House of Commons
Tuesday 24 April 2018
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
We are looking at ways to improve our justice system and to modernise the delivery of justice in many ways, including with technology. In circumstances where 41% of tribunals were used at half their capacity in 2016-17, it is right that we consider whether spending money on the physical estate is the best use of money.
The Government like to say that they have reallocated court services rather than closed them, but Bedford has lost its magistrates court and employment tribunal court, so the public and lay members must travel more than 30 miles to access justice. Can the Minister reassure me that family court services, which are heard in the highly utilised Shire Hall, will remain in Bedford indefinitely?
The hon. Gentleman is right in relation to the changes taking place in Bedford to a certain extent, but I emphasise that the closure of the tribunal court is nothing to do with any changes being made by the Ministry of Justice or Her Majesty’s Courts and Tribunals Service. The tribunal service is closing because the landlord did not extend the lease, and it was a decision of listing, which is a judicial capacity, to move the tribunal court’s hearings elsewhere. Civil cases will be heard in Bedford magistrates court, and until another location is found, it will not close.
Northallerton magistrates court in my constituency is scheduled for closure. Will the Minister consider using that court as a pilot for some of the future technology solutions, to ensure that those are workable in practice, before the closure is implemented?
My hon. Friend makes a valid point, as has his neighbour, my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak). I have met them both and the police and crime commissioner for the area. It is important to consider the appropriateness of pilots for mobile technology, and we will do so.
Thousands of key court staff were axed, but the Government are now spending tens of millions of pounds more on contracting agency staff. More than 100 courts were sold off, each raising not much more than the average house price. Now the Secretary of State has appointed someone with a slash-and-burn record as the new chair of the HMCTS board, telling the press that Tim Parker’s
“expertise will be vital as we deliver our reform and modernisation of the courts”.
To allay concerns that Mr Parker has been appointed for his toughness on cuts, can the Minister outline the specific expertise that Mr Parker has in working in our court system?
The hon. Gentleman makes a number of points that I would like to refute, but I will mainly concentrate on two. It is important that where successful people in business put themselves forward for public service, we should welcome them and not put off experienced people from taking up important posts. Mr Parker has been successful in the businesses that he operated and has operated them appropriately, and we welcome him to his post. The hon. Gentleman also talks about cuts to our system. I would like to make it clear that the Ministry of Justice is proposing an extensive reform programme, which will put £1 billion into our courts service.
Benefit applicants in Kettering tell me that they are now having to wait a completely unacceptable 45 weeks for tribunal appeal hearings due to a lack of a suitable location. Will the Minister look into that as a matter of urgency and get that problem fixed?
It is very important that when cases are started, they are heard expediently, so that people are not prejudiced and do not have to wait for justice. I am happy to meet my hon. Friend to talk about those issues.
This is something the Department studied in detail in 2015, and we have conclusive evidence that giving somebody a community sentence rather than a short custodial sentence reduces reoffending over a one-year period.
We have evidence of that in Scotland as well. The Scottish Government’s move towards community payback orders has helped Scotland to achieve its current 18-year low in reoffending. Is the Minister looking to the Scottish Government’s example and considering how they have managed to achieve these figures?
Absolutely. We have a lot to learn from Scotland, specifically on community sentences, and indeed we will be looking at what more we can do to emphasise that a custodial sentence in the short term should be a final resort. In reoffending terms, it is often much better for somebody to be given a community sentence.
In Cornwall, I work closely with Konnect Cornwall, headed up by Ian Curnow, which does a lot of work on behalf of the Government and the Department for Work and Pensions to support ex-offenders and people who are on the way into trouble. What more resources can be made available so that no one is left behind?
A lot of this is about identifying those key local providers. The real challenge that we need to overcome, which is true not just for justice but for local councils, is that of making sure that when we work with the third sector we work, not with big national providers, but with small, grassroots local charities.
I draw the House’s attention to the fact that I am a life member of the Magistrates Association. In the all-party parliamentary group on women in the penal system, we recently heard from the Magistrates Association that magistrates are not familiar with the content of community penalties. That makes them reluctant to choose such penalties. The issue, in part, seems to be a lack of funding for training. Will the Minister comment?
This is a long-standing issue—it was true even in 2008-09—that consistently, the judiciary and magistrates have expressed concerns about community sentences. We need to do much more to build confidence, but the fact that this has been going on for nearly 10 years shows that it is a very challenging thing to do. Training will be an important part of that.
Prison Officer Recruitment
Retaining and recruiting engaged and motivated staff is critical to delivering the solutions to drive improvement across the service. Between the end of October 2016 and the end of March 2018, we have increased prison officer numbers by 3,111 full-time equivalent staff. This is already significantly over our target of 2,500 additional staff by the end of December 2018. Investing in the frontline is vital for safety, rehabilitation and security, which is why we are spending £100 million a year in additional prison officers.[Official Report, 1 May 2018, Vol. 640, c. 1MC.]
I thank my right hon. Friend for that answer and commend him for the work that he has done on recruitment. Can he confirm when we can expect to see the new officers on the landings?
I can tell my hon. Friend that 90% of the 3,111 will be on the landings by the summer, and all will be in place and operational by the end of the year.
I thank my right hon. Friend for his answer. Will he update the House on the progress being made towards the new key worker model and the impact it is having on prison officer recruitment?
My hon. Friend is absolutely right to raise that point. The key worker model is crucial. It will allow prison officers to spend more time, both on a one-to-one basis and with small groups of prisoners, improving staff-prisoner relationships. That can help us reduce both violence and reoffending. Some prisons, such as HMP Liverpool, are already running that scheme, and I look forward to more prisons fully implementing that over the months ahead.
Many of Dartmoor prison’s prison officers live in Plymouth and have told me of their concern that prison officer cuts, inexperienced new staff and increasing retirement ages are causing stress and concern. Can the Minister reassure me that there is a proper plan to address staffing and morale in our Prison Service?
There is already a proper plan to address that point about staffing. That is why the numbers are going up, and that is the point I am setting out. The numbers are at a five-year high. We are ahead of what we promised in October 2016. I am pleased that we are doing that and we will continue to recruit new prison officers—net new prison officers—into the Prison Service.
What additional training will these new officers be given to deal with the scourge of the availability of drugs in our prisons throughout the United Kingdom?
The hon. Gentleman makes an important point. We are refreshing the way that training works for prison officers. It is very important that we deal with the issue of drugs, which has been a real game-changer in its effect on prisons. As we change and refresh our training process, we need to ensure that new prison officers have the skills they need to deal with drugs.
The net increase in the number of prison officers is very welcome, and I particularly welcome the Secretary of State’s reference to a key workers scheme, but does he agree that the mix of the workforce is important? Successful key worker and personal officer schemes will depend on having experienced staff, because they are best able to develop relationships with prisoners and deal with violence, the risk of suicide and other issues. Will a strategy now be put in place for the retention of existing staff, perhaps with incentives to encourage good people to remain in the service?
My hon. Friend is right; it is important that we not only recruit new staff, but retain existing staff. We are working closely with those prisons that are failing to retain staff. It is worth pointing out that in 2017 the percentage of prison officers in bands 3 to 5 who left the service was 9.7%—higher than we would like it, but not particularly out of line with other employers. Prison officers do a very valuable job, and we need to recognise that, support them and encourage those who have a lot to offer to continue to serve.
I am astonished that the Secretary of State can come here and appear somewhat triumphant. Let us be absolutely clear: this Government cut 7,000 prisoner officers, so there are still 4,000 fewer than there were in 2010. When does he expect prison staff numbers to return to 2010 levels?
I suspect that you, Mr Speaker, would stop me if we started a debate on the state of the public finances in 2010 and the difficult decisions that had to be taken as a result of the situation we inherited. The reality is that since October 2016 we have been recruiting more prison officers, we are ahead of what we said we would do and we are continuing to recruit prison officers. That is really important to ensure that prisons operate as they should.
Suicide in Prisons
Any death from suicide in prison is a tragedy. We have managed to reduce the number of suicides in prison—it nearly halved between 2016 and 2017—and most of that progress is due to a new protocol that identifies the individual needs of prisoners and their times of maximum vulnerability.
How many additional staff who are trained to deal with medical illness have been brought in?
Nearly 15,600 of our staff have received additional training—that is the figure produced by my colleague. The ACCT—assessment, care in custody and teamwork—process, which is the new protocol for suicide reduction, focuses on the evidence for when prisoners are most vulnerable, for example their first night in custody, and how to ensure that we deal with them. But we still need to reduce the number of suicides further.
Ninety-three women have died in prisons in England and Wales since the 2007 Corston report. When the new female offender strategy is published, will it focus on community alternatives to prison, especially for the 70% of women who are sentenced to six months or less?
Absolutely. This is a common theme. We have clear evidence that reducing the use of custodial short sentences and instead diverting people into the community can be good for protecting the public, by reducing reoffending, but it is also very good for mental health and for reducing suicide.
Supporting victims of crime is a priority for the Government and we have made a commitment to publish a victims strategy by this summer. The strategy will set out our cross-Government approach to make fundamental improvements for victims. It will also consider how compliance with the entitlements in the victims code might be improved and better monitored, and how criminal justice agencies responsible for the delivery of entitlements might be better held to account.
The Minister has promised us a strategy by the summer, but a victims law was offered in the 2015 Conservative manifesto and included in the following Queen’s Speech and reiterated in the 2017 general election. When will this long-promised law finally see the light of day?
We are considering both legislative and non-legislative measures. If any legislation is required to underpin the victims code, we will bring it forward when parliamentary time allows.
With respect to victims of domestic abuse, will the Minister consider women who are not eligible for legal aid to help with their divorce after domestic abuse, including women who currently fail the means test due to their having a share in a valuable family home? Will he meet me to discuss the problems that such women face in paying for basic legal advice?
I thank the right hon. Gentleman for the question. Yes, he has a point with regard to the funding of domestic abuse cases from legal aid. My ministerial colleagues are fully aware of this issue, and I am more than happy to meet him.
“Why should victims always have to be fighting their corner? That’s why we need a victims’ law.”
They are not my words, but the words of the Government’s Victims’ Commissioner. Can we be clear: will she and all the other people who are calling for it get a victims law?
My intention in the strategy is to outline the legislative requirements needed to underpin the victims code. By definition, that is a victims law.
Leaving the EU: UK Legal System
First, I congratulate my hon. Friend on his impressive marathon run at the weekend.
We have agreed an implementation period that will give businesses and individuals legal certainty. We are now concentrating on ensuring that we negotiate the right future for our country, including a deal to ensure that there is mutual enforcement of recognition of judgments in the justice sector.
I thank the Minister for her response. I am very pleased not to have to bob this week, I can tell you, Mr Speaker.
Scotland is proud to have its own ancient and distinct legal system. Brexit will present the most significant challenge to that since the creation of the Scottish Parliament. It is therefore vital that we get it right. Will the Minister reassure me that, at her Department’s heart, it will ensure that Scots law continues to flourish post Brexit, respecting the distinct nature of Scots law and preventing legal confusion and chaos?
My hon. Friend is right to identify that Scotland has a distinct legal system that should be respected. It is important that we engage fully with the devolved Administrations to ensure that we get the best and the right deal throughout the United Kingdom. The Secretary of State will be speaking this afternoon to the Scottish Justice Minister and my officials speak regularly with their counterparts in Scotland to ensure that we will get the best deal for the UK.
Given the uncertainty surrounding Brexit, it is important that the Government do not add to the worries of businesses, especially those that would otherwise be in a position to invest and grow. Will the Secretary of State end the uncertainty in the credit market and release the response to part 2 of the soft tissue injury claims process consultation immediately?
The hon. Lady raises an interesting issue that I am happy to look into. More generally, legal certainty is incredibly important, which is why it is so good that we have agreed the implementation period, which gives us a period of certainty.
Has the Minister made any assessment in the Department of the beneficial changes that can follow from our legislative framework here in the UK, once we are finally unencumbered by the EU?
The hon. Gentleman is right that, after we have left the EU, we will be able to determine our laws, which will benefit our country in the way that we decide.
At the moment, there are two British judges on the European Court of Justice: one from the English legal tradition and one from the Scottish legal tradition. During the transition period, the domestic legal systems of the United Kingdom will continue to be subject to the full force of the jurisdiction of the European Court of Justice, whether in relation to litigation between private individuals or enforcement against the United Kingdom. Why, then, have the UK Government agreed to article 6 of the draft withdrawal agreement?
The judges at the ECJ make a very valuable contribution to our jurisprudence and to the rights of individual citizens. It is worth pointing out that once someone is appointed as a judge of the ECJ, they are not a representative of their country; they are an individual determining cases that come before them, without any partisanship towards their country. Indeed, if we had a British case before the Court, there would be no saying whether it would come before an English judge or any other judge.
One of the things that means the European Court of Justice is not a foreign court is the presence of British judges on it, but article 6 of the draft withdrawal agreement, which appears to have been agreed, provides that there will be no British judges on the Court of Justice during the transition period. Effectively, they are getting the sack at the end of next March, despite the Court’s continued jurisdiction over the United Kingdom. Does the Minister accept that, as a rule of law issue, it is concerning that there will be no Scottish judge and no English judge on the Court of Justice during the transition period, despite the fact that these countries will continue to be subject to the Court of Justice? Will she persuade the Prime Minister and the Secretary of State for Exiting the European Union to revisit this issue in the negotiations to come, so that there will be British judges on the Court of Justice during the transition period?
As I mentioned, once the judges are appointed, they act independently of their country, so if we respect the judgments and the integrity of the other judges who are there already, we should be satisfied that we will get justice.
My hon. Friend, along with my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) and the right hon. Member for Delyn (David Hanson), are campaigning strongly and tirelessly on this issue; I was very pleased to meet them on 17 April. I am not aware of any specific conversations that the Secretary of State has had with his Cabinet colleagues, but the Government are sympathetic to the intention behind the Bill, although we believe that the offence is already caught by other legislation.
Police dog Finn from my constituency was stabbed in his stomach with a 10-inch blade. When the offender tried to stab his handler, police dog Finn jumped up and took another stab wound to his head to save the handler. If the handler had not been given a little scratch to his hand, the offender could not have been sent to prison, because the current legislation does not work. The Service Animals (Offences) Bill, which is promoted by my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald), has its Second Reading this Friday. I am grateful to the Minister for the meeting that she had with me, but will she support the Bill on Friday because it can make progress only with Government support?
I am aware of the case and I was very pleased to discuss it. Police dog Finn did a remarkable thing, and I know that he has been recognised for his work. The Government are looking at the issue.
But will the Minister support the Bill on Friday?
As the right hon. Gentleman knows, the Bill is in the hands of the Department for Environment, Food and Rural Affairs, and it will respond.
May I update my hon. and learned Friend? Some 34 out of the 41 police commissioners in this country support the Service Animals (Offences) Bill, and lawyers up and down the country, including Sarah Dixon, who runs the Finn’s law campaign, have identified a gap in the law. Is it not time that the Government backed my Bill?
I am grateful for a third opportunity to address this issue and to speak again—this is the third time that I have heard my right hon. and learned Friend express his support for the Bill in the Chamber. As I have said, the Government are looking at this issue, and the matter is primarily for DEFRA.
In so far as the right hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) seeks my advice, and he might not do so, my advice to him, to put it bluntly, is to follow Churchill’s adage: KBO—keep buggering on at all times. Just keep going, man!
I congratulate hon. Members on their work in this area. As an animal rights campaigner, I think it is simply wrong that criminal damage is the highest charge that can be brought to punish someone who attacks a service animal. What are the Government doing to change the legal oversight, to protect our brave service animals, and to ensure that those who attack and injure service animals are subject to the full weight of the law?
My hon. Friend raises a technical point about the offences that are available. In fact, there are two: criminal damage; and an offence under animal welfare legislation. Both attract a penalty of up to six months and, as she may be aware, DEFRA has identified that it is looking to increase the sentence to five years.
Prisoner Education/Reoffending Rates
To address education in prison, Dame Sally Coates’s report makes three key recommendations: first, to carry out an individual survey of a prisoner’s educational needs when they enter prison; secondly, to make sure that governors have more control over education provision to reflect the needs of the prison or local area; and, thirdly, to make sure that English and maths are a core part of that curriculum.
A 2017 report said that the quality of education in English and Welsh prisons was generally good, but it found that poor attendance and punctuality of prisoners often went unchallenged and that the process of moving prisoners to learning, skills and work activities from the wings was often ineffective and poorly managed. What is being done to address those problems?
It is absolutely right that there is no point having good educational provision if prisoners are not getting to the classrooms. Fundamentally we need to do two things: first, make sure that prisoners are moved reliably and predictably from their cells into the classrooms; and, secondly, make sure that the educational provision in the classrooms is sufficiently attractive for the prisoners to engage.
I apologise for being late, Mr Speaker, but I was at the unveiling of the first statue of a woman in Parliament Square.
May we have an evaluation of how far we have got? Some years ago, when I was Chair of the Education Committee, we looked at skills training in prisons, but I do not think that much has happened since then, particularly for people on the special educational needs spectrum, and especially those with autism.
There has been a significant improvement in the Ofsted reports, but the hon. Gentleman is absolutely right that people with special educational needs, in particular, and the more than 50% of prisoners who have previously been excluded from school or have literacy challenges remain a big issue for education in prisons.
Does the Minister agree that one of the keys to reducing reoffending rates is ensuring that skilled probation officers have manageable case loads so that they can give enough time and energy to each individual in their care?
Absolutely. It is particularly important that there can be flexibility so that there can be a higher ratio of probation officers to high-risk cases than for low-risk cases.
It is right, of course, that prisoners must turn up, but when I visited Deerbolt prison in my constituency, the governor said that the contractor, Novus, was extremely unreliable. What is the Minister doing to respond to the report by ensuring that as contracts are rolled over, control of them is decentralised to the prison?
This is a central issue about which governors get very frustrated. Over the next 12 months, the hon. Lady will discover that we are putting governors in charge of that provision so that they can put pressure on the provider within the prison and ensure that it meets their needs.
Prisoners: Mental Health
We are committed to improving the provision of and access to mental health services for those in the justice system. We continue to roll out the keyworker role across the closed male estate so that all prisoners will have a named officer to provide them with dedicated support during their sentence. As the Minister of State, Ministry of Justice, my hon. Friend the Member for Penrith and The Border (Rory Stewart), said earlier, 14,600 prison staff have now completed at least one module of this training.
Figures show that, in March 2017, 75% of prisoners in England and Wales with serious mental health problems experienced significant delays in their transfer to hospital for treatment. Last month, an independent review of mental health assessment reported delays to transfer, with one of the reasons being the delay by the Ministry of Justice in sanctioning transfers. Given the pressure on those suffering poor mental health, surely this is important enough to require swifter action. What steps is the Minister taking to address the problem?
I became responsible last September for the unit in the Ministry of Justice that authorises the transfer of patients from the criminal justice system into secure accommodation. We have had some internal difficulties, which I inherited, with the staffing of the unit, but things are improving. I get a weekly update on the number of people in the system who need to be transferred. I am under no illusions about the need to expedite those transfers, and I am in weekly contact with the Department of Health and Social Care about the need to assess the capacity at low, medium and high-security levels in the secure accommodation network.
Probation Services: Reoffending Rates
While the frequency of reoffending—in other words, the number of offences committed by prolific offenders—has risen since 2009, the base rate, or the number of people reoffending, has dropped by two percentage points since the introduction of community rehabilitation contracts.
In 2015, the Government commissioned two important reviews: the Dame Sally Coates review of education in prisons, which was mentioned earlier; and the Charlie Taylor review of the youth justice system. Both reviews highlighted basic failures in the current system and made important recommendations. Will the Minister tell me how many of those recommendations have been implemented?
My focus has been on the Dame Sally Coates review; youth justice is dealt with by the Under-Secretary of State for Justice, my hon. Friend the Member for Bracknell (Dr Lee). The Dame Sally Coates review is driving the entire education transformation over the next 12 months, particularly in respect of the three indicators that I mentioned earlier, including the assessment of prisoners and coming up with a plan. I shall have to reply in writing to the hon. Lady’s question about exactly how many recommendations have been implemented.
The joint report of the inspectorates of probation and of prisons stated that if the key functions of community rehabilitation companies
“were removed tomorrow…the impact…would be negligible.”
So what exactly are we paying for?
I must respectfully disagree with that. As I have said, the base rate of reoffending has dropped by two percentage points, which is actually quite significant, as the rate was flat for nearly 40 years before that. It would be very dangerous indeed to remove the community rehabilitation companies, which are looking after 40,000 people who were previously under very short periods of supervision, and nearly 100,000 extra people who would be dangerous to the community if not properly monitored.
I share the outrage at the distress that this intrusive behaviour can cause to victims, and I am determined to ensure that they can be confident that their complaints will be taken seriously. I am sympathetic to calls for a change in the law, and my officials are reviewing the current law to make sure that it is fit for purpose. As part of that work, we are considering the private Member’s Bill that is being promoted by the hon. Member for Bath (Wera Hobhouse).
It is appropriate on this day to refer yet again to the statue of Millicent Fawcett, and I shall channel my inner Millicent Fawcett by asking the Secretary of State this question. Nearly 100,000 members of the public have signed a petition calling for upskirting to be made a specific sexual offence, and MPs from all the major parties have signed an early-day motion that makes the same call, so why is the Secretary of State still refusing to act? We really need to ensure that our law reflects that of Scotland, where provisions on upskirting have been incorporated in the Sexual Offences (Scotland) Act 2009.
Let me also acknowledge the unveiling of the Millicent Fawcett statue.
As I have said, I am sympathetic to the idea of our taking action in this regard. There are instances in which people have been successfully prosecuted for upskirting in the context of outraging public decency, and voyeurism can also apply under the Sexual Offences Act 2003. However, those offences do not necessarily cover every instance of upskirting, which is why there is a strong case for looking at the law and considering whether we need to change it.
I, too, am using my inner Millicent Fawcett courage to raise this issue. In Scotland, the offences of upskirting and downblousing are covered by the 2009 Act. Surely the Secretary of State accepts that the same could be done in this country.
We are looking very closely at the Scottish legislation and experience. It is true that a very small number of prosecutions have been brought under that legislation. I want to reassure people that successful prosecutions have been brought in England under the existing law, but I think that there is a case for making sure that we have legislation that deals with this offence specifically.
I think that we all receive correspondence about this regularly. As other Members have done, may I encourage the Secretary of State to look at what has been done in Scotland, where we have shown leadership? The House is clear about the need for action—the will is there, so we must act.
We are looking very closely at how the Scottish legislation has operated to establish whether, if there is a gap, that represents a way in which we can address the matter.
Prison Capacity: South-west
In Devon and Cornwall, as in my own constituency in Cumbria, the number of offenders is fortunately quite small in absolute terms, which means that provision is at Exeter and Dartmoor.
The Minister will know that Dartmoor Prison is earmarked for closure, after notice was served on its lease back in 2013. The prison is an asset to the south-west and employs a number of my constituents. My hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) is also keen and eager for the prison to remain open. Will the Minister review the decision and look at what more can be done to keep that facility open?
The decision to close the prison was based on the fact that it was built in 1805 and there are significant maintenance issues, with a great deal of damp and leaking. However, we pay tribute to the governor and the prison officers for running a very good prison regime that is popular with the prisoners, which is one thing that we will have to balance when making the final decision on the prison.
Courts: Physical Access
I regularly meet HMCTS to discuss the court estate. It regularly reviews the estate and has monitoring systems in place to ensure that there is appropriate physical access for disabled people and, when appropriate, to identify gaps and make improvements.
If there is monitoring, the Minister will be aware that the North Staffordshire combined justice centre, which is where my constituents from Stoke-on-Trent are sent for personal independence payment appeals, has small steps and insufficient parking, and on one occasion a gentleman was asked to remove a piece of life-saving equipment so that it could be scanned by security before he entered the building. Is the Minister willing to meet Pam Bryan and John Beech from the Stoke-on-Trent and Newcastle disability network so that we can look at how the site can be made fit for purpose?
The hon. Gentleman is right: I am aware of that. The charity he mentions—the Stoke-on-Trent Area Network for Disability—made a complaint, and HMCTS had a meeting on 5 April to discuss the issue. It is looking at the feasibility of implementing the suggestions that were made, such as putting in place automatic doors, signage and improvements to the waiting area, but I would be very happy to meet the hon. Gentleman and his constituents to discuss them.
Access to courts for people with disabilities will not be improved by closing courts. It turns out from the response to a written question I recently tabled that this year no Minister has visited any of the courts that are due for closure. May I implore the Minister to come to Cambridge and talk to people with disabilities to see the impact that the Government’s plans will have?
I am always happy to meet people who use the courts service around the country. We are improving access in a number of ways, including by ensuring not only that we have court buildings, but that disabled people can take advantage of the ability to give evidence by video link so that they do not have to go to a court at all.
Family Justice System
I was pleased to meet my hon. Friend in March to discuss issues related to the family justice system, which he cares deeply about. It is important that every child has a stable home, and we need to look across the justice system to ensure that it delivers the right outcomes for vulnerable children and their families.
I was grateful for the meeting with the Minister. Does she agree with Baroness Shackleton that fault-based divorce produces uncertainty that creates an industry for lawyers and a jungle for the layman? Is it not high time for an overhaul of the whole family law system to address that and many other issues to do with couples’ rights before, after and without marriage?
My hon. Friend makes a powerful point about no-fault divorces, as he has previously. When there is conflict within a family, it is important to reduce that conflict in the interests of not only the parents but the children. I can confirm that we are looking actively at the issue.
Our family courts are in crisis. The Ministry of Justice’s own figures show that since the removal of legal aid from the family courts, two thirds of litigants represent themselves and have no access to lawyers. They have to deal with the incredibly complex issues that arise in the family courts. Will the Minister confirm whether, as part of the review of the family justice system, the Lord Chancellor will re-establish early legal aid in such cases, which we have promised?
The hon. Lady makes an important point. Family justice is important, because issues for children start by having a stable home and a strong family. She will know that, as part of the LASPO reviews, we will be looking at the issues she raises. I should also say that we have an online pilot at the moment relating to divorce, and it has been incredibly successful. It used to be the case that 40% of paper applications for a divorce were sent back owing to incorrect filings. That number is now down to 0.8%.
Since 2010, the Government have made tackling domestic abuse an absolute priority. Last month, the Prime Minister launched the violence against women and girls strategy at No. 10, and following on from that I attended the first roadshow event, at Edgbaston cricket ground in Birmingham, to meet victims of domestic abuse and campaigners.[Official Report, 11 May 2018, Vol. 640, c. 12MC.]
Safer Places is a remarkable and extraordinary domestic violence charity in my constituency. It has highlighted the problem of the delay between domestic violence incidents being reported and finally getting to court. What are the Government doing to reduce the time between the incidents being reported and getting to court, so that the perpetrators of this evil abuse can be brought to trial more quickly?
The police response to domestic abuse has improved in recent years, and action has been taken to address the inspector of constabulary’s recommendation that domestic abuse should be a force-wide priority. The police are referring over 19,000 more cases to the Crown Prosecution Service than they were in 2010. In the courts, the listing of cases is a judicial function, and they have a responsibility to ensure that all cases are heard by an appropriate judge with the minimum of delay.
Birmingham Pub Bombings: Legal Aid
We have had a number of representations about this issue, many from the hon. Gentleman himself. I took part in the Westminster Hall debate on the subject, and I was pleased to have the opportunity to hear from him and many other Members. The Secretary of State also met the family of a victim recently. I understand that the recent decisions of the Legal Aid Agency are frustrating for the families, but the hon. Gentleman knows that I am unable to intervene in individual cases.
As public funding has been made available to the coroner to appeal the judgment of the High Court on the naming of suspects in relation to the Birmingham pub bombings inquests, should not parity of representation be made available to the families of the victims of those bombings, to defend that same High Court judgment? If legal aid is not available to the families, why does the Minister not make funding directly available, following the example of the Hillsborough inquests?
The hon. Gentleman makes a powerful point. This is a tragedy for all those concerned. He knows that the families have legal aid in relation to the inquest. Legislation on legal aid for judicial review and for inquests is different.
Prison Plans: Port Talbot
I should like to pay tribute to the hon. Gentleman for his amazingly assiduous campaign. He asked exactly the same question, with exactly the same words, at the last Justice questions, since when I have met him another half dozen times. We have had a good meeting with his constituents, and I am now aware of their individual and general concerns. However, we need prison places in Wales.
The hon. Member for Aberavon (Stephen Kinnock) is further evidence of the KBO principle. The Minister said what he said non-pejoratively, but I simply make the innocent and prosaic, but valid, point that repetition is not a novel phenomenon in the House of Commons.
Repetition can be a form of flattery, Mr Speaker. I should like to thank the Minister for meeting me and the representatives of the NPT Prison Group for a constructive discussion, and for agreeing to put plans for the Baglan prison on hold. I am sure he will also have noted the decision of the Welsh Government to put all plans on hold pending a strategic review. Can he assure me that all plans for the Baglan prison are well and truly on hold, and that the UK Government will engage in a constructive and positive manner with the Welsh Government in the strategic review?
I hope the hon. Gentleman feels that we are engaged in a constructive and positive manner and that we have very much taken on board the concerns around that site, but it is important to bear in mind that more than 1,500 prisoners with Welsh addresses are currently being held in English prisons. We need to think about how to provide accommodation for them in Wales, because that is important for reducing reoffending, resettling them in their communities and keeping the links with their families.
Given the overwhelming evidence that smaller local prisons, where family links and the Welsh language can be maintained, are far more effective at reducing reoffending, why is the Secretary of State still proposing super prisons in south Wales when they are known not to work?
There are of course reasons why larger modern prisons are favoured, and that is partly about how we can manage things at scale. However, if there are communities in Wales that would like to come forward with proposals for smaller local prisons, I would absolutely agree that there is a strong argument for keeping prisoners closer to their homes.
Prisons: Drug Smuggling
We have invested in improving security through the use of body searches and metal-detecting technology in every prison. We are also trialling new X-ray body scanners to reveal more hidden items. We have invested £3 million to establish national and regional intelligence units in Her Majesty’s Prison and Probation Service which, with prisons, probation and law enforcement partners, are building intelligence about the highest-risk offenders.
I thank the Secretary of State for his answer. My local newspaper, Clacton Gazette, recently ran a story about the use of drones to deliver drugs into prisons. Short of shooting the damn things down, what is the Department going to do about that?
I thank my hon. Friend for his question and his suggestion. We are taking decisive steps to tackle drones bringing contraband into prisons. Under Operation Trenton, Prison Service and police investigators intercept drones and track down the criminals behind them. There have been at least 32 convictions to date, with those sentenced serving in total more than 100 years in prison.
I am delighted to announce that we have met and exceeded our October 2016 target of recruiting an additional 2,500 prison officers, with 3,111[Official Report, 1 May 2018, Vol. 640, c. 2MC.] full-time equivalent staff joining the prison workforce seven months ahead of schedule, 90% of whom will be on the landings by the summer. Prison officers are some of our finest public servants, and I am happy to see individuals seeking out a career in our Prison Service. Along with the rest of the workforce, those bright new recruits will ensure that prisons are safe and decent, tackle the unacceptable levels of drugs in prisons and cut the rate of reoffending.
Will the Secretary of State outline what steps are being taken to secure employment opportunities for prisoners?
My hon. Friend is right to raise that. One of the best ways in which we can reduce reoffending is by increasing employment, which is why we have the New Futures Network coming in. I am keen to focus on ensuring that we provide employment opportunities to prisoners as much as possible.
The Windrush scandal is one of the cruellest examples of unaccountable state power targeting the vulnerable, defenceless and innocent that I can remember. Senior figures describe our immigration law as complex and unintelligible to everyone but working specialists, so I was disappointed to hear the Home Secretary say yesterday that people affected by the Windrush scandal will have “no need for lawyers”. I am sure that the Justice Secretary will understand why those words will not do, so will he guarantee today that all those who have been put into this kind of situation will have access to the necessary legal advice to help them when they need it most?
The Home Secretary set out a comprehensive plan yesterday for how we will make the process much easier for those who have been affected. For example, those who have retired to another country will be able to obtain British citizenship much more easily to allow them to come here without great difficulties involving visas and so on. The Home Secretary also set out how we are going to put in place arrangements to ensure that there is compensation for those who deserve it.
The Government’s reckless approach to our justice system means that criminal barristers have now been forced into co-ordinated action and are refusing to take up legal aid work due to changes to the advocates’ graduated fee scheme. Against all convention, the Government have denied parliamentary time to debate that properly. The Criminal Bar Association made a formal request that the Ministry of Justice delay, withdraw, amend or reconsider the implementation of the statutory instrument. If the Government will not listen to the views of parliamentarians, will they at least listen to barristers, put the new scheme on hold and set about fixing it?
On parliamentary time, my understanding is that we are waiting for information from the Labour party. On the substance of the issue, let us remember that reforms to the AGFS were worked out with the Bar Council and the Criminal Bar Association. The reforms are necessary to ensure that legal aid funds are distributed in an appropriate way, and that is why the reforms are being made.
As the Under-Secretary of State for Justice, my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer) pointed out, the Department for Environment, Food and Rural Affairs leads on this matter. The Government continue to look at this issue.
As the hon. Gentleman will be aware, there has been an urgent notification process. We have put a plan in place. I have now visited HMP Nottingham, and I pay tribute to Tom Wheatley, the governor, for the work he is doing. He has a much better care process in place, and he has highly trained staff. We expect to see improvements soon at HMP Nottingham.
My hon. Friend makes an important point about the important role that magistrates play within our legal justice system. The Secretary of State told the House of Lords Constitution Committee that the judicial age in general is being looked at in the round.
I will be meeting the Welsh Secretary specifically on this issue next week. We are setting up a meeting with the Head of the Welsh Government, who of course will be changing, and I would very much like the hon. Gentleman to join that meeting. I reiterate that, so long as offending rates in Wales remain as they are, although it is laudable that the Welsh Government wish to divert people away from prison, we currently need places for Welsh prisoners.
Fentanyl is unbelievably dangerous and has contributed to nearly 20,000 deaths a year in the United States. We have underscored through the Crown Prosecution Service guidance for prosecuting people. Fentanyl is a class A drug, but 50 times more powerful than other drugs. People need to understand that even a tiny quantity of this drug is a serious danger to the person producing it, to the person supplying it and, above all, to the public, and must be prosecuted.
I am aware of the recent document produced by the Law Society. Of course, it is important that we have professionals at every level, that we have a diverse profession and that we encourage young people to join what is an excellent profession.
My hon. Friend is right to say that in putting together this scheme discussions went on for two years with members of the Bar and the MOJ. They were calling for us to implement this scheme, so that is the scheme we have implemented. We are always willing to talk to members of the CBA and the Bar Council. Since I have been appointed, in the past three months, I have met the chairman of the Bar Council twice and the chair of the CBA twice.
Northern Ireland has just undergone the longest rape trial in its history, resulting in the acquittal of four men. The Department is carrying out a major review of that trial because of subsequent problems flowing from it. Will the Government—the Department—make a submission to that review, particularly looking at whether the accused should not be named until after a verdict is published?
I thank the hon. Gentleman for his question. This is a long-standing and very sensitive issue, one my predecessors have looked at closely. We continue to look at it; there are arguments on both sides, and we need to examine the cases carefully before we rush to any judgment on this.
I know my right hon. Friend cares deeply about this important matter and he has raised it with me several times. Transparency is very important, and we are looking at the pilot. I am happy to update him, and I am looking forward to our meeting tomorrow with the Society of Editors.
When a person spends time in custody and the CPS then drops the case against them, as opposed to losing a case in court, they are not entitled to compensation, even when they have lost their home and everything. Does the Minister agree that that is a huge injustice? Will she say what she is doing about it?
The hon. Lady raises an interesting issue and I would very much like to discuss it with her.
Nick Hardwick, the former head of the Parole Board, made the case yesterday that it should be required to publish comprehensive explanations for the decisions it takes and that it should make public the names of the people who are making those decisions. May I urge my right hon. Friend to follow that advice as he undertakes his own review?
My hon. Friend is right to point out that I am undertaking my own review of that. The first step is to address the decision of the High Court on the existence of rule 25, which prohibits, in essence, any information being provided on Parole Board decisions. We will do that, but we also need to look more widely at how the Parole Board rules work—that includes the issues of transparency and of how the Parole Board can reconsider cases in particular circumstances.
The troubled Holme House prison in my constituency has had another damning report, this time from the Independent Monitoring Board, which talks of a shortage of staff, a lack of appropriate care for prisoners, a sustained drugs problem, and more violence against staff and between prisoners. Things do not seem to be getting any better. Will the Minister please take an interest in Holme House and ensure it gets the support it needs?
Absolutely. The central problem in Holme House is, of course, not the age of the building—it is relatively modern—but the drugs. So the first steps we are taking are to get more scanners, sniffer dogs and staff in place. It remains a very serious problem; the connection between the drugs, the violence and the suicide in Holme House is making it a particular area of focus for this Department.
What steps are the Government taking to improve the court experience for victims and for witnesses, because it can be a highly stressful and intimidating environment?
The MOJ is taking a number of steps to improve the position for victims and witnesses: we have introduced the ability to give evidence through video link, so people can give their evidence even before the hearing, which takes the stress out of it; and physically disabled people can give evidence by video link in another location. So we are trying to improve the Courts Service experience for everybody.
Most people know my constituency of Liverpool, Walton as the home of two premier league football clubs, but I think the Minister knows it better for the two prisons: HMP Liverpool, which was built in 1855, and Altcourse, which was built in 1997. Will he update the House on progress in the redevelopment of HMP Liverpool, and does he think that these Victorian prisons can ever be fit for purpose?
Unfortunately, as the hon. Member for Stockton North (Alex Cunningham) implied in his question, the age of a prison is not always the determining factor. We have significant challenges in relatively modern prisons. It is true in Liverpool that Altcourse has been performing better, and it is the newer prison. In Liverpool, we have provided a new multimillion pound fund for the repair of the windows across the estate, and we are looking at improving the conditions right across the estate. Stafford and Dartmoor show that it is possible to run good prisons in older, Victorian buildings.
I am grateful to the prisons Minister for meeting me recently to discuss the Farmer review, and I welcome his commitment to it. Will he update the House on the implementation of the Farmer review?
The Farmer review focused on the importance of families in rehabilitation. Prisoners’ links with families are central to reducing reoffending, and we have very strong evidence that when family links are kept, reoffending reduces. That means better family rooms and more family visits. In certain cases, prisons are having a lot of success piloting interactions between prisoners and, for example, the teachers of their children. All that is central, and the Farmer review is something for which we should be hugely grateful.
In October last year, the Government announced that they planned to increase the maximum penalty for death by dangerous driving. They also said that they would create a new offence of causing serious injury by careless driving. Six months on, we have still not seen any action. Will the Minister tell the House just when these vital changes will be implemented?
We will be updating the House in due course.
A year ago, virtually to the day, the legislative provisions of the Prisons and Courts Bill, which are necessary to implement Lord Briggs’s review of civil court structure, were lost in the Dissolution of Parliament. These important reforms are pressing and needed. Can the Secretary of State update us on when the Government intend to reintroduce legislation to enable the reforms to be progressed?
What I can say at this point is that I think we need to bring forward a number of aspects of that to help to modernise our court system. I hope to be able to make progress on that in the coming months.
Next week will be the six-month anniversary of the publication of the report by Bishop James Jones into the experience of the Hillsborough families. The report contains many recommendations that relate to the work of the Ministry of Justice. Will the Secretary of State explain when we will see action from the Government on those recommendations?
The position in relation to inquests and legal aid funding, as the hon. Lady may or may not know, is running alongside our legal aid review. I hope to be able to assure her that those matters are being looked at.
One of my constituents is fighting for justice, having suffered horrific physical and sexual abuse at Medomsley youth detention centre in the 1970s. Will my hon. Friend please update the House on the likely timescales for compensation and further convictions?
I thank my hon. Friend for the question. The case that he refers to is a tragedy, and I am aware of it. We are in the middle of the independent inquiry into child sex abuse, and the interim report is out this week. Officials from my Department are fully engaged with that, and we are conscious that in some institutions that the Department is responsible for allegations have been made that child abuse has taken place in the past. Once we have a handle on that totally, we can start talking about the possibility of compensation.
A failure to agree on arrangements in international family law risks leaving a serious gap in the legal framework for proceedings involving children with family connections to the UK. Can the Secretary of State confirm what contingency planning is being undertaken to deal with that risk?
It is really important that as we leave the EU we try to get arrangements similar to those that we have in relation to our cross-border workings through our court system. Family law is one of the important matters that we need to look at. I was very encouraged to see in the EU’s recent guidance that reciprocal arrangements in relation to family are one area that they are particularly interested in.
(Urgent Question): To ask the Minister of State for International Development to update the House on the humanitarian situation in Yemen.
The UK is deeply concerned about the humanitarian crisis in Yemen, which is the largest humanitarian crisis in the world. More than 22 million people—over three quarters of the population—are in need of humanitarian assistance. The UN estimates that 17.8 million people in Yemen do not have reliable access to food and that 8.4 million face extreme food shortages. Last year, the country suffered the worst cholera outbreak ever recorded in any country in a single year.
At the Yemen pledging conference in Geneva earlier this month, the Minister of State for the Middle East announced £170 million of support to Yemen this year from the UK. That funding will meet the food needs of 2.5 million Yemenis. Last year, the UK was the second largest donor to the UN’s humanitarian appeal for Yemen. Our funding provided more than 5.8 million people with at least a month’s supply of food, nutrition support for 1.7 million and clean water and sanitation for approximately 1.2 million people, but money alone will not be enough. We must see sustained progress on the response to this year’s cholera outbreak; we must see payment of public salaries to millions of civil servants and their dependants; and we must see unhindered humanitarian access into Yemen. The UK has led the way here, too, lobbying and advising all parties to take the life-saving steps to prevent further deterioration of the crisis.
We are aware of reports over the weekend of significant civilian casualties resulting from coalition airstrikes. We take those reports extremely seriously. The Saudi-led coalition has confirmed that it will carry out an investigation. It is essential that that happens without delay, that the results are published and that the lessons learned are acted upon. Our hearts go out to the families of those killed. We call on all parties to comply with international humanitarian law. A political settlement is the only way to bring long-term stability to Yemen and to address the worsening humanitarian crisis. The Yemeni parties must engage constructively and in good faith to overcome obstacles and to find a political solution to end the conflict.
I thank the Minister for her response.
Last week, the UN special envoy to Yemen, Martin Griffiths, briefed the Security Council on reports of a sizeable military offensive. He said:
“the prospect of intensive military operations in Al-Hodeidah, long heralded, may soon be forthcoming.”
He went on:
“Our concern is that any of these”—
“developments may, in a stroke, take peace off the table.
There have been a number of missile attacks on Riyadh by the Houthis, many of which have been intercepted, but one last weekend resulted in a Saudi casualty. Saudi Arabia has the right to protect its territory and its people from these attacks. However, Hodeidah is one of the two major entry points for aid into Yemen. Any military offensive would cause an already catastrophic situation to deteriorate further. Will the Minister assure the House today that the UK is doing everything it can to prevent such an offensive by the Saudi-led coalition from taking place? Surely, if an attack on Hodeidah goes ahead, the UK would have to suspend arms sales to the Saudi-led coalition.
The UK has been supporting the coalition by providing targeting training for its air force. By the Ministry of Defence’s own figures, 42 potential violations of international humanitarian law by the Saudi-led coalition were recorded in just three months at the beginning of this year, compared with 66 incidents over the whole of the past year. Will the Minister set out what the value of our training is when the rate of civilian casualties is increasing, not decreasing?
Finally, as the Minister rightly says, what Yemen needs is peace and a political settlement. This conflict will not be solved by further violence. May I implore the Government to bring a resolution to the UN Security Council as a matter of urgency? Eight million people in Yemen are on the brink of starvation. Surely the United Kingdom has a responsibility to lead the international community to put peace on the table.
I congratulate the hon. Gentleman on securing today’s urgent question and finding time to discuss these important issues on the Floor of the House. He is absolutely right to pay tribute to the work of Martin Griffiths. As the hon. Gentleman will know, the UK holds the pen on this matter at the United Nations, and it is really important that Martin Griffiths has been appointed as a United Nations special envoy. As colleagues will know, he brought the debate to the floor at the United Nations last month. The UK strongly backs his work, and his outline of the process that will lead to a political solution and peace in Yemen. In fact, I am glad to have the opportunity to reiterate a point that he made: we urge all parties to the conflict to exercise restraint and continue to facilitate access for essential imports of food, fuel and medical supplies into the country, including through Hodeidah and Saleef ports. I agree that further military action is not the way forward. The way forward towards peace is around the negotiating table.
The hon. Gentleman made some points about the important role that the UK can play in the peace process, in addition to the role as penholder at the United Nations. Clearly our role is also to be a candid friend to those involved in the Saudi-led coalition; to encourage the process of the investigative joint incident assessment team and the publication of its reports, 55 of which have been published so far; to recognise that the UK is not involved in any way in the targeting chain; and to reiterate the importance of the UK having the most rigorous export controls, which involves the observation of international humanitarian law.
Is the Minister absolutely convinced that President Hadi is not an impediment to a political settlement?
I will not fall into the temptation of commenting on any of the individual players concerned. Clearly, President Hadi needs to be involved in the discussions about the way forward. The United Nations special envoy, after publishing his outline and road map towards peace in Yemen, will need to engage a wide range of counterparties.
I thank my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) for asking the urgent question, and the Minister for responding.
The situation in Yemen is as dire as ever, with millions at risk of famine, the worst cholera outbreak in human history and the alarming prospect that Hodeidah port may soon become a conflict zone. The Houthi political leader, Saleh al-Sammad, was reportedly killed in a bombing last week. What impact does the Minister think that this will have, and what steps is she now taking to reopen dialogue on a ceasefire with the new Houthi leadership and Saudi Arabia?
Last week in this Chamber, the Minister for the Middle East admitted that the level of humanitarian access was not as great as he would wish. Fuel and food imports are not enough and port access remains unpredictable for traders and aid agencies. Just yesterday, appalling images emerged of an airstrike hitting a wedding party. Twenty people were tragically killed and 45 more were wounded. The bride was killed and the groom taken to hospital.
Time and again, the Government imply that this suffering will happen with or without the UK. Well, surely now is the time to make it very clear that Britain will not be complicit. Will the Minister tell us whether the UK Government insisted on full, permanent, humanitarian access in Yemen and an end to the bombing of civilian areas before signing the £100 million aid partnership with Saudi Arabia last month? In the light of the weekend’s appalling airstrike on the wedding party, will the Government now finally suspend their arms sales to Saudi Arabia?
I thank the hon. Lady for her questions, which allow me to reiterate some of the points that I made to the hon. Member for Liverpool, West Derby. Yes, I do think the UK has an important role to play, particularly as the pen-holder at the United Nations. That is why we are strongly backing Martin Griffiths, the new special envoy for the peace process in Yemen. We believe that that is the most constructive route whereby the UK can engage all the participants in this conflict and send a common message to all of them that the way forward is not through bombs or missiles but through peace discussions, and very much in the way that he has outlined in his reports to the United Nations. The UK is proud to support his office and the tools that he needs to help with this.
As the hon. Lady will know, we are very involved with the United Nations’ role in inspecting ships going into Hodeidah port and reassuring participants that they are purely for humanitarian aid. The UK is also playing a role through the United Nations team that is trying to prevent access for the missiles that are being used to shoot from Yemeni territory into Saudi Arabia, risking the lives of civilians within Saudi Arabia as well. I do think that the UK is playing a constructive role in all these matters. That includes the Secretary of State travelling to Riyadh in December to take practical steps in terms of access to the port for humanitarian aid.
Could the Minister describe the mechanism or system by which our aid gets taken from where it arrives in-country to the people who most need it, presumably by convoy? How do we ensure that this aid actually gets to the people towards whom we have targeted it?
This is an opportunity to pay tribute to all the humanitarian workers in all the conflict areas of the world who very often take such risks in delivering humanitarian assistance to some of the most conflict-affected parts of the world. My hon. Friend will be aware that in all areas where humanitarian aid is delivered, it can sometimes be caught up with different players in the conflict. Obviously we take every kind of precautionary measure through the United Nations to prevent this from happening, but it is still too often shockingly the case that some of this humanitarian assistance gets taken into situations where it is used as part of the conflict. That is one of the very many dangers that we highlight, and it is why we want to ensure that humanitarian workers around the world have safe access to provide their life-saving aid.
Many of us woke up this morning to see the horrific images of yet another airstrike by the Saudi-led coalition that has targeted innocent people, this time a wedding party in northern Yemen killing at least 20 people, including the bride. Of course, this is not new. Shockingly, of the 17,000 airstrikes since the war started, one third have hit non-military targets. The whole House should quite rightly condemn Saudi Arabia and its coalition for targeting innocent people.
Does the Minister agree that the UK Government’s selling 48 fighter jets to Saudi Arabia only last month, bringing total arms sales to £4.6 billion since the beginning of the war, makes the UK complicit in these atrocities and undermines the Government’s international development spend in Yemen? At the very least, will the UK Government commit today to fully and finally halt all arms sales to Saudi Arabia? Will she set out how the UK Government will influence Saudi Arabia to bring about a meaningful political solution to the war in Yemen?
Clearly, the UK is saying to all sides in this conflict that the way to secure peace is through political dialogue, including on the side of the Houthis, from Yemen into Saudi Arabia, but also through ensuring that international humanitarian law is respected in this conflict. The hon. Gentleman will be aware that this matter went to the UK High Court in 2017, and the High Court ruled in favour of the UK’s conclusion that Saudi Arabia does have processes in place to secure respectful compliance with international humanitarian law. He will also be aware of United Nations resolution 2216. We say to all the parties in this conflict that the way forward is not through bombing and missiles; it is through the political process that the United Nations special envoy has set out.
My hon. Friend mentioned the largest cholera outbreak since records began, but the aid community is also struggling to cope with the largest diphtheria outbreak since 1989, with over 1,000 cases of this highly infectious disease. Young children are enduring the brunt of this outbreak: 90% of fatalities are under the age of 15. In an environment where more than half of all health facilities are closed or partially functioning, there has been a surge in child mortality driven by communicable diseases and chronic malnutrition. What more can this country and others do to make sure that medicines and nutrition get to the people who need them?
My hon. Friend raises a very important point. The UK welcomes the approval by the Yemeni authorities in Aden allowing the import of oral cholera vaccines, which should allow 400,000 doses to be administered in southern Yemen. Discussions on vaccinations in the rest of the country are continuing. The partnership with UNICEF in Yemen is allowing UK aid to be spent on vital immunisations against other outbreaks, including diphtheria, as well as helping to train staff on the ground on how to deal with new cases.
First, I join calls from the Opposition Benches for arms sales to Saudi Arabia to be suspended, and echo the condolences to those killed in the wedding party.
The Ministry of Defence has previously confirmed that British forces are in the Saudi-led coalition operations room to provide training and advice
“on best practice targeting techniques to help ensure continued compliance with International Humanitarian Law.”
What went wrong? Was this latest strike in compliance with international humanitarian law, and what are its humanitarian consequences?
Of course, we welcome the fact that the Saudi-led coalition has acknowledged that a full investigation needs to take place to answer the questions that the right hon. Gentleman has asked. We urge that that investigation happen as quickly as possible. It does need to be published so that lessons can be learned.
My hon. Friend rightly refers to the outbreaks of cholera and other diseases. The United Kingdom can be rightly proud of the aid that we are giving. What plans does she have to ensure that there is a supply of clean water to people who are suffering so that the diseases are not spread and people are not forced to drink dirty water?
My hon. Friend raises an incredibly important way in which UK aid is used—to provide clean water on the ground. We would reiterate the same access requests that we have made previously, because it is vital that the relevant water purification tablets find their way to people so that they can be reassured that the water they are drinking is not going to make them ill.
The Minister keeps talking about political dialogue, but who are we having the political dialogue with? We have debated this many times in the Chamber over the last three years, and things have just got worse in Yemen. Today, 22 million people need humanitarian and protection assistance, including more than 11 million children—that is 4 million more people than was the case six months ago. A child is dying every 10 minutes in Yemen from preventable diseases, and yet the blocking of the ports and airports continues. What exactly is the Minister doing and who is she talking to?
It is vital that the discussions include all the people who can move this situation from one where we are observing a conflict to one where we have a peace process under way. My understanding is that the United Nations Security Council presidential statement adopted on 15 March was unanimously supported by all involved. It calls on all parties to the conflict to comply with their obligations and for the solution to be fully inclusive.
The current situation in Yemen is not just a civil war or a sectarian conflict; it is also in many ways a proxy war between Saudi Arabia and Iran. In addition to diplomatic pressure being brought to bear on Saudi Arabia and the Gulf states, what pressure is being brought to bear on the allies of Tehran and that side of the conflict?
My hon. Friend is correct to point out that it is thought that the missiles being fired into Saudi Arabia from Yemeni territory are predominantly being supplied by Iran. I reiterate that the UK is trying to work with the United Nations to prevent that and to prevent use of the routes that might be being used to supply those weapons. It is important that all parties call on those supplying the arms to cease.
The Minister referred to the fact that Saudi Arabia is going to conduct an inquiry into the tragic events of the weekend, but surely the British Government should now support a fully independent United Nations-led investigation into violations of human rights on both sides in Yemen?
We welcome the fact that the Saudi-led coalition has committed to an investigation, and it is important for that to be published in the very near future.
The hon. Member for Liverpool, West Derby (Stephen Twigg) was right to highlight that the immediate and most pressing priority is the alleviation of humanitarian suffering in Yemen, and the Department for International Development should be proud of its work in that area. He also highlighted that, alongside Saudi Arabia’s legitimate right to defend itself and support the legitimate Government of Yemen, it must, like all parties to the conflict, show restraint in its actions. Can the Minister reaffirm the UK Government’s strong position that what we need alongside humanitarian aid is a multilateral ceasefire to which all parties to the conflict simultaneously sign up?
I can confirm that that is why the UK is so strongly backing the United Nations special envoy who has recently been appointed and the work he is doing to outline a plan of action and to engage all participants in that process.
The Minister acknowledges that Yemen is the largest humanitarian crisis in the world, so why are the UK Government via their arms sales choosing to make that awful situation even worse? How can we have any moral standing on the world stage while we continue to sell arms to the head-chopping, war-mongering Saudi Government? Of course we need to have diplomatic relationships, even with countries we do not agree with, but surely to continue selling arms to a Government who are essentially committing war crimes is beyond the pale, even for our own Government.
The hon. Lady will know that under United Nations resolution 2216, there is a legitimate reason for Saudi Arabia to be concerned about the fact that missiles are being fired on a regular basis into its territory. But she is right that the way forward is for all parties to engage in the political process, and that there is no military solution to the current conflict in Yemen.
I commend the commitment that the Government have already given to humanitarian aid in Yemen, but heavy rains will hit Yemen shortly, and the cholera crisis will get worse, together with the other awful diseases that are a consequence of having not enough water and unsafe water. Can the Minister expand on when extra aid will get there and exactly how it will get to the people who need it? Getting into the right places is extremely difficult.
My hon. Friend is right that this is not just about the money. This month’s pledging conference attracted a wide range of people who were prepared to contribute to funding the humanitarian effort, but it is also essential to ensure that the improvement in access does not slip back. We are concerned to maintain the role we have played both through the United Nations and bilaterally in ensuring that humanitarian access is as good as it can be.
The recent ghastly attack on the wedding party is not the first atrocity on civilians. Markets, schools and hospitals have been hit by coalition airstrikes in a civil war that has already claimed 10,000 civilian lives. As my right hon. Friend the Member for Cynon Valley (Ann Clwyd) said, that has created a humanitarian crisis in which a child is dying from a preventable disease every 10 minutes. Can the Minister answer the question put to her by my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg): is it not time for the UK as penholder to call for a new United Nations Security Council resolution to ensure unimpeded access to Hodeidah and other ports?
The hon. Gentleman is right to reiterate the important role that the UK can play as penholder, which is why we so strongly support Martin Griffiths’ recent appointment as the UN special envoy on this situation. There was a United Nations Security Council meeting in March on this very subject. He is outlining the way forward in terms of engaging all parties to this conflict in discussions, and that has the wholehearted support of the UK at the United Nations.
I welcome the UK’s support for the UN verification and inspection mechanism, which is helping to speed up the inspection of ships delivering vital supplies to Yemen. However, does the Minister agree that that process needs to be speeded up even more if the people of Yemen are to get the supplies they so desperately need?
My hon. Friend raises a very important detail. The UK has great expertise in maritime matters, and we have deployed experts to Djibouti to help with that inspection process. In fact, UK support has helped to increase the proportion of ships that have been physically inspected by almost 10 times, from 8% to 77%.
May I press the Minister a little further? She gave a long answer a moment ago to my hon. Friend the Member for Birmingham, Northfield (Richard Burden) about a UN Security Council resolution. Exactly when can we expect to see one?
The UK led the drafting in March of the United Nations Security Council presidential statement, and as I understand it, that statement, which calls on all parties to comply with their obligations under international humanitarian law and to facilitate humanitarian access, and emphasises the need for an inclusive political solution, was widely supported.
The fundamental cause of the misery in Yemen is the Iranian-backed Houthi insurgency, which has blighted the lives of tens of millions of people. I have not yet made it to Yemen, but I made it to within a kilometre of the border in Saudi Arabia—a visit I declared in the Register—and there I learned that something like 70,000 rockets and over 50 Scud missiles have been fired from Yemen into Saudi Arabia, and 50,000 people have been evacuated. Saudi Arabia has the right to defend itself. We need to get this in perspective, because although at the moment there is no chance of any kind of political dialogue, I would rather that Hodeidah port was in the hands of the coalition, which would increase the chances of aid getting through to these benighted people, than that it remained in the hands of the Houthi insurgents.
My hon. Friend is right to highlight the perspective of those people who are on the receiving end of missiles fired from within Yemen, and he allows me to reiterate that United Nations resolution 2216 speaks of that. I disagree to some extent with my hon. Friend, in that I do not think that further military conflict is the way forward. We think the way forward is through the political process, backed by the United Nations special envoy.
Liverpool is home to many of the Yemeni diaspora in the UK, and the plight of family members who are suffering in Yemen is a constant anxiety and pain to many of my constituents. I have listened closely to the Minister. In the light of the presidential statement from the UN Security Council, may I ask her specifically, as that was at least a month ago, whether she believes that a resolution is now urgently needed to permanently open all naval ports and airports to both humanitarian and commercial traffic, and if so, what is the UK going to do as penholder to achieve that?
The hon. Lady is right to say not only that these discussions are ongoing, but that they must be pursued with enormous urgency. I can assure her that the work that the special envoy is engaged upon has that urgency at its heart, and involves the UK wholeheartedly backing the way in which he is taking forward engagement with all the parties to pave the way for further steps.
I am sure I was not the only person who was struck by the Minister saying that we would be a candid friend to the Saudi-led coalition. With one third of the 16,847 air- strikes hitting non-military targets, surely we have now come to the time for a bit more candour and a bit less friendliness. Continuing to sell arms to Saudi Arabia is like giving more booze to an alcoholic; it is something that no proper, true or candid friend should be doing.
The hon. Gentleman is absolutely right to highlight the important role that the UK can play in being able to use the strong relationship that we have to raise these difficult decisions and difficult issues more effectively. For example, most recently, in March, during the visit of the Saudi Crown Prince Mohammed bin Salman, the Prime Minister was able to raise exactly these serious UK concerns about Yemen.
Like my hon. Friends, I reiterate that every 10 minutes a child dies from preventable causes in Yemen. Will the Government give priority to the reopening of Sana’a airport, to help alleviate this desperate situation?
Among the work that the UK is doing, I particularly highlight the work that we have done through Djibouti, in terms of shipping access to Hodeidah, but it is something that we are monitoring very carefully. As the hon. Gentleman is aware, only about two thirds of the humanitarian assistance that Yemen needed got through in March, and so far in April it seems to be an even lower percentage, so it is something that we are paying very close attention to.
I am grateful to my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) for asking this urgent question. I think we all agree that what happened in Hajjah was absolutely shocking. It is not a first, and such killings continue in a war that has seen a lot of individuals killed. There needs to be a clear process of accountability; otherwise, the killing will simply continue. I welcome Martin Griffiths as the new special envoy. He has talked about a peace process, but let us not forget that recently Ismail Ahmed, the outgoing UN special envoy, said that the Houthis had walked away from a peace deal. My question to the Minister is how do we get a peace deal when the Houthis walked away from the Kuwait talks and the Geneva talks and Ismail Ahmed said they walked away from the talks at the back end of 2017? How do we get these people around the peace table?
As I said, negotiations and the special envoy’s work are ongoing, and I thank the hon. Gentleman for his support for his role and the work that he is doing, but no one should underestimate the difficulty of the task that he has been asked to undertake.
One of the terrible consequences of this conflict is that there are millions of internally displaced people in Yemen. The Minister is aware that Christian Aid is campaigning very volubly on that issue. How will the UK Government’s approach to the United Nations compacts on refugees and migrants address the particular needs of internally displaced people in Yemen?
I cannot give the hon. and learned Lady a specific response. She has drawn my attention to a particular detail, on which I will have to respond in writing.
According to Save the Children, there are now over 22 million people—that is two thirds of the population—in Yemen in need of humanitarian aid and protection. That includes more than 11 million children. That is 4 million more people than six months ago. The situation is only getting worse. Does the Minister agree that it is in part a result of the failure of this Government to pursue an end to this with the vigour required? Surely, now is the time to get together, as the penholder, another UN resolution, and to suspend arms sales to Saudi Arabia.
I draw the hon. Lady’s attention to the points that I have made earlier. It is important that the UK backs the work of the United Nations special envoy.
The UK’s ability to uphold the values of a rules-based international system will be undermined unless the UK is shown to call Saudi Arabia to account for its indiscriminate bombing of civilians in Yemen. So I ask the Minister, as so many other colleagues have today, to treat with urgency the need for a new UN Security Council resolution to make sure that all ports in Yemen are open to humanitarian aid to deal with the catastrophic situation already in place on the ground. Finally, if the Government of Saudi Arabia are not prepared to show appropriate restraint when exercising the country’s legitimate right to defend itself, I ask that the UK Government be prepared to––and will––suspend arms sales to Saudi Arabia.
Of course, in addition to backing the work of the United Nations special envoy, the UK will continue to maintain the very rigorous combined arms sales criteria, in terms of arms exports from the United Kingdom.
White phosphorus burns at 815 °C, and to the bone if it comes in contact with human flesh. Is its reported use as an incendiary weapon in Yemen considered by the British Government to be a chemical attack, and if not, why not?
The hon. Gentleman highlights, as did other hon. Members, the need for rigour in the process of investigating all these incidents and, in the case of those that come from the Saudi-led coalition, the importance of encouraging the joint investigative team to adopt a process that makes it possible to publish those reports very quickly.
During our visit to Saudi Arabia over the Easter recess, we were able to put the UK’s concerns about the humanitarian catastrophe to the King, and in detail to his Ministers and officials. Will the Minister update the House on the block on the funds that have been deposited by Saudi Arabia in the Central Bank of Yemen, which are much needed? May I also gently say to her that it surely did not aid the cause of peace that she did not mention Iran and its pernicious role in the conflict until she was asked by her Back Benchers?
The hon. Gentleman raises an important issue. It allows me to welcome the fact that Saudi Arabia and the United Arab Emirates pledged between them some $930 million in humanitarian assistance at the Geneva conference earlier this month. However, as many colleagues have pointed out, it is important that it gets through.
Saudi Arabia has every right to defend itself, but what it is doing in Yemen goes way beyond self-defence. When one of the world’s wealthiest, most heavily armed and most highly trained military machines kills civilians in every one in three attempts, we have to accept that this is no accident; it is deliberate, unrestrained slaughter of civilians. I understand why the Minister cannot publicly criticise arms sales to Saudi Arabia. It is very noticeable that, despite being asked by nearly every Member on the Opposition side of the House, she has not yet personally defended those arms sales. Is that because, in conscience, she knows that they cannot be defended?
I have said numerous times that the UK maintains rigorous arms export control criteria, and one of those must be that at the time of export there are no concerns that the arms will be used in contravention of international humanitarian law. Again, this is an opportunity for me to emphasise how important it is that the Saudi-led coalition publishes the joint investigative assessment team’s reports, and to welcome the fact that 55 reports have been published so far.
The UK is not meant to sell weapons to countries when there is a clear risk that they will kill innocent civilians or break international humanitarian law. We sell 50% of all our weapons to Saudi Arabia, and 61% of all the killings have been the result of Saudi and coalition airstrikes. What is the Government’s red line on breaking international humanitarian law? When will we stop licensing the killing of innocent civilians?
The hon. Gentleman might even be a member of one of the Committees involved in this, so he will know exactly what the wording is for our arms exports criteria. We have heard from other colleagues about the missiles that are being fired into Saudi Arabia, and this allows me to reiterate—perhaps in conclusion, Mr Speaker—that a political solution is the only way forward to bring long-term stability to Yemen.
The Minister was approaching her peroration, but she has not yet completed it; she has one further opportunity to expatiate, because we have a further inquiry, from Mr David Linden.
Thank you, Mr Speaker. The Minister talks about the UK being a penholder at the United Nations, but part of the problem is that we give the pen to Saudi Arabia so that it can write us cheques in exchange for arms. I want to ask her this question not as an MP speaking to a Minister, but at a human level. When she sees images of children clinging to their dead parents, does she not realise that it is time to end the arms sales to Saudi Arabia?
What I can say is that the hon. Gentleman rightly draws to the House’s attention how this conflict is harming the lives of so many, and why it is so important that the UK backs the work of the United Nations special envoy in taking forward the discussions that can lead to a political solution that will bring peace to Yemen.
(Urgent Question): To ask the Minister for the Cabinet Office if he will make a statement on the financial position of Capita.
I genuinely welcome this opportunity to update the House on Capita’s announcement yesterday, which covered its 2017 full-year results, the launch of a £701 million rights issue and an update on its transformation programme. As I have told the House repeatedly, private companies can answer for themselves, but the Government’s priority is the continued delivery of public services. As we demonstrated with regard to Carillion, we have continued to deliver public services without interruption.
The House will recall that I came here in February when Capita initially announced the rights issue. Capita confirmed yesterday that it is proceeding in line with that previous announcement. The House might be interested to know that Capita’s statement yesterday announced that underlying profit before tax is £383 million for 2017, which is in line with market expectations; that, as a result of the rights issue, it has made a £21 million contribution to reducing its pensions deficit; and that, as a result of the announcement, the market reaction was a share price rise of over 10% on the day.
Capita’s board and auditors have confirmed that the company will continue to have adequate resources to deliver on its obligations, supported by its rights issue and other steps designed to strengthen its business. The rights issue is underwritten and the required shareholder vote will take place in early May. Management have confirmed that the key shareholders fully support their plan. In addition, the company has suspended dividends until it begins to generate positive cash flow; it expects to generate at least £200 million in 2020. The impact of all this has been to reduce dividends and shareholder returns in favour of other stakeholders. This, once again, is evidence of shareholders taking the burden, not taxpayers.
I understand that Members remain concerned about outsourcing companies, following Carillion’s liquidation. However, we must be clear that Capita has a very different business model and financial situation; it is not a construction business and it has minimal involvement in private finance initiatives. The measures that it has announced are designed to strengthen its balance sheet, reduce its pensions deficit and invest in core elements of its business. As I said in February, arguably these are the measures that might have prevented Carillion from getting into the difficulties that it did.
It remains the position, as I said in February, that neither Capita nor any other strategic supplier is in the same position as Carillion, but I would like to reassure the House that officials in my Department and I continue to engage regularly with all strategic suppliers. It is in taxpayers’ interests to have a well-financed and stable group of key suppliers, so we welcome the moves that the company announced yesterday.
The public will clearly be deeply concerned that yet another major Government contractor has been in financial distress, following Carillion and earlier service problems with Serco and G4S. Capita is not a construction company, but given that we are dealing with IT services that affect literally millions of people—for example, in relation to tax credits, disability testing and benefits, the congestion charge, the BBC licence fee and Army recruitment—what contingency plans has the Minister put in place since he was informed that the company’s losses are not sustainable? Is there a Crown representative in place? Have new contracts been stopped? Since the new chief executive announced cuts of £175 million a year, to make savings for the new company, how far have these been discussed with the Government, and how far have they a bearing on the provisions of those highly sensitive services? In the light of this development and earlier developments with Carillion, what steps have the Government taken to reform the system of Government procurement, so that we do not have companies low-balling to win contracts that then make losses, and to break up some of the contracts, so that we are not over-dependent on a handful of financially fragile companies?
I thank the right hon. Gentleman for his questions. I will seek to address them all, but please forgive me if I miss any. I will come back to him in writing if I do.
On the company’s overall position, it is important to understand that what has happened is exactly in line with what was announced back in February, so there is not really a new development. The company’s underlying position, as it has said publicly, is that it has about £1 billion of cash that it can call upon.
The right hon. Gentleman asks about the Crown rep. I confirm that the Crown rep is Meryl Bushell. I met her this morning and continue to engage with her, as I do with all the other Crown reps.
The right hon. Gentleman asks whether new contracts had been awarded. Since the statement in February, no new contracts have been announced by central Government. However, I understand that the BBC and authorities in Northern Ireland have announced contracts.
The right hon. Gentleman asks what we are doing to break up the system of Government procurement. I always ask, with every contract that crosses my desk to be authorised, whether we have broken it up into as many small pieces as possible to make it accessible for small businesses. Over the Easter period, I made an announcement to help us meet the very challenging target we have set of 33% of all business going to small or medium-sized enterprises. We set a target of 25% in the last Parliament and met it. I announced a range of measures to help us towards the 33% target. I wrote to all the Government’s key suppliers saying that I wanted them to appoint an SME representative to try to drive business to SMEs. I have required all their subcontracting over the value of £25,000 to be published on the Government’s Contracts Finder. I am consulting on ways to improve prompt payment to make it a condition of business being awarded to strategic suppliers. That is very important to SMEs, and I am looking at ways to give them a right to go over the top of key suppliers to the Government to give them a right of recourse.
I say gently to the right hon. Gentleman that both he and I have a proud record from our time working for the coalition Government—he at a much more senior level, running the Department for Business, Innovation and Skills. In line with other Governments, we continue to award contracts to Capita. The House may be interested to know that of the major central Government contracts that have been awarded to Capita, about 20% were awarded under Labour, over half under the coalition Government and 27% under this Government. This issue does not to relate to one party over another.
The reason we do it is that we know outsourcing delivers efficiencies. According to one survey, we receive efficiencies of at least 11%. If we get efficiencies of 11%, that means more money to spend on health, more money to spend on education and more money to spend on core services. That is why the Labour Government did it, why the coalition Government in which the right hon. Gentleman served did it and why this Government continue to use outsourcing.
Does my hon. Friend agree that there is something of a correction going on throughout the sector, as it adjusts to the effects of the Carillion collapse and to the perhaps over-tight margins that some contracts have imposed on providers? I draw his attention to the fact that the Public Administration and Constitutional Affairs Committee is doing an inquiry into the lessons to be learned from the collapse of Carillion. Personally, I take confidence from the fact that the investors have decided to trust Capita with £700 million more of their capital to secure the long-term future of the company.
I thank my hon. Friend for his question. He is absolutely right that what we discovered yesterday was that the rights issue is proceeding exactly as planned. In terms of the overall market, I have tried to be clear all along that suppliers should expect a decent rate of return—not an excessive rate of return, but one that allows them to run a profitable business, while ensuring that there are savings for the taxpayer. That is why we use private companies. It is not because of ideology; it is because they deliver savings to the taxpayer, which means more money to be spent on health, education and other public services.
May I thank you, Mr Speaker, for granting the urgent question and congratulate the right hon. Member for Twickenham (Sir Vince Cable) on securing it?
Capita is one of the strategic suppliers to the Government, providing services of particular strategic importance, yet, as we heard from its boss today, it had no strategy aside from mucking up the management of the dental register, leaving hundreds of dentists to stand idle; failing to maintain the primary care support service in England, which supervises GP and patient records; and failing on the Army recruitment contract, among many other failings. Members have been highlighting those and other failures to the Government over a period of years and will not be surprised at the latest news. I echo the call from the right hon. Member for Twickenham for the Minister to outline what contingency plans he has put in place to deal with a possible default on any one of those contracts.
The Government claim to be monitoring the situation and have a Crown representative in place, but do they even know what they are monitoring if they are not sure about the number of contracts Capita runs? I and other Members have asked for a list of Government contracts undertaken by Capita and have not been provided with one. Do the Government know how many contracts Capita undertakes across central Government and, indeed, across local government? Will they publish a list of all those contracts?
Will the Minister confirm what improvement plans have been agreed with Capita since its string of profit warnings or yesterday’s refinancing? What quality thresholds will be built into Government contracts to ensure that Capita and other privateers reach an acceptable standard of service delivery, particularly in view of their precarious financial situation?
This latest episode in the saga of outsourcing scandals again shows the public that the Government’s commitment to this practice is nothing more than ideological. Despite the danger to public services, along with the treats to Capita’s staff and subcontractors, the Government will not shift from their view that these giant multinational firms should make huge profits from the public purse, until the point when they fold, taking our public services with them. The Government act as though these firms should be allowed to privatise the profit of the public sector, while nationalising the risk to the British public. We need a change in direction now. Will the Minister use this latest episode involving Capita to finally introduce a presumption in favour of in-house provision of public services?
I have a great deal of respect for the hon. Gentleman, and he could have done a little better than some of the overblown rhetoric in his contribution. Yesterday’s announcement was entirely in line with market expectations.
The hon. Gentleman asks what is being done in relation to strategy. The strategy has been set out clearly by the new chief executive. It includes a revised divisional structure and executive team to better manage and enhance services and client value, as well as a rights issue, which, as I said, has proceeded as planned and will materially improve the company’s financial stability, thereby reducing its debt, enabling it to invest in core services, allowing it to reduce the pensions deficit, which it has done by £21 million—I hope all Members will welcome that fact—and allowing it to reduce its cost base.
The hon. Gentleman asks what contingency planning the Government are doing. As I have said, we undertake appropriate contingency planning in respect of all our strategic suppliers. I take a close personal interest in that as a Minister, and I know that the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office takes a similarly close interest in it.
The hon. Gentleman asks about contracts that have been awarded to Capita, so let me give him the numbers. Of the current major central Government contracts that have been awarded to Capita, nine were awarded under Labour, which is 20%, 24 were awarded under the coalition, which is about 53%, and 12 were awarded under the current Conservative Government, which is about 27%. This is not a party issue; all three formations of government have decided to use outsourcing companies.
To conclude, I had thought that the hon. Gentleman would agree with the words of a previous Labour leader and somebody who many regarded as being, at least in some senses, a successful leader. Gordon Brown, hardly a rabid right-winger, said:
“It simply would not have been possible to build or refurbish such a number of schools and hospitals without using the PFI model.”—[Official Report, 14 November 2007; Vol. 467, c. 665.]
That was a sensible Labour Government who were committed to delivering public services. We do not see such sense from the current Labour party, I am afraid.
While I agree with the thrust of the Minister’s response, I am afraid I have to tell him that a serious blot on Capita’s record is the Army recruiting contract. Capita does not have much experience in that area and has been underperforming very seriously on the contract for some five years. I told the House in Defence questions yesterday that it is now known universally in the Army as “Crapita”, because of its poor performance on the contract. Will the Minister accept it from me that, although nobody wants to see Capita go bust because of all the jobs that would be lost, equally we cannot have an Army without recruits? Therefore, this is one contract that Capita, honourably, should hand back.
I must tell the right hon. Gentleman that his second reference to the rather unfortunate nickname of the company concerned has just caused some merriment among school students in the Public Gallery. They clearly found it very funny, as did I, so the right hon. Gentleman may be a celebrity among those students—not to mention, of course, in his constituency and in many other parts of the country.
My children are aged six and eight, and on the off chance that they happen to tune into this later, I will make sure that I do not repeat that word, because I would not want to hear it around our breakfast table.
I know about the commitment of my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) to this issue; he is absolutely right to raise it. We all know that there have been problems with Capita, but I can update him and the House by saying that the MOD and Capita have agreed an improvement plan under their contract. I understand that Capita is looking to deliver on that plan, so I am confident that it is making steps in the right direction, although I do not deny that there have been problems in the past.
A £701 million rights issue after a £530 million loss, with a scramble to recover reputation after damaging contract bungles, is indeed indicative of a business with no strategy. Given the wide range of public services involved, is the Minister at all worried by the situation? If so, what precautions has he put in place to protect people’s jobs? Does he agree that this highlights a role for the public sector in providing vital public services? Given that he is wedded to the PFI model, will he take the time to look closely at the Scottish Government’s Scottish Futures Trust model, which has saved the Scottish Government £1 billion?
I thank the hon. Gentleman for his questions. As I have said, Opposition Members keep trying to characterise this as ideological, but the fact is that Governments of all colours have used outsourcing. Why? Because they know that that can deliver savings. It is just the same as when private companies use outsourcing so that they can focus on their core businesses.
The hon. Gentleman asks whether I take a close interest in this—yes, I take a close interest in all our strategic suppliers. On a weekly basis, I receive updates on the position and on the plans that we have, if necessary, in relation to all our strategic suppliers. However, I restate to the House that Capita’s position is not the same as Carillion’s—nor, indeed, are any of the other strategic suppliers in that position.
Does my hon. Friend agree that the Labour party is interested only in the ideological pursuit of renationalisation at any cost? What matters to the public is that they get the best services at the best value to the taxpayer.
My hon. Friend’s raises a very important point that is another rebuttal to this idea of ideology. If we want to look at ideology, perhaps the number of PFI contracts signed by a Government would give an indication of that, so let us look at the numbers. How many contracts did Labour sign on average each year? Fifty-five at the peak. How many have this Government signed in the past year? One. If this is about an ideological commitment to the use of the private sector, Labour Members should search their souls in relation to their last Government.
The Minister makes great play of the 11% savings from contracting out, but it is no good making savings if core services are not being delivered well. Will he outline how many of the contracts he is concerned about—he has listed them a couple of times—and will he tell us how many contracts he is discussing with Capita with regard to whether their delivery should be reviewed? It is no good spending taxpayers’ money on a private company if it is not delivering the services that it is paid to deliver.
The contracts that each Department agrees with the private sector for the delivery of services are very stringent. Each Department is responsible for ensuring their proper delivery, and if the company is not delivering properly, it will be in breach of the contract and remedies will be available. At the point of re-letting a contract, we look at the overall performance of the company concerned to ensure that it is in a fit state to be able to deliver on its promises. There is a dual responsibility between the individual Departments, which set out the terms, and the Cabinet Office, in which I sit, which has overall responsibility for the supplier market.
Barnet Council has a significant contract with Capita. It also has a business continuity planning framework that monitors liquidity and indebtedness. It reviewed the situation twice last year, and again after the recent profit warning, and the company was shown to be far from reaching the relevant threshold for triggering any action, but in the local elections, the Liberal Democrats are using the issue to scaremonger. I urge the Minister not to take advice or direction from someone who undersold Royal Mail by £1 billion and then called the loss “froth”.
I thank my hon. Friend for his question. Tempting though it is, I shall resist the urge to comment on the Royal Mail deal, but I refer him again to the— [Interruption.] When the Department was controlled by the Liberal Democrats, I do not think the right hon. Member for Twickenham (Sir Vince Cable) would have taken kindly to a Conservative special adviser getting too heavily involved.
I refer my hon. Friend the Member for Hendon (Dr Offord) to statistics that demonstrate that over half of the contracts that were given to Capita were awarded under the coalition Government, in which the Liberal Democrats played a sterling part. If they want to play politics, I refer them to those statistics.
May I push the Minister on contingency planning because I fear that the Government are being a bit complacent about that issue? Since Carillion went bankrupt, hospitals in Sandwell and Liverpool have been mothballed. What confidence does he honestly have that if Capita were to go the same way as Carillion, its contracts would continue to run and these crucial public services would continue to be delivered? The experience of Carillion is that that is not happening.
I gently disagree with the hon. Lady, who has a great deal of expertise in this area. Public services have continued to be delivered without interruption. There is a specific question about the PFI contracts in respect of those two hospitals, but I reassure her and other hon. Members, who I know take an interest in this, that we are taking a very close interest in the matter. We are engaging with NHS Improvement and the Department of Health and Social Care to try to resolve this as quickly as possible and ensure that we have a clear plan for the delivery of the hospitals.
Obviously I support outsourcing in principle, but I am really concerned. If Capita is reviewing the way it operates—it has operated abysmally in various spheres, particularly Army recruiting, as my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) said—are the Government reviewing how they have oversight of these contracts so that we can get more effective feedback and problems can be corrected quicker?
I thank my hon. Friend for his question. He is absolutely right to raise the issues that we have had with the Army recruitment contract, but what is happening demonstrates that the Government are engaging with these problems. The MOD and Capita have agreed an improvement plan, which seeks to address some of the significant problems that we have. When these problems arise, we are engaging with the companies concerned to try to deliver improvements.
What assessment have the Government made of the impact on apprentices who are employed in Capita’s many workplaces? How many individual apprentices may be affected? Which regions of the UK are particularly exposed? What contingency plans are in place to protect potential losses to the apprenticeship programme, and what will be done to stop these failing business practices? I am fed up with having to listen to poor apprentices in other companies who have lost their roles as a result of failing business practices.
I reassure the hon. Lady that the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office is taking a very close interest in this and working in respect of all those apprenticeships. At the moment, those apprenticeships are ongoing, but clearly we need to look at how we can manage their future so that young people do not find themselves disadvantaged. I can assure the hon. Lady that this is a top priority for my right hon. Friend.
The Minister says there have been problems with Capita, and while Capita and Carillion are different businesses in different situations, they have something in common: the businesses are both big and complex. What steps are the Government taking to involve more small and medium-sized businesses in the delivery of public services?
My hon. Friend raises a very important point. It is right on two levels that we have a diverse supply market: first, because the more suppliers we have, the less we are at risk from the loss of any one supplier; and, secondly, because small and medium-sized enterprises are the backbone of our economy locally and nationally, creating 16 million jobs, and I am determined to ensure they get their fair share of such contracts. That was why I announced a range of measures over Easter, including providing subcontractors with a right of access to buying authorities in order to report poor practices. It was also why the Prime Minister wrote to every Secretary of State requesting that they appoint an SME champion. I want the message to go out to all SMEs—I spent a lot of time over Easter meeting small businesses and communicating this—that they can bid for and win Government contracts. Go on to Contracts Finder, find them, and bid for them!
In my two decades in the House, I have opposed PFI schemes root and branch from the beginning. It seems that the number of PFI agreements has dwindled to virtually zero, so it looks like the Government agree with me now. A number of public authorities are now insourcing and making financial gains as a result. Will the Government encourage that process, which would save public money? Will they also not hand out lucrative public contracts to Capita to help it out of its present circumstances?
I shall resist the suggestions of Front-Bench colleagues; I do not think I will ever convince the hon. Gentleman to cross the Floor, despite his warm words.
We reviewed PFIs and introduced the new private finance 2 contracts, which removed many of the excesses we saw under the last Government. The hon. Gentleman asks about the rewarding of new contracts. Since the statement in January, as I said, no contracts have been awarded to Capita by central Government. Two have been awarded by the wider public sector—by the BBC and Northern Ireland authorities.
My hon. Friend will recall that Capita developed from the public sector in the first place. Does he agree that the use of outsourcing not only controls costs and gives gains to the public, but provides certainty over the standards of service provided to the public? If an outsourced company fails to deliver to those standards, the contract can be recalled and given to an alternative provider.
As ever, my hon. Friend and neighbour is absolutely correct. That happens regularly, and it is exactly why private companies all use outsourcing to provide services such as cleaning and site security—because they can use specialist providers and because that delivers savings. He talks about how the Capita model arose. I remind Labour Members who are getting overexcited that Capita was founded by Sir Rod Aldridge, who was a major donor to not the Conservative party, but the Labour party.
May I associate myself with the comments about Army recruitment made by the right hon. Member for Rayleigh and Wickford (Mr Francois) and the hon. Member for Beckenham (Bob Stewart)? Does not the Minister accept that Capita is only the latest outsourcing company to be in trouble? With some, including probation, hospital and rail companies, having to hand back contracts and the growing crisis in the over-leveraged, offshored care industry, does he not question whether there are not actually deep systemic problems with the Government’s dogma-driven privatisation model?
I simply fail to understand how Labour Members can say that this is dogma-driven when the last Labour Government awarded 55 PFI contracts a year and one was awarded in the last year. Some 20% of the contracts awarded to Capita were awarded by the Labour party. This is not about ideology; it is about what works. Outsourcing delivers savings, which means that we have more to invest in the public sector—more in our schools; more in our hospitals.
May I give the Minister an opportunity to repeat and reinforce his message about small businesses and the importance of their getting more involved in the delivery of public services? Will he encourage businesses in my constituency and the wider Dorset region to bid for contracts?
My hon. Friend is absolutely right. Small businesses should be going out there and bidding for Government contracts. I know that his constituency has much expertise in the aerospace sector, and I announced further measures over Easter to help such small businesses. I wrote to all our strategic suppliers asking that they adhere to the prompt payment code, and I am requiring suppliers on large contracts to provide their subcontracting data. They can be under no illusion that the Government are watching closely to ensure that in terms of contracts from government itself and subcontracting, SMEs get their fair share.
I welcome the Government’s recognition that Capita is not delivering on its contract for Army recruitment, but rather than Capita simply introducing an improvement plan, would it not be better for the Government to consider bringing contracts back in-house so that Army recruitment is conducted by the Army? That is what the Army wants.
As the hon. Gentleman has acknowledged, I have answered the question about the Army recruitment contract, and I shall not repeat my answer, but I would say that we are not driven by an ideological approach. If services can be delivered better in-house, of course they can be delivered in-house, but in the majority of cases, for contracts such as cleaning and security, both the private and public sectors have found that they get cheaper services that are just as good quality when they outsource. That is the right decision to make.
Capita employs hundreds of people in my constituency at a place called Preston Brook. What discussions have the Government had with recognised unions, such as the Communication Workers Union, about the job and pension security of those workers?
The hon. Gentleman raises a very important point. I can reassure his constituents, as I have done repeatedly at the Dispatch Box today, that yesterday’s announcement was in line with expectations. Capita is not in a similar position to Carillion. I can also reassure them that, as a result of the rights issue yesterday, a further £21 million has been paid down into the pension fund, meaning that their pensions are more secure as a result of the announcement on Monday.
The Minister has spoken several times in glowing terms about the importance of the SME sector. One of the issues that came out of Carillion’s collapse was the deplorable reality that it often did not pay its SMEs their subs for 120 days, and sometimes more. That is the way to destroy the SME sector. Given that this is taxpayers’ money, will he give me a guarantee that that is not happening at Capita and that people are getting paid within a fair and reasonable time?
The hon. Gentleman is right to raise the issue of prompt payment, and I know that various Select Committees are looking into the Carillion case. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is sitting next to me, and the Chancellor announced in the spring statement a call for evidence on the prompt payment code, which governs such payments. The Government pay about 96% of our contractors within 30 days. As I said, I have written, post Carillion, to all our strategic suppliers to re-emphasise the importance of adhering to the code. We are consulting on how to exclude suppliers if they do not do so.
With your permission, Mr Speaker, I shall make a statement about the takeover bid by Melrose Industries plc for GKN plc. On 29 March, Melrose announced that holders of 52% of GKN shares had accepted its offer, and as of last Friday, the figure had reached 88.5%.
As I informed the House on 27 March, the Enterprise Act 2002 sets out three circumstances in which a takeover can be referred to the Competition and Markets Authority on public interest grounds. They are financial stability, media plurality and national security. Any such reference must take place within four months of the completion of the transaction, and must result from a quasi-judicial decision, made impartially, on the basis of an open mind and solely on the evidence presented. No grounds were advanced for a reference on the grounds of media plurality or financial stability. To inform my decision on national security, I asked for a comprehensive assessment to be made by the Ministry of Defence and other bodies concerned with our national security.
The Secretary of State for Defence has written to advise me that the MOD has completed its detailed analysis and has agreed with Melrose a set of undertakings, specifically: to ensure that the Government are informed in advance of any plans to divest a business, a component of a business, or assets which engage in activities that the Ministry of Defence considers to have national security implications; to ensure that the Government have early visibility of any prospective purchasers, including structures of consortia and persons holding significant influence and control; to prevent the disposal of the relevant business, components of a business or assets without the consent of the Government; to ensure that the Government receive suitable protections from any subsequent purchaser in the event of any future sale of elements of the business; to ensure the continuation of contractual obligations to protect intellectual property and classified information; to ensure the continued maintenance of any capabilities with a national security dimension; and to provide the MOD with powers to inspect information and facilities to ensure the protection of classified information.
Those undertakings are combined with the undertakings that Melrose agreed to make in response to my letter of 26 March, including undertakings not to dispose of the aerospace business for at least five years without the Government’s consent; to maintain a UK stock exchange listing for at least five years; to ensure that the business remains headquartered in the UK, and that a majority of directors are resident in the UK; to ensure that both the aerospace and Driveline divisions retain the rights to the GKN name; and to guarantee that spending on research and development will take place on at least GKN’s previous level, amounting to a minimum of 2.2% of sales for the next five financial years. In important respects, those undertakings go beyond commitments given by the previous management team. Melrose has also agreed to meet my officials and me every six months to provide updates on its ownership of GKN.
On the basis of the commitments given relating to national security, the Ministry of Defence concluded that statutory intervention was not required. That is consistent with the other assessments that I have received. On the basis of the assessments that I have considered and the undertakings that have been entered into, my judgment is that there are not reasonable and proportionate grounds to make a statutory intervention on the grounds of national security.
GKN is a very important business, performing vital work in industries—aerospace and automotive in particular—with an expanding global market in which British innovation and excellence offer great opportunities. This takeover bid has entailed a vigorous debate about which of the two alternative British managements could most credibly reap those opportunities. The shareholders chose—initially by a small majority, and finally more substantially—new management. All UK public companies are subject to that challenge of how they can best be run: it is an essential part of the competitive business environment for which Britain is renowned.
The takeover bid has been important in wider ways. It is the first contested bid in which the new regime of legally binding commitments on future conduct has applied. The commitments that have been made reflect the strong interest of stakeholders—including employees, UK taxpayers, suppliers, and research and development partnerships—in knowing the future intentions of a bidder, provided in a way that is binding. These responsibilities, which broadly reflect those placed on directors of ongoing businesses by section 172 of the Companies Act 2006, are important to ensure that the longer-term and strategic interests of our economy are considered and addressed during takeover bids.
Now that such an ability to make post-offer undertakings has been established, I expect them to be implemented. The new management’s stewardship of these important businesses carries with it important responsibilities for our economy and our country. I look to the management to honour its commitments in both the spirit and the letter, and to create a strong future for GKN, its employees, its suppliers, and the industrial sectors in which it will play a major role.
I gave the House a commitment that I would carry out my legal responsibilities seriously, meticulously and fairly, and that I would keep the House up to date at every phase of these proceedings. I believe that I have done so, and I commend my statement to the House.
I thank the Secretary of State for giving me advance sight of his statement.
There are two issues that I must raise today: the fact that the reported assurances obtained by the Government, both in the letter of 27 March and subsequently, are not sufficient to guarantee the security of the long-term prospects of the company and, indeed, the workforce; and the inadequate capacity of the takeover regime to protect companies outside the very limited grounds of national defence, media plurality and financial stability.
First, as I made clear last month, the assurances obtained by the Government in Melrose’s letter of 27 March were sadly inadequate. Apart from the first five assurances which were post-offer undertakings, what was in the letter was completely unenforceable. For example, there were no post-offer undertakings on maintaining employment or tax residency, which could easily constitute such undertakings. Indeed, the maintenance of employment is vital to our national security, and the loss of these jobs will cause the diminishment of vital skills that are integral to our defence industry.
Putting aside issues of enforceability, what of the assurances that have been reported since 27 March? The reported veto power that the Secretary of State for Defence has to stop the sale of certain businesses will not, I am afraid, solve the national security problem. Melrose reportedly has a short-term outlook which undermines the long term that is required for defence projects. That is important, and a veto on the sale of certain parts of the business by the Defence Secretary will not help significantly. Sadly, the Government’s failure to address the short-term horizons of Melrose may damage the capability of a business to deliver projects that could last for 10, 15 or 20 years.
Secondly, our takeover regime is inadequate, and the Secretary of State is acutely aware of that. If a takeover falls outside the grounds of national defence, media plurality and national stability, the Secretary of State cannot act, even though the takeover may be harmful for the business, harmful for employees, harmful to research and development, and harmful to supply chains.
Let us take the case of Unilever. Last year it was threatened with a takeover, and there was nothing that the Government could do because the takeover fell outside the three public interest exemptions. Unilever has since commented on the inadequacy of the UK takeover regime, and its recent decision to place its headquarters in the Netherlands was, as reported by the Financial Times, arguably driven by a desire to escape the poor safeguards for takeovers in the UK. Labour Members have called on the Government to broaden the public interest test. The measures that the Government have proposed so far are not good enough. We know that, in GKN’s case, they already had the power to act and did not do so. However, our takeover rules would not have prevented Unilever from being taken over had Kraft been prepared to follow through, because that had nothing to do with any of the three exemptions.
I agree with the Secretary of State that our takeover regime must be open enough to encourage foreign investment, but it must also protect against short-termism and long-term damage to our economy and national security. Arguably, too often it is short-termism that prevails. Only this week we heard reports that the hedge funds that bought GKN shares to make Melrose’s takeover possible are now targeting Melrose, shorting the company on the stock exchange.
What we needed from the Secretary of State today was not just a waving through of the deal, but action, both in obtaining concrete assurances from Melrose on the future of GKN and its workforce, and in the form of clear plans to reform and widen our takeover regime to protect British businesses. I fear that the short-term predators already smell their next victim—and it is not just Melrose; it is Britain’s industrial future.
Right from the outset, the hon. Lady has been unable to advise us of what specific undertakings she thought it was appropriate to obtain. She needs to understand that as this is a quasi-judicial decision, the statement that she made that she would block the bid would disqualify her from making that decision, as the right hon. Member for Twickenham (Sir Vince Cable) knows to his cost.
The evidence presented to me was that this was a British company taking over another British company, that no such takeover has ever been blocked on national security grounds, and that the Ministry of Defence and the other agencies said there was no reason for intervention on those grounds. I have to tell the hon. Lady that the previous directors of GKN themselves said that there was no reason for an intervention on national security grounds. She should reflect on the commitments that the Defence Secretary and I have secured to retain the aerospace division for at least five years, to ensure that the Government have the right to approve any future sale of any defence business or asset, and to invest in research and development to at least the current level. Not once in the past four months has she engaged in a similarly forensic way to set out what she thinks would be appropriate commitments.
The hon. Lady says that the commitments are inadequate, but they have been given as legal deeds and in some cases set out to the Takeover Panel as post-offer undertakings. The truth is that she has had the opportunity to engage with this matter, but having prejudiced her position by saying from the outset that the takeover should be blocked, she has given away the ability to have influence on what the regime should be.
The hon. Lady knows perfectly well what the Government’s powers on takeovers are, because the 2002 Act was passed under a Labour Government and sets out those limited powers, which are the same as in the rest of Europe. The difference between the Government and the Opposition is that when we came into government, we reformed those powers to allow post-offer undertakings to be given, so the situation when Kraft bid for Cadbury and undertakings were reneged upon cannot happen in the current circumstances. We have taken an active approach to ensuring that all stakeholders’ interests are secured, whereas the hon. Lady preferred to float above it all and simply say no before considering the evidence. We have proceeded responsibly, and she would do the employees of and stakeholders in GKN a service if she engaged more forensically in future.
What are the sanctions if commitments are not honoured?
Sanctions with regard to undertakings to the Takeover Panel are those for contempt of court, which include everything up to imprisonment.
I thank the Secretary of State for advance sight of his statement.
The Secretary of State mentioned holding Melrose to the spirit and letter of its commitments, but traders have been short selling £725 million, or 17%, of Melrose stock, effectively betting against it making a success of GKN. What action will he take if there is any breach of the spirit or letter of the commitments?
The Secretary of State did not cover jobs in his statement. I asked him following a previous statement to what extent he would require assurances to prevent assets from being stripped and jobs lost, and not just those in the MOD or national security. What assurances has he had on the financial restructuring involved in the takeover, which will mean more debt and less investment at the core of GKN? How will that situation progress the Government’s industrial strategy, and can he explain how allowing the takeover will protect the skilled jobs that we require and tackle productivity issues?
I am grateful to the hon. Gentleman for his questions. He will know that one undertaking that has been given is a commitment to at least five years of research and development investment, including participation in the joint industry bodies, which have been a successful part of our arrangements in the aerospace and automotive sectors and are an important part of our industrial strategy. That is a valuable commitment that I would have thought the hon. Member for Salford and Eccles (Rebecca Long Bailey) and he would welcome.
The previous GKN management criticised the commitment to retain the aerospace business, saying that it should not have been entered into given that the sell-off of GKN’s automotive business had already been agreed to. It constitutes a longer-term commitment than was made during the latter period of the previous ownership.
The hon. Gentleman will understand that in obtaining commitments from a bidder, I have to bear in mind commitments that the incumbent management have or have not made. No commitments had been made on the total number of jobs, and indeed the sale programme involved a majority of the business. One of the features of today’s results announcement was that the debt of the previous business was higher than anticipated, and the plans that the new management have set out include paying it down.
I thank the Secretary of State for his statement and welcome the undertakings that he has secured.
The future of GKN was determined by speculators who came on to the share register in the final weeks of the bidding process to make a quick profit. Does the Secretary of State agree that that is no way to determine the future of a great British manufacturing company, and will he now conduct a review of the takeover code to ensure that speculators cannot participate in that way in a vote to decide a company’s long-term future?
I understand my hon. Friend’s concern, and a number of hon. Members have raised that point before. There are a couple of things to say about it. First, most people who have bought shares latterly during the takeover process bought them from longer-term shareholders, and one way in which a bid can be backed is for people to sell before the end point of that bid. That situation was looked at, appropriately, by Professor John Kay, who published a substantial review. His panel noted that one suggestion was that voting rights should accrue only if people had been on the share register for a specified period. The Kay review concluded:
“We were persuaded that the introduction of such provisions by legislation or regulation would involve practical difficulties and would be unlikely to achieve the intended effect.”
That was an expert review by a serious person, but of course in all circumstances such as this we keep our corporate governance arrangements under review, and I will certainly do that now.
I would like to follow up on the point that the hon. Member for Telford (Lucy Allan) raised. Other countries have a rule that people must have been shareholders for a certain period before they can vote on a takeover deal. Some sort of financial transaction tax would also reduce short-term speculation in companies that leads to their being taken over in this fashion. I urge the Government to look again at the takeover code, particularly for businesses that are so integral to our industrial strategy and have received a lot of taxpayer funding, in this case for the R&D work that GKN has undertaken.
I am glad that the hon. Lady mentions the R&D work, which is very important. The commitments that have been made on R&D, both to keeping up investment and to participating in R&D partnerships, are extremely important. She and her Business, Enterprise and Industrial Strategy Committee asked for undertakings to be given on that and a number of other issues, and were not satisfied with the undertakings that were offered. I persuaded the company to go further and obtained undertakings relating not only to national security but to R&D and the ownership of businesses, and I hope she will acknowledge that that is valuable.
On the hon. Lady’s point about differential voting rights for shareholders, I mentioned the John Kay report, which her predecessor Committee scrutinised—I think the right hon. Member for Twickenham (Sir Vince Cable) gave evidence backing the report’s judgment. I know that her Committee is correctly interested in keeping our arrangements up to date, and if she and her colleagues want to review these matters, what their predecessors said is a good example of how that can be done.
I congratulate my right hon. Friend on his statement, and on the work he has done on this difficult issue, especially in relation to securing the five-year guarantee for the aerospace business, which is unprecedented for a business such as GKN. Indeed, as he has just said, the last management refused to countenance such an arrangement. I visited the plant in my constituency a week or two ago and, despite some cynical scaremongering by some in the party opposite, the management and workers there are optimistic about the future and looking forward.
I am grateful to my hon. Friend for his comments. It seems to me that when we establish a regime of post-offer undertakings, it is necessary to be active and to apply ourselves to the undertakings that it is important to secure. It is true that there has never been any commitment to own an important business such as that for more than five years, and I think that this will be valuable and welcomed by the employees in his constituency. I recognise his assiduousness in visiting the plant and talking to his constituents who are employed there.
Further to the excellent intervention from the hon. Member for Telford (Lucy Allan), the Select Committee Chair, does the Secretary of State accept that the role of the short-term investors has been highly destabilising? They acquired 20% of the stock, they forced the takeover through and they are now short selling. If he is not persuaded of the merits of differential voting, how does he propose to deal with this problem?
The right hon. Gentleman was not persuaded either. He commissioned a report, he had a respected and eminent individual look into this, and he gave evidence to the Select Committee to say that he was not persuaded. I have described some of the circumstances involved. Those who bought shares in the latter stages bought them from people who had decided they did not want to back the existing management. He knows that I take a great interest in ensuring that our regime of corporate governance is the best in the world. The fact that people can invest here with confidence forms an important part of our reputation. We have been successful over many years, and of course if the Select Committee wants to review the experience since the report that he commissioned, it has the ability to do that and I would be very happy to participate.
The Minister will be aware that the global headquarters of GKN are in Redditch, and that this has been my first priority ever since we heard the news of the takeover. Is he also aware that I spoke to Melrose on Friday, and that it assured me that it has no plans to shut the Redditch office? It believes that many of the jobs will be reabsorbed into the functions of GKN. Does he agree that that is really good news, and contrary to some of the things we have heard in the media? Will he also comment on observations in the media about the Airbus relationship? Again, we have heard that the takeover could have a negative impact in that regard, but that is not what I have heard from Melrose, which thinks that the relationship could continue. Can he comment on that further?
I congratulate and applaud my hon. Friend on being active and engaging with the new management to talk about the important headquarters function in her constituency. She has indeed secured good news from the company in that respect. I understand that the divisional heads of the aerospace and automotive businesses have been reappointed by the new management. Let us bear in mind that the incumbent management’s proposal was, latterly, that the automotive business should be sold, and that it would now be in the process of being sold. Airbus is clearly an important company, and there were some comments ascribed to it, although I do not think that they have been repeated. It will be important for the new management to set out its plans, so that all suppliers can have confidence in those relationships.
Is the Secretary of State aware that short selling has been the decisive factor in this, and that that is a matter of great concern throughout the House? Also, he has rightly been concerned about the reputation of Melrose Industries plc for taking short-term measures. It cuts, closes and sells on at a profit. That is its reputation and, as far as I am aware, that is what it has invariably done. He has therefore sought longer-term undertakings—and five years is a significant period—that will keep the plants going and ensure that the company redoubles its commitments. However, his statement contained no indication as to whom those commitments are to be made, except presumably the Takeover Panel. What powers does the panel have to impose binding sanctions or, if necessary, to take the company through a legal process that he claims in his statement will be legally binding? On these crucial issues, he seems to have made no progress at all.
This is the first time that any such commitment has been given on the ownership of assets for a period of five years. I have been active in establishing this regime, and I think the hon. Gentleman knows that, in my engagement with manufacturing and other industries, I have considered carefully the strategic importance of continued investment and stability. In the final analysis, there was a greater commitment to stability of ownership from the bidder than there was from the incumbent management. On the question of enforceability, I will place in the Library of the House the deeds that have been entered into in favour of the UK Government by the company. Some of them are under the Takeover Panel regime. As I said to his colleague on the Labour Front Bench, the effect of this new regime is that there will be sanctions up to imprisonment for a breach of those undertakings.
I welcome the encouragement that my right hon. Friend gave to the Chair of the Business, Energy and Industrial Strategy Committee to look at the issues surrounding this takeover, and I am sure that the Committee will do that. Importantly, he also pointed out that this was a contest between two British management teams. Does he agree that the British taxpayer should expect companies that receive public money, either through contracts or through research and development, to be prepared to give an undertaking to take a long view when it comes to investment decisions?
That is right, and I would also welcome consideration of these matters. Right from the beginning, I have made a commitment to the House that I would take a considered, comprehensive view and use the powers that I have, and that where I did not have statutory powers, I would say what I expected. When it comes to research and development, to the ownership of assets and, for today’s purposes, to national security, a long-term commitment is required, and it has been important to obtain undertakings in all those areas. I hope that the Committee will take a look at this.