will tell him where the real problem lies. Today we spend nearly £50 billion in payments on interest to those we have borrowed from as a result of the legacy of the Labour party. That is more than we spend on the NHS pay bill, and it is more than we spend on our core—[Interruption.]
Order. The Prime Minister’s answer will be heard, as I indicated that the question from the Leader of the Opposition would be heard. Mr Gapes, you are a senior and cerebral denizen of the House. This excessive gesticulation is not good for you, man. Calm yourself.
We spend £50 billion every year on debt interest payments to people we have borrowed from. That is more than the NHS pay bill, it is more than our core schools budget and it is more than we spend on defence. That is the result of the economy we were left by the Labour party in government. And what does the Leader of the Opposition want to do? He wants to borrow £500 billion more, which would make the situation worse and would mean even less money for schools and hospitals.
My hon. Friend raises a very important issue, and I fully understand the concerns of the families. He talks about the timetable for decisions, and the Department for Transport has accepted the air accidents investigation branch’s recommendation to commission an independent review. The Department is working with the air accidents investigation branch to determine the exact scope of the review. The Civil Aviation Authority has accepted all the recommendations. Considerable work is going on to learn the lessons from this disaster, and obviously we are also committed to ensuring that, where there is a public disaster, people are able to have proper representation. I will ask the Lord Chancellor to look at the questions raised by my hon. Friend.
May I associate myself with the Prime Minister’s remarks about the zero tolerance there has to be for bad sexual practices and behaviour? I certainly commit my Members to working with the Government to make sure that we have a system that we can be proud of and that will protect all members of the Houses of Parliament.
I also pass on my condolences to the family and friends of Frank Doran on his untimely and sad death this week.
Can the Prime Minister tell the House how much a working single parent can expect to lose because of the roll-out of universal credit?
I am grateful to the right hon. Gentleman for agreeing to work across the House on this important issue. He refers to sexual misconduct, but it is important that any processes that are put in place not only look at sexual misconduct but look at issues such as bullying—that is also important.
The right hon. Gentleman has raised the roll-out of universal credit with me before. As he knows, the reason why we have introduced universal credit is to ensure that people are encouraged into the workplace and that when they are in the workplace they are able to keep more of the money they earn. I believe that that is an important principle. It underpins what we are doing and will continue to do so.
The reality is that new research shows that working single parents could lose an average of £1,350 a year because of the cuts to work allowances. Universal credit is fast becoming Theresa May’s poll tax. The Prime Minister has a habit of U-turning, so will she U-turn one more time and fix the problems with universal credit?
I have underlined the principle that lies behind universal credit, which I believe is a very important one. That is why when we look at the support that is given to people it is not just about the support they receive in financial terms on universal credit; it is also about the support they receive to help them to get into the workplace to ensure that they can actually meet the requirements of getting into the workplace and that when they are in the workplace they can keep more of the money they earn. That is an important principle. We will continue to roll out universal credit, looking carefully at its implementation as we do so, because we are doing this in a careful way, over a period of time. But the important principle is that universal credit is a simpler system that ensures people keep more as they earn more.
My right hon. Friend is absolutely right to say that we want to ensure that we take the advantages offered by modern technology. That is why these issues have been addressed in our industrial strategy and will continue to be addressed. We recognise that when we talk about infrastructure in this country, increasingly the IT infrastructure—the broadband infrastructure—is part of that; this is not only about the physical road and rail infrastructure. So we are investing £790 million in improving broadband, taking our public investment to £1.7 billion. We are also, as she says, leading the world in the development of electric cars, and we need to ensure that we have those vehicle charging points. So we have put in place, and are putting in place, grants and policy measures to ensure that we see those charging points so that people can take advantage of those new vehicles.
I thank my hon. Friend for raising this point. We all recognise the value of stable and strong families, and this is a cause she has championed, not only through her time in this House, but outside it. I am happy to join her in welcoming the development of family hubs, and I will certainly encourage Conservative mayors and councils across the country to be champions of them.
I am afraid I did not hear the end of the question. The hon. Gentleman stands up and waxes lyrically about his city of Dundee. He will recall that I was asked about Dundee’s city of culture bid last week, and I made the point that a number of places throughout the UK might put in bids. On the creative industries, I am pleased to see the development of the V&A in Dundee. The Tay cities deal will be important for Dundee and the whole Tay area, as other city deals in Scotland have been for the areas in which they have been agreed.
My hon. Friend raises an important issue. We are clear that proposals should be developed at a local level by local clinicians, while taking account of and listening to the views of local residents and local constituents on the relevant matters. It is important that local people are heard and know that decisions have been taken in the light of any concerns they have raised. I understand that any proposals for urgent care that are developed by the Gloucestershire STP will be subject to full public consultation in due course.
Over the past few years, both when I was Home Secretary and under my right hon. Friend the current Home Secretary, we have taken steps to ring-fence certain domestic violence funding over a period of time so that there can be greater certainty for organisations that work in this area. There is much for us to do, because sadly we still see domestic violence and abuse. One of the other steps we are taking is of course to bring in new legislation on domestic violence, which I hope will clarify the situation. Nevertheless, we need to address this through a wide variety of action.
First, I agree with my hon. Friend that we are proud to have some of the highest animal welfare standards in the world. We want to continue to have a reputation as a country with those high standards, so leaving the European Union is not going to change that. We remain committed to high animal welfare standards. Indeed, as he says, we may have the opportunity to enhance those standards so that we can further demonstrate to people this country’s reputation as a place where they can be safe and secure in the knowledge of the conditions in which their food has been prepared.
I am pleased to see that the number of children in absolute poverty has actually come down under this Government, but of course we need to be aware of the impact of decisions that have been made. We are looking carefully at the implementation of universal credit. Let me repeat what I said in response to the question asked by the leader of the Scottish National party, the right hon. Member for Ross, Skye and Lochaber, which is that the point of universal credit is that it is a more straightforward and simpler system, but also it helps people to get into the workplace and ensures that they keep more of the money that they earn. I think that that is important.
My hon. Friend stands up well for his county and constituency on this matter. I am very happy to confirm that we will maintain that commitment in our forthcoming industrial strategy White Paper. We do want to see a fairer distribution of infrastructure spending across the country because we know that infrastructure investment is important to unlocking economic opportunities, economic growth and productivity in our towns, villages and cities. We have backed that with ambitious commitments to increase our spending on infrastructure by 50% over the next four years, but I can assure him that we will be looking at that infrastructure spending across the whole country.
I will, of course, look back at the questions that the hon. Lady said that she raised with me in this House. I assume that she raised those with me when I was Home Secretary. I am very clear that the Whips Office—I hope that this goes for all Whips Offices across the House—should make it clear to people that, where there are any sexual abuse allegations that could be of a criminal nature, people should go to the police. It is not appropriate for those to be dealt with by Whips Offices; they should go to the police. That continues to be the case.
As I say, I will look at the questions that the hon. Lady raised with me, but I am very clear that we will take action against those where there are allegations that we see and the evidence is there that there has been misconduct. I say to her that I hope that we will all send a message from this House today that we want people in this place to be able to feel confident to bring forward cases, and we need to ensure that those cases are dealt with in a way that people can have confidence on both sides that they will be properly investigated. That means I want to see a good process in this Parliament, so that people do not feel that they have to go through a party political process to have their allegations considered.
I assure my hon. Friend that we recognise that the men and women of our armed services serve with great distinction and loyalty, and we are all grateful to them for the service that they give to this country. That is why we are committed to maintaining 2% of our GDP being spent on defence. He very kindly invites me to visit his constituency, and I will be very happy to do so if my diary allows.
A few days ago, the Chancellor told the House that the Government could not afford to borrow £50 billion to invest in housing because of the burden on the next generation. The Communities Secretary says that the Government must borrow £50 billion because of the burden of unaffordable housing on the next generation. Will the Prime Minister adjudicate?
There is no need to adjudicate. The Government absolutely agree that it is necessary for us to ensure that we are building more homes across the country. We have already announced policies to enable that to happen. A number of proposals were set out in the housing White Paper. I was very pleased to announce the extra £2 billion for affordable housing at our party conference, and the extra £10 billion for the Help to Buy scheme, which genuinely helps people to get their first foot on the housing ladder. We are seeing, and will continue to see, more houses being built under this Government.
Earlier this week in Llangammarch Wells in my constituency, a horrific farmhouse fire claimed the lives of a father and five young children. This has had a devastating effect not just on the family, but on the tight-knit community that surrounds them. Will my right hon. Friend join me and this House in sending our sympathies to the bereaved family and to everyone in Llangammarch? Will she also praise the outstanding work of our emergency services, who dealt with this appalling tragedy with true dedication and professionalism?
My hon. Friend has raised a very tragic case. I am sure that everybody across the whole House will want to join him in sending condolences to the family and friends of those affected by the fire. This was, indeed, a terrible tragedy. As he said, it is not only the family, but the local community who have been affected. The emergency services did sterling work. I am pleased to commend their bravery and professionalism in dealing with the issue. The Secretary of State for Wales has spoken to the police and they will remain in touch over the coming days. Once again, our emergency services do an amazing job protecting us, as we see in so many instances. They never know when they are going to be called out to such a tragic incident.
Given today’s news that the Electoral Commission is investigating Arron Banks, the main financial backer of Brexit, and given the significant British connections being uncovered by the American Department of Justice’s special counsel Robert Mueller in investigating Russian interference in the US presidential election, will the Prime Minister assure me that the UK Government and all their agencies are co-operating fully with the Mueller investigation or will do so if asked?
We take very seriously issues of Russian intervention, or Russian attempts to intervene in electoral processes or the democratic processes of any country, as we would with any other states involved in trying to intervene in elections. We do, of course, work closely with our United States partners. I assure the right hon. Gentleman that, as part of that relationship, we co-operate with them when required.
Last month I was in the Kurdistan region of Iraq—I refer the House to my declaration in the Register of Members’ Financial Interests—where I saw people’s enthusiasm for independence and a fresh dialogue with Baghdad. The subsequent military actions against the peshmerga by Iranian-backed militia and the Iraqi army are wholly unjust and completely unacceptable. Will the Prime Minister accept that the peshmerga and the Kurdistan region, to whom we owe so much both for resisting Daesh when the Iraqi army dumped their weapons and ran and for helping to keep our own streets safe, remain vital to our security? Will she do all she can to encourage a resolution based on full respect for the Iraqi constitution and the democratic will of the Kurdish people?
It is right that we are working with our international partners in the region to defeat Daesh together with the global coalition. Daesh is losing territory. The action being taken is having an impact on it; its finances have been hit, its leadership is being killed and its fighters are demoralised. But we do want to see political reconciliation in Iraq and a political settlement to the Syria conflict to deny Daesh safe space and prevent its re-emergence. My hon. Friend raises a particular point about Iraq and the Kurdistan region. The Government have always been clear that any political process towards independence should be agreed with the Government of Iraq. We want political reconciliation in Iraq and we have been urging all parties to promote calm, to pursue dialogue and to take this issue forward through dialogue.
An hour ago, the Government published a report by the Right Reverend James Jones, “The Patronising Disposition of Unaccountable Power”, which the Prime Minister commissioned to ensure that the pain and suffering of the Hillsborough families is not repeated. Given what we have heard in this session and given the events surrounding the Grenfell Tower disaster, I worry that the pain and suffering of the Hillsborough families is already being repeated. Will the Prime Minister commit her Government to supporting both a duty of candour for all public officials and, as the report requires, an end to public bodies spending limitless sums to provide themselves with representation which surpasses that available to families?
Obviously, the House will appreciate that I have to be careful about what I say in relation to Hillsborough because of ongoing criminal proceedings, but I want to pay tribute to the work of Bishop James Jones throughout: in chairing the independent panel, as my adviser on this issue and with the family forums. He has done an excellent job once again. His report into the experiences of the Hillsborough families, which has been published today, as the hon. Lady says, is important. The Government will need to look very carefully at the, I think, 25 points of learning that come out of it and we will want to do so. I have always been very clear that the experience of the Hillsborough families should not be repeated. That is why we have looked at and are committed to the concept of the public advocate. We want to ensure that people have the support they need and it is important that we learn the lessons of Hillsborough. As she knows, I was involved in making the decision that enabled the Hillsborough families to have legal support on a basis that I felt was fair in relation to the other parties involved in that inquest. I assure her that we will not forget the Hillsborough families, who have been dignified throughout the many years they have been waiting for justice. We will not forget them, we will not forget their experience and we will ensure that we learn from it to improve the experience of others in the future.
May I cheekily make a diary suggestion to the Prime Minister? If she could remain in the Chamber for just a few moments after questions, she will hear my right hon. Friend the Member for Newbury (Richard Benyon) introduce the Armed Forces (Statute of Limitations) Bill, which would provide protection to those brave service personnel who served in Northern Ireland during the troubles. Like her, and I am sure the whole House, I want to see the setting up of the Northern Ireland Executive, but does she agree that we cannot do that at the price of pandering to Sinn Féin and allowing a witch hunt for those people who served so bravely for so many years to uphold the rule of law?
I am not sure I am going to be able to satisfy my right hon. Friend on the first point he raises, but I can assure him that I am aware of the proposed legislation my right hon. Friend the Member for Newbury (Richard Benyon) is bringing forward. We all want to see the Northern Ireland Executive restored. We recognise that the question of legacy issues has been there throughout the discussions in Northern Ireland and continues to be. What I want to ensure is that any investigations that take place in the future take place in a fair and proportionate way. Our soldiers did serve bravely, as my right hon. Friend says, in upholding the rule of law. It is important that we never forget all the people who lost their lives at the hands of the terrorists in Northern Ireland and it is important that any investigations are conducted fairly and proportionately.
As the Prime Minister will be aware, self-employed people are not eligible for shared parental leave. This places the burden of childcare on the mum, and denies fathers financial support and bonding time with the child. Has the Prime Minister seen the demands of the March of the Mummies, and can she give us assurances that she is prioritising this very urgent issue?
The hon. Lady raises an important issue and I am happy to look at the point that has been made, but I remind her that the reason we have shared parental leave for anybody is because when I was Minister for Women and Equalities I ensured it was introduced.
In my constituency, one of the big challenges as we leave the European Union is the uncertainty about the seasonal migrant workforce. Angus produces 30% of Scotland’s soft fruit and welcomes over 4,000 seasonal workers every year. Does my right hon. Friend agree that we need clarity on the new migration framework— for the benefit of these loyal workers, for the prosperity of our British soft fruit industry and to support the overall rural economy of our United Kingdom?
My hon. Friend raises an important point about the importance of supporting the rural economy across the whole of the United Kingdom. In relation to the seasonal agricultural workers scheme, which she has referred to, obviously we will, as we leave the European Union, be bringing forward new immigration rules, which will enable us to have that control that we have not had in the past for those coming from the European Union. We recognise that we need to do that in the national interest. We need to look at the needs of the labour market, and that is why my right hon. Friend the Home Secretary has commissioned the independent Migration Advisory Committee to look at the needs of the UK labour market and to further inform our work as we bring those new immigration rules in. The issue my hon. Friend has raised is one they will look at.
Armed Forces (Statute of Limitations)
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 create statutory limitations on court proceedings against current and former members of the armed forces for certain alleged offences committed during military operations or similar circumstances; and for connected purposes.
Everyone in this House, and particularly those of us who have served in the armed forces, wants our armed forces always to be seen as the most professional in the world. This means we want them to abide by the strict codes of behaviour we impose on them and, in addition, to abide by the international rules of war.
In the Balkans, Iraq, Afghanistan, Northern Ireland and elsewhere, we have asked our armed forces to operate in highly complex war-fighting scenarios. Almost to a man and a woman, they have acquitted themselves in the finest traditions of the three services. The reputation of this country and our armed forces has been enhanced by their professionalism, restraint, compassion and courage.
There is a problem, however. First, there has emerged out of the Iraq conflict an industry in which lawyers—sadly, often dishonest lawyers—have used vast amounts of public money to attempt to bring cases against current and former members of the armed forces. If there was any truth in these cases, that would be one thing, but the abject failure of the allegations to stick shows how vile and corrupted the process became.
The Government were right to close down the Iraq Historic Allegations Team. The organisation was processing over 3,000 cases, which gives an indication of the absurdity of some of those claims. My understanding is that just 20 cases were running at the time of IHAT’s demise, and none of those is believed to be viable by prosecutors.
My Bill would bring an end to what has become known as “lawfare”. Never again would dreadful individuals such as Phil Shiner be able to line their pockets, or the pockets of their legal firms, with vast amounts of public funds while pursuing our veterans into old age.
My Bill would set a statute of limitations beyond which it would be impossible to bring a case against any individual about whom an allegation was made regarding actions he or she took while serving on operations. I would argue that 10 years is the right period for which to legislate. I fully accept that there would have to be caveats and exceptions, and my Bill would define what we mean by operations. A decade gives plenty of time to bring forward legitimate cases in which real wrongdoing has occurred, and it is about the timescale after which evidential trails start to run cold. The House should be indebted to the Defence Committee, under the leadership of my right hon. Friend the Member for New Forest East (Dr Lewis), and the Sub-Committee that met under the leadership of my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), because their work on this issue has informed the Bill.
Later this month in Belfast, a 78-year-old man will face charges including attempted murder. Dennis Hutchings was an exemplary soldier who ended his career as a senior warrant officer. He has a severe heart condition and only 11% kidney function. The allegations against him relate to an incident in 1974 when a patrol he was leading in Northern Ireland—this was a time of intense terrorist activity—fired on an individual, who was killed. In 1975, he was told that no action would be taken against him or any member of his patrol, and that was confirmed many years later with a similar message from the Director of Public Prosecutions.
So what has changed? No new evidence is being laid before the courts—in fact there is less evidence, as two of the three witnesses are dead—and the firearms, casings and original file have been lost, but the Northern Ireland Director of Public Prosecutions claimed in January that new evidence had come to light. Many fear that we are seeing a form of retributive politics. Extreme nationalist-leaning individuals in the Northern Ireland justice system have decided to reignite such investigations.
The Government have rightly said that there should be no bias in how such investigations are carried out but, unfortunately, there already is a bias. Of the 3,600 deaths in the troubles, 90% were at the hands of terrorists. These were people who went out with the express intention of killing and maiming. The security forces went out with the express intention of saving lives. I spent most of my time in the fields and streets of Northern Ireland—most of my early 20s were spent there—protecting prison officers, reservists and police officers from being assassinated in or near their homes. So please can we end this argument that there is some kind of equivalence between terrorists and the security forces? There is a limit of two years for any former terrorist found guilty after the Good Friday agreement was signed. Many feel that the on-the-runs letters, which were part of the Good Friday agreement, effectively give terrorists a statute of limitations.
More than 300,000 people served in Op Banner in Northern Ireland between 1969 and 2007. Those of us who are still alive will testify to the complexity of that operation. Many of us, myself included, witnessed acts of extraordinary restraint and professionalism by young soldiers in the face of extraordinary provocation.
Like most Op Banner veterans, I have been moved by the ability of community leaders and politicians to bury the enmities of the past, and to enter government with those who killed, or ordered the killings of, people they knew. Of course there are ongoing tensions in Northern Ireland, and we all hope these can be ironed out in the coming weeks and months. However, in the main, what Northern Ireland has done in the last few years is so impressive—it is moving on. It is moving on from the horrors of killing and maiming.
Terrorists who would otherwise be in prison walk free under the terms of the Good Friday agreement. The person who slaughtered seven members of my battalion’s band while they were playing to tourists in Regent’s Park is known to the authorities but is not pursued. So why is Dennis Hutchings being pursued? Why are we now facing the possibility of many more veterans receiving the knock on the door? My Bill would end this nonsense. Op Banner ended 10 years ago, and so would all pursuits of veterans into old age by a flawed and, some would argue, deeply prejudicial judicial system.
If we discuss this with any audience, we get a clear message that unites left and right, old and young, and people who have a detailed knowledge of military matters and those who have none. They want to draw a line under the troubles. For them, hounding Dennis Hutchings and others to the ends of their lives is abhorrent.
Those who agree that these prosecutions and investigations are wrong, but disagree that this is the way forward, have to answer some clear and resounding questions. What would they do to end this grotesque charade? Do we just put up with it and hope that no one notices? Can we imagine any other country in the world doing this to its veterans? Do we really want to see people who should be appreciated—even revered—for what they did being taken from their homes, questioned, and prosecuted for actions they took on our behalf many decades ago in one of the most impossible campaigns of modern times? It is time for this House to reflect the mood of the vast majority of people in society.
Question put and agreed to.
That Richard Benyon, Richard Drax, Emma Little Pengelly, Dr Julian Lewis, Johnny Mercer, Mrs Madeleine Moon, Jim Shannon, Bob Stewart, Leo Docherty, Mr Kevan Jones, Sir Nicholas Soames and James Gray present the Bill.
Richard Benyon accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 15 June 2018 and to be printed (Bill 120).
[4th Allotted Day]
Armed Forces Pay
I beg to move,
That this House notes that the pay of Armed Forces personnel has been capped at 1 per cent in 2017-18 and that this represents another below inflation pay settlement; further notes that the size of the Army, Royal Air Force and Royal Navy and Royal Marines is below stated targets; notes that dissatisfaction with pay has been identified by service personnel as a reason for leaving their respective force; and calls on the Government to end the public sector pay cap for the Armed Forces and give Armed Forces personnel a fair pay rise.
Our armed forces represent the very best of what this country stands for. Across the House, we recognise their dedication and their professionalism and, especially at this time of year, we honour the sacrifices that they make on our behalf. Yet when it comes to their pay, our armed forces personnel have not been treated with the fairness and decency that their service deserves. In every year since 2010, the Conservative party in government has made a conscious decision to give our brave men and women a real-terms pay cut. As a result, regardless of rising rents in service accommodation and cuts to tax credits, the pay that service personnel receive has lagged way behind inflation in each of the past seven years. This sorry state of affairs means that the starting salary of an Army private has been cut by over £1,000 in real terms since Labour left office. Is it any wonder that the Government are presiding over a crisis in recruitment and retention?
Of course, pay is very important. However, does the hon. Lady accept that in a survey conducted among 12,000 members of the armed forces this year, pay did not feature in any of the top five categories, and that in fact the Government are doing a huge amount to ensure that terms of employment are right and that the armed forces have a good service model?
I am not quite sure where the hon. and learned Lady has been, because that is not evident in the materials that I have been reading. For example, AFCAS—the armed forces continuous attitude survey—clearly states that two thirds of personnel do not find levels of pay satisfactory. That is one of the main reasons why people consider leaving the armed forces.
I do not want to drone on about it, but I was in the Army for 14 years, and not once has someone spoken to me about their pay. Looking incrementally at how we are paid compared with our NATO allies or those in the US, the British armed forces have a respectable pay deal that goes up each year in pay bands with the X factor. It is simply disingenuous to say that there is a military out there that is deeply disaffected by how much it is paid.
It surprises me to hear the hon. Gentleman say that, because not only do we have the evidence in the AFCAS report, but the pay review body itself has talked about frustration with levels of pay and identified that as a real source of concern within the armed forces. I think we must be living on different planets.
Perhaps it depends on where you come from, because certainly in Wales plenty of people are complaining to me about pay issues in the armed forces, and people are struggling to cope with their bills. People have rung me this morning concerned about press reports on the cutting of the £29-a-day allowance for service in Iraq, which they see as a further cut to their capacity to cope while remaining in the armed forces. I thank my hon. Friend for bringing this debate forward today. It is an issue and I am glad we are here to discuss it.
I represent Chetwynd barracks and am very proud of the great service of the Royal Engineers there, and I am a former Minister in the Ministry of Defence, with responsibility for welfare. I have to say that pay was not, and is not, on the list of concerns of those constituents who serve so well in our armed forces. Accommodation is another matter, but it is not about pay. With great respect to the hon. Lady, perhaps those listening to this are not being done a great service. There are other issues about our armed forces that we should be debating, but not this one.
I find the comments of Conservative Members quite astonishing, because I remember as a Defence Minister being harangued by Conservative Members in opposition arguing that we did a bad deal for the armed forces, even though we accepted the pay review body’s recommendation. With regard to the X factor, in 2013 the pay review body chairman was sacked because the Prime Minister at the time, David Cameron, did not want to recommend an increase in the X factor.
My hon. Friend refers to an absolutely shocking situation. It is very disappointing that Conservative Members are starting this debate on such a negative note.
More and more personnel are choosing to leave the armed forces, and every one of the services is shrinking in size. A recent Government-commissioned report by the right hon. Member for Rayleigh and Wickford (Mr Francois) found that recruitment to the services was “running to stand still”, leading to the “hollowing out” of our armed forces. Yet rather than getting to grips with this problem, the Conservatives’ record is a litany of missed targets and broken promises. Their 2015 manifesto pledged to keep the size of the Army above 82,000. That was hardly an ambitious target, considering it was well over 100,000 when Labour left government, but miss the target they did, and the trade-trained strength of the Army is now just 77,600.
The figure of 82,000 had mysteriously disappeared by the time of the Conservatives’ 2017 manifesto. That fateful document simply promised to
“maintain the overall size of the armed forces”.
We can add that pledge to the rubbish pile along with the rest of the Tory manifesto, because since June’s election we have seen a reduction in the size of the Army, a reduction in the size of the Royal Navy and Royal Marines, and a reduction in the size of the Royal Air Force. Now we are in the shameful position where the Defence Secretary cannot rule out cuts to our Royal Marines, or even promise that the Army will not shrink further.
The Government may be complacent about the diminishing size of our armed forces, but we are not. At a time of immense global uncertainty—
I was for 15 years chair of the defence unions and responsible for our membership of the Commonwealth War Graves Commission in north-west Europe, where 80% of our war dead are buried. I saw at first hand their heroism and their history. Does my hon. Friend agree that at a time when our country faces an ever more serious threat to our national security, it is absolutely wrong to cut tens of thousands from the armed forces and to say that those who remain will suffer a pay cut?
The hon. Gentleman needs to take cognisance of the fact that in every year we were in office, we spent considerably more on defence than the 2% of GDP commitment. In fact, in our last year in office, we spent 2.5% of GDP on defence—a figure that this Government have never matched.
I am a former soldier and not a mathematician, but I suggest that the hon. Lady studies the figures that the Ministry of Defence has released, which show that in 2015 its annual budget was £34.3 billion, and that in 2020-21 it will be £39.7 billion. That number is clearly going up, so overall the budget is increasing. To characterise the situation as a landscape of cuts is, frankly, erroneous.
Indeed, the number needs to go up, because costs are escalating. We have said clearly that we would match that increase, but I have to tell the hon. Gentleman that costs are escalating far higher than that figure will accommodate.
At this time of immense global uncertainty, we cannot allow numbers to continue to slide, month after month, while all we get from the Government is warm words and crippling complacency. The Government’s chosen recruitment partner, Capita, is completely unfit for the job at hand. We have had warning after warning that Capita has not fulfilled its basic obligations, but as the number of personnel recruited continues to fall, the amount paid to Capita has grown and grown.
We propose to take real action to begin to address that state of affairs, by lifting the public sector pay cap and giving our forces a fair pay rise. I recognise that that alone would not be a silver bullet for the crisis in recruitment and retention, but we know from personnel that pay is one of the main reasons why they choose to leave our armed forces. Satisfaction with basic rates of pay and pension benefits is at the lowest level ever recorded. The Armed Forces Pay Review Body has found that there is an
“over-riding sense of uncertainty and an increasing view that the offer will only get worse”.
Barely a third of service personnel are satisfied with their basic pay, and 42% have said that pay was a push factor for them in choosing to leave the forces. Is that any wonder, when our servicemen and women have had to shoulder real-terms pay cuts that have left them badly worse off? Between 2010 and 2016, the starting salary of a corporal fell by nearly £2,000 in real terms, whereas for a flight lieutenant that figure was £2,800.
At the same time as they have been hit by real-terms pay cuts, our servicemen and women have faced rising costs in forces housing because changes to charges for service family accommodation mean rent increases for nearly three quarters of occupants. The Government’s future accommodation model risks adding to that pressure because it fractures forces communities by forcing service families into the private rented sector, with all the additional costs that that brings to them and the taxpayer. The Armed Forces Pay Review Body has warned of a “perfect storm” for personnel who face increases in rent and national insurance contributions, at the same time as their pay is cut in real terms.
Let us be in no doubt that the responsibility for the below-inflation rises lies firmly with the Government. Since the Government lost their majority at the general election, Ministers have made great play of the supposed independence of the Armed Forces Pay Review Body. They would have us believe that the pay review body sets the rates and Ministers merely implement them, as if it were some coincidence that the body had not recommended an above-inflation rise since 2010. But that is little more than a cynical attempt by Ministers to shirk responsibility, because of course they instruct the pay review body to work within the context of the cap. Despite all the warm words from the Secretary of State and Ministers, the Treasury has said that it will not fund increases above and beyond the 1% cap; that is a fact.
Does my hon. Friend agree that the situation is worse than that? The idea is that the pay review body should be independent and able to make recommendations for Ministers and the Government to look at, but in 2013 the then Prime Minister sacked Alasdair Smith, the chair of the pay review body, because he made recommendations that the Treasury and the Government did not like. Does she agree that that is outrageous?
I am listening carefully to the points that the hon. Lady makes, and as a current reservist I have every sympathy with the idea that pay should rise. However, does she appreciate that within ranks in the armed forces there is pay progression? It is right to talk about starting salaries, but one also has to appreciate that pay will progress within particular ranks.
Has the hon. Lady taken into account the non-contributory pension that applies to the armed forces? Despite the fact that the 2015 changes represented a deterioration in terms and conditions, the pension still represents a wonderful gold standard that is the envy of both the public and private sectors.
In any career, one would hope to have career progression. The hon. Gentleman also refers to the fact that the pension offer is not as generous as it once was. The problem is that people still face a perfect storm of rising costs and pay that is not keeping up with those costs.
Does my hon. Friend agree that our Conservative colleagues seem to be confused about the difference between a pay rise and a pay increment? Those are two very different things; one of them is an entitlement and the other is in the gift of the Government.
My hon. Friend expresses that perfectly.
Of course, the pay review body can recommend a higher award for a specific group of personnel, but if it did so, it would have to reduce increases for others. In other words, it would be robbing Petra to pay Paula. Even when increased pressure on recruitment and retention has been raised with the pay review body, it has been unable to recommend a pay rise to deal with the problem, given the Treasury’s insistence that it will not provide the funds.
Rather than passing the buck, is it not time for the Government to do the right thing and lift the public sector pay cap across the board so that our armed forces and, indeed, all public sector workers—firefighters, nurses and ambulance workers—get the pay award that they deserve? That is a popular policy that commands support across the country. More than three quarters of voters, including 68% of Conservative voters, want to give public sector workers a pay rise. I hope that that straightforward proposal will command support in the House this afternoon.
Let us remember that while other public sector workers have unions to work on their behalf, our armed forces do not, so it is all the more important that we in this House speak up on their behalf. I say to Conservative Members that there is no point in saying that they back our forces personnel if they refuse to stand up for them when it counts. There is no point Conservative Members pretending that they want forces’ pay to improve if they are not prepared to vote for it. Members should listen to what our service personnel are telling us. The pay review body has found:
“Service personnel are becoming increasingly frustrated with public sector pay policy. They feel their pay is being unfairly constrained in a period when costs are rising, private sector earnings are starting to recover, and the high tempo demands on the Armed Forces have not diminished.”
Those men and women work tirelessly to keep us safe. Surely the very least they deserve is fair pay for their service.
The fact is that we cannot do security on the cheap. Whether we are talking about moving the goalposts so that we barely scrape over the line to meet NATO’s 2% spending target, cutting corners with short-sighted defence cuts that have weakened our defence capabilities or imposing a public sector pay cap on our brave armed forces personnel, the Government simply will not stump up the cash to invest in our national security. I make this challenge to Conservative Members: they have talked the talk, but are they prepared to walk the walk into the Lobby with us this afternoon and show the courage of their convictions in their vote?
I am grateful to the Opposition for giving me the opportunity to discuss armed forces pay. The motion reflects a shared sense on both sides of House of the value our armed forces bring to the nation. It reflects an appreciation of their unparalleled bravery and enormous efforts all around the globe—whether fighting Daesh in the middle east, providing vital reassurance to our Estonian allies against Russia aggression, or bringing essential humanitarian aid to those whose lives have been devastated by hurricanes in the Caribbean. Lastly, it reflects a desire that those who put their lives on the line should receive the reward that is their due. At the same time, the motion presents but a partial picture of a complex issue, so I welcome this opportunity to correct some the misconceptions and provide some of the missing context.
I was going to say 2.14%, but it is 2.16%.
First, there is the broader fiscal context. We should not forget why pay restraint was imposed in the first place back in 2010. It was a consequence of a large inherited economic deficit. The whole public sector, not just our armed forces, was subject to the same conditions. Given that a huge chunk of the defence budget is spent on personnel—currently, just under £9 billion, which is more than we spend on equipment support—the MOD had an important part to play in supporting the Government’s efforts to restore the UK’s economic credibility. After all, a stronger economy means stronger defence. Having taken those tough decisions, we have since seen the deficit reduce by three quarters and the economy grow, while taxes are low and employment is high, which benefits us all.
Most of us in the Chamber sat through the proceedings on the ten-minute rule Bill, and no one spoke against it. Tribute was paid to the courage, the service and the sacrifice of our armed forces—not only in Northern Ireland, but in Iraq—and the Minister put his tribute on the record at the beginning of his response. There is a moral obligation, so I do not want to hear about fiscal reasons. I want this Government to recognise their moral obligation and duty to our armed forces and to lift the 1% pay cap in recognition of the armed forces’ courage and sacrifice for the country and the Queen.
I will move on in a moment to that very question. I would add that many of us also sat through Prime Minister’s questions, and I would simply refer the hon. Lady to the very powerful argument that the Prime Minister made in response to the question from my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) on the very subject she has raised.
The second point this motion ignores is the impact of pay progression. Officers and other ranks are tied to incremental pay scales, and they routinely and regularly move up the bands. The hon. Member for Llanelli (Nia Griffith) talked about privates. The average private soldier starts on a salary of £18,673. After one year, through incremental pay alone—not including the 1% pay increase—that rises to £20,029, which is an increase of 7.26% in one year. After three years, the salary rises to £21,614, which is an increase of 15.8%, not including the 3% increase that would have been given. That is an increase in pay of almost 20% over the three years.
The Minister is wrong. The point is that, in any job, people get a pay increase because they are being trained and their ability to serve increases as that goes on. The fact is that the yearly increases my hon. Friend the Member for Llanelli (Nia Griffith) mentioned affect a private’s pay because they affect the levels of the bands and the percentages. He cannot argue that, just because somebody gets pay progression, not giving them an increase in their basic pay every year will not affect their ultimate pay. Of course it will.
I am slightly worried about the hon. Gentleman’s approach. We have actually been great friends in this House for many years, so I am somewhat surprised that he called me disingenuous. I am sure that I will get my revenge at some point. As somebody who continues, after 29 years, to serve in the armed forces, I would like to think that accusing me of all people of being disingenuous when it comes to the armed forces is slightly unfair. I like to think that I have done my bit.
At the end of the day, I do not think that a private soldier receiving £18,673 in their pocket on day one—admittedly before tax—and then receiving £21,614 after three years will care too much whether that is due to pay progression or annual increases; it is money in their pockets.
Order. The hon. Member for North Durham (Mr Jones) should not keep hollering from a sedentary position in evident disapproval of the stance taken by the Minister. Apart from anything else—he is chuckling about it—it is marginally discourteous to his hon. Friend the Member for St Helens North (Conor McGinn), who had requested an intervention and had it granted, before it was ripped away from him by the hon. Gentleman’s unseemly behaviour.
Talking about the figures, I was very concerned to read in the London Times this morning that the Government are considering scrapping the £29 deployment allowance that applies to soldiers on the frontline in Iraq. The Minister is an agreeable chap, and I would like to give him an opportunity to deny that categorically at the Dispatch Box.
I am a very agreeable chap, but this is yet more speculation from The Times. No decision at all has been made to scrap the operational allowance. Every year since the operational allowance was introduced 12 years ago, there has been a review of where it should and should not apply. Soldiers have not been told that they will not receive it when they go to Iraq. I am deeply proud that this Government have doubled the operational allowance from £14 to £29. Finally—to get the last word, for the time being at least, with the hon. Member for North Durham (Mr Jones)—none of those figures takes into account the substantial rise in the personal tax allowance introduced while this Government have been in power.
I will not give way at the moment—I am taking my revenge—but I am sure he will get another chance.
Despite fiscal constraint, salaries in the armed forces throughout this period have not stagnated. Indeed, they have actually risen on average by 1.5%. What is more, the MOD has the option of introducing targeted payments where there are particular recruiting and retention issues. These payments can range from time-limited financial incentives through to longer-term recruitment and retention payments that recognise the particular challenges we face in retaining certain specialisms, such as military pilots or submariners.
That brings me to the third aspect of the pay story, which has been conveniently glossed over. Joining our forces comes with a range of often unacknowledged additional benefits: a non-contributory pension scheme, subsidised accommodation and food, access to free medical and dental care, and allowances packages—I have just mentioned one of them—towards additional costs. It is therefore unsurprising that pay is neither the primary reason why people enter the service, nor the primary reason why they leave.
Let us be absolutely clear: the subsidised accommodation costs that our service personnel are charged are approximately two thirds—I repeat, two thirds—of what they would pay in the private sector. There has been a readjustment across the range, because some of the bands were completely out of date. For example, accommodation was graded according to how far it was from a public telephone box. What relevance does that have in 2017 compared with access to broadband? So there was a readjustment, but let us not forget that members of the armed forces pay considerably less than they would if they worked in the private sector.
I am glad to hear my hon. Friend talk about non-pay benefits. My constituents at Catterick garrison and at RAF Leeming most often talk to me about the day-to-day hassle and unfairness they face as a result of their service. To that end, will he confirm the Government’s commitment to the armed forces covenant and perhaps develop further what they are doing to ensure that nobody is penalised by their service in our armed forces?
I am delighted that perhaps we have a moment of consensus across the House when we talk about the military covenant. It is indeed one of the success stories of recent years. When I was in my previous role, which is now filled by the Under-Secretary of State for Defence, my right hon. Friend the Member for Bournemouth East (Mr Ellwood), we managed to convince the nation of the value of service, and to see so many companies signing up to the armed forces covenant—well over 1,400—is a testament to its success. Indeed, every local authority in England, Scotland and Wales—
I thank the Minister for giving way. May I take him back to his comment about military salaries rising in real terms? Can he explain to the House why the Ministry of Defence publication of 1 September 2017 states:
“Fig. 11 highlights that growth in military salaries fell below inflation from financial year 2010/11 to 2014/15.”?
Will he source where his evidence is coming from, as opposed to the evidence that the rest of us are having to rely on, which is taken from the MOD’s own website?
Will the Minister give way?
I have been generous, but I am going to make progress. I will give way again before I finish my speech.
In other words, when it comes to armed forces pay, context is all, and the decision to award a 1% pay increase in 2017 did not happen in isolation. It followed a recommendation by the Armed Forces Pay Review Body and the Senior Salaries Review Body. They were clear that their decision
“broadly maintained pay comparability with the civilian sector”.
Critically, the AFPRB and SSRB are independent organisations that make annual recommendations. Their reports are detailed, comprehensive and take time to compile. For 2016-17, they gathered written and oral evidence from everyone from the Defence Secretary down, including more than 2,300 service personnel and 154 spouses. They held 186 discussion groups before arriving at a decision. Such a thorough, evidence-based approach is precisely why it would be wholly wrong to start introducing ad-hoc in-year reviews, as some people have suggested.
Focusing solely on the pay award also excludes the other reforms we have made to pay—reforms supported by the AFPRB itself. For example, in 2016 we introduced a new pay scheme, more effectively to reward personnel for their skills and simplify an individual’s pay journey. Consequently, people are better able to predict their future career earnings and make better-informed decisions.
At the same time, we recognise that, in an increasingly competitive world, we need to do more to plug skills gaps in parts of the public sector, such as engineering, if we are to continue delivering world-class public services. That is why the Government’s recent announcement that greater flexibility will be available in public sector pay remains key. It means the independent pay review bodies can now make their own judgements on future pay awards to mitigate any potential future impact. So, for 2018-19, the AFPRB will no longer have an across-the-board requirement to keep its recommendations within a total 1% maximum award. But let us not jump the gun. The 2018-19 armed forces pay review is still to come. It will be agreed as part of the budget process and we expect its recommendations early next year.
The Minister is extensively quoting the AFPRB, but it is also clear that it says that
“if inflation continues its upward trajectory, we could foresee recruitment becoming more challenging and morale being adversely impacted... we would need to consider very carefully whether a one per cent average limit on base pay was compatible with continued operational effectiveness”.
He knows my concerns about the recruitment figures and that I accept that pay is not the only issue affecting recruitment and retention, but will we see those recruitment figures going up, and will he listen to what the AFPRB is clearly saying?
Over the past year, we have seen 8,000 applications to the Army, which is an increase of some 20% on the previous year, but I am interested in the hon. Gentleman’s view. I was deeply surprised to discover while reading a national newspaper that part of Labour’s plan is to use the money for marketing—some £10 million a year—as one source of income to give soldiers a pay increase. We have approximately 150,000 armed forces personnel, so that would be an increase of about £5.50 a month per member of the armed forces, but it would involve scrapping the one thing that delivers recruiting. So, no marketing budget for a bottom-fed organisation? Does he agree with that? Does he agree with the plan of his Front Benchers to scrap the marketing budget?
Marketing is obviously a crucial part of the recruitment process, but the Minister needs to be clear. He has given me an answer that makes it clear that every single course—including those at Catterick in the constituency of the hon. Member for Richmond (Yorks) (Rishi Sunak), who has just left—is under-recruited. Every single course at Sandhurst since 2015 has been under-recruited. It is his Government who are leading us to this recruitment crisis. Pay is one part of that, and a crucial part, but he is the Minister and he is in charge.
So we have a crucial marketing budget. Would that be scrapped? I am going to Catterick in two weeks to be the passing-off officer for the latest group of Gurkhas to pass off. That is a fully recruited course; not all courses are, but I am delighted to say that the last Sandhurst course was also fully recruited.