House of Commons
Wednesday 16 May 2018
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office was asked—
Government Procurement: Small Businesses
Small businesses are the engine of our economy, and we are determined to level the playing field so that they can win their fair share of Government contracts. That is why, last month, I announced a range of new measures, including consulting on excluding bids for major contracts from suppliers who fail to pay their subcontractors on time and giving subcontractors greater access to buying authorities to report poor payment performance.
I thank the Minister for his answer, but I recently met small businesses at the Rugby branch of Coventry and Warwickshire chamber of commerce, many of whom told me that they were put off from tendering for public sector contracts by the complexity of the process. I know that Ministers have worked hard to break down barriers, so what steps is he taking to get the message across that there are real opportunities for business among small companies?
My hon. Friend raises a very important point. As he says, we have already removed complex pre-qualification questionnaires from low-value contracts, but this afternoon I will again be meeting the small business panel, which represents small businesses up and down the country, and we will be discussing exactly how we can further simplify pre-qualification questionnaires and associated bureaucracy.
The UK’s fantastic small and medium-sized enterprises drive innovation and help to deliver our public services. What barriers has the Minister identified that he will tackle to ensure that we can see more small businesses from around the country tender for Government contracts?
I thank my right hon. Friend for her question. She is absolutely right: I am committed to breaking down barriers for SMEs supplying the public sector. That is why, over Easter, I announced that we required significant contractors to advertise their contracting opportunities for SMEs on Contracts Finder. In addition, my right hon. Friend the Prime Minister has appointed an SME champion in each Department, and I have personally written to strategic suppliers to remind them of their obligation to pay subcontractors on time.
A report that I published in conjunction with the TaxPayers Alliance earlier this year found that some public sector organisations are spending up to seven times more for a ream of photocopier paper than others. What steps is my hon. Friend taking to ensure that the public sector spends taxpayers’ money more wisely in everything that they incur and spend, and will he undertake to read my report?
I will, of course, undertake to read my hon. Friend’s report and will respond directly. It is precisely for this reason of getting good value for the taxpayer that we established the Crown Commercial Service to increase savings for the taxpayer by centralising buying requirements for common goods and services such as photocopier paper.
FCC Environment has public sector contracts across 160 constituencies, yet it refuses to pay its workers sick pay. The workers in Hull have been out on strike for more than 30 days after one of their colleagues developed cancer and had to return to work after a month because he could not afford to be off work. Will the Minister please look at reforming the rules for procurement so that no companies can exploit workers in this way and not pay them the basic right of sick pay?
Clearly, all suppliers are subject to the general law of the land, which covers many of those points. In addition, we have introduced a supplier code of conduct, which looks exactly at those corporate responsibility points, and we review it continuously, and we will review it with such cases in mind.
Today’s Carillion report clearly demonstrates the urgent need to deal with the late payment culture in the construction industry, which is hitting many subcontractors. Most important and pressing for me today, four months after the Carillion collapse, is the ongoing shutdown of the Midland Metropolitan Hospital. I have raised the matter with the Cabinet Office several times, with Health Ministers, and even twice here in the Chamber with the Prime Minister, so when will the Government stop dithering and start work again on this much-needed hospital?
I know that the right hon. Gentleman is very passionate about this issue. I can reassure him, rightly again, that we remain absolutely committed to getting the new hospital built as quickly as possible, and we are supporting the trust to achieve that while ensuring that taxpayers’ money is spent appropriately.
Although we warmly welcome moves to open up Government contracts to SMEs, the fact is that they are still being crowded out by big suppliers that regularly fail to deliver, including G4S with its youth custody provision; Capita with its failing Army recruitment contract, among many others; and, of course, Carillion. Will the Government introduce a new requirement that firms cannot bid for new Government contracts while they are still failing to meet quality standards on their existing public sector jobs?
Individual contracting Departments clearly keep the performance of all contractors under review. The hon. Gentleman says that we should ensure that small businesses can bid for Government contracts. I announced a range of measures over Easter precisely to deal with that issue. Indeed, we have introduced a requirement for all subcontracting opportunities by principal contractors to be advertised on the Contracts Finder website, which gives SMEs a great chance to bid for work.
House of Lords Reform
On 20 February, the Prime Minister wrote to the Lord Speaker to respond to the Committee’s recommendations. The Prime Minister has committed to do her bit to reduce the size of the House of Lords by continuing the restrained approach to appointments that she has taken so far.
Does the Minister agree that the size of the House of Lords now makes it ungainly, that it is politically unbalanced and that it has become democratically very detached? Is not it time that we looked in more general terms at the future of the House of Lords?
Does the Minister realise that her Government’s refusal to reform the upper Chamber combined with the provisions of the European Union (Withdrawal) Bill mean that, for the first time ever, the unelected House of Lords will have more power over devolved matters in Scotland than the elected Scottish Government. As a democrat, how can she justify this outrageous situation?
I have two points. First, I am actually very pleased and grateful to the House of Lords for the consideration that it has given to the EU withdrawal Bill. It has provided important scrutiny, in particular of the devolution clauses for which I and my right hon. Friend the Chancellor of the Duchy of Lancaster are responsible. Secondly, I think that many Members of this House would agree that there are many fine representatives of the Scottish people in this very Chamber who do a very fine job, and I welcome them to their places.
My hon. Friend has it exactly right. There are many more important issues in the minds of the electorate. These issues were of course discussed at length during the last general election, when, as I have said, our manifesto was very clear that we did not think that reform of the House of Lords was a pressing priority.
In any discussions that the Minister may have with the Lord Speaker’s Committee, would she be able to impress on its members the need to ensure that the will of the people of the United Kingdom in leaving the EU ought to be uppermost in the minds of the lords and that they overlook that at their peril?
This sits with the theme to which I already alluded, which is that we think that the House of Commons should have rightful primacy. Indeed, that is where we see elected representatives of the British population who are able to carry forward—in the instance to which the hon. Gentleman refers—the will of the British people in leaving the European Union.
UK Constitutional Integrity
The constitutional integrity of the United Kingdom is vital to the security and prosperity of all four nations. That is why the EU (Withdrawal) Bill respects devolution, while allowing common approaches to be maintained to secure the common market of the United Kingdom.
Mr Russell has always been perfectly constructive and sensible in his approach to negotiations, and I am obviously disappointed that so far the Scottish Government have not felt able to join the Welsh Government in agreeing to the sensible compromise that is on the table. What has been made very clear to me by Scottish businesses, however, is that the UK common market matters a great deal to their prosperity.
Is the Minister aware that we can have integrity and maintain integrity as well as having access to this vital £600 million market? Is he further aware that a small businessman in my constituency, after hearing him on the Radio 4 “Today” programme, phoned me and said “I feel suicidal.”?
I am sorry if constituents feel that way after talking to the hon. Gentleman. The important point about small businesses is that they need to be able to sell freely to customers and to get supplies from contractors in all parts of the United Kingdom freely without erecting new internal trade barriers within our kingdom. That is what the EU withdrawal Bill makes possible.
Constitutionally, nationalist politicians are quite entitled to pursue their political objectives. The Government’s responsibility is to ensure that Scottish businesses and Scottish consumers are protected and that they do not risk extra burdens or higher prices as a result of obstruction in the UK internal market.
Order. Mr Linden, I have high hopes of your prospects of statesmanship in due course, which are not aided by you waving an Order Paper in an eccentric manner. [Interruption.] Order. The same goes for Scottish Conservative Members. Mr Kerr, you are a most amiable individual, but you do tend to become very over-excitable. Calm yourself, man, calm yourself.
Last night, four out of five parties in the Scottish Parliament voted by an overwhelming majority to withhold legislative consent for the EU withdrawal Bill. How would this Government, in ignoring the decision of the democratically Scottish Parliament, preserve the integrity of the United Kingdom?
I have been very heartened by the degree of cross-party support in the Welsh Assembly and in the House of Lords for the sensible compromise that the Government have put on the table. As I have said repeatedly to Scottish Ministers, my door remains open to consider any practical proposal they want to bring forward, even at this stage, but I would urge the Scottish Government to think again.
Our world-leading national cyber-security strategy is supported by £1.9 billion-worth of investment. It sets out measures to defend our people, businesses and assets, to deter our adversaries and to develop the skills and capabilities we need.
With cyber-attacks on public services in other countries and a highly publicised attack on our own NHS, does my hon. Friend agree that cyber-security is not just the responsibility of people at the top of our businesses, public services and agencies, but is actually the responsibility of every single employee, and that we have to get that culture across our public service estate?
It is undeniable that the UK is in the grip of a digital skills gap, yet despite the Government’s national cyber-security programme, the problem is getting worse. Fewer students are taking up technology-based A-levels, and those who do are underperforming compared with their counterparts in other subjects. What conversations has the Minister had with his Front-Bench colleagues to ensure that digital technology is integrated across the curriculum and that teachers of all subjects are given the training to help them inspire the next generation into closing the digital skills gap?
I do not recognise the picture that the hon. Lady paints. We are a world leader in digital technology, as I repeatedly see when I visit the Government Digital Service, which has an extensive training programme. In addition, one of the first three of the Government’s new T-levels will focus on digital.
I received a letter last week from Greater Manchester police that informed me that on 18 April I was involved in a vehicle collision in Salford and that, if I am convicted, I will face a fine of £1,000 and get six points on my licence. As many Members will testify, I was in this place on 18 April. This is a clear example of identity theft. Greater Manchester police have been most helpful and told me that it is likely that a drug dealer in Manchester has stolen my identity. You will be interested to know, Mr Speaker, that he has put down my occupation as “cobbler”. I would be interested to know what the Minister has to say.
The hon. Gentleman’s profession should have been orator and statesmen; that would have been a better description. He is absolutely right that we should be working with the police, and that is why one of the measures in our strategy is to deter and disrupt our adversaries, which includes states, criminals and hacktivists.
Public Life: Intimidation
The trend of increased intimidation can seriously damage our democracy. That is why we will be consulting on recommendations made by the Committee on Standards in Public Life to undertake legislative changes, for example, to remove candidates’ addresses from ballot papers and create an electoral offence of intimidating candidates. An electoral offence will reflect our view that elections and candidates need to be better protected.
I thank my right hon. Friend for that answer. He will be aware of incidents designed to intimidate people from being involved in public life, including a recent incident where a brick was thrown through a Conservative candidate’s window in Liverpool. Does he agree that it is vital that all involved in public life seek to encourage a culture of respect and tackle those who seek to intimidate people?
Absolutely. My hon. Friend makes a very good point. That was a shocking incident, which I hope all of us on both sides of the House would find abhorrent. The candidate had her one-year-old daughter in the room when the brick was thrown. That is a salutary lesson to us all. Such conduct deters people from participating in politics. That is why we have to look at removing the requirement on local addresses, but we also need leadership from the top. That is why we have introduced a respect code, which I hope the Labour party will eventually follow.
People who intimidate those in public life are thugs, wherever they are on the political spectrum. Can the Minister tell us what he proposes to do about the Daily Mail calling several of his colleagues “traitors” when they spoke up with their views on Brexit?
My right hon. Friend has great experience, and he is absolutely right that we have to crack down on that kind of behaviour and make it clear that we must allow debate with respect, so that people want to and feel confident to get involved in politics. I just hope the Labour party will get its house in order and bring in a respect code as well.
People with no fixed address can register to vote at an address or place where they spend a large part of their time. The Government have and will continue to work with homelessness charities to make sure that the paperwork required to register without a fixed address can be easily accessed.
The voter ID pilots in the recent local elections required people to produce a passport, bus pass or utility bill with their address on it—you will see the irony, Mr Speaker. How likely is it that someone of no fixed abode could produce those documents, and what will the Government do to avoid their disenfranchisement?
The hon. Lady raises an important point. We had those pilots just a few weeks ago, and I look forward to a full evaluation of their impact. We believe they have been successful and that very few people were negatively affected by them. I look forward to working with the Electoral Commission on the next steps.
People with no fixed address can register to vote through a “declaration of local connection” form. Will the Minister look at reforming that form so that, given the stigma associated with its name, it is no longer called that? The form also states that if people have been sectioned under the Mental Health Act, they have to report it. That requirement is a disgrace and needs to be removed.
I pay tribute to my hon. Friend for his work in looking at such things—not only the form he mentions, but paperwork to assist people with a visual impairment or those who need to register anonymously. This Government can be proud of those achievements, and I would be happy to discuss his points further with him.
Three thousand eight hundred: that is the number of people nationally with no fixed abode who are registered to vote. Does the Minister agree that that is woefully under-representative of the number of homeless people and families in this country? One way to make it easier for people with no fixed abode to register to vote would be to remove the requirement to print the form. Why is the group of voters with the least access to a printer the only one that has to print out their paperwork?
As I said in my first answer, homelessness charities and other organisations that assist homeless people are very able to help them with the form, and that is very important. I would also say that this Government are working across the breadth of what we need to do to support those who are homeless, and I regard the ability to register to vote as just one of those pieces of work. My right hon. Friend the Minister for the Cabinet Office chairs the taskforce that is looking at how to reduce and eliminate rough sleeping, and that is important work.
Since our last Cabinet Office questions, the Government have reached an agreement with the Welsh Government on changes to the European Union (Withdrawal) Bill and an inter-governmental agreement on the establishment of common frameworks. I welcome yesterday’s decision by the National Assembly for Wales to grant consent to the Bill, and I place on record the Government’s commitment to act along the lines of the inter-governmental agreement respecting devolution, and to seek consent in our dealings with all three devolved nations.
Groucho Marx once said, “These are my principles, and if you don’t like them—well, I have others.” In homage to Groucho, the Scottish Conservatives used to have principles on clause 11 of the European Union (Withdrawal) Bill, but they have abandoned them to become isolated, as theirs was the only party to vote for legislative consent in the Scottish Parliament yesterday. Is the right hon. Gentleman ashamed—not just a tad embarrassed—on behalf of the Scottish Conservatives?
The hon. Gentleman has a question to answer. He and his party support continued membership of the European Union. The powers in the Bill allow for the temporary carrying forward, for a time-limited period, of the frameworks that already exist, and to do so when that is in the interests of Scottish jobs and Scottish consumers. What is the hon. Gentleman’s objection to that?
We believe that the recent trials have been successful. As I said earlier, we will be evaluating the pilots fully and then taking careful decisions about next steps. We remain of the view that voter fraud is a crime that should be stamped out, and it would be very good if other parties in this place joined us in that belief.
As a matter of fact, I took up this office on 8 January 2018. I do not think the picture the hon. Gentleman paints is an accurate one. It was only in January that we were presented with details—full details—of what Carillion proposed. It would have been wrong for the Government to bail it out for private sector failures of judgment.
My Department supports consistent standards of devolution awareness across the civil service. The Cabinet Office runs a cross-Government learning campaign, in partnership with the devolved Administrations, to ensure that there is good practice throughout the United Kingdom.
As I set out in detail in my evidence to the Liaison Committee, three of the contracts were actually awarded before the profit warning. The two from HS2 Ltd were part of a joint venture. The other joint venture partners stepped forward, in line with their contracts, to ensure that the project continues with no additional cost to the public purse.
The data so far from the successful five pilots does not seem to provide evidence to support the Opposition’s scaremongering. Most people’s experience of the pilots was very positive. We will evaluate the next steps before returning to the House with the way forward.
My hon. Friend raises a very important point. We are determined that the public sector uses technology to improve services. Indeed, just last week I announced the first GovTech challenges to help tech firms to create innovative, cutting-edge solutions to public service challenges. The first seeks to use artificial intelligence solutions to identify recruitment images that are created by Daesh and spread online.
We are now in an unsustainable and inconsistent position whereby 16 and 17-year-olds in Scotland and Wales can be trusted to vote in local government elections, yet their counterparts in England and Northern Ireland are denied that right. Does the Minister agree that if we are to maintain the integrity of our electoral process, we must have equal voting rights across the UK?
First, the Government stood on a manifesto in which we agreed to keep the voting age at 18. Secondly, we believe in devolution. As my right hon. Friend the Minister for the Cabinet Office has told the House very strongly, our work on the European Union (Withdrawal) Bill and elsewhere supports devolution. That, I am afraid, is the real answer to the hon. Gentleman’s question.
Colleagues, today the two extremely brave police officers who apprehended the killer of our late friend and colleague Jo Cox are in the Gallery for Prime Minister’s questions. I am referring to PC Jonathan Wright and PC Craig Nicholls, both of the West Yorkshire police. Gentlemen, we honour your public service. We thank you for it and we offer you the warmest of welcomes here to the House of Commons today. [Applause.]
We are also joined by the former Presiding Officer of the Welsh Assembly, Dame Rosemary Butler, and her husband Derek. Rosemary and Derek, you too are very welcome. Thank you for coming.
The Prime Minister was asked—
I am sure that the whole House will wish to join me in offering our best wishes to His Royal Highness Prince Harry and Meghan Markle for their wedding this Saturday, and in wishing the very best for their future lives together. It is also Mental Health Awareness Week, and it is fitting that we mark Prince Harry’s tireless work to raise awareness of the ongoing challenges faced by service personnel making the transition to civilian life, including of support for their mental health.
Mr Speaker, may I say how appropriate it is for the House to recognise the bravery and hard work of PC Jonathan Wright and PC Craig Nicholls in apprehending the killer of Jo Cox? When Jo Cox was killed, this House lost one of its best.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
My hon. Friend raises an important point—he is absolutely right to do so. As we leave the European Union, as he will know, we will have the opportunity to deliver a farming policy that works for the whole industry. That is why we are asking for the views of everyone involved or with an interest about the development of a policy that reflects the reality of life for food producers and farmers, the opportunity to improve our farmed environment and the issues that my hon. Friend raises. Our food has a great reputation—a very high reputation—for quality that is built on high animal welfare standards, strong environmental protections, and the dedication of farmers and growers right across this country.
Thank you for welcoming PC Wright and PC Nicholls to the Chamber today, Mr Speaker. They did great work, as indeed do police officers all over the country. It was right that you should recognise them on behalf of all of us.
It is Mental Health Awareness Week. I join the Prime Minister in wishing Harry and Meghan all the best, and I thank Harry for his work to highlight the need to challenge the stigma surrounding mental health, and the ability for us all to talk about mental health to ensure that people do not suffer in silence on their own—particularly young people, who are often so grievously affected by this.
When the Prime Minister wrote at the weekend that she wanted
“as little friction as possible”,
was she talking about EU trade or the next Cabinet meeting? [Laughter.]
I think the right hon. Gentleman knows full well that this Government have a policy of leaving the customs union and of ensuring that, as we do so, we have as frictionless trade as possible with the EU, we have a solution that ensures we have no hard border between Northern Ireland and Ireland, and we have an independent trade policy. But if he is talking about friction, perhaps he could reflect on the fact that this month, the shadow Health Minister in the Lords voted for a second referendum; that at the weekend, the shadow Brexit Secretary refused to rule out a second referendum; and that on Monday, the shadow International Development Minister tweeted in favour of a second referendum. Perhaps when he stands up he could put the minds of the British people and this House at rest and rule out a second referendum.
The divisions in the Cabinet mean that there has been no progress in negotiations for five months. The reality is that members of the Cabinet are more interested in negotiating with each other than with the European Union. The Prime Minister’s promise of
“as little friction as possible”
is in stark contrast with the earlier commitment that this would be “friction-free”, so will she explain how much friction she is willing to accept? Businesses and workers in those companies need to know.
We want to ensure that we can continue to trade in as frictionless a way as possible. The suggestion that trade is entirely frictionless at the moment is not actually correct. We have set three very simple objectives for a future customs union. I will say to the House that achieving those objectives, which I have just set out, will not be easy—it will be difficult. Some will say, “Forget about an independent trade policy”—that is not the position of this Government. Some might say, “Don’t worry about the Northern Irish border”—that is not the position of this Government. It is absolutely right that we aim to achieve those three objectives. The right hon. Gentleman talks about progress. We will be publishing a White Paper in a few weeks showing how much progress we are making.
Ministers are no nearer to agreeing a White Paper than they are a strategy for going forward. I remind the Prime Minister that UK has the slowest economic growth of all major economies, and its growth overall is slower than that of the eurozone. The Government’s uncertainty and recklessness are putting jobs and investment at risk. Last week, Airbus confirmed that its space contract would move abroad post Brexit and that it was considering its overall position in the UK because of the Government’s complete lack of clarity. How many other businesses have warned her that they too are considering their future in this country?
The right hon. Gentleman talks about preparations for the negotiations and the White Paper. Let us remember what his position was—[Interruption.] His position was that we should have triggered article 50 immediately after the referendum, with no work having been done in preparation for the negotiations. He would not even have had a white page, let alone a White Paper, to base his negotiations on. What would that have led to? It would have led to what Labour does every time it is in government—it would have sold Britain out.
The problem is that the Prime Minister’s own position is not even supported by her Cabinet. Rolls-Royce has said:
“We’re worried about border checks…we need to be thoughtful and careful about”
future investments. Ford has said:
“any sort of border restrictions or customs friction is going to be an inhibitor to us continuing”.
“We cannot invest in a world of uncertainty”.
Businesses are understandably frustrated by the Government. This week, the Environment Secretary gave his view on the Prime Minister’s preferred customs partnership model. He said that
“there have to be significant question marks over the deliverability of it on time”
as it “has flaws”. Well, at least he didn’t call it “crazy”, as the Foreign Secretary did. If the Prime Minister cannot convince even her own Cabinet of her strategy, what chance does she have with 27 other European countries?
The right hon. Gentleman has taken this view of our position in the negotiations before. Before December, he said we would not get a joint report, and we did. Before March, he said we would not get an implementation period, and we did, and we continue to negotiate. He asks what British businesses are doing. I will tell him what they are doing. They are creating more jobs in this country, meaning that we now have record levels of employment. What did we see under Labour? Half a million more people unemployed—because Labour Governments always leave office with more people out of work than when they went in.
May I congratulate the Prime Minister on record numbers of zero-hours contracts, record numbers of people in in-work poverty, and a record of wages lower today than 10 years ago? May I also congratulate her on formally dividing her Cabinet into rival camps—as if it needed doing—to consider two different models? As a process of parliamentary scrutiny, I hope that both Sub-Committees will report directly to the House so that we can all make up our minds on the rival factions in her Cabinet.
While the Prime Minister’s Government dither, the Dutch Government have now begun training the first batch of extra customs officials to deal with the reintroduction of customs checks for British goods at Dutch borders. In October, the Prime Minister’s official spokesperson said, “HMRC”—[Interruption.]
Order. The right hon. Gentleman will complete his question more quickly if Members do not shout—[Interruption.] Order. Mr Colin Clark, I do not require your assistance. You are an amiable enough fellow, but no assistance for the Chair from you is required.
I want to accommodate Back Benchers, and I will do so today, as I always do. I am concerned about people who want to ask questions. If people do not want to ask questions, they must shush and listen, and if they do want to ask questions, they had certainly better keep schtum.
As the right hon. Gentleman knows, we are indeed making preparations for all contingencies, and the Chancellor of the Exchequer has announced money which has been allocated to Departments to make those necessary preparations.
May I correct what the right hon. Gentleman said at the beginning of his question? He referred to zero-hours contracts. In fact, if we look at the figures, we see that almost two thirds of the increase in employment in the past year has been in full-time work, more than three quarters of the growth in employment since 2010 has been in full-time work, and about 70% of the rise in employment since 2010 has been in highly skilled work. Perhaps, when he stands up, the right hon. Gentleman will welcome the jobs that have been created under this Government.
The question that I asked the Prime Minister was, “How many more HMRC officials have been recruited?” She has not answered it. Let me help her, and say that if more are being recruited, as is being claimed, they will not even make up for the cuts made in the last eight years. It seems that the Dutch Government are more prepared for dealing with Brexit than the British Government.
We have had 23 months since the referendum. We have just 10 months in which to complete negotiations, and the Government are in complete disarray. On both sides of the negotiations, the reality is dawning that deadlines are at risk of not being met. More and more jobs are at risk as more and more businesses openly consider the options for relocating their jobs. The Government are so busy negotiating with themselves that they cannot negotiate with anyone else. If the Prime Minister cannot negotiate a good deal for Britain, why does she not step aside and let Labour negotiate a comprehensive new customs union and living standards backed by trade unions and business in this country? Step aside, and make way for those who will negotiate it.
What we have seen under this Government are more jobs being created, and more high-paid jobs being created. We have delivered on our December joint report on Brexit, and in March on the implementation period. Let us look at what we would see from the Labour party. With Labour Members, you simply cannot trust a word that they say. They said that they would strike new trade deals, but what do they want? They want to be in a customs union that would ensure that they could not strike new trade deals. Promise broken. They said that they would scrap student debt, but after the election they went back on that. Promise broken. They said that they would tackle anti-Semitism. Promise broken. Only the Conservative party can be trusted by the British people to deliver a Brexit that is in the interests of British people, and to deliver opportunity for all in a Britain that is fit for the future.
I am very happy to join my hon. Friend in welcoming the good economic news, not just that more people are in employment but that real wages are up. I note that when I challenged him to do so, the Leader of the Opposition was unwilling to welcome the number of jobs that have been created in this country that mean there are more people with a regular income to look after their families. And as my hon. Friend says, the news that real wages are up means more money in people’s pockets under the Conservatives.
I am sure the whole House will wish to join me in wishing Ramadan Mubarak to all Muslims preparing to start the month of Ramadan today.
Last night the Scottish Parliament voted by 93 votes to 30 to refuse consent to the withdrawal Bill. The Scottish National party, the Labour party, the Liberal Democrats and the Greens all voted to refuse consent. The Conservatives are isolated and out of touch with the people of Scotland. Will the Prime Minister respect the will of the Scottish Parliament and work with the Scottish Government to amend the withdrawal Bill?
We have been working with the Scottish Government for some time now, as we have been working with the Welsh Government, on this issue. First, decisions that the devolved Administrations are able to make before exit will continue to be able to be made by them after exit. What the Bill does is set out a mechanism that respects devolution and lets us maintain the integrity of our own common market as we work out the long-term solutions. That is a reasonable and sensible way forward. The Welsh Government and now the Welsh Assembly, including Labour and Liberal Democrat Members of the Welsh Assembly, agree with that. I think it is right that we go ahead with measures that not only respect devolution, but ensure we maintain the integrity of our common market.
If the Prime Minister wishes to respect the Scottish Parliament, she should respect last night’s vote. It is very simple: the Tories are seeking to veto the democratic wishes of the Scottish Parliament. This is absolutely unprecedented. If this Government force through the legislation without the consent of the Scottish Parliament, the Prime Minister will be doing so in the full knowledge that they are breaking the 20-year-old devolution settlement. Will the Prime Minister reassure the House that the withdrawal Bill will not go through without the consent of the Scottish Parliament?
Of course we are disappointed that the Scottish Parliament has not granted its consent; we have been working hard in recent months to find a way through on this issue and clause, and the effort put into this has been shown by the fact that the Welsh Government and Assembly have given their consent to this Bill. I say to the right hon. Gentleman that we want to ensure the integrity of the United Kingdom’s common market, and when he talks about the democratic will he might wish to recall the fact that it was the democratic will of the Scottish people to remain in the United Kingdom.
My hon. Friend is absolutely right to be raising this issue on behalf of her constituents in the way that she is. I understand this issue is currently being considered by the Independent Reconfiguration Panel, which will then advise my right hon. Friend the Health Secretary. I am sure my hon. Friend will recognise that, as the issue is under an independent review at present, I will not go into further detail on the specifics, but on the general point I wholeheartedly agree with her that community hospitals are a vital part of the range of services we want to see in our NHS.
The hon. Lady will know that we have been doing much to improve the facilities of treatment for those people with mental health problems. We are putting record levels of money into mental health. We are also making a number of changes—for example, increasing the training of teachers and other members of staff in schools better to identify mental health problems among young people and to ensure that they can be properly dealt with. Is there more for us to do? Yes there is, because for too many years in this country, Government after Government did not treat mental health problems in the way that they should have done. We have recognised the need to raise awareness of mental health issues earlier, and this Government are putting more money and facilities in to ensure that those with mental health problems are properly treated and given the treatment they deserve.
I absolutely agree with my hon. Friend. As she will know, we have protected police funding since 2015. For 2018-19, including council tax, there will be an additional £460 million investment available to policing, and we have been able to do that because of the balanced approach that we have taken to our economy. As she points out, however, it is police and crime commissioners who are locally accountable for the decisions that they make, and she is absolutely right to raise this issue and the decisions made by her local police and crime commissioner on behalf of her constituents.
If the hon. Gentleman looks at what we have seen in the past few months, he will see company after company announcing investment in this country, which is leading to more jobs here. Yes, as we look ahead to leaving the European Union, we need to ensure that our customs arrangements will meet the three tests that I set out earlier: an independent trade policy enabling us to do trade deals around the world; as frictionless as possible a border with the EU; and ensuring that there is no hard border between Northern Ireland and Ireland. That is exactly what the Government are working to produce.
As we approach the anniversary of the appalling tragedy that was the Grenfell Tower fire, our thoughts are with the victims and survivors and all those affected by that tragedy. My hon. Friend refers to rehousing. There are 210 households in total that are in need of a new home, and I understand that 201 households have accepted an offer of either temporary or permanent accommodation.
On the issue of the safety of buildings, the fire and rescue services have visited more than 1,250 high-rise buildings, and immediate action has been taken to ensure the safety of every resident. Councils and housing associations must remove dangerous cladding quickly, but paying for these works must not undermine their ability to do important maintenance and repair work. I have worked closely with my right hon. Friends the Chancellor and the Housing Secretary, and I can today confirm that the Government will fully fund the removal and replacement of dangerous cladding by councils and housing associations, estimated at £400 million. The Housing Secretary will set out further details later this week.
We all recognise the significant contribution that the late Baroness Jowell made in the various roles that she undertook in government and to the various issues that she championed. Sure Start centres remain a key part of delivering the best start in life for every child, but we have built on that legacy by introducing 15 hours of free childcare for disadvantaged two-year-olds and 30 hours of free childcare for three and four-year-olds. Just as importantly, we are focusing on quality, with 94% of early years providers now rated good or outstanding, the result of which is a record number of children ready for school. We will continue to work to ensure that every child gets the best start in life.
Thank you, Mr Speaker. I want to register my heartfelt thanks to all the staff at the Midland Centre for Spinal Injuries at the Robert Jones and Agnes Hunt Orthopaedic Hospital in my constituency. Without their extraordinary skill, professionalism and simple human kindness, I would not be here today.
The House of Commons Library confirms that an estimated 63% of Members of this House represent constituencies that voted leave. Does the Prime Minister agree that should those Members not support her by voting for her programme of taking back control by leaving the single market, the customs union—any customs union—and the remit of the European Court of Justice, they will be denying the democratic vote of their constituents and doing lasting damage to our democracy?
I am happy to join my right hon. Friend in commending the work of all at the Midland Centre for Spinal Injuries, and we are pleased to see him back in his place in the Chamber.
My right hon. Friend is absolutely right that this Government are delivering on the vote of the British people, which was to leave the European Union. As we do that, we will ensure that we get the best Brexit deal for the United Kingdom. I consider it to be a matter of politicians’ integrity that having given the choice to the British people we should then deliver for them on that choice.
The hon. Lady raises an important issue. Cystic fibrosis is obviously a terrible, life-limiting condition, and it is right that patients should have access to cost-effective, innovative medicines and technologies. The issue has been taken up by Members from across the House and, as the hon. Lady mentioned, there is an ongoing dialogue between NHS England and Vertex, but I am keen to see a speedy resolution to the negotiations. I understand that several Members have asked to see me about the issue, and I am happy for that to happen.
The freedom of the press was upheld in a series of votes in this place last week. Does my right hon. Friend agree that it is still important to hold newspapers’ feet to the fire on standards? Will she join me in encouraging further progress in this area?
My hon. Friend is absolutely right. This House has voted to uphold the freedom of the press, which is an important underpinning of our democracy. Of course we expect high standards from our press and, as he will know, arrangements have been put in place to ensure there is that opportunity, through various bodies, to deal with the issue. It is important that everybody in this House is ready to accept—although we do not always agree with what the press say, and sometimes what they say is uncomfortable—that the freedom of the press is an important part of our democracy.
It remains true that, to uphold its principles, we are putting more money into the national health service. In November 2017 my right hon. Friend the Chancellor announced that a further £10 billion is going into the national health service. I have said that we will have a review for a long-term plan for the national health service, which will include multi-year funding. The hon. Lady refers to the numbers of doctors and nurses, and we have more nurses and more doctors in our national health service today than we did when we came into government.
A growing number of university students are struggling with their mental health and, tragically, suicide has risen among students. My right hon. Friend has shown her commitment to mental health among young people with the plans for mental healthcare in schools. Will she make the mental health of university students her next priority?
My hon. Friend of course raises an important point. As she says, we have put a focus on the mental health of children in schools because we know that a significant proportion of mental health problems start before a child reaches the age of 14. She makes an important point about university students, and that is certainly something I will look into.
We have not forgotten about Erasmus, or indeed a number of other programmes that give opportunities for universities and students here in the United Kingdom. We have said there are certain programmes that we wish to remain part of when we leave the European Union, and Erasmus is one of those we have cited that we may wish to remain part of, but of course we are in a negotiation with the European Union and we will be dealing with these matters in that negotiation.
Mr Speaker, you are looking resplendent in your Arsenal tie.
I was fortunate enough to go to Djibouti, an African country with great challenges, with UNICEF. I am sure everybody in this House will want to see the UK do more with trade in Africa. Given that 485 of us voted to allow the Prime Minister to trigger article 50, does she agree that we should support her leadership and support the UK in getting the best deal so that we can trade with Africans and help lift them out of poverty?
My hon. Friend raises a very important point. When we leave the European Union we will be able to negotiate those trade deals in our interest, and not rely on Brussels negotiating trade deals for us. We will have that independent trade policy, and certainly we will be looking to do trade deals with a number of countries in Africa. I took the opportunity at the Commonwealth Heads of Government meeting to speak to a number of leaders from Africa about just this issue.
I say to the right hon. Gentleman that, obviously, we were all appalled at the revelations of what had happened in terms of CSE in Rotherham and, sadly, in other parts of the country. I will ask the Home Secretary to look at the issue. As the right hon. Gentleman will know, certainly as regards police funding, there are arrangements whereby bids can be put in to the Home Office. Those are properly considered and discussed with the police force in question, with decisions taken on that basis.
My constituent Sharon Hollman went through the devastating loss of her teenage son, who committed suicide. She is seeking a serious case review by Kent County Council about multi-agency failings that meant he did not get appropriate mental health support. This week is Mental Health Awareness Week. What reassurance can the Prime Minister give to my constituent and others about the need to ensure that we have appropriate mental health support for children and that lessons are learned from this tragic loss?
I am sure the sympathies of the whole House will be with Sharon, because no parent should have to endure the agony of burying their child. May I reassure my hon. Friend that we are absolutely committed to seeing mental health services improve on the ground? That is why we have committed to making an additional £1.4 billion available to improve children and young people’s mental health services, and we have committed to ensuring that by 2020-21, 70,000 more children and young people each year will have access to high-quality NHS mental health care. On the specific case she has raised, I know that my right hon. Friends the Education and Communities Secretaries will be happy to look into the detail of it in order to ensure that lessons are indeed learned.
I am pleased to make the House aware, once again, of the significant funding that is going into our defence forces—into our armed forces—including a significant investment in the ships of the Royal Navy. I am pleased to have been on the Queen Elizabeth, the new aircraft carrier, which is a fine representation of the commitment we put into our defence spending. As my hon. Friend will know, a modernising defence programme review is taking place, involving the Ministry of Defence, the Treasury and No. 10. We will be looking, in due course, at any changes that need to be made to ensure that our defence capabilities do indeed meet the threats we face.
This House has had and will continue to have many opportunities to debate these issues in relation to the European Union and the United Kingdom’s future relationship with it. There will be not only the meaningful vote that has been promised, but the voting on the European withdrawal agreement and implementation Bill that will come before this House and on a number of other relevant Bills for our Brexit.
Thousands more homes across North Yorkshire will receive access to superfast broadband thanks to the Government’s investment in North Yorkshire County Council. Much of that will be connected with fibre direct to the premises. Does the Prime Minister agree that fibre represents gold-standard broadband and that local authorities must use all their powers to ensure that developers install fibre broadband when building new homes?
My hon. Friend makes the very important point that access to superfast broadband is important not only for individuals but for people who run businesses from home and in his community. It is important that we look ahead and that, when local authorities put these arrangements in place, they provide the best opportunity for people so that not only people’s personal interest in accessing broadband but the interests of the local economy can be met.
Does my right hon. Friend share my disappointment and regret that we did not secure a legislative consent memorandum in the Scottish Parliament? Does she share my concern that Scottish Labour and Scottish Liberal Democrats have become the midwives for the Scottish National party’s crusade to tear apart the Union, leaving only the Scottish Conservatives as the party that wants to get on and make a success of Brexit?
I share my hon. Friend’s disappointment. As I said in response to the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), we have worked long and hard with the Scottish Government and the Welsh Government on those proposals. The Welsh Government and the Welsh Assembly have accepted them; Labour and the Liberal Democrats in the Welsh Assembly voted for them. It is a shame that it was not possible in the Scottish Parliament for agreement to be reached with the Scottish Government. As my hon. Friend said, we all want to deliver a Brexit that is good for the whole of the United Kingdom.
Following the completion at the end of the year of the Boundary Commission’s review, which will apply to the whole of the United Kingdom, reducing the number of constituencies and Members in this House, has the Prime Minister further considered the resulting relative increase in the size of the Executive in this place? May I urge her not to apply the policy that is currently being applied to Northern Ireland of not having any Ministers, refusing to appoint any and allowing civil servants to run the place?
Obviously we will look at the consequences of the proposals for the number of elected Members of Parliament in this House. I wish to see Ministers in Northern Ireland, able to take decisions for Northern Ireland. As the right hon. Gentleman knows, that depends on our being able to get agreement among the parties for reinstating the Northern Ireland Executive and allowing the Northern Ireland Assembly to play its full part in the affairs of Northern Ireland. We will continue to work with all parties because I believe that it is in the best interests of the people of Northern Ireland for that devolved Executive to be reinstated.
This year of all years, millions of people wish to remember the sacrifices of our servicemen and women in conflicts around the world, but in my constituency, Hillmorton branch of the Royal British Legion tells me that there is a danger that its annual parade will not take place because of challenges in arranging road closures. Will the Prime Minister meet me to see how that situation and perhaps others across the country might be resolved?
We absolutely agree that it is right that we commemorate the contribution of British and Commonwealth military and civilian servicemen and women involved in the two world wars and later conflicts. As I understand it, the Department for Digital, Culture, Media and Sport co-ordinates the event in London, but perhaps the Secretary of State for Transport will need to meet my hon. Friend to discuss the matter, although I suspect that it also involves local authorities and the police in his area. I encourage those discussions. We do not want any of the commemorative events not to take place because of a lack of arrangements being put in place for them.
The Lakes line from Oxenholme to Windermere has seen 160 cancellations in the month of April and 72 cancellations in the first week of May alone, risking the potential futures of GCSE students as they try to get to school and are left stranded, people trying to get to work, and the hundreds and hundreds of people visiting what is Britain’s second biggest tourist and visitor destination. Will the Prime Minister join me in saying that that is an outrage; will she use her office to ensure that Northern has the franchise removed from it; and will she undo the damage to the Lakes line by keeping the Government’s initial promise to electrify that line?
My right hon. Friend the Transport Secretary is aware of the issue that the hon. Gentleman has raised. I understand that the Department for Transport is working with Northern Rail to identify the nature of these issues and to see a quick resolution of them.
Despite clear evidence of potentially criminal wrongdoing, our regulators and law enforcement agencies seem unwilling or unable to take action against those at the highest level responsible for the business banking scandals at RBS, Lloyds and HBOS. Will the Prime Minister do everything that she can to make sure that those people are held to account regardless of their status, seniority or background?
This is an issue that my hon. Friend has not only raised today but been a tireless campaigner on, and he is absolutely right. Small businesses are the backbone of our economy, and it is vital that lessons are learned from what happened at RBS and at HBOS in Reading. As he will know, the Financial Conduct Authority has reported that there were areas of widespread inappropriate treatment of firms by RBS. That was unacceptable. He will also know that the events at HBOS in Reading constituted criminal activity for which those responsible were brought to justice. The independent FCA is currently investigating matters arising from both of those cases. I look forward to receiving its conclusions, but it is important that we do ensure that this matter is fully addressed, and addressed properly, so that it does not happen again.
If, like Jane, the Prime Minister had worked nights at Sainsbury’s for the past 30 years, how would she regard its plans to cut her pay by £2,000 as one of 13,000 people due a pay cut in 2020? Does she agree with boss Mike Coupe that those people are “in the money”, or does she see it as an insult to Jane’s hard work, her determination, and her abilities in just about managing?
We recognise the hard work that many people such as the hon. Lady’s constituent put in day in, day out to keep our economy going. I will look at the issue that she has raised, but these are commercial decisions that are taken by the employer and by Sainsbury’s.
On a point of order, Mr Speaker. We look to you to protect the conventions of this House. It is a long-standing convention that when the Government propose to make a statement to the House, the Opposition Front-Bench team, through the usual channels, is afforded sight of the statement an hour or so before it is due to be made. It is understood that commercially confidential matters can be redacted, but the convention has been scrupulously adhered to by previous Conservative Governments and, up until now, by the current Conservative Government and by previous Labour Governments as well. It is also a convention of this House that the Government do not bring statements on those days that are specified in our Standing Orders as being for the parliamentary Opposition to choose the topics.
Both of those conventions have been breached today. This is the third time that the Government have tabled statements on Opposition days. The reason is obvious: it is to erode the principal debates. Mr Speaker, you know today’s debates are heavily subscribed. What can you do to protect us from what I regard as a constitutional outrage?
No, no. No further point is required. I am very grateful to the hon. Gentleman.
Let me say to the House this: I have been advised by the Secretary of State for Transport, who beetled up to the Chair to catch a word with me during Prime Minister’s questions, that the statement is commercially sensitive. I have no reason to seek to gainsay the right hon. Gentleman. I do not know whether it is, but no doubt it has such an element. It is regrettable if there is not very substantial notice for the Opposition. [Interruption.] Order. I am dealing with the matter. I do not need any help from the Secretary of State. I am advised that the Opposition did in the end have approximately half an hour’s notice of this statement, and I am happy to hear from the Secretary of State if he wants to respond to the point of order.
On the point about the making of Government statements on Opposition days, this is by no means unprecedented, including under previous Governments. However, if I may say so—and I will—it is highly undesirable for there to be statements on very substantial public policy matters, in which the House will doubtless be interested, on an Opposition day. One looks to people traditionally with responsibility for safeguarding the rights of the House, of whom the Chair is one, but not the only one, to take these matters very seriously. This is an undesirable state of affairs, and if it were to happen on further occasions, a great many hon. and right hon. Members, not to mention interested parties in the Opposition day debates outside the Chamber, would view it, frankly, as an abuse. I hope that that message is heard loudly and clearly on the Government Front Bench, at the highest level, by the people in particular by whom it needs to be heard. If I have to make the point again on future occasions, and to use the powers of the Chair to facilitate the rights of this House in other ways, no matter what flak emanates from the Executive, I will do so in the future, as I have always done over the past nine years, and no one and nothing will stop me doing my duty by the House of Commons.
If the Secretary of State wants to respond to the point of order, he is very welcome to do so.
It is in the statement.
Further to that point of order, Mr Speaker. Seven minutes ago, The Guardian’s “Politics live” with Andrew Sparrow said:
“East coast rail franchise to be brought back under public control.”
It appears that someone has broken an embargo, or something has gone wrong, because I guess that that is what the Secretary of State’s statement is to be about. Will you put investigations in place to find out why that statement has been made before we have had the opportunity to listen to it from the Secretary of State?
I thank the hon. Gentleman for his point of order, and I respect his sincerity, but it is not for me to initiate inquiries on this matter. I say two things to the hon. Gentleman whose point I otherwise take very seriously. First, let us see what is in the statement, and whether in fact there has been a leak. Secondly, were it to transpire that there had been, that would be a matter to be laid squarely at the door of the Department whose statement it is, and it would be incumbent on the Secretary of State in those circumstances to initiate any such inquiry. At this point, we should hear the statement. I thank the Secretary of State for approaching the Dispatch Box to deliver it.
East Coast Main Line
Mr Speaker, I would like to make a statement about the future of the east coast main line. As was made clear in the point of order that we have just heard, it has been quite important to try today to handle the release of this information in as controlled a way as possible. We did, of course, approach the Opposition earlier this morning, and explained how we were going to communicate the information to them. My officials shared this statement with the Opposition parties shortly after 12 o’clock, at approximately the same time that Stagecoach was itself told about this—both would expect to be given warning of what is a significant and, for them, market and price sensitive announcement.
Let me set out what I have to say today. The House will recall that, back in November, I set out details of our rail strategy, and our plans to integrate the operation of track and trains. I also indicated that one of the key parts of that plan was to address what were then well-documented problems on the east coast main line by creating a new, integrated rail operation on that route.
In February, I gave the House an update on the financial problems on the east coast main line, and indicated that the current franchise would run out of money within months. This is not because the route is failing—it continues, and will continue, to generate substantial returns for the Government, and the most recent figures show passenger satisfaction at 92%. The route has its challenges, but it is not a failing railway. However, as I explained in February, Stagecoach and Virgin Trains got their bid wrong and they are now paying a price. They will have lost nearly £200 million meeting their contracted commitments. This means that taxpayers have not lost out because revenues are lower than predicted; only Virgin Trains East Coast and its parent companies have made losses at this time.
As the Brown review said in 2013, in an effective railway industry franchises can occasionally fail. But we do not, and cannot, expect companies to hold unlimited liabilities when they take on franchises—they would simply not bid for them if they had to. This means that franchises sometimes do fail, which is why a Conservative Government previously created the structures for the operator of last resort to ensure that we can always guarantee passenger services if franchises cannot continue.
In my statement in February, I said that I was considering two options to continue delivering passenger services in the run-up to the creation of the new east coast partnership. The first was to permit Stagecoach to continue to operate the railway on a not-for-profit basis until 2020, and to permit it to earn a performance-related payment at the end of its contract. The alternative was to implement an operator of last resort, bringing the route back into the temporary control of my Department, as provided for in legislation. Last autumn I established a team to prepare this as an alternative to use if required.
In the past two months, my Department has carried out a full analysis of these options, focusing on how each performs against the key principles that I set out in February: protecting passenger interests; ensuring value for money for taxpayers; and supporting investment and improvement in the railway. I am today publishing my Department’s assessment. To summarise, the analysis suggested that the case was very finely balanced, with some elements favouring a contract with the existing operator and others favouring the operator of last resort. When judged against my key principles, neither option was obviously superior. I have, however, taken another factor into account. I want to make the smoothest possible transition to the creation of the new east coast partnership. Given this finely balanced judgment, I have taken into account broader considerations and decided to use the current difficulties to drive forward sooner with our long-term plans for the east coast partnership.
I have decided to begin the transition process towards creating the new partnership now. This will be in the long-term interests of passengers, as every member of staff on the railway will be focused solely on delivering an excellent service for the future. I am therefore informing the House that I will terminate Virgin Trains East Coast’s contract on 24 June 2018. I plan to use a period of operator of last resort control to shape the new partnership. On the same day, we will start with the launch of the new, long-term brand for the east coast main line through the recreation of one of Britain’s iconic rail brands, the London and North Eastern Railway.
The team that have been working for me since last autumn to form the operator of last resort will take immediate control of passenger services, and will then begin the task of working with Network Rail to bring together the teams operating the track and trains on the LNER network. I am creating a new board, with an independent chair, to oversee the operation of the LNER route. The board will work with my Department to build the new partnership. It will have representatives of both the train operating team and Network Rail, as well as independent members, who importantly will ensure that the interests of other operators on the route are taken into account. I will appoint an interim chair shortly, and will then begin the recruitment process for a long-term appointment.
When the new LNER operation is fully formed, it will be a partnership between the public and private sectors. In all circumstances ownership of the infrastructure will remain in the public sector, but I believe that the railway is at its strongest when it is a genuine partnership between public and private. The final structure of the LNER will need to be shaped in conformity with the primary legislation that governs the industry, but my objective remains to move to a situation that leaves one single team operating the railway, with the simple goal of ensuring that they continue the work of the existing operators in improving services for passengers.
The rigorous process that we have followed underlines our commitment to ensuring that businesses operate under firm but fair rules. This Government are willing to take tough decisions when necessary to ensure that we build a stronger, fairer economy for all. I do not want these changes to cause passengers any anxiety at all. I want to reassure them that there will be no change to train services, the timetable will remain the same, tickets purchased for future travel—including season tickets—will continue to be valid, and customers will continue to be able to book their travel in the normal way. The ambitions that we have for services will also continue.
I want to reassure staff that the changes will not impact on their continued employment. It will be no different from a normal franchise change. Indeed, I want the LNER to have employees at its heart, so I am instructing the new board, working with my officials, to bring forward proposals that will enable employees to share directly in the success of the LNER as a pure train operator and subsequently as the new partnership. I am pleased to announce that Andy Street, the Mayor of the West Midlands and the former chief executive of John Lewis, has agreed to provide the team with informal advice about how best to achieve this.
I have already set out my plans to restructure the Thameslink, Southern and Great Northern franchise, following the successful delivery of the Thameslink programme. I have indicated that we will separate it into two or more franchises after the end of the current contract in 2021. We have not yet reached a decision on how to operate Great Northern services. However, I have had initial discussions with the Mayor of London about the possibility of transferring some of these to London Overground, as recommended in Chris Gibb’s report. Any change will be subject to consultation, but there is also an operational case for integrating Great Northern services from King’s Cross into the new LNER operation. I am asking my officials and the new LNER board to do feasibility work on this option.
I have also taken official advice about the future of the passports currently held by Virgin Holdings and Stagecoach, determining whether they are fit and proper to operate on our railways. A multidisciplinary panel has considered the situation and recommended that both companies continue as train operators. The panel advised that there is no suggestion of either malpractice or malicious intent in what has happened. Clearly we have to be vigilant about future financial commitments, but in my view those organisations have paid a high financial and reputational price for what has happened. This Government operate firm but fair rules in their dealing with business, and I have been advised that it would not be reasonable to remove or place conditions on the companies’ passports. However, this decision is provisional and will be subject to further review at the point at which the VTEC contract is terminated.
It is vital that we remember the benefits that the railway has seen since privatisation. Passenger numbers have doubled. New trains with new technology are being rolled out right across the network. Innovation has driven up passenger satisfaction. We are seeing a huge amount of private investment in the future of our railway, and the lessons of the financial failure of the east coast main line are already being, and must continue to be, learned. But our ambitions are bigger.
In the rail strategy that we published last year, we began to look at the future of the industry in order to make the private sector model fit for changing travel patterns and new technology, and to focus on a better quality passenger experience. These advances would not be possible if we returned to nationalisation and lost private sector innovation. This work will conclude in time for the spending review to ensure that we improve how we enhance the private sector drive to improve services for passengers in the coming years in a way that is fair for taxpayers and passengers.
Of course, the passengers on the east coast main line are the most important people in all this, and 92% of them say that they are happy with their travel experience. The steps I have put in place today will help to deliver even more for them, with the recreation of one of Britain’s most iconic rail brands; the start of the proper recreation of an integrated regional rail operation; and the arrival of the brand new intercity express trains later this year, the majority of which will be built at Hitachi’s plant in Newton Aycliffe in County Durham, continuing to support 700 jobs in the north-east. I believe that this strategy will set this railway on a path to a better future. I commend this statement to the House.
May I just comment on the point of order made by my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown)? I was given sight of this statement 30 minutes before I entered this House. I was not given an electronic copy, I was not allowed to take one away and, as I sit here right now, I have still not been provided with a copy of the statement. I consider this absolutely reprehensible. The Secretary of State does this every single time—relying on confidentiality and market sensitivity. Every single time he treats me with contempt, Her Majesty’s Opposition with contempt, and the House of Commons with contempt. It is about time he changed his ways. This is a shameful practice.
Today, the i newspaper reported that the millennial railcard announced in the 2017 Budget has been scrapped because the Treasury will not agree to fund it. In that case, why did the Chancellor announce it? This Government have nothing to offer that age group other than spin and broken promises.
In the past year, the Transport Secretary gifted Virgin and Stagecoach a £2 billion bail-out after they had failed on the east coast main line at the same time as awarding those same companies a lucrative contract extension on the west coast main line. Yet he has the audacity to come to the Dispatch Box and say that it is not reasonable to remove or place conditions on their passport. It is absolutely ludicrous. Three times in under a decade, private companies have failed on the east coast main line. Its only successful period was from 2009 to 2015 under public ownership, when £1 billion was returned to the Treasury. It was the best-performing operator on the network before being cynically re-privatised on the eve of the 2015 general election. The then Secretary of State for Transport said:
“I believe Stagecoach and Virgin will not only deliver for customers but also for the British taxpayer.”
What nonsense! Report after report by the Public Accounts Committee, which described the Government’s approach as “completely inadequate”, and by the Transport Committee detail the failure of the privatised franchising system on its own terms. The Government’s incompetence has been disastrous for passengers and led to misery for millions of people.
We have been here before many, many times, year after year. The Secretary of State and his predecessors have stood at the Dispatch Box and told the House that privatisation is being reformed. We have had reform, reform and reform. We have had bail-out after bail-out. Rail companies win; passengers and taxpayers lose. There is a definition of insanity: doing the same thing over and again and expecting different results. This is the situation we find ourselves in today. Franchising remains at the heart of the alleged partnership. No amount of tinkering can solve the failings of a broken privatised system where the public take the risk and the train companies take the profit, aided and abetted by the Transport Secretary.
Can we really believe anything that the right hon. Gentleman says? Rail investment is promised; rail investment is cancelled. He makes claims about technology despite his civil servants telling him that it does not exist. No one takes his announcements seriously. Every announcement is a smokescreen to divert attention from the failures of his rail franchising policy. The east coast main line is but one vulnerable rail franchise. What about Northern, TransPennine, Greater Anglia and South Western? Will there be bail-outs for operators on those lines who fail to meet their targets?
Let us be clear about the privatised public sector operator of last resort—how ridiculous is that?—on the east coast main line. These companies—multinational Canadian engineering company SNC-Lavalin, Arup, and big-four accountancy firm Ernst and Young—are not running the east coast main line for nothing. This is Conservative-style public ownership—more private profit. Only Labour’s version of public ownership will deliver what the railway needs.
There is a clear solution to the problems on the east coast main line. It was a successful public company between 2009 and 2014, thanks to the previous Labour Government. I am just sorry that the Secretary of State will not accept the stark staringly obvious answer: an integrated railway under public ownership, run for passengers, not for profit.
The first thing to say is that I could have done what has been done previously and made a stock market announcement at 7 am this morning, and not come to the House first. I actually chose on this occasion to come to the House first to provide the information, albeit price sensitively, in the best possible way. I am disappointed that the hon. Gentleman does not believe that that is a more appropriate way to handle such an issue than making a 7 am announcement to the stock market, as has been past practice.
The hon. Gentleman talks about nationalisation. Let us deal with this issue head on. Labour has spent the past few months desperately trying to take us back into the ambit of the European Union. Let me explain this to him very simply: his policy on rail nationalisation is illegal under European law. It is all well and good Labour Members arguing that we should stay in the single market and have a second referendum and all the rest of it, but his version of nationalisation is not legal under European law, so why would we take him seriously when he talks about this? I am interested in what works, and that is what we are doing with today’s announcement.
The hon. Gentleman harks back to the period of public operation of this railway. During that period, fewer staff were employed, it generated less money for the taxpayer, and passenger satisfaction was lower than it was subsequently. So it was not some great nirvana period. Yes, things were done in a way that moved things beyond the collapse of National Express in 2009, but the performance of the team currently running the railway has been good. It is not their fault that the parent company got its sums wrong. We should pay tribute to the team who work on that railway and say that it is not their fault that I have had to make today’s announcement.
The hon. Gentleman keeps going on about a £2 billion announcement. That is another example of why Labour does not understand any of this, because otherwise he would realise that no bail-out has taken place, any more than Labour bailed out National Express. This railway line is continuing and will continue to make a substantial contribution to the taxpayer. When he talks about a £2 billion bail-out, he does not understand the finances of the railway. It is not true today and it was not true when National Express collapsed. The reality is that this is the best way to take forward what has been a difficult situation on this railway on a path that I believe in and I think the public believe in: it is better to bring back the operation of track and train, and that is what we will do.
The hon. Gentleman raises the issue of the railcard having been scrapped. That would justify his not believing everything he reads in the papers.
I welcome my right hon. Friend’s statement. As I understand it, with the formation of LNER there is no bail-out and nor is there any renationalisation, which will be widely welcomed. On the basis that taxpayer value has been protected, will he say what extra investment might be available to LNER, whether there will be opportunities for private sector investment and whether he will open up the line to open-access competition?
The latter point is really important. We want open access to continue. This line has some excellent open-access operators. The system we are putting in place will do nothing to preclude that from happening. I am very clear that that has to continue and that the interests of both the open-access operators and the freight companies needs to be protected as we take this forward. I assure my hon. Friend that that is what will happen.
I want to continue to see private investment in our railways. The Labour approach would mean that each year the railways were competing for public capital with schools, education and the rest. That is something that Labour Members do not quite understand. The railway gets more investment through a partnership between the public sector and the private sector than ever it would through their renationalisation policy. Going back to the days of decline and failure under British Rail is their way for the future. We just have to look at what is happening in France, where people are desperate to move away from that model because it is not working.
Let us go back to 2012 and look at the failed west coast main line franchise. Back then, when Virgin was going to lose out, it was happy to go to court. It ran a public campaign—“Keep Virgin on the west coast”. Oh, how it squealed; we were to feel sorry for it. What happened? Yes, it got a direct award. Returning to the here and now, it gets to walk away from this franchise—no harm, no foul. We do not hear it squealing now. It is an absolutely sick joke. Virgin should not be allowed to bid for future franchises.
On this franchise, it is not just Virgin Trains East Coast that got its sums wrong. We keep hearing about how it got its sums wrong, but that means that the Department for Transport got its sums wrong when it assessed the tenders. Where is the due diligence? What is going to happen within the Department to make sure that it does not make the same mistakes in future? What about the other consortiums that lost out if VTEC got its sums wrong? Do they now have grounds to go to court having missed out because the Government awarded the franchise to a company and now just blithely say, “Oh, it got its sums wrong. Don’t worry about it—that’s what happens with some franchises. They get their sums wrong, and we move on and re-tender.”
Will Virgin and Stagecoach be allowed to bid for the new partnership? That really would be rubbing salt into the wounds of this process. Richard Branson has blamed Network Rail. He says, “It’s not our fault, guv—it’s Network Rail.” What is the truth in this? How much of this problem has been caused by Network Rail, and is that going to be sorted out? Will the Secretary of State please devolve Network Rail to Scotland, so that at least the Scottish Government can take care of these matters in Scotland? The current system cost an extra £60 million last year. He says that this is not a failing railway and that Virgin and Stagecoach are reliable. In fact, what we have is a failing Government.
If we want to find a failing Government, we just need to look north of the border. I do not plan to devolve responsibility for Network Rail to the Scottish Government because I do not believe the Scottish Government are capable of overseeing it properly. They are messing up education and health in Scotland. They should concentrate on doing the things they already have right before they take on any extra powers.
The hon. Gentleman talks about there being no harm to Virgin-Stagecoach. It has just lost 20% of its market capital. Most people running a business would say that that is a pretty big blow. It is not happy about that, and nor will any of its shareholders be. We have changed our approach since this franchise was let. There are new risk-sharing mechanisms in place. Most recently, we did not accept the highest bid for the last franchise we awarded, and we have to continue to work on this. I have asked my hon. Friend the Minister of State, who is the rail Minister, to work closely with colleagues in the Treasury to identify the best way to ensure that we have the right risk-sharing mechanisms for the future, so that we look after the interests of passengers and the taxpayer.
The hon. Gentleman asks about the new partnership and the bids. This is a completely different paradigm. This is not another franchise bid in two years. We are looking at shaping a different kind of railway, and we will set out plans for that to the House in due course.
Can my right hon. Friend confirm that all planned investment in the line will continue and that the extension of direct services to Middlesbrough will be unaffected?
I have every intention of continuing to meet the commitments to new services in the original VTEC document. The only complication that has arisen is around engineering works by Network Rail and when those take place, but there is no intention to withdraw any future service plans. Most will be able to start on time in 2019. A small number may be delayed beyond that, but that will be for reasons outside the control of the train operator.
In November 2014, the then Secretary of State promised that the new franchise awarded to Virgin-Stagecoach would run for eight years and return £3.3 billion in premium payments to the taxpayer. He said:
“These figures are robust and have been subject to rigorous scrutiny, including by independent auditors.”—[Official Report, 27 November 2014; Vol. 588, c. 1080.]
The Secretary of State must take responsibility for this serious repeat failure. If Virgin-Stagecoach got its figures wrong, so did his Department, and he should apologise to passengers and taxpayers for that failure. The Transport Committee will be subjecting this failure to detailed scrutiny, but what does the decision today mean for other franchises that we know are struggling to meet their obligations?
There is no other franchise today in the same position. We are seeing some changed patterns of ridership on the railways. For example, people are choosing to travel to work three or four days a week and work from home one day a week, and we are doing careful work on what that means for the future. As I said, my hon. Friend the rail Minister is working on that very issue and any implications for the future of franchising. The reality, as I keep saying, is that this railway has continued to deliver a higher contribution to the taxpayer and a higher level of customer satisfaction than it did prior to 2014.
For the residents of Berwick-upon-Tweed, the east coast main line is critical infrastructure, until the Secretary of State manages to dual the rest of the A1 all the way through. Can he confirm that there will be no disruption and that my constituents will be able to continue using what has always been an excellent train line?
I can give that commitment. I hope that it will become an even more excellent train line, though passengers may be tempted away, as tomorrow I will do the formal opening of the last link of motorway-grade road between London and Newcastle—something that should have happened a long time ago but did not happen in the 13 years when the Labour party was in power. It is this Government who are bringing better transport services to the north-east.
This is the third time that a private franchise on this line has failed. The Secretary of State just told the House that when it is fully formed, the new LNER operation will be a partnership between the public and private sectors. Can he clarify that, until that time, it will in effect be a publicly run service? If so, he could have made a considerably shorter statement if he had just got up and said, “For the time being, I am renationalising the east coast main line.”
It will be a publicly run service, and over the next two to three years, we will be developing the new model of the future. As I say, the operator of last resort is a publicly run service—so, yes, it will be, and we will be making the transition to the new arrangements over that period.
Further to the Secretary of State’s answer to my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), he will know that extra services between London and Shipley and Bradford are scheduled to operate from next year onwards. What reassurance can he give that those extra services will operate? Can he ensure that Network Rail privatises the work required, so that those extra services are in operation on time, because they are very important to the local economy in the Bradford district?
As has been said, three private companies have run the east coast main line, and they have all failed, except for the one that was disposed of by the last Government under the previous Transport Secretary. I wonder sometimes whether we should look at the current Secretary of State’s slush bucket and see how much Stagecoach put into it.
Forgive me, but I do not know whether it was an allegation. It happened very quickly, and I did not deem it in any way to be disorderly. I will look at the record later, but the hon. Gentleman has made his point and the Secretary of State has responded to it.
I suspect the Secretary of State is of a similar age to me and therefore remembers the last time our railways were nationalised. Is he therefore bemused by the somewhat romantic image that the Labour party portrays of what the railways were like? My recollection is that they were dirty, inefficient and nearly always late, not to mention the terrible sandwiches. They were a far cry from the modern and efficient railways we have today, thanks to private investment. Most of our challenges now are a result of rapid growth in passenger numbers.
We do not even have to look back to the days of British Rail. We just have to look across the channel to a railway that is heavily indebted, where there are threats of line closures, where the leadership of our friends in the French Government are saying that it simply is not acceptable to carry on the way they are and where they are looking to take their railway in the direction of ours and not the other way round.
Franchising on this line has failed repeatedly. The Secretary of State could make himself incredibly popular in my constituency, which is the birthplace of the railways, if he just stood up, looked behind him and said, “My name is Chris Grayling, and I have just nationalised a rail line.”
I have just explained why I do not think nationalisation of our railways is the long-term answer: we just have to look across the channel and see the chaos there to understand that a trip back to the days of British Rail is not right for the future of the travelling public in this country, however much Opposition Members might want it.
I have been working closely with the Rail Action Group, East of Scotland to reopen stations at Reston and East Linton. In the light of today’s announcement and given the impact that the operation of the east coast main line has on those stations, will the Secretary of State meet me and the hon. Member for East Lothian (Martin Whitfield) to discuss those projects and how the east coast main line might be able to progress them further?
I would be happy to do that. I want to see services on this route develop, and I want to see new destinations and new kinds of service. Of course, once High Speed 2 opens, there will be an opportunity for a whole raft of new services on this route, because of all the extra capacity that will be freed up.
I wonder whether I could first address the point of order. Correct me if I am wrong, but I think the Secretary of State said that all Opposition parties had been informed of the contents of the statement before we came into the Chamber. That was not the case for my party. We had no notification at all, other than an email with a heading saying that there would be a statement. We did not receive an electronic notification until two minutes past 1 o’clock, when we were all already in the Chamber. Could the Secretary of State comment on that?
The Government cannot simply go on bailing out failing rail franchises. There will be a knock-on effect on other rail franchises, and what are other companies to do if there is a further reduction in economic growth and they are finding it difficult? Are the Government going to bail out every one of them, or will they take the opportunity to look at how public ownership works in this case and examine the future of the railways?
I will make two points. The custom and practice is to provide an advance copy of a statement to Her Majesty’s Opposition. It has also been the custom in recent years to provide one to the third party. Both of those were done this morning, so I have followed conventions as per normal.
The hon. Lady talks about bailing out a private franchise. I have not bailed out any private franchise; I have just taken away its contract.
Order. We will come to points of order—[Interruption.] Order. Calm! I commend yoga to the shadow Secretary of State. I will happily take the hon. Gentleman’s point of order at the end but not in the middle of the statement. I will wait with eager anticipation, bated breath and beads of sweat upon my brow to hear his point of order at the appropriate moment, and I am sure I will hear it.
I was in the process of calling somebody from the Government side—Mr Iain Stewart.
Will my right hon. Friend confirm that nothing he has announced today will affect the investment in new rolling stock and the introduction of the new Azuma trains on the east coast main line? In the spirit of cross-party co-operation, may I give him a cheer for reintroducing the LNER brand back into our railways? LNER was one of the four great private railway companies that developed our railways in the last century.
The Secretary of State said that he was not aware of any problems with other franchises. Perhaps he was not in the House during Prime Minister’s questions, when problems with the Northern franchise were identified. Private companies are walking away from franchise bids in Wales and the east midlands. Is this not clear evidence that the rail franchising model is broken, and that the answer is a truly integrated railway under public ownership?
First, the number of firms asking for passports to apply for franchises is actually increasing, not decreasing. As I keep explaining to Opposition Members—they are causing as much trouble as they can for the Government over the European Union, instead of working together in the interests of this country—what they are proposing is illegal under European law.