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Commons Chamber

Volume 639: debated on Tuesday 17 April 2018

House of Commons

Tuesday 17 April 2018

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Tax Avoidance and Evasion

Since 2010, Her Majesty’s Revenue and Customs has secured more than £175 billion that would have gone unpaid and introduced more than 100 new measures to crack down on tax avoidance, tax evasion and other forms of non-compliance, so that the tax gap is now at a record low, and one of the lowest in the world, at 6%.

It is extremely encouraging that the UK tax gap is at a record low, but it appears that multinationals are trying to run rings around HMRC, so will my right hon. Friend outline what further steps the Government are taking to build on that excellent success?

I am grateful to my hon. Friend for raising this issue. It is a great achievement to have got the tax gap down to one of the lowest in the world, but we are not complacent. We are currently calling for evidence on whether online platforms should play a greater role in ensuring tax compliance by their users; we are consulting on an innovative split payment method to tackle online VAT fraud; and we will continue to lead in the G20 and other forums on seeking agreed multilateral solutions to the challenge of where and how to tax global digital companies, which are particularly difficult to tax under the current system.

I echo the praise for HMRC’s performance in tackling tax avoidance and evasion over recent years. Is the Chancellor becoming more convinced of the importance of having public country-by-country reporting, so that not only HMRC but customers and campaigners can see where multinationals are making their profit? That way, we can make sure that they are paying the right tax in the right countries.

As my hon. Friend will know, the UK was one of the first countries to implement the OECD model for country-by-country reporting to tax authorities. Those reports have been required for periods that started on or after 1 January 2016. On public reporting, the Government are committed to a multilateral approach to ensure that reporting provides comprehensive information and is fair between UK-headquartered and non-UK-headquartered multinationals. We are engaging constructively on the EU proposals for public country-by-country reporting, which we see as a step in the right direction.

The Chancellor will be aware of President Macron’s proposal for taxing the revenue of the big internet platforms, which the Chancellor acknowledges are difficult to tax under the existing rules. Are the Government considering building on the entente cordiale of recent days by co-operating with and learning from the French model for how we should tax that revenue?

I would not call it a French model; it is a Franco-German initiative. We have been working closely with the French and the Germans on this issue. We discussed it at the G20 in Buenos Aires a couple of weeks ago and we will discuss it again at the informal ECOFIN meeting in Sofia at the end of next week. The Government’s position is that we are supportive of the EU proposals, but we want to be clear that any such measure can only be a temporary solution. The long-term solution has to be an agreed multilateral approach to the taxation of the digital economy. That requires us to get the United States on side, because most of these global digital companies are domiciled there. Without the United States’ co-operation and support, it will be difficult to make any tax system sustainable.

It is critical that HMRC collects tax correctly. To that end, will Ministers tell me when I am likely to receive a reply to my letter of 6 February regarding the Roadchef case? HMRC is still to settle with the Roadchef employees benefit trust in respect of money paid to HMRC as tax in error.

My right hon. Friend the Financial Secretary to the Treasury tells me that he agreed to meet the hon. Gentleman but has not heard from him to arrange a meeting. Let me reiterate on my right hon. Friend’s behalf that he would be happy to meet the hon. Gentleman to discuss this case.

Young Philp was standing a moment ago. The fella has stopped standing. Do you want to get in there, man? Go for it.

Thank you, Mr Speaker; I could hardly resist such encouragement.

I wished only to say how much I welcomed the Government’s recent paper, published by the Financial Secretary—[Interruption.] There is a serious point. The paper on corporate tax and the digital economy demonstrated again that this country is showing leadership. I encourage the Treasury to look into working with the European Union on a sales tax, and even to consider a user tax, if we can do that more quickly.

Thank you for your very carefully tailored piece of demand stimulation, Mr Speaker. It was much appreciated for the economy of the Chamber.

My hon. Friend is right. As I have already said, working with the EU on this interim proposal for a turnover-based tax is, we believe, the right thing to do. We have, of course, also introduced an interim measure of our own, seeking to tax licence fees that are paid to low-tax jurisdictions where we judge that the underlying basis of the licence fee is economic activity taking place in the UK. We have that measure already in place, and we will continue to work with the EU on its proposed measure.

Despite promising to tighten up on Scottish Limited Partnerships, not a single non-compliant SLP appears to have been fined, which could have raised up to £2.2 billion. When will SLPs be banned, and what action are the Government taking on other shell companies to stop tax fiddling and money laundering?

The hon. Lady asks a specific and detailed question about Scottish Limited Partnerships. The legislation is designed to deter the kind of activity to which she refers. The absence of fines should not be taken as an indication of an absence of activity. As she will know, Her Majesty’s Revenue and Customs always seeks, first of all, to deter non-compliant behaviour before it moves into hard compliance. If I may, I will write to her with a more detailed answer on the very specific point about Scottish Limited Partnerships.

To follow up on that question about Scottish Limited Partnerships, I am concerned that the Chancellor is not able to stand up and talk about tangible action that he is taking on this matter. This has been a live issue for a very long period of time. Will he commit to taking action on Scottish Limited Partnerships?

What I can commit to the House is this: wherever HMRC detects non-compliant behaviour, it will act, but it is for HMRC to determine how best to act in individual cases, and it is right that Ministers do not have direct involvement in HMRC pursuing individual cases. I will write to the Opposition spokesman, the hon. Member for Oxford East (Anneliese Dodds), and I am sure that the hon. Member for Aberdeen North (Kirsty Blackman) will be interested in that reply.

There were 2,800 Scottish Limited Partnerships registered last year, only 1,100 of which have registered persons of significant control That is a very low percentage. Of that 1,100, 172 are registered as belonging to Russian individuals. Given all that is happening just now, it is vital that the Chancellor takes urgent action on this—not just a letter at some point in the future. This needs to happen as soon as possible.

I will ensure that the hon. Lady gets the letter as soon as possible. It is right to focus on groups that are using structures for non-compliance or purposes that we would wish to deter, and HMRC will always do so. I will update her by letter, hopefully later today.

Tax: Small Businesses

I thank my hon. Friend for his question. The Government are bearing down tirelessly on the tax burden on businesses of all sizes, reducing corporation tax from 28% for large companies in 2010 to 19% today, and for small businesses from 21% to 19%. We will go still further, reducing the burden to 17% by 2020. For unincorporated businesses, we are, of course, increasing the personal allowance, in the previous Budget, to £11,850. That will increase further to £12,500 in 2020—further relief to many small businesses.

I thank the Minister for that encouraging answer. Businesses are, of course, unpaid tax collectors for the Exchequer and the Federation of Small Businesses recently estimated that businesses spend, on average, three working weeks a year on tax compliance. Is there anything further that the Minister can do to reduce that kind of expensive burden on businesses?

I thank my hon. Friend for raising the FSB’s report. I have not only read it, but met the FSB to discuss the report in detail. I highlight to the House two of its important recommendations: one is around better guidance on taxation, and I have tasked officials on that mission within HMRC; and the second is Making Tax Digital, which we are rolling out for VAT-registered companies in 2019. The report states that this

“presents an opportunity to simplify and speed up tax compliance.”

Is the Minister not concerned that the Office for Budget Responsibility report into welfare trends from January this year estimates that £1.5 billion of support for small businesses will be taken from them through the minimum income floor in universal credit? The Select Committee on Work and Pensions heard that 70% of small businesses currently last for 18 months, but that that will reduce to 20% for those on universal credit. Small businesses will be strangled at birth.

The hon. Lady neglects to mention the fact that small business confidence in the UK is now in positive territory for the first time in many years. We have gone to great lengths within the tax system, as I have just explained, to reduce the burden on small businesses. We rolled out £9 billion of business rates relief in the 2016 Budget and a further £2.3 billion of relief in the autumn Budget last year. We will continue to be on the side of small businesses.

A significant number of businesses in west Cornwall and the constituency of St Ives, which I represent, are facing extreme hardship because of business rate increases in 2017 and 2018. This is becoming a burden that is too great for them to bear. What immediate help can the Minister make available to these hard-working business owners?

As I have just identified, the Government have done a huge amount to reduce the burden of business rates. We recognise the important fact that these taxes need to be paid, irrespective of whether businesses are profitable or otherwise. That is why we have gone to such lengths, providing £9 billion of relief in 2016, including transitional relief for those facing the largest potential increases in business rates, and a further £2.3 billion by way of bringing forward by two years the change in the indexation of business rates from retail prices index to consumer prices index, saving businesses £2.3 billion over the next few years.

Business rates are really hitting businesses in York, particularly in the retail sector. This is having a huge impact on our city. On 8 March 2017, the Chancellor promised this House a complete review of business rates, yet we have only seen sticking plasters from the Government. When will that review begin?

The business rates review is being undertaken by the Ministry of Housing, Communities and Local Government.


My hon. Friend is asking the right question. The only way to deliver a high-wage, high-skill economy of the future and to sustainably raise living standards is to raise our productivity growth rate. This requires investment by the Government in infrastructure, skills, and research and development. Since 2010, this Government have provided over half a trillion pounds in capital investment, increased investment in skills and reduced taxes for business. But raising the productivity growth rate also requires action at the level of the firm. Lower taxes provide a strong incentive for businesses to invest in raising their productivity. These tax reductions include the £9 billion package to reduce business rates that the Financial Secretary has just mentioned.

Productivity is a key element in determining our future standard of living. The current productivity gap in Yorkshire and the Humber provides great opportunities for growth. However, significant and sustained investment is required to achieve this. Will my right hon. Friend commit to the excellent northern powerhouse project and ensure that the region gets the vital investment in infrastructure that it needs to improve productivity?

My hon. Friend is right again. We will only build an economy that works for everyone and every region if we succeed in narrowing the regional productivity gap. For that reason, the Government are fully committed to the northern powerhouse. We have announced a funding boost of £436 million to improve transport connections within the northern city regions through the transforming cities fund, with a further £840 million to be competitively allocated to the largest cities in England. This builds on the record amounts of more than £13 billion over this Parliament that we are already investing in northern transport, which is more than any previous Government.

One of the ways in which the Chancellor could improve productivity across south Wales and beyond is to invest in the tidal lagoon project, which will bring skills and investment to the area, in line with what he said in answer to the hon. Member for Morley and Outwood (Andrea Jenkyns). So may I encourage him please to bring this investment forward and start delivering for the people of south Wales?

As the hon. Gentleman knows, the tidal lagoon project is under careful consideration by the Government, and a decision will be made and announced in due course.

One of the consequences of increasing productivity is of course higher wage growth, which I think would make everyone feel much better. The Chancellor may be aware of the Treasury Committee’s recent report on childcare, which called for more childcare support for those undergoing retraining—another way of increasing productivity. What were his thoughts on that, and what is his progress on talks with the national retraining scheme?

I am happy to tell my right hon. Friend that we have had a very productive first meeting with the CBI and the Trades Union Congress to flesh out the shape of the national retraining partnership, which is clearly going to be a crucial part of our investment in skills in future. I do take her point on childcare. We have of course seen the Select Committee’s report and will respond to it in due course.

On 6 April, the Treasury bizarrely used a “thumbs up” emoji in a tweet celebrating the worst decade of productivity figures since 1817. I will help the Chancellor with the arithmetic—that is 201 years ago. I know that he has a new-found Tiggerish optimism, but is not his Department’s tweet, even with his misplaced exuberance, more like self-delusion for which local government, the police, the NHS, the fire service and public services more generally are paying the price?

We have a challenge in this country around productivity, and it is not a new challenge, as the hon. Gentleman well knows. For eight years, the OBR has estimated UK productivity growth, and on eight occasions it has had to revise down the estimates that it had made. This is a long-term challenge facing this country. Rather than trading insults about what has happened in the past, I suggest that the most constructive approach would be for us to work on improving the UK’s productivity performance. That means investing in infrastructure—this Government have committed half a trillion pounds of capital investment since 2010—addressing the skills gap, ensuring that capital is available to businesses, and addressing management challenges at the level of the firm. All those strands need to be taken forward together if we are going to create the high-tech, high-wage economy that we all want to see in this country.

Children’s Services: Funding

4. What discussions he has had with the Secretary of State for Housing, Communities and Local Government on the adequacy of funding for children’s services. (904777)

In 2016-17, local authorities spent £11.9 billion on children’s services and childcare support, and we have seen child development outcomes improve significantly since 2013.

With the number of young people subject to child protection inquiries rising by 140% in the past decade, it is deeply troubling that by 2020 there will be a £2 billion funding gap in children’s services. The Minister knows as well as I do that local authorities are crying out for more support, so what urgent funding can she now make available to protect these vulnerable children?

First, we have actually increased the spending for the most vulnerable by £1 billion since 2010. That is funding for the most vulnerable through local authorities. I would point out to the hon. Lady that the important thing is the outcomes we are achieving. The fact that child development outcomes have improved since 2013 and that more children are getting that good level of development shows that we are investing our money in the right areas.

There can be no greater service to children than that provided by our teachers. The Chancellor has been very generous in funding a pay rise for NHS staff outside the NHS budgets. What discussions have been had with the Department for Education to see if the same offer can be afforded to teachers?

It is very important to point out that the agreement with NHS workers and NHS unions has been in exchange for productivity improvements. We are altering the contracts to make them more effective, helping the people in these jobs to achieve more at the same time as giving them a pay rise. The situation in schools is different. Headteachers have much more power over what they pay individual teachers. In fact, last year teachers got an average pay rise of 4.6%, including promotions, so headteachers do have that flexibility to make decisions about what is best for their school.

Can the Minister explain why, when we face a national epidemic of knife crime and serious youth violence affecting more and more children in this country, the Treasury failed to provide one penny of extra resource for the Government’s new serious violence strategy, which will now be funded by £40 million of cuts to an already overstretched Home Office?

I point out to the hon. Lady that real-terms spending in the Home Office is going up. We are funding the Home Office, but the important thing is what we do with that money, and that is why the Home Secretary has outlined the serious violence strategy to deal with that issue.

Small and Medium-sized Cities: Infrastructure

In this Parliament, investment, including in infrastructure, will be at its highest sustained level since the 1970s, and our cities large and small are an important part of that strategy. We recently launched the £1.7 billion Transforming Cities fund to upgrade infrastructure, in addition to £345 million of funding for local road projects in England.

I thank the Minister for his response and for meeting me recently. Does he agree that cities such as Stoke-on-Trent are perfectly placed to benefit from investment through the Transforming Cities fund?

I quite agree: Stoke-on-Trent is exactly the kind of city that we designed the Transforming Cities fund to benefit. From the meeting we had, I know that my hon. Friend sees opportunity in Stoke—in Stoke station, at junction 15 on the M6 and in the proposal for a ceramics park. With the dynamic Conservative leadership in Stoke at the moment, we look forward to receiving that application.

I do not often get angry in the Chamber, but can I ask the Minister to stop spending his time in Maidenhead and Runnymede and come to the real towns and cities of this country like Huddersfield, where we can see the deterioration of infrastructure everywhere we look? That is because this Government have cut and cut local authority spending—that is the truth. He should get out more and see what this country is really like.

The independent Infrastructure and Projects Authority has said that by the end of this Parliament, central Government funding for infrastructure will be greater in the north than in the south. The hon. Gentleman is speaking to the wrong Minister if he thinks that we do not care about the north. This son of a Liverpudlian and a Mancunian, born in Wolverhampton and representing North Nottinghamshire, needs no lessons from him.

I accept that Huddersfield is a most admirable place. My grandma lived there all her life, as I have told the hon. Member for Huddersfield (Mr Sheerman) before. Splendid place, splendid woman.

Cities are important, but so too are seaside towns such as Weymouth. We desperately need investment in those places, or they will just go to rack and ruin. Having met a Minister from the Ministry of Housing, Communities and Local Government recently, I understand that Government are looking at initiatives for towns and seaside towns. Can the Minister confirm that that is true? If so, what money will be available?

My hon. Friend raises an important point. The Government’s strategy is not limited to cities. The Transforming Cities programme is for our smaller and larger cities, but we are also interested in coastal towns and communities. I recently met a number of parliamentary colleagues representing those communities, and I would be happy to meet my hon. Friend to talk about how the Treasury will be working with CLG.

Does the Minister accept that as we leave the EU, many people across the United Kingdom will want to see economic development beyond the south-east of England, and that enterprise zones such as the one in my constituency could be used to maximise inward investment and produce productivity and prosperity for everyone across the UK?

I entirely agree. That is why we are working with Mayors such as the Mayor of Tees Valley, who is producing a development corporation and has new powers of planning reform and so on to drive forward the economy of that part of the north-east. We are very happy to talk to other hon. Members who would like to take forward similar proposals.

Leaving the EU: No Deal

6. How much his Department has spent on preparing for the possibility of no deal with the EU when the UK leaves the EU. (904779)

I am pleased to tell my hon. Friend that in the spring statement we allocated £1.5 billion to make sure that we are prepared for all eventualities in the European negotiations.

I am grateful to the deputy Chancellor for her response. Has she had an opportunity to look at table 4.28 in the Office for Budget Responsibility report accompanying the autumn Budget, which shows a Brexit dividend of £55 billion in the four years between 2019 and 2023? Does the deputy Chancellor agree with her own figures showing that leaving the EU will be a great economic benefit to this country?

I thank my hon. Friend for his question. There is indeed money that will be released as a result of our leaving the European Union. We are working on the spending review, which will take place next year, and part of the job of that spending review will be looking at how we allocate that money domestically.

24. Many of my constituents work in the financial sector —the financial services sector, specifically. Does the Chancellor not recognise that the closest possible alignment with the single market is the best possible outcome for this vital sector? (904798)

My right hon. Friend the Chancellor recently made a speech outlining the future of financial services and making sure we get the best possible deal with the European Union. Let us remember that London is a global financial centre—it was recently rated the best in the world—and as well as getting the best deal with the EU, we need to make sure that we can trade with the rest of the world.

It seems to me that over recent months the UK has changed its position from negotiating the final deal before the transition period to negotiating the final deal during the transition period. Is not the reality that the British Government’s negotiating position will be considerably weakened once we have left the EU?

We have made huge progress in the European negotiations. We are seeing business confidence increasing and investment increasing, and by this autumn we should have agreed a clear framework with the EU so that businesses have certainty about future investment.

The UK’s economic growth in the final quarter of 2017 was the weakest of any economy in the G7, and the OBR is forecasting that the UK is on course for our worst period of economic growth since the end of the second world war. However, none of these already dire forecasts factors in a no-deal Brexit, which would have a severe impact on jobs, growth and tax revenues. We know the Chancellor knows this; indeed, he has said so publicly. The question is: why are his colleagues not listening to him?

It is very important that in the negotiations with the European Union we always keep the option of no deal on the table; otherwise, we will not get the best possible deal. But we are very confident of achieving a good deal. Why is the hon. Gentleman not welcoming the fantastic economic news we have had this morning: the lowest unemployment—again—since 1975, and wages up by 2.8%? It seems to me that there are an awful lot of Eeyores on the Opposition Benches.

National Living Wage

7. What assessment his Department has made of the effect of the introduction of the national living wage on low pay. (904780)

The national living wage has increased levels of pay. In fact, we have seen the wages of the lowest fifth of our population in terms of earnings increase by 7% in real terms since 2015.

My right hon. Friend will know that the two biggest policies that have put more money into the pockets of the lowest earners in this country have come from this Government—namely, the increase in the tax threshold and the minimum wage. What more will the Government do to make sure that private businesses, together with public services, are working to continue to increase wages and improve the quality of life in cities such as Plymouth?

My hon. Friend is absolutely right: we need to increase productivity, which will help drive up wages. That is why we are working with employers on the national training scheme, and why we are increasing our investment in areas such as maths and computer science to make sure that our young people have the skills for the future that will enable them to earn high wages and compete with the rest of the world.

The national living wage applies only to people over the age of 25, yet the cost of living in places such as Stoke-on-Trent is the same for people under the age of 25: there is no discount on their rates, mortgage or utility bills. Do the Chancellor and his Ministers think it is fair that these people are expected to earn less when their living costs are not affected?

What is unfair is the fact that, under the last Labour Government, youth unemployment went up to 20% and those young people were left on the scrapheap, whereas we have reduced youth unemployment by 40%. We have more young people in work earning the vital skills for their future.

21. Despite this increase in the price of labour, why is unemployment continuing to fall, particularly youth unemployment? (904794)

My right hon. Friend is right, and the reason is that we have taken the time to reduce the deficit to make it easier for employers to take on staff. We have reduced corporation tax, making it easier for companies to hire people. That is why we have the lowest unemployment since 1975, and rising wages. It is a shame that Members on the Opposition Benches cannot acknowledge that massive achievement.

It is completely unacceptable that a 17-year-old and a 25-year-old starting on the same day in the same job face a £3.63 gap due to their ages. When will the Chief Secretary end the scandal of state-sanctioned age discrimination?

It is extremely worrying that those on the Opposition Benches would rather see young people out of work and without opportunities than in work, learning and getting the skills for their future. All the evidence shows that if we set the rate too high we see youth unemployment, which is exactly what happened under the previous Labour Government.

Corporation Tax

9. What assessment he has made of the effect of the recent reduction in corporation tax on employment and wages. (904782)

There can be no doubt that this Government’s record on reducing corporation tax from 28% in 2010 to 19% now, and further on down to 17% in 2020, has driven growth, kept prices down, pushed wages up and, indeed, led to more employment. Since 2010, we have seen more than 3 million more people in employment, and, as the Chief Secretary to the Treasury has just outlined, the lowest unemployment since 1975.

Successful businesses create jobs and pay taxes. What steps are the Government taking to back businesses that play by the rules?

My hon. Friend uses the expression “play by the rules”. I should make it very clear to the House that those that do not play by the rules will be clamped down on by Her Majesty’s Revenue and Customs. We have brought in £175 billion in respect of clamping down on avoidance, evasion and non-compliance since 2010. We have, as my right hon. Friend the Chancellor has outlined, the lowest tax gap in our history, at 6%. Those who play by the rules will benefit from our pro-business policies: bringing taxes down, providing relief on business rates, and other measures such as the employment allowance, worth £3,000 for the first employee as a relief on national insurance contributions.

When it comes to employment and wages, and the impact that corporation tax cuts have had, we have heard a lot of crowing from Ministers this morning, but we all know that our economy is wildly different, depending on where people live. Has the Minister asked for a distributional analysis of the impacts that he has just been talking about?

We have debated at great length the issue of distributional analysis, in this Chamber and around the Finance Bill and other measures. The hon. Lady will know that all tax measures are subject to TINs and to various assessments. We are also bound by the Equality Act 2010 when we take decisions in respect of taxation. As a Minister, I can assure her that I take my duties in that respect extremely seriously.

Businesses in my constituency welcome the cut in corporation tax, but does not my right hon. Friend share my concern that businesses in Gordon are being damaged by punitive business rates and the highest income tax rates in the United Kingdom?

My hon. Friend raises an important issue, which is probably best listened to very carefully by some of those on the Opposition Benches. I can only speak for the UK Government here in this House, and we will continue to be on the side of businesses, small and large, to ensure that their tax burden is as low as possible.

Lines ag and bg of the spring 2017 Budget predicted that the cuts in corporation tax would cost the Treasury over £24 billion by 2022. If the Treasury had had that money to invest in infrastructure and construction, how many well paid construction jobs could the money have created?

Let me make two simple points. First, corporation tax cuts are clearly to the benefit of businesses who employ people, create wealth and generate the taxes we need to fund our vital public services. Secondly, we have cut corporation tax from 28% to 19% since 2010, and the corporate tax take has risen by 50%.

A moment ago the Financial Secretary was banging on about TIMS. I was not informed about this matter, but the Clerk has consulted his scholarly cranium and he tells me that it stands for Treasury information management systems.

Oh, TINs! Well, I am sure everybody attending to our proceedings was perfectly well aware of what the right hon. Gentleman had in mind. I am sure I was in a minority of one in not knowing. And what are those pigs I see flying in front of my very eyes?


Productivity, as I have already said, is at the very forefront of the Government’s agenda. That is why we established the national productivity investment fund, a £31 billion package of investment in infrastructure and research and development, and committed to introducing a national retraining scheme, which we are developing in partnership with the CBI and the TUC to ensure that British workers have the skills they need to benefit from technology change. The focus now has to be on moving forward with firm-level initiatives, such as Be the Business led by Charlie Mayfield and Made Smarter led by Juergen Maier, that start to look at the challenges we face at the level of the firm in this country to make sure that we are doing what we need to do not only in infrastructure and skills but in investment in management at the level of the firm.

May I congratulate my right hon. Friend on all the steps he is taking, with the Government, to improve productivity, which is very badly needed indeed in our economy? Does he agree that it is becoming increasingly difficult, with a very modern, interconnected, internet-driven economy, to successfully garner the information needed to truly assess how well we are doing on productivity and across the whole scale of Government statistics on the economy? Does he agree that this is first-order business and that we need to get this matter resolved so we may have a better picture overall?

My right hon. Friend is right that there is some evidence of a measurement challenge around the productivity figures. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) asked a few moments ago about the relationship between rising wage costs and continued economic and employment growth. The question is why the tightening labour market is not driving a higher productivity performance and whether an element of that is in fact a management challenge. A great deal of time and energy is being spent on this issue. Indeed, the figures on productivity for the last two quarters do, on the face of it, show some improvement. Now, one swallow does not make a spring and we should be very cautious about interpreting—even a summer, Mr Speaker. I am even less ambitious! We should be very cautious about interpreting those figures, but, as we see record high levels of employment in the economy, we should expect them to help to drive the UK economy’s productivity performance.

I listened to my right hon. Friend set out the Government’s plans for investment in transport and infrastructure a few moments ago. What direct impact on productivity does he expect those investments to have in the regions where they occur?

We are undertaking the largest rail investment programme since Victorian times and the largest road investment programme since the 1970s. Overall, the Government are now investing public capital at the highest rate for 40 years. This is one of the components that drives productivity in one of the areas where we have a long-standing gap with our principal competitors: too little public infrastructure. We are closing that gap and that will have a positive impact on productivity growth, but we still have to tackle skills, capability at the level of the firm, and access to capital. It is an important strand, but it is only one strand of the productivity conundrum.

As the Chancellor just said, skills are a crucial plank of improving the nation’s productivity. Since the introduction of the apprenticeship levy, apprenticeships have collapsed. The Government have also slashed resources for further education institutions, such as the excellent Bishop Auckland College in my constituency, so what is the Chancellor going to do about the middle-level skills base?

The Government are highly committed to the apprenticeship programme. I recognise that starts are down—we always expected that—but something else is happening, because analysis shows that now that employers are contributing with their own levy to apprenticeship programmes, they are opting for higher-level apprenticeships. There are fewer starts than we expected, but we are seeing a much higher level of apprenticeship. There are more degree-level apprenticeships and more apprenticeships at the higher levels. The Department for Education and the Treasury are looking carefully at how this is working—[Interruption.] This is a serious issue, but the important question is about making sure that the skills that the economy needs are generated.

The only productivity figures worse than the UK’s are the Chancellor’s—that is not an insult, but a statement of the blindingly obvious. Is he aware that a recent TUC assessment indicated that, in effect, the UK economy is on a negative trajectory? GDP growth is weak—on an annual basis, it is the weakest it has been for five years—and hours worked have declined. Public investment lags significantly behind that of our comparators. Wages remain stagnant and inflation is stubbornly high. What is his answer to this—perhaps a tweet, and maybe with a smiley emoji this time?

Not for the first time, I do not recognise the picture of our economy that is painted by Opposition Front Benchers. Figures today tell us that we have new record high numbers of people in employment, and new record low unemployment figures. That should be something that we are celebrating. Real wages are forecast to turn positive from this quarter and to go on growing thereafter. Employment is expected to grow by another 500,000 by 2022. We are working hard to ensure that productivity performance increases across the economy because that is the only sustainable way to achieve higher wages and higher living standards.

Order. I am afraid that progress has been terribly slow today. I would like to get through some more questions from Back Benchers, but we will need to have single-sentence questions and pithy replies. We do not have time for long pre-prepared speeches.

Building our Future Programme

Progress has been excellent on the Building our Future programme. We have now secured locations for 12 of the 13 regional hubs and negotiations are continuing on the final site.

The HMRC office in Stockton South is closing. Hundreds of staff are being offered jobs in Newcastle, which involves a three-hour minimum round trip that people say they cannot make, because their family lives are built around a job that they are proud of. Will the Minister please meet me given what we now know about the impact that the closure will have on Teesside and its people?

The hon. Gentleman will know that all staff who may be affected will have face-to-face consultations with HMRC staff a year before any changes occur. Some 90% on average of those across the programme will be in a position of having left employment or retired, or finding it perfectly acceptable to move, in this case to Newcastle. I would be delighted to meet the hon. Gentleman to discuss the issue.


12. What discussions he has had with Cabinet colleagues on ensuring that people have high-tech skills to increase productivity. (904785)

The Government are working across Departments to help to prepare businesses and working people to seize the opportunities that technology will bring. At the Budget we announced, among other measures, a trebling of fully qualified computer science teachers, the creation of a T-level in digital skills and the retraining partnership that my right hon. Friend the Chancellor has spoken about.

My hon. Friend makes an important point. We are trying to roll out our changes in apprenticeships, T-levels and other matters as quickly as possible across the country. We commissioned the Juergen Maier “Made Smarter” review to increase the adoption of digital technology in businesses—particularly small and medium-sized enterprises—and we will follow up on that in the months to come.

The circular economy has the potential to create hundreds of thousands of jobs in this country. What discussions has the Minister had with the Secretary of State for Environment, Food and Rural Affairs about how we can maximise these opportunities?

The hon. Lady raises an important point. We are working closely with the Department for Environment, Food and Rural Affairs, and my right hon. Friend the Chancellor announced a call for evidence on single-use plastics in the spring statement. We intend to make proposals in due course.

National Debt

13. What comparative assessment he has made of the size of the national debt (a) today and (b) 12 months ago. (904786)

Public sector net debt as a percentage of GDP was 85.1% at the end of February 2018, which was 0.9 percentage points higher than last February. The latest forecast shows that debt will fall this year, two years before the fiscal rules require.

The national debt is going up by £5,000 a second. Can I be helpful? Will the Minister join me in stopping hospitals that are outsourcing staffing to avoid VAT, with an estimated 6% savings on wages lost to the Treasury, from doing so?

The important point is that the debt is going down this year. We want to avoid a situation like that in the last three years of the last Labour Government, when public sector net debt doubled.

The hon. Member for Mid Dorset and North Poole (Michael Tomlinson) can very easily shoehorn in his own inquiry on this question. Question 14 is not dissimilar to 13—have a go on 13, man.

14. That is very kind of you, Mr Speaker. Is it not vital that we reduce our national debt, stop wasting taxpayers’ money on debt interest repayment, and spend it on our public services instead? (904787)

I concur absolutely with my hon. Friend. He might like to know that between 2010 and 2017, we spent £300 billion on debt interest, which is twice the current annual budget of the NHS.

Given all the talk of austerity, will the Minister tell us what Government spending was in cash terms in 2010 and what it is in this financial year?

I can assure my hon. Friend that the Government have taken a balanced approach to the public finances, reducing the deficit by three quarters. We have also made tough decisions to invest as well as to spend on public services, which is what the public expect of us.

Topical Questions

My principal responsibility is to ensure economic stability and the continued prosperity of the British people. I shall do so by building on the plans set out in the autumn Budget and the spring statement. The Government are determined to meet the important challenges we face and to seize the opportunities ahead as we create an economy fit for the future.

The Treasury is holding on to £10 million from the Roadchef employees benefit trust following a High Court dispute. Can Ministers ensure that HMRC returns the money to the trust with interest so that the 4,000 workers and former staff, including a number of my constituents, can finally receive what is owed to them?

We touched on this matter earlier, I think. It is important that HMRC deals with matters separately from Ministers, but we are aware that HMRC is in discussion with the trustees in this case and we hope for a resolution soon.

T2. Does the Chancellor agree that consideration should be given to making expenditure such as gym membership tax deductible in recognition of its health benefits and, ultimately, cost-saving benefits for the NHS? (904800)

Perhaps I am in need of the gym, Mr Speaker.

I shall take that as an early Budget representation, and my hon. Friend should be aware that we already have various tax-free reliefs in respect of health in the workplace—check-ups, eye tests, the cycle to work scheme, on-site workplace gym membership and welfare counselling. Of course, our soft drinks industry levy has led a number of companies to improve the quality of their products healthwise.

In advance of today’s debate on Syria, I welcome financial measures to sanction the Syrian regime. According to past Government figures, £151 million of assets belonging to leading figures in the Assad regime in Syria have been frozen by authorities here. Since then, 261 Syrian individuals have been listed as financial sanctions targets in the UK. Can the Chancellor tell the House what the Treasury’s best and latest estimate is of the total value of assets held in the UK by individuals connected with the Syrian regime?

I do not have a figure for the latest valuation of those assets. Many of the assets in question will be property assets, I suspect, meaning that the values will move from time to time. I can assure the right hon. Gentleman that the Treasury is fully engaged in the process across Whitehall of seeking to deal with unacceptable behaviours of the type that we have seen in Syria. Financial sanctions will remain an important tool in our armoury, whether we are dealing with chemical attacks in Syria or attacks on the streets of the UK.

I welcome the Chancellor’s response, but the problem is that the lack of transparency in our financial system makes it virtually impossible for him to know exactly how many assets linked to such regimes are owned in the UK. It is estimated that more than £5 billion of assets owned by Assad and his associates are being held overseas and, according to international reports, the UK is recouping far less of the corrupt assets owned by individuals linked to the Syrian regime than is being recouped by other countries. For example, assets linked to the Assad regime worth more than half a billion pounds have been not just frozen but seized by the Spanish authorities. So far, no unexplained wealth orders have been used against Syrian regime figures.

The Government promised to give a date for the publication of a register of owners of UK property based overseas back in 2015, but now, three years later, we are told that a register will not be published until 2021. Will the Chancellor bring forward the date for the introduction of what is an essential defence against corruption?

I think that the right hon. Gentleman is being a little bit harsh on the unexplained wealth orders. The legislation has been in place for only a couple of months, and we will of course look at opportunities to use it. As for his challenge on the date for the registers, I will look into the matter, as he has asked me to do. I will then write to him to let him know the reason for the date that we have set, and whether there is any opportunity for it to be brought forward.

I think that we are all in the same place on this issue. We all want to ensure that London cannot be used as a route for dirty money—for the ill-gotten gains of regimes that are stealing from their people and channelling money offshore. It must be recognised that London is the world’s largest global financial centre, which presents us with some challenges, but we will continue the work.

T4. High street retailers such as Toys R Us and Carpetright are closing branches because of the rise in online sales. What measures are Ministers taking to reduce business rates, which currently penalise property-based businesses to the advantage of online retailers? (904802)

My hon. Friend puts her finger on the significant structural challenge that we face. This country has a higher penetration of online retailing than any other major economy—we are at the cutting edge—but that, of course, has an impact on traditional retailing, and we have to expect that patterns of retailing will change. We have brought forward by a year the switch to three-year business rates reviews, and we have introduced a package of £9 billion of business rates relief, but we will have to consider this major structural challenge over the coming years as a nation.

T3. The European Commission has hinted that the UK may be given access to the European financial services market, but only on the basis of equivalence. Does the Chancellor support the preferable basis of mutual recognition for that future arrangement, and what prospect does he see of securing it? (904801)

As the right hon. Gentleman will well understand, I much prefer a system based on mutual recognition. There are problems with the EU’s equivalence regime: it is arbitrary, it is unilateral, and it can be withdrawn with zero notice. No one can operate a multitrillion-dollar business on the basis of such arbitrary arrangements. However, we are working with the Commission and key member states, and I am optimistic that we will reach a satisfactory solution.

As my hon. Friend will know, this morning we were given the good news that we are now back in positive real-wage territory. He will also know from the projections of the Office for Budget Responsibility at the time of the last Budget that we anticipate an increase in real wages throughout the projection period.

T6. The number of people with unmanageable payday loan debt has more than halved since the Financial Conduct Authority introduced a total cost cap more than three years ago following pressure from Members on both sides of the House. New analysis by Citizens Advice suggests that extending the cap to doorstep-loan and rent-to-own markets would have the same impact on problem debt in those sectors, and could save consumers up to £154 million a year. Will the Chancellor consider taking such action? (904805)

The hon. Gentleman has made a very sensible point. The FCA is looking into that proposal and will publish another report in May. I met Andrew Bailey just a few weeks ago to underscore the importance of the issue, and as we proceed with the construction of the single financial guidance body that will deal with some of the challenges of problem debt, I know that this will be another focus of its work.

Automation, machine learning and artificial intelligence have the potential to offer huge productivity gains. What discussions has my right hon. Friend had with colleagues across Government about providing leadership in this important field so that we can reap the maximum productivity boost and be at the forefront of this exciting technology?

As I have said many times in this House, we have two choices: we can either run away from this challenge; or we can run towards it and embrace it. In fact, if we want to maintain the living standards of our people and the status of our economy in the future, we have no choice but to embrace it—and we are doing so. I announced at the autumn Budget funding to support the uptake of digital technologies across Government, allowing the Government to be an exemplar, but we are also promoting these technologies to private business. The UK is at the forefront of many of these cutting-edge technologies.

T8. The housing crisis has gone on for far too long under this Government. Lewisham’s Labour council is about to build its 500th new council home since 2015, but many people still come to my surgeries because they reside in temporary accommodation. Will the Chancellor now commit to reversing the 63% cut in funding to the council’s budget so that Lewisham can get on with building more homes? (904807)

First, we have committed to building 300,000 homes per year over the next decade, which is vitally important to address the issue. Also, when we came into government, 80% of local government funding was being provided centrally, but we have now enabled local councils to raise that money. That is the right thing to do—people vote locally and councils should be accountable locally.

We have heard encouraging news today about wages, but what more can Ministers do to help my constituents with the cost of living?

There are a number of challenges that need to be overcome for the poorest. We have increased the national living wage by 4.4%—to £7.83 an hour—and also the allowance that applies before people pay tax. We have made other changes, such as freezing fuel duty, to ensure we are doing all that we can for the hardest-working people in our communities.

Order. I exhort the Minister to face the House; I understand the temptation to look backwards, but one should always look at the House.

T9. Many NHS trusts have set up subsidiary companies to take advantage of a VAT loophole to save money, often at the cost of the lowest-paid staff. Does the Chancellor have any plans to close this tax loophole and place the NHS on the same VAT footing as local government? (904808)

I thank the hon. Lady for her question. Perhaps this is something that I could take up with her offline so that I fully comprehend the exact point she is raising.

Last year, more businesses were created in the UK than in any other developed economy. Does that not show that the Government’s policy towards businesses is working, and what will the Treasury do to build on that success?

My hon. Friend is absolutely right that a record number of businesses are starting. We saw double the amount of investment in tech companies last year compared with the previous year. Britain is booming, and that is because we have taken the important measures of reforming our welfare system, making it easier to take on staff and reducing corporation tax. The Labour party wants to stop all that, raise taxes and make it harder for businesses to succeed.

The Government’s green rhetoric is nothing more than empty promises. They say that they have ambition, so when will the Chancellor commit funding for onshore wind, solar and, importantly, the Swansea Bay tidal lagoon? The benefits of these investments would boost not only our green economy, but the supply chain and jobs.

I have already answered the question on the Swansea Bay lagoon—we are studying the project. All of these projects have to meet value-for-money tests. We already have a fantastic offshore wind sector, with record low costs to the consumer through offshore wind generation. We have to decarbonise our economy in a way that also keeps electricity prices as low as possible for consumers and businesses.

Last night, the pound hit its highest rate against the dollar since the referendum. Will the Chancellor join me in welcoming this sign of international confidence, which is so contrary to the run on the pound predicted by the shadow Chancellor?

I welcome all signs of international confidence, but I never comment on the exchange rate of the pound.

Six in every 1,000 people in the UK have lymphoedema. What commitment will the Government make to deliver a comprehensive and equitable strategy for NHS England and to end the postcode lottery for lymphoedema patients in the United Kingdom?

That is a question for the Secretary of State for Health, but I would point out that we are putting extra funding into the health service, including an extra £10 billion to help with nurses’ pay and to ensure that we are investing in the technologies for the future.

The shadow Chancellor mentioned frozen Syrian assets. There has been a long-running cross-party campaign to unfreeze frozen Libyan assets so that that money can be spent compensating the victims of Libyan-sponsored IRA terrorism. Will my right hon. Friend look at that again? Is he aware that it would require a UN resolution? Is that the case with Syria’s assets, and does he think that all the members of the UN Security Council would be in favour of such a move?

My hon. Friend tempts me down a complex route. I will look at that again; I am familiar with the issue from my time as Foreign Secretary. The decision that Ministers have to make around the freezing of assets is a quasi-judicial one, and it has to be made very carefully in the light of the specific facts. There are great complexities in Libya, where in some cases competing authorities are claiming ownership of assets.

You are a patient fellow, Mr Stone, and you have been waiting for a long time. Let’s hear you.

Thank you, Mr Speaker. One way to boost the UK’s productivity is to give disabled people employment opportunities. Can the Chancellor of the Exchequer tell me what discussions he has had with the Department for Work and Pensions and possibly the Scottish Government about maximising the potential of our disabled people?

The hon. Gentleman is absolutely right to say that getting more disabled people into work is vital for our economy and also for helping with their quality of life. I am very happy to look at what he has suggested.

Last year, the Department of Health announced £7.8 million for building a cancer unit in my constituency, which of course I was delighted about. However, the money is stuck in the Treasury and the Humber NHS Foundation Trust is unable to withdraw it in order to start the building work. Please can the Minister urgently unlock that money so that the trust can start to build that desperately needed cancer unit straight away?

I will look at what the hon. Lady has said, but I very much doubt that an amount of money of that size will be stuck in the Treasury, because of the NHS’s delegated limits. But let me look at it, and I will write to her.

In Bury, a small business and its supply chain are still owed £4.1 million by Carillion for their work on the Royal Liverpool Hospital. Will the Chancellor agree to meet me and them to hear their ideas about how we can prevent the likes of the Carillion collapse from happening again and protect our small employers from the changes in the construction industry?

The important thing about the issues with Carillion was that, first, we made sure that public services operated, and that, secondly, we did not give rewards for failure in a company that went bust. I would be very happy to look at the specific situation that the hon. Gentleman has outlined and to meet him.

Very well done. Unfortunately, it was so well done that the Chancellor did not hear it. Blurt it out again, man!

What message will the Chancellor be sending to the thousands of public and civil servants who will be at the march organised by the TUC on 12 May asking for a fully funded, above-inflation pay rise?

The Government have been clear that the cap on public sector pay has been abolished and that it is for individual Departments and bodies to talk to their workforces about how pay can be increased in a self-funding way through productivity enhancements. We have seen that being done in the NHS with the “Agenda for Change” deal, which is now with the unions and staff for voting. It is a very good pay deal, but it will be supported by significant improvements in productivity. If we can do it there, we can do it across the piece.

Order. One colleague has been standing for a long time and has not asked a question. I call Jim Shannon.

Thank you, Mr Speaker; it is a straightforward question. In this age of online shopping, what help is available for start-up businesses that are focused on internet shopping?

Start-up businesses involved in online shopping are able to avail themselves of the full range of support for any start-up business. There is no specific regime for online shopping businesses.

Thank you, Mr Speaker. An elderly couple in my constituency, Mr and Mrs Fitzgerald, are about to lose their home. They have an interest-only mortgage with Santander, which does not allow mortgages for people over 75, although the Nationwide allows them for people up to 85. Will the Minister help me to persuade Santander so that Mr and Mrs Fitzgerald do not lose their home in the coming weeks?

Clearly, the lending decisions of individual banks are a matter for them, but I would be happy to meet the hon. Gentleman to consider the case and see what has happened.

Points of Order

On a point of order, Mr Speaker. I wonder whether you can advise me in relation to a response I received to a question today about the business rates consultation. I have had responses not only from Treasury Ministers, but from Ministers at the Ministry of Housing, Communities and Local Government and at the Department for Business, Energy and Industrial Strategy. After being forensic on the issue, those other Ministers put me back in the hands of the Treasury, but the Treasury is now sending me on the merry-go-round again. Please may I have clarity on how to get a response to my question?

I am grateful to the hon. Lady for her point of order. I cannot provide that clarity, but I think the request for same is entirely reasonable. To be fair, the Chancellor has heard the point of order, so may I suggest a quiet word and that an attempt is made to provide satisfaction? It is extremal important that Members are not unreasonably frustrated in pursuit of factual information. We will leave it there for now.

On a point of order, Mr Speaker. I brought this to your attention this morning so that I can raise an important matter. It has been brought to my attention by several sources that the Government have been selectively offering intelligence and security briefings by the Prime Minister’s National Security Adviser on the current situation in Syria and the UK’s military response to it. The briefings appear to have been offered to members of the Labour Opposition not on the basis of Privy Counsellor status, but on the basis of those who are sympathetic to the Government’s position. That leads to concerns that the Government are using intelligence briefings to manipulate Parliament and to bolster support on the Opposition Benches for their behaviour based not on security terms, but on politics. Is it right that the Government should treat members of the Opposition in that way? What mechanisms are open to get to the bottom of the matter?

The only mechanism that I know is open to the hon. Gentleman is for him to complain about that via the device of a point of order, which he has just eloquently done. In all solemnity, I understand why he is disconcerted or worse about the matter. That said, and while thanking him for his characteristic courtesy in giving me notice of his intention to raise this point of order, I must say to him—he will be disappointed, but this has the advantage of being true—that with whom the Government shares intelligence material is entirely a matter for the Government. It is not a matter for the Chair.

If I can attempt to share the hon. Gentleman’s pain, sometimes senior members of the Government share information with me, and I am bound to say that the more astute and sensible, from the very highest level downwards, do that, but other Ministers are not so inclined to do so. A similar principle applies in relation to the Whips. Some Whips share things with you, sometimes you think it is worth telling a Whip something, and sometimes you think, “Actually, that is about the last person I would tell.” It is a mixed experience, and I understand that he is upset about the matter, but it is not a matter for the Chair. In one sense, I am flattered the hon. Gentleman invests me with powers that I do not possess, but I cannot provide a resolution of his problem. If he really persists, I will hear him once more.

Further to that point of order, Mr Speaker. I would not dream of trying to invest you with powers that you do not have or do not wish to have. My point is that you preside over a Parliament that the Government have done everything to sideline since last week, and it has now been brought to my attention that they are using intelligence and security briefings here to manipulate Opposition Members—not to inform those Members but to potentially bolster their own case.

I understand your point, Mr Speaker. Of course the Government can share briefings on Privy Council terms with non-Privy Counsellors, but surely the deeply cynical fashion of only doing so if one agrees with the Government cannot go unchallenged.

It has not gone unchallenged because the hon. Gentleman has raised the matter. The truth is that sometimes in life a problem does not have a solution, and this might be an example. At any rate, if there is a solution, it is not in my hands to provide it.

What I very politely say to the hon. Gentleman is that the only solution I could offer yesterday to the very widespread sense that the situation in Syria should be debated was to use my powers to grant a Standing Order No. 24 debate, and that is what I did. It was open to me to do that for today, and that is what I did. I do that in order to try to help the House.

I do not want to be flippant about it. I will always try to help the hon. Gentleman, but I also believe in being absolutely candid with him and other colleagues. Is this something I can resolve? It is not, but he has aired it. If he can persuade a Minister to see him about the matter—it is an arguable proposition whether he will be successful in his mission—I know he will pursue the matter like a dog with a bone.

On a point of order, Mr Speaker. Do you have any indication of a Minister coming to this House to make a statement about a purported legal challenge to the Scottish Parliament’s UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill? There are media reports that the Attorney General has confirmed that such a challenge is to proceed to the UK Supreme Court, notwithstanding the fact that the legislation was ruled as within the Scottish Parliament’s competence by Scotland’s chief Law Officer, the Lord Advocate, and the fact that it was passed in the Scottish Parliament by 95 votes to 32, with only the Tories and one Lib Dem voting against it. The Bill was due to become law tomorrow.

It is surely a very serious matter that the Tory party, having been defeated by a democratic vote of the Scottish Parliament, is now seeking to challenge it. Is there any way I can secure a ministerial statement, rather than Ministers briefing to the media as per usual?

I understand entirely why the hon. and learned Lady is concerned about this matter. When I came into the Chamber I had received no notification of this matter—it may be that something has become public more recently.

I do not need the matter dilating further, so the hon. and learned Lady cannot do so. I gently say to her that she knows some Members wanted to raise the matter in the Chamber today via another mechanism and, on grounds of pressure of time, I declined for it to be raised by that other mechanism. In those circumstances it is more than a tad, if I may say so, cheeky of Cherry to seek to raise it via a point of order. [Interruption.] That was a very good-natured reply. The hon. and learned Lady should consider herself very fortunate that I am being so patient.

It is perfectly possible for the matter to be raised on another day and, knowing the pertinacity of the hon. and learned Lady, I feel sure she will make an attempt on a subsequent day, and it is open to her to do that. I hope that is helpful. [Interruption.] “Generous”, says somebody from a sedentary position. Well, that is my middle name.

Prisons (Substance Testing)

Motion for leave to bring in a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to make provision about substance testing in prisons and similar institutions.

Drugs in our prisons are a major problem, which we need to do more to tackle. A recent review by Her Majesty’s inspectorate of prisons in 2015 showed that 52% of prisoners had used drugs in the two months before they went to prison. A survey from 2016-17 showed that 31% of female prisoners and 47% of male prisoners found it easy or very easy to get drugs in prisons. In 2016, there were almost 11,000 incidents of drug finds in prisons in England and Wales alone, with 225 kg of illicit drugs recovered.

Psychoactive drugs are a newer problem for our prisons system and for our society, but they are a growing and dangerous problem, and further action is needed. These drugs are often incorrectly termed “legal highs”. Not only do they alter the mind in broadly similar ways to class A drugs, but they have particularly pernicious and damaging effects on mental health—on issues such as anxiety and depression. A recent Centre for Social Justice report in 2015 suggested that a majority of prisoners had tried Spice, a particularly famous psychoactive drug. Last July, the former prisons and probation ombudsman, Nigel Newcomen, said that 79 deaths were directly linked to psychoactive substances between June 2013 and September 2016.

So what does this Bill actually do? Currently, the Prison Service can test for prohibited drugs specified under the Misuse of Drugs Act 1971. In order to add a newly formed and manufactured psychoactive drug to this list of prohibited drugs, the Government need to manually add each and every psychoactive drug to it. As Members will fully appreciate, that can be cumbersome and time-consuming. It is relatively easy for drug manufacturers and chemical experts to get around the law. They do that by producing slightly different versions of these psychoactive drugs, which means that our Government and Prison Service are entirely reactive and slow. As a result of our legislative process, the Government can get a psychoactive drug added to the banned list only after it is already doing a huge amount of damage to our system.

The Bill is straightforward and simple. It allows a generalised definition of “psychoactive drugs”, one provided by the Psychoactive Substances Act 2016, to be added to the statute book, which will allow the Prison Service to test prisoners for any and all psychoactive substances, now and in the future. This allows our Prison Service to be proactive, not reactive. As we go through the legislative process, I would hope to get cross-party and Government support—I can see the Minister of State, Ministry of Justice, the hon. Member for Penrith and The Border (Rory Stewart) in his place—to expand the powers of the Prison Service to test for the misuse of pharmaceutical drugs and to provide for generalised prevalence testing. That would allow prisons to have a better understanding of the drugs that are running through the system.

We spend lots of time in this House debating how to cut the reoffending rates of prisoners. I believe, as I suspect do many Members, that excising the cancer of drugs from our prisons would be one of the most significant things we could do to cut reoffending rates. We know that drugs are a problem, but the Government and the Prison Service are fighting this with one hand tied behind their backs. Let us untie that hand, and untie the hands of prisoners who become addicted to or stay addicted to drugs throughout their time in prison because there are, sadly, too many drugs in our prisons.

If hon. Members are serious about prisons being drug-free, they should support this Bill. If they are serious about rehabilitation of offenders, they should support this Bill. If they are serious about social mobility, by which I mean the ability of men and women to leave prison without the burden of drug addiction, so that they can get on and make the most of their lives, they should support this Bill. I commend it to the House.

Question put and agreed to.


That Bim Afolami, Gareth Snell, Nicky Morgan, Ben Bradley, Priti Patel, Gillian Keegan, Mr Simon Clarke, Vicky Ford, Sir Henry Bellingham, Lee Rowley, Alex Burghart and Leo Docherty present the Bill.

Bim Afolami accordingly presented the Bill.

Bill read the first time; to be read a Second time on Friday 6 July, and to be printed (Bill 195).

Military Action Overseas: Parliamentary Approval

Emergency debate (Standing Order No. 24)

I beg to move,

That this House has considered Parliament’s rights in relation to the approval of military action by British Forces overseas.

It is great to see you in the Chair, Mr Speaker. All I have to say is that the nation stands in admiration of your constitution and as you were in the Chair yesterday from bell to bell for eight and a half hours we are all now in admiration of your personal constitution as well. I also thank you for granting this debate.

My hon. Friend the Member for Wirral South (Alison McGovern) was right in yesterday’s debate when she said, in quoting the right hon. Member for Sutton Coldfield (Mr Mitchell), that this is a hung Parliament and therefore political power must pass from the Cabinet to the Floor of the House. But I do not totally agree with that analysis; the lack of a majority makes it more urgent, but the principle of accountability to Parliament when it comes to war making was established in 2003, when the Labour party had a large majority, and that principle must now be enshrined in law. Indeed, the tombstone of the former Foreign Secretary, our friend the late Robin Cook, who warned so eloquently in this House against the decision to invade Iraq, records his words:

“I may not have succeeded in halting the war, but I did secure the right of Parliament to decide on war.”

I am sorry to say that the Government are now attempting to overturn that democratic advance.

Does the right hon. Gentleman not agree that protecting the lives of UK servicemen and women will sometimes require the use of surprise and that therefore prior parliamentary approval could on occasion be life-threatening?

I will be dealing with that point during my speech. I do understand the point the hon. Gentleman is making and the need for urgent action at times, and there are provisions for that in the proposals we are putting forward.

During yesterday’s statement, the Father of the House—the right hon. and learned Member for Rushcliffe (Mr Clarke)— the leader of the Scottish National party and the leader of the Liberal Democrats, as well as of the official Opposition, agreed that Parliament should have been recalled. That is a common position on all sides of the House, absolutely irrespective of our views on the action undertaken in Syria last Saturday morning.

Does my right hon. Friend agree that we should listen not just to voices inside the Chamber, but to voices outside—the great British public? A woman on the doorstep in Ealing said to me this weekend, “Did we just regain the sovereignty of Parliament to hand it over to a Prime Minister with no majority or, worse still, to Trump?” Did she not have a point?

My hon. Friend’s constituent is right that parliamentary sovereignty requires that Parliament holds Government to account.

The Father of the House said that

“once President Trump had announced to the world what he was proposing, a widespread debate was taking place everywhere—including among many Members of Parliament in the media. However, there was no debate in Parliament.”—[Official Report, 16 April 2018; Vol. 639, c. 47.]

It was happening everywhere, except here. The SNP leader put it more succinctly:

“When the Prime Minister called a Cabinet meeting last week, she should have recalled Parliament.”—[Official Report, 16 April 2018; Vol. 639, c. 48.]

The UK Prime Minister and the Executive must be accountable to Parliament, not to any other Government, let alone to the whims of any President or other head of state. The need for an independent British foreign policy, based on human rights and international law, has never been more urgent.

Does my right hon. Friend share my disappointment that we have a Prime Minister who inherited a parliamentary majority that she managed to lose rather clumsily, and rather than responding to her situation by trying to build consensus throughout the House on a whole raft of issues—this is the most important, but I include all Opposition days and so on—she has decided to respond by ignoring Parliament?

My hon. Friend is right that all kinds of debates could have taken place and a consensus reached, or not. Either way, there could have been that opportunity. That is what Parliament exists for. Parliamentary approval can be crucial to ensure the democratic legitimacy of any planned military operation or warlike act, just as it can establish public consent for a Government’s wider strategy.

The right hon. Gentleman mentions a vote; had there been a vote in this place last week to protect innocent civilians in Syria, how would he have voted?

This is a debate about process. [Interruption.] Could the hon. Gentleman contain his aggression for a moment? I made very clear my concerns about the strike, its legitimacy and the legality behind it, so I should have thought it was pretty obvious what my view on it was. That is not to say, as I pointed out last night—[Interruption.]

Order. The right hon. Member for Rayleigh and Wickford (Mr Francois) made a very fine speech yesterday. He spoke on his feet with considerable passion and integrity, but he should not now rant from a sedentary position. He used to misbehave 30 years ago, when he stood against me in Conservative student politics. We have both grown up since then.

Are we going to get a video of that debate, Mr Speaker?

Currently, the Government of the day, of whichever hue, can, under the powers of the royal prerogative, deploy our armed forces without obtaining parliamentary consent for that action. It is important that our armed forces know that they have the democratic backing of Parliament and the support of the public for any action that they undertake.

Is not the essential point that the action that the Government have taken goes against the statement they made in 2016, when they prayed in aid action taken in 2013, 2014 and 2015, the nature of which was essentially similar to the action that was taken last week on the Prime Minister’s prerogative? Unless it is clarified and codified in law, the uncertainty will remain as to whether the Government really respect the convention to which they say they still adhere.

Indeed, my hon. Friend is right. There is an established convention, and I fear that the Government were trying to breach that convention with their actions yesterday. I welcome the parliamentary convention that has developed since the Iraq war, whereby the Government are expected to seek the approval of the House before they commit forces to action.

It is. Following the intervention by the hon. Member for Cardiff West (Kevin Brennan), I wish to clarify the difference between this most recent operation and what happened in 2013—