House of Commons
Tuesday 7 December 2021
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Chancellor of the Exchequer was asked—
UK Ports: Prevention of Disruption over Christmas Period
The Government’s priority is to keep goods moving and avoid delays at the border. To ensure that, we have set up a new Cabinet Committee on logistics to deal with supply chain issues. I recognise that the new customs controls come in on 1 January. Her Majesty’s Revenue and Customs is supporting traders and hauliers to adjust to their new obligations following the end of the transition period.
I am glad that the Minister is setting up a Cabinet Committee—that is lovely—but let me tell her what is impacting people on the ground. Daniel Lambert Wines, an importer in my constituency, for example, has gone from taking seven to nine days to import wine from the EU to 12 weeks. That is really not acceptable. The national Food and Drink Federation says that it is causing huge problems for the supply chains when it comes to bringing wine into the UK, and Christmas is one of the biggest periods for purchasing. Can the Minister set out what she will do to start tackling the issues around the delays in importing wine, so that everyone can have a sensible tipple over the Christmas period?
The hon. Member will know that it is important to have committees to work across Government, because the supply chain issues affect all Departments. He will know of some of the actions that we have taken—30 actions to tackle HGV issues to increase efficiency in the supply chain. We have temporarily extended drivers’ hours, relaxed late-night delivery restrictions, and deployed the Ministry of Defence’s driving examiners to increase HGV testing capacity. Yesterday, the policy director of Logistics UK said that she saw a number of signs of improvement.
I am sure that my right hon. and learned Friend and HMRC are working very hard to ensure that the changes to the import processes coming in on 1 January run smoothly and do not result in lots of additional friction at the border. However, the Federation of Small Businesses has estimated that just one in four smaller companies is actually prepared for the changes that are about to happen. Is she aware of that particular issue? If she is, what action is she taking in the short time that remains?
My right hon. Friend makes an important point. The Government and HMRC have taken significant action to ensure that hauliers and carriers are ready. HMRC has weekly meetings with strategic operators. It has conducted webinars for well over 1,000 haulage businesses and it sends monthly emails to more than 14,000 hauliers on the next steps. I appreciate that it might be that big businesses are more ready than small businesses, but we have done work there as well. I am very pleased to have met the Federation of Small Businesses about two weeks ago to discuss these issues.
I am pleased to say that the distribution analysis published in the Budget showed that the actions of this Government since 2019, over this Parliament, will benefit those on the lowest incomes the most. Income inequality is also lower than it was in 2010, and we on the Conservative Benches know that the best way to reduce inequality is to get people into fantastic, well-paid jobs, which is exactly what we are doing.
Income inequality in the UK has barely changed over the past 10 years, so how can it possibly be fair to ask working people to pay even more tax through the national insurance increase next year, while the Government are also giving away a £4 billion tax cut for banks’ profits through cutting the banks’ surcharge from 2023? Will the Chancellor set out the combined impact of those two decisions on inequality?
Income inequality on the last published statistics is lower than it was in 2010. There are also fewer people living in absolute poverty. With regard to national insurance, we took a decision to fund the NHS in a progressive manner to clear the backlog and usher in reforms to the social care system that will benefit everyone in this country. As for banks, I am not sure whether the hon. Lady has seen that the rate of corporation tax that banks will pay is going up from 27% to 28% while the rest of the UK corporate base will pay 25%. It is right that the banks pay a fair contribution to our coffers, but we should also recognise that financial services is a fantastic UK asset that employs 1 million people, two thirds of whom are outside of London and the south-east.
Although discussions about regional inequality between the north and south in the UK are important, this must not be reduced to a simple and misleading binary. My area of Edmonton, north London, has an unemployment rate of 9.7%, almost double the national average. Will the Chancellor assure the House that he will provide the investment that London needs, starting by providing the funding that Transport for London requires to maintain its services, particularly the bus services, on which lower-income Londoners are disproportionately reliant and which face 20% reductions without support?
If Londoners are worrying about the state of their transport system and who is responsible for it, I think we all know, and those problems were there before coronavirus. What we are responsible for is making sure that people have access to high-quality work, and I reassure the hon. Lady that we are investing in our plan for jobs right across the country. I have visited jobcentres in London. We are helping to get people into work and helping them to get the skills they need. I hope that I can work with her local area to bring that unemployment rate down.
Covid has accelerated the decline of bank branches, so Acton now has none and no cashpoints, because our post office has gone. The resultant cashless society has hit constituents hard, from the chap who came to see me who has come a cropper because of Trump’s sanctions regime—he has had all his accounts frozen—to my son and his pals who cannot get a hot snack after school without plastic, to businesses that want to bank their takings. Will the Chancellor urgently look into this gross economic inequality that is hitting so many of the constituents of all of us?
The hon. Lady makes a fair point; the Economic Secretary to the Treasury is doing work on exactly that issue. The Government have committed to bringing forward legislation, if required, on access to cash, but I would be very happy to look into the specific circumstances of her constituent. If she writes to me, we will do that.
As ever, the Chancellor’s warm words do not match the reality faced by so many people across the country. Take disabled people, for example—[Interruption.] Rather than groaning, will hon. Members please listen? Disabled people have been disproportionately attacked by Tory Governments over the past decade through austerity, cuts to benefits and, most recently, a cruel lack of support during covid. Nearly 2 million disabled people were not given the £20 uplift in benefits, including thousands of households in my seat of Leeds East. Every December, we mark the United Nations International Day of People with Disabilities, so if the Government are genuinely interested in tackling economic inequality, will they—[Interruption.] It is not funny, grow up. Will the Government backdate the payments to disabled people and others on so-called legacy benefits who have been left out and let down over the past 18 months? Disabled people deserve to be treated better.
I am enormously proud of the Government’s commitment to those who are disabled. We looked after them during the crisis and we continue to support them. We recently announced £500 million for the disabled facilities grant, more investment in the Department for Work and Pensions to help close the disability employment gap and—this is something I am personally proud of—investment in Changing Places, which means that those with disabled children or adults will have access to the high-quality facilities that they need to enjoy days out with their family. I assure the hon. Gentleman that I and the Government are committed to helping all those who need our help, and we will continue to deliver on that promise.
There is currently huge inequality between the taxation of businesses online and those of bricks and mortar. I thank the Chancellor for the support that he has given to the high street during the pandemic through business rate relief. However, as I know that he believes in low taxes, I ask him: when will business rates be modernised so that we can get an even playing field for online and high street businesses, which is very important to the Blue Collar Conservative group?
My right hon. Friend has rightly campaigned on this issue and she raises an excellent point. The good news on business rates is that, next year, thanks to the tax cut that we announced in the Budget, 90% of retail, hospitality and leisure businesses will see at least a 50% cut in their business rates bill. That is worth £1.7 billion; it is the biggest business rates tax cut since the system was created, other than during coronavirus. On her point about offline and online, she will know that we have helped to bring in an international tax treaty to tax large multinational digital companies, and we continue to consult on the pros and cons of an online sales tax.
Does my right hon. Friend agree that one of the best ways in which we can reduce inequality is by ensuring that young people are equipped with the skills that they need to succeed, wherever they live? That is why the additional £126 million of funding for work placements and training is so important for young people in Grantham and Stamford.
My hon. Friend is absolutely right; I know that he is a staunch supporter of skills and getting young people into work in his constituency. He mentions traineeships, which are fantastic initiatives with a 75% success rate in helping young people and a great example of our plan for jobs in action, spreading opportunity right across the country.
Boosting the minimum wage, reducing the universal credit taper rate and increasing the work allowance will make a tremendous difference to the real-world choices of people living and struggling on low incomes. Does my right hon. Friend agree that, along with those Budget measures, the fact that we now have a record number of job vacancies means that we have a tremendous opportunity as a nation to really bear down on long-term unemployment and reduce economic inactivity, especially among the most disadvantaged groups?
My right hon. Friend obviously speaks with authority on the topic; I am grateful for his support and engagement on these matters over the past year and a half. He is absolutely right: thanks to the actions of this Government’s plan for jobs, unemployment has now been falling for nine months in a row, record numbers of people are in work and wages are rising. As my right hon. Friend says, that is the best way to help people. That is what this Government are doing.
My Ynys Môn island constituency has one of the lowest gross value added levels in the UK and is in desperate need of investment to reverse that inequality. Can the Chancellor confirm that the match funding announced in the nuclear sector deal is in place for the proposed thermal hydraulic testing facility on Anglesey?
I hope that my hon. Friend will forgive me for not treading on the toes of the Business Secretary, but what she will know is that we allocated £120 million for future nuclear development in the Budget and spending review. I know that the subject is of keen interest to her and that she has long campaigned on it in her area. I am happy to support her in her conversations with the Business Secretary as he decides how to allocate that funding.
Thank you, Mr Speaker.
It takes some doing to come up with an inheritance tax aimed at people in the lowest-value properties, but that is exactly what the Chancellor and the Conservatives have done in the way they have designed the social care cap. Even the original author of the policy, Sir Andrew Dilnot, has said that the changes that the Government have made mean that
“the less well off will not gain any benefit from the cap.”
When it comes to tax, we should look at what the Government do, not what they say or the newspapers they brief. Why is the Chancellor imposing a tax rise on almost everyone to pay for a policy that will hurt those with the lowest-value properties in the country?
Our social care reforms will benefit millions of people up and down the country, because they will remove the anxiety that the entirety of their assets will be swamped by ever-escalating social care costs, but that is not all they do. It is important to recognise that they also invest in the social care workforce—half a billion pounds over the next few years to upskill, train and provide development for the social care workforce, which will benefit all of us. Critically, they will also help us to tackle the social care and elective backlog that has built up. I am sure that everyone in this House will want to see that. The waiting lists were scheduled to get to unprecedented levels; we wanted to tackle that, and that is what this funding will do.
Families are heading into the winter facing a cost of living crisis with rising prices and the Chancellor’s tax rises on the way. Last week, the Bank of England produced even lower growth forecasts than the Office for Budget Responsibility did at the time of the Budget, and now the Bank is forecasting that inflation will rise above 5% next year. Why does the Chancellor think that the Conservatives have produced such low levels of economic growth over the past 10 years? Has this lost decade of low growth not led directly to the cost-of-living crisis, the high taxes and the inequality that people are facing today?
Forgive me, Mr Speaker; I should have welcomed the right hon. Gentleman to his new position. I look forward to working with him in his new role.
With regard to the winter and energy prices, of course many people are anxious about inflation. It is something that we are grappling with. What I will say to people is that we have put in place multiple interventions to help with those costs, notably the household support fund—half a billion pounds to help millions of our most vulnerable. That comes on top of our existing support, whether it is for pensioners or for those on lower incomes, to help with energy bills that were already in place. This Government remain committed to helping people with the cost of living. I assure the right hon. Gentleman that we will continue to look at the situation carefully.
Regional mutual banks are a feature of all the other G7 economies, which have much lower levels of regional inequality. They are key to the provision of small and medium-sized enterprise finance. We have a number around the UK that are ready to go, led by experienced professionals; all they need is some pump-prime funding. Will my right hon. Friend agree to meet me to discuss this very exciting policy area?
I am always delighted to meet my hon. Friend and neighbour, and if we could do that in north Yorkshire, it would be fantastic. He is right—as he always is—to champion the need for small and medium-sized enterprises to have access to the finance that they need, and if he has come up with yet another idea to ensure that that happens, I should be delighted to learn more.
The Chancellor likes to talk a good game on the universal credit taper rate and his pretendy living wage, but that only benefits those who are lucky enough to be in work and ignores many people who are disabled, carers or out of work, and those who are still on legacy benefits. Why has he abandoned and forgotten that group when they face a cost-of-living crisis this winter which will often affect them more than the rest of the population?
It is simply not right to say that we have forgotten anyone. We remain committed to supporting all the most vulnerable in our society. I have mentioned previously the various different mechanisms that we have to help people with energy bills, and indeed the recent increase in the local housing allowance.
The hon. Lady says that we talk a good game. Those of us on the Government Benches believe fundamentally in the power and ability of work to transform people’s lives. We want to make sure that people have great jobs, and we want to make sure that those jobs are well paid. The cut in the universal credit taper rate will ensure that there is a £2.2 billion tax cut for those on the lowest incomes, and we are insanely proud of that.
High-skilled Jobs: Young People
Through our plan for jobs, more than 100,000 young people have started kickstart jobs, including more than 9,300 in the west midlands, but that is not all that we have done. The spending review provides for investment of £1.6 billion in high-quality education, £554 million in the national skills fund, £2.7 billion in apprenticeships, and £60 million in the youth offer to help young jobseekers find lasting work.
Last month when I presented awards at the Crimson Academy apprenticeship awards event, I met some incredibly talented apprentices who were raring to go and get into the world of work. Will my right hon. and learned Friend join me in congratulating them, and will she confirm that apprenticeships are a great way for young people to obtain high-skilled jobs that can help to bridge the UK skills gap?
I do of course join my hon. Friend in congratulating those apprentices. The Government are continuing to invest in high-quality technical education and to reform the skills system so that it is employer-led, to give young people the right skills and training to enable them to succeed in life. More than 100,000 apprentices have been hired under our new incentive payment scheme, 75% of whom were under 25. Skills boot camps are upskilling people into high-growth sectors, including the digital sector.
Red Diesel Fuel: Planned Tax Changes
To help ourselves achieve net zero and improve UK air quality, we are reducing the entitlement to use red diesel, which currently enjoys a duty discount, from next April. The full duty rate more fairly reflects the damaging impact of diesel emissions, and will incentivise the development of greener alternatives.
In my constituency and across Northern Ireland, small family-run construction companies and those operating on a larger scale are telling me that this move will cripple their profitability, and that alongside the significant increase in the cost of materials in the last year, it will make their operation even more challenging. Will the Chancellor and the Minister agree to meet industry representatives to hear about the real-life impact, and to explore how it can be addressed and how jobs and profitability in Northern Ireland can be protected?
We recognise that this is a significant change for some businesses, but we have consulted on it since it was first announced in 2020. Those whom we have consulted include representatives of the construction sector and representatives from Northern Ireland, and the case simply is not compelling in comparison with the importance of reducing our harmful emissions. Red diesel leads to 14 million tonnes of carbon dioxide emissions each year, and we need to incentivise greener alternatives as part of our transition to net zero.
I fully support the Government’s push towards net zero. Drainage boards do vital work to protect people, businesses and livelihoods from flood risk. Does the Minister agree that as they come to set their budgets it is vital that the Government provide assurance that their work will not be affected by changes to red diesel duty?
My hon. Friend is right to say that drainage boards do really important work. The fact is that the public sector, as well as the private sector, needs to decarbonise. In fact, in a low-lying constituency where there is a great awareness of flooding and climate change it is probably even more important, and I am sure his constituents appreciate the importance of reducing our carbon dioxide emissions. I know that the Department for Environment, Food and Rural Affairs is working with the Association of Drainage Authorities on the point that he makes.
Self-employed People: Covid-19 Support Schemes
Previous receipt of covid-19 support should not, in and of itself be a barrier to credit provided that the applicant meets the lender eligibility criteria. It remains important that lenders carry out checks to ensure that they do not lend to individuals in an unaffordable way.
I take the Minister’s point and I agree with what he is saying, but that is not the reality of what people are finding in my constituency. Business owners as diverse as a music teacher, a house renovator and an airport taxi driver have been told that the reason they cannot get a mortgage or other credit arrangements is that they have availed themselves of the Government’s schemes. Their businesses are up and running, and it is concerning if no assessment has been performed. Will the Minister get in touch with people at the high street banks and prevail upon them to ensure that businesses with a sustainable track record that simply used those schemes are not penalised for that reason?
The Government have worked with the Financial Conduct Authority and we will continue to work with it and with credit agencies to ensure that those payment holidays have no impact on borrowers’ credit ratings. However, the checks that banks and financial institutions undertake need to reflect changes to individuals’ income. We do not seek to involve ourselves in commercial decisions. The mortgage lending rates to the self-employed are in line with those overall for the self-employed, but of course I will continue to work with the banks and financial institutions, and the regulators, to keep the situation under review.
Levelling Up: National Retrofit Strategy for Homes
The Government’s heat and building strategy announced £3.9 billion of funding to decarbonise buildings over the next three years. This included £1.8 billion of support for low income households. I am sure that my hon. Friend will be pleased to hear that her constituency was recently allocated £5.2 million to retrofit low-income homes.
A retrofit strategy also requires established accreditations that customers can trust and training that workers will want to re-skill into. SGS College, the Active Building Centre and others in my patch across Stroud are uniquely placed to create those programmes and certifications for the whole country so that we can implement the Government’s ambitions. Will my hon. Friend be working with the Department for Business, Energy and Industrial Strategy and the Department for Education to ensure that funding is available for this crucial work?
My hon. Friend is absolutely right say that we need to have the right skilled workforce for our transition to net zero, and training is part of that. This year we have provided £6.4 million to help 18 training providers to train around 8,000 people, and our £2.5 billion funding for the national skills fund includes funding for employer-led boot camps. I would be very happy to meet her to discuss the part that SGS College and the Active Building Centre in her constituency could play in making sure that we have the workforce we need for the net zero transition.
A decade ago we saw the failure of the green new deal, and only recently we have seen the complete and woeful failure of the green homes grant scheme. These were supposed to retrofit homes, create jobs and boost the economy. Will the Treasury work with the Department for Business, Energy and Industrial Strategy to get a grip on this, so that they invest taxpayers’ money in achieving net zero and creating jobs rather than throwing good money after bad?
The green homes grant and its associated scheme for the Chancellor’s plan for jobs saw £1.75 billion invested in improving more than 100,000 homes. We are now bringing in a more targeted replacement, the home upgrade grant, to support low-income households, and that received £950 million at the spending review. We will continue to support low-income households to ensure that they become more energy efficient, which is good for keeping bills down and an important part of our net zero transition.
Levelling up is the core mission of this Government. At the autumn Budget we announced the first awards from the £4.8 billion levelling-up fund, together with £5.7 billion for transport investment in eight city regions and £3.8 billion for investment in skills over this Parliament. Our levelling up White Paper will be published in January.
I know the passion of the Chancellor and the Chief Secretary for levelling up, and I welcome the creation of a Treasury campus in the north-east. When the Treasury next relocates, may I encourage my right hon. Friends to look at Huddersfield, Marsden and Slaithwaite in my Colne Valley constituency? They are strategically located on the TransPennine rail route between Leeds and Manchester, and we are set to have millions invested thanks to the integrated rail plan. We have fantastic former mill sites ready for regeneration, and the Chief Secretary and the Chancellor would be welcome to join me on a visit.
I thank my hon. Friend the Member for Colne Valley (Jason McCartney) for his invitation, and I look forward to being in Darlington at the Treasury’s northern hub this week.
I am glad to hear of my hon. Friend’s support for the wider investment on the TransPennine rail route, which will improve connectivity between Manchester, Leeds and York, including Marsden and Huddersfield, with benefits starting this decade. Diary permitting, I would be delighted to discuss a visit to see that investment in action.
Thank you, and happy Christmas to you, Mr Speaker.
Connectivity is critical to levelling up, which is why I have advocated and secured significant infrastructure improvements in Lincoln since 2010. The recent counterproductive 25% cut in Lincolnshire’s highways maintenance grant is not levelling up, and my right hon. Friend the Chancellor was sitting next to the Prime Minister when I raised this issue at Prime Minister’s questions a fortnight ago.
If the Treasury does not provide the funding to return Lincolnshire’s highways maintenance grant to 2019-20 levels, at the very least, there will be a significant impact on improvements and repairs to the highways network in our county. Will the Chief Secretary agree to return the funding to pre-pandemic levels, or at least to put pressure on our colleagues in the Department for Transport to do so?
I hope I can reassure my hon. Friend. The spending review confirmed that local road maintenance funding will be held at 2021-22 levels, which include the £500 million potholes fund committed to in our manifesto for places not receiving city region settlements. This represents a 10% increase on 2019-20 local road maintenance funding, with the exact allocations to be confirmed by the DFT shortly.
Lincolnshire will also benefit from the £2.6 billion committed in the spending review for local road upgrades, including the North Hykeham relief road, as well as more than £5 million from the integrated transport block to spend on small local transport priorities. I am, of course, happy to continue this conversation, but there is significant funding coming and specific allocations are imminent.
My right hon. Friend knows the importance of local rail connections to regional growth in the north. With the publication of the integrated rail plan, will he confirm that the Treasury stands ready to approve full funding for new stations such as Haxby in my constituency, which is ready to go?
My hon. Friend raises an important point. The centrality of good local transport connectivity to regional growth cannot be overstated, which is why we have provided £96 billion for the integrated rail plan, the largest ever Government investment in our rail network.
Last year the Government provided £400,000 to support plans for a new station at Haxby. I understand Network Rail has been working in close partnership with the council to develop that work and, in conjunction with other Ministers, I am happy to make sure the work is supported by both HMT and DFT.
The Scottish Commercial Music Industry Taskforce understood that the extra money put into the culture recovery fund in the Budget will produce £40 million of Barnett consequentials for the Scottish Government. To date, the taskforce understands that only £9 million of that money has been released, putting our creative and cultural sector at a significant disadvantage. Will the Chief Secretary tell me today, or perhaps in correspondence, when the Scottish Government will receive the remaining £31 million?
The Budget provided the largest ever block grant settlement for Scotland, Wales and Northern Ireland as part of the Barnett consequentials, of which we are very proud. On the right hon. Gentleman’s specific point, I am happy to reply to him in correspondence when I have further detail.
The western gateway partnership covers a cross-border area with 4.4 million people and brings huge economic potential across south Wales and the south-west, but it is still yet to receive the same level of recognition from the Government as other pan-regional partnerships, such as the northern powerhouse. Will the Government address that and get behind the western gateway?
The hon. Lady raises a really important point: the western gateway is a phenomenally important part of our wider UK growth package. I engaged closely with it last year when I was the Minister for Regional Growth and Local Government and I am always happy to support its work. The western gateway has equal standing alongside the northern powerhouse and the midlands engine. I can certainly confirm that I and, indeed, Ministers in the Department for Levelling Up, Housing and Communities are always happy to engage substantively with the hon. Lady and with the leadership of local authorities in that area.
One way to reduce regional inequality is to encourage investment, which creates jobs, generates tax revenue and brings opportunities for supply chains. Does the Minister therefore understand many people’s bewilderment at the fact that the Scottish Government have lobbied for there to be no development in the Cambo oilfield? That will cost 1,000 jobs, lose the revenue from 175 billion barrels of oil, push up oil prices, make us more dependent on foreign supplies and create a chilling environment for investment. Does the Minister agree that the economic madness of the Green tail wagging the SNP dog is going to cost Scotland dearly? What assurances can he give to the oil industry that the UK is a place for investment?
The right hon. Gentleman makes a valid point about the importance of oil and gas to the UK economy and, of course, in particular to Scotland’s economy. My colleagues on the Government Benches would join him in saying it is really important that we support the success of the North sea oil and gas industry into the future. The SNP’s lack of support is a serious disappointment and a serious concern. The Government are committed to supporting the transition to net zero, but that must involve the word “transition”, so that industry will be of importance for decades to come.
I thank the Chief Secretary for what he said in support of the western gateway, but may I draw to his attention the importance of skills to improving regional growth? On Thursday this week, the AccXel construction skills accelerator centre will open in my constituency. It is a partnership, supported last year by Government money that a fantastic private sector business has already turned into the centre that will open this week. It will take students at the beginning of next year and drive construction skills to a high level throughout the south-west of England.
Skills are at the heart of our wider work on levelling up, which is why £3.8 billion has been allocated throughout the course of this Parliament to make sure we get the right skills for the right people in the right sectors, so that we can grow the economy in the way that is needed. I warmly commend what is going on in my right hon. Friend’s constituency, because it is precisely that kind of work that will ensure that jobs and growth really level up opportunity throughout the country.
Gender Equality: Fiscal Policies
Our fiscal policies support the Government’s ambition of creating a fairer and more equal society, and women are among those who will benefit the most. For example, women are expected to benefit disproportionately from the Government’s increase to the national living wage to £9.50 for workers aged 23 and above, as well as the rise in the national minimum wage for young people and apprentices.
I am glad you found someone to answer, Mr Speaker.
Some 6,500 women in my Livingston constituency are WASPI women and they are furious. When I recently met them with the Women Against State Pension Inequality co-ordinator Carla O’Hara, there was anger and anxiety and there were many, many tears. Will the Minister tell me and the WASPI women from his constituency and from the constituencies of Members throughout this Chamber whether the
“fresh vigour and new eyes”
that the Prime Minister promised back in July 2019 is still on the table? Or is it, yet again, another broken promise?
The Government have always considered this issue, which goes back over the past decade, very carefully. For the purposes of intergenerational fairness and the wider sustainability of our pension settlement into the future, it is vital that that settlement is reflective of longer life expectancy. I am afraid that is the underpinning principle of the Government’s work and we stand resolutely behind it.
Inflation: Living Standards
The Government recognise that inflation is rising, and are closely monitoring the situation. The Bank of England is responsible for keeping inflation at its 2% target. As my colleagues mentioned earlier, we are working with international partners to tackle global supply chain disruption, and are taking targeted action worth more than £10 billion over the next five years to help people with the cost of living.
As food and energy bills are skyrocketing this winter, far too many of my constituents face the appalling choice between heating their homes and putting food on the table. Will the Minister therefore confirm how much more my constituents on average earnings will be paying in income tax and national insurance from next April, as a result of the Government’s decision to freeze the income tax personal allowance and to increase national insurance contributions?
The Government very much recognise the challenge that people are facing, which is why we have introduced a range of interventions, including: the warm home discount; the household support fund, giving £500 million to local authorities to distribute; changes to the taper rate; and an increase in the national living wage. That range of interventions will help with the cost of living challenges, and will help many of the hon. Lady’s constituents.
I do not agree with my hon. Friend’s characterisation of the causal relationship, but I recognise that the Bank of England continues to be responsible for monetary policy. My hon. Friend has always held distinct views that represent a particular school of economists, and I will continue to listen carefully to what he has to say to the House.
There is a cost of living crisis, temperatures are falling and Ministers are ignoring average households, who are struggling to pay enormous bills. Household energy bills have increased by more than £230 since last winter and are set to increase even more early next year, and we have recently seen higher tax receipts from energy bills. Will the Minister back Labour’s policy of using this money to cut VAT on people’s energy bills to zero over the next six months?
I welcome the hon. Lady to the Front Bench. I draw her attention to the answer that I just gave concerning the number of interventions that the Government have made, including the warm home discount and additional support through local authorities. Households in the lowest income decile receive on average more than £4 in public spending for every £1 that they pay in tax. The Government are acutely sensitised to the challenges that we face this winter.
Pooled Client Bank Accounts: Guidance
The Joint Money Laundering Steering Group guidance helps firms to meet their obligations under the money laundering regulations. Banks should take measures to assess risks presented by pooled client accounts to ensure that the accounts are not abused for criminal purposes.
Yacht brokers have been using pooled client accounts for years to protect large sums of their clients’ money, without issue. Changes to the guidance have meant that banks are now closing some of these accounts, putting some of these professional, long-established businesses at risk. Will my hon. Friend meet me, UK Finance, and the Association of Brokers and Yacht Agents, to find a solution quickly? This is an important sector of the economy for some of our coastal communities, such as my constituency.
My hon. Friend knows a lot about this matter and the industry, and I take her concerns very seriously. Although the Government will never insist on individual lending decisions and behaviours of banks, we will engage closely. I will meet her, and the Association of Brokers and Yacht Agents, and I will write to UK Finance to ensure that the guidance that is posted is being used effectively in the circumstances that she has raised.
The Pandora papers show how overseas shell companies secretly buy up luxury property in the UK. In 2018, the Government published draft legislation for a new register of such entities to crack down on the use of UK property for money laundering. This is a matter of law and order. Ministers promised to deliver that register in 2021, yet for some reason, since the current Prime Minister took office, that commitment seems to have been abandoned. Will the Minister now, four years since the UK anti-corruption strategy was published, finally admit that the promise of delivering a register in 2021 has been broken, and will he give us a firm date by which the register will be in place?
The hon. Member keeps asking “Where is the register?” I will answer the question in a moment. What the Government have done is put in an additional £63 million in the last Budget to deal with Companies House reform, which is one of the areas. We have been the world’s leader in terms of common reporting standards. We were the first country, five years ago, to raise the standard in terms of transparency. We will implement that register when legislative time becomes available.
A month ago, I set out our plan for a stronger economy, protecting and supporting jobs, driving up economic growth and cutting the universal credit taper rate, giving the lower-paid in our society a tax cut worth £2.2 billion.
In the 2019 Queen’s Speech, the rationale for reform was set out as being to
“ensure our tax system is supporting Scottish whisky and gin producers and protecting 42,000 jobs”—
including many in my constituency. How would the Chancellor square that with the actual proposals, which will tax domestic producers more than those of imported cava, prosecco and champagne; do not take into account how people consume spirits with mixers, the sugar and calorific content or his own Government’s health policies; and actually increase the competitive disadvantage of an important domestic sector compared with the international one?
Our reforms of the alcohol duty system usher in a system that is simpler, fairer and better for public health. I am not entirely sure that the hon. Lady has got the details right on this. In fact, for Scotch whisky, this is an improvement because we have levelled the playing field for higher-strength drinks, which the Scotch Whisky Association had been calling for. With regard to the differential between domestic and foreign producers, because English sparkling wine is produced to a lower alcohol content naturally than foreign sparkling wine, it will actually, for the first time, enjoy a tax advantage under the new system. Perhaps most relevant immediately, we also froze all alcohol duties—a half-a-billion-pound tax cut for British people this year.
I want to take this opportunity to put on record my thanks to the Mother of the House, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), who, in the nearly 40 years that she has been in this place, has done more for the rights and representation of women than anyone else.
At the weekend it was briefed that the Government will set up a star chamber to crack down on waste—which, frankly, has been the hallmark of this Government. Indeed, the Government’s own accounts show that the incompetent way in which the business support schemes were structured meant that the Chancellor has allowed fraudsters to walk away with £6.5 billion of taxpayers’ money. That would be more than enough to cut the basic rate of income tax by a penny in the pound, worth £370 a year to basic rate taxpayers. So can the Chancellor explain why quick electronic checks such as cross-referencing with HMRC tax data were not conducted before money was handed out? Given this huge waste of taxpayers’ money, can the Chancellor confirm that he will be the first witness in front of his own star chamber?
The hon. Lady would usually be on top of the numbers. She will understand that there is a difference between a one-off saving of £6 billon and an annual saving on a tax cut of £6 billion. Those two things are not like-for-like comparable. On the numbers she refers to, I am happy to tell her that in the most recent analysis from the Department for Business, Energy and Industrial Strategy’s independent adviser, the estimate of fraud was reduced by a third because of the actions that the Government had taken, which is welcome news. But of course we remain committed to tackling fraud. That is why in the spring Budget we invested an extra £100 million in HMRC, with 1,200 new people to tackle fraud, and they are expected to recover over £2 billion over the next 12 months. With regard to bounce back loans, 55,000 loans worth up to £2 billion were recovered and stopped. We are absolutely committed to tackling fraud wherever we see it.
The Chancellor might be relaxed about handing out £6.5 billion, or perhaps it is £4 billion, to companies that did not deserve it, but we on this side of the House are absolutely not. It is reported that a £4.7 million loan was given to a business founded just two days before it was handed the cash. It should not be beyond the wit of Government to get money to where it needs to go—to great British business—without allowing fraudsters to steal taxpayer funds. Leaving the till open and unattended for thieves to clear out would be a sackable offence for a shop worker, yet apparently it is acceptable for the Chancellor of the Exchequer. Staggeringly, only one in 40 cases where fraud has been reported is actually being pursued. Let me ask the Chancellor this: when was he first alerted to this fraud, and how much does he think taxpayers will get back from the billions of pounds lost to fraudsters?
As I have said, the new taxpayer protection taskforce at HMRC is expected to recover between £1 billion and £2 billion in the next 12 months, and has already made a good start on that. It is fair to reflect on where we were in spring 2020. I remember being at this Dispatch Box every other day. I remember Members from all parts of the House rightly holding the Government to account for getting money to businesses in a matter of hours and days, not weeks. In fact, I heard from the hon. Member for Oxford East (Anneliese Dodds), the shadow Chancellor at the time:
“We need a full guarantee for…some loans…We are running out of time, so how will the Chancellor ensure that the bounce-back loans get to the businesses that need them?”—[Official Report, 27 April 2020; Vol. 675, c. 110.]
The then shadow Business Secretary, the right hon. Member for Doncaster North (Edward Miliband), said that the Government should:
“urgently look at 100% underwriting of loans and simplified lending criteria.”
Indeed, the hon. Lady herself wrote to me and said that
“the process for SMEs to apply for such loans appears cumbersome.”
I make no apology for making sure—
Order. I appeal to Members that if you all want to get in, you have to help each other. If you are not going to help each other, do not be disappointed when you do not get in. It is not fair, and the same goes for the Front Benchers. Topicals are meant to be quick, short and speedy to keep the business going. We are not being fair. Whoever is answering that question, please do so briefly.
As we build a strong economy, we need to raise skills. That is why we announced in the spending review an increase of £3.8 billion in skills spending over this Parliament. The spending review included funding for a specific 50-plus training scheme to support people like those being helped by Teach A Trade so that they can retrain and stay in work. I am happy to speak further to my hon. Friend about how we can support Teach A Trade and others like it to do what they do.
My hon. Friend makes an excellent point about the Welsh Government. This Government are supporting hospitality businesses with a lower rate of VAT till spring worth £7 billion and a business tax cut next year that has Barnett consequentials for the Welsh Government, so hopefully they can do the same.
I chair the caucus of 40 Conservative MPs who have the River Severn—Britain’s longest river—flowing through their constituencies. The river is causing increasing destruction and chaos for our communities with the increasing floods. Will the Minister meet the River Severn Partnership, a consortium of councils up and down the River Severn, to hear what the flooding Minister—the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow)—heard earlier this year during her visit to Shrewsbury, that there will be a gross value added uplift of up to £150 billion if we find a solution for managing Britain’s longest river?
We recognise the important work of the River Severn Partnership. Between now and 2027, £170 million will be invested in flood and erosion risk management in the English Severn and Wye region, but I would be happy to meet my hon. Friend and colleagues to talk further.
The hon. Lady raises an important point. Of course, we delivered a record settlement for the Department of Health and Social Care at the recent spending review. That budget will rise to £177.4 billion in 2024-25. NHS dentistry is a top priority of that spend.
Can the Minister confirm that the £1,000 a year tax cut delivered through changes to the universal credit taper rate will begin to be seen in people’s bank accounts this side of Christmas?
The hon. Member will know that an independent review has already been carried out by Lord Morse, and the Government accepted all but one of its recommendations. HMRC does have a helpline, but it is important to continue to ensure that we look after those who are most vulnerable.
I thank my right hon. Friend the Chancellor for all that he is doing on levelling up and, in particular, for the establishment of the Darlington economic campus. Can he update the House on how things are progressing and how many of his team are now enjoying life in Darlington?
May I advise my right hon. and learned Friend that the Government’s step in the Budget last month to cut business rates by 50% for retail, hospitality and leisure companies, which means that 90% of all eligible businesses will see a cut of at least 50%, has been warmly welcomed across my Borough of Bexley? It will help many business to not only survive, but flourish.
Transport sits at the heart of the spending review that has just concluded, and of course we have the £96 billion integrated rail plan. I am very happy to look at the scheme to which the hon. Member refers, but obviously Transport Ministers are engaged in a constant process of making sure that we deliver the projects that are the best value for money and result in the greatest transport bonuses across the country.
Can the Chancellor confirm that, contrary to industry suggestions, the Government remain committed to legislating for access to cash as soon as possible?
Absolutely, I can. We will legislate, regardless of what the industry brings forward.
Florence Roby Ltd was turned down when it bid for Government contracts for personal protective equipment last year, despite a 50-year track record of high-quality production. It was not asking for special favours; all it wanted was a fair chance of winning Government contracts. Some £3.5 billion was handed out to friends and donors of the Conservative party through a VIP lane. That is in stark contrast to the experience of Florence Roby Ltd. When will good people such as my constituents get access not to a VIP lane, but to a level playing field?
We worked at speed to secure the PPE needed to protect our frontline workers, and we supplied over 58,000 different healthcare settings. We now have a four-month stockpile of all critical PPE to make sure that the NHS can continue to be protected. All these bids are assessed in line with standard guidance to make sure that there is total equity in that process. Any suggestion to the contrary is fundamentally misleading.
Harrogate has been the trial and development location for universal credit, and I have seen how it helps people make work pay. Does my right hon. Friend the Chancellor agree that rolling it out further, and migrating people currently on legacy benefits, will help even more people make work pay?
The Minister will be aware that Viktor Fedotov, the secret co-owner of Aquind, has been implicated in a £72 million fraud scheme linked to Putin’s Russia. Can the Minister say what due diligence has been done on the project company and its owners, and if he and ministerial colleagues will protect our national infrastructure from these alleged fraudsters by stopping the disastrous project once and for all?
A key way to support economic growth is to help level up our forgotten high streets, such as Eston Square, where the old precinct building is blocking key investment and preventing new businesses from moving in. When the Chancellor is next up in Teesside, will he come with me to Eston, and meet leaders at Redcar and Cleveland Borough Council to see what can be done to level up Eston Square?
The Chancellor of the Exchequer will be aware of the considerable public unease about the proposed demutualisation of Liverpool Victoria. Will he therefore consider sympathetically the cross-party letter he has received from over 100 parliamentarians calling for a review of the law governing mutuals?
As the hon. Gentleman knows, we have had considerable engagement on this subject. This is a matter for the Financial Conduct Authority, and we have discussed it. Obviously, members will now vote on the proposal. On the broader issue of how this sector is treated, I remain willing to engage with him on further changes and reforms that may help it in future.
Ministers will know of the importance of the Humber ports to the regional and national economy. Access to Immingham and Grimsby ports is in part via the A180, which has an old concrete surface that is crumbling and in need of urgent repair. This afternoon I will meet Highways England to discuss that. May I tell it that the Chancellor will fund those improvements?
I commend my hon. Friend for his inventiveness. Our ports lie at the heart of our prosperity, and I am delighted that the Humber freeport is imminently going live, alongside the Teesside and Thames freeports. I wish him the best of luck in making his case for that investment.
I thank my hon. Friend for the close interest that he takes in foreign affairs. We are deeply concerned by Russia’s pattern of military build-ups in and around Ukraine, and we are closely monitoring the situation. The UK is very clear: any military incursion by Russia into Ukraine would be a strategic mistake, and the Russian Government should expect significant strategic consequences. The cost of an incursion would be catastrophically high.
At the meeting of NATO Foreign Ministers in Riga last week, and at the Organisation for Security and Co-operation in Europe Ministerial Council, the Foreign Secretary, alongside our allies, made crystal clear our commitment to Ukraine’s sovereignty and territorial integrity. The Foreign Secretary repeated that support bilaterally to her Ukrainian counterpart last Wednesday, 1 December, and to her Russian counterpart on Thursday 2 December. The Prime Minister has also spoken to President Zelensky on a number of occasions, to reiterate the UK’s support. He raised the issue of Russia’s aggression towards Ukraine directly with President Putin when they spoke ahead of COP26.
Our vocal support for Ukraine’s sovereignty and territorial integrity is backed by our actions. The Foreign Secretary will host Foreign Minister Kuleba in London tomorrow for the first UK-Ukraine strategic dialogue. Diplomatically, we operate at the heart of the international community’s efforts. Hon. Members will be aware that President Biden is meeting President Putin later today. Yesterday, our Prime Minister met President Biden, and the leaders of France, Germany, and Italy, to ensure that a joint message will be given to President Putin. We have also helped to frame international sanctions against Russia, deepened NATO’s partnership with Ukraine, and led efforts in the UN and OSCE to hold Russia to account.
Militarily, we are providing defensive military support, primarily through Operation Orbital, the UK’s training mission to Ukraine, and since it launched in 2015 we have trained more than 20,000 members of the Ukrainian armed forces. The UK is one of the largest contributors to the OSCE special monitoring mission to Ukraine, and that is playing a critical role in providing impartial reporting on the situation on the ground in eastern Ukraine. Earlier this year, we reaffirmed our commitment to that in the integrated review.
Last year alone, we allocated £40 million in official development assistance and other funding in support of programmes that support prosperity, resilience and stability in Ukraine. We have also deepened our bilateral ties with Ukraine, in particular through our political free trade and strategic partnership agreement. In conclusion, the UK is unwavering in our support of Ukraine’s sovereignty, and its territorial integrity, including of its territorial waters, within its internationally recognised borders. Russia should uphold the OSCE principles and commitments that it freely signed up to, which it is violating through its ongoing aggression against Ukraine.
We may be weeks away from a major war in eastern Europe. First, will the Government confirm that the 1994 Budapest memorandum commits the UK and others to respecting Ukraine’s territorial integrity? What do the Government believe those treaty obligations amount to? Secondly, does the Minister agree that the tools for preventing war are few, but one of them is an insistence that Nord Stream 2 does not go ahead, and an insistence that gas continues to flow through Ukraine and, indeed, Poland? Do the Government understand that the potential to cut Russia out of the SWIFT international payments system, Iran-style, may amount to a devastating economic blow? In the case of war, is the UK prepared for Russian actions in cyber and espionage, aimed at the UK, and in the UK?
Finally, regardless of whether Russia invades this month or this year, do the Government accept the assessment that Putin will probably try to achieve three things in his last decade in power—first, dismembering Ukraine, whose borders, as he said this summer, he no longer respects; secondly, shattering the unity of NATO; and thirdly, cementing Russia’s identity as a state opposed and viscerally hostile to the west, rather than allied with it? What can the Government do in the long term to militate against these dangerous outcomes?
My hon. Friend raises a lot of questions. The UK position on Nord Stream 2 has not changed. We have repeatedly aired our concerns about the construction of Nord Stream 2, which would undermine European security by allowing Russia to tighten its grip on those nations that rely on its gas. Nord Stream 2 would divert supplies away from Ukraine, and the transit of Russian gas through Ukraine is regarded as a deterrent against further Russian aggression, so it is a vital part of Ukraine’s national security.
We have already put in place a number of sanctions against those responsible for the illegal annexation of Crimea. We are co-ordinating with international partners, but as my hon. Friend knows, we never speculate about future sanctions, because to do so would undermine their effectiveness.
Let us be very clear: we stand by Ukraine, and we are considering an extension of purely defensive support to Ukraine to help it defend itself. Putin needs to de-escalate now and return to diplomatic channels.
I welcome the Minister’s comments. It is important at moments such as these that we send the united message from all sides of this House that the UK is resolute in our support for the sovereignty, the independence and the territorial integrity of Ukraine. Ukrainians want a democratic future; they want to choose their own path and their own political destiny.
It is essential that, alongside our NATO allies, we make it crystal clear to the Russian Government that any attempt to further undermine Ukraine’s integrity will be met with a strong, consistent and resolute response. We welcome the diplomatic steps that have been taken already, and recognise the importance of the forthcoming dialogue between President Biden and President Putin.
With that in mind, what reassurance are we providing to NATO allies in eastern Europe? Does the Minister believe that this is part of a wider pattern of dangerous behaviour by Russia, with tensions raised in Ukraine, Belarus and Bosnia? Will she engage with the incoming German Government to discuss the cancellation of Nord Stream 2 in order to ensure that Russia is not able to increase Europe’s energy dependency or weaken our unity?
As well as working with our allies, we must ensure that we are doing all we can at home to challenge the Russian Government’s behaviour. We know that the UK continues to be a soft touch for corrupt elites and the dirty money that helps sustain the Putin regime. More than 18 months after the Russia report was published, none of its recommendations has been fully implemented. Will the Minister commit to taking those steps?
I thank the right hon. Gentleman for demonstrating the united front in this country in supporting the people of Ukraine—we are absolutely united in standing by Ukraine at this time. To demonstrate Ukraine’s resilience, we need a co-ordinated, increased approach not just defensively but economically, and we especially need support for Ukraine on the energy front. That is precisely why we are working with our NATO partners and other leading allies and why the Prime Minister spoke to not only President Biden but the leaders of France, Germany and Italy yesterday.
We have repeatedly aired our concerns about the construction of Nord Stream 2 and its implications for European security, and we will continue to do so. The right hon. Gentleman will also know that we have already put in place a number of sanctions, and we always stand ready to put in place sanctions against those responsible for human rights and other abuses. We have put in place sanctions against those who led the illegal annexation of Crimea, and we will continue to work with international partners on that front.
I recently visited Ukraine with Foreign Office Ministers as part of the Crimea forum, as set out in the Register of Members’ Financial Interests.
Does my hon. Friend agree that the current situation is not only an early foreign policy challenge but an opportunity for the new German Government to set out their future policy with regards to Russian aggression? Does she also agree, as she mentioned in her statement, that it is through unity that we send a message to Russia? The United States, the United Kingdom and the whole European Union—particularly France and Germany—need to send a united, robust, clear and unequivocal message to Putin that any aggression will be met with severe penalties.
My right hon. Friend is absolutely right: any Russian incursion into Ukraine would be a strategic mistake, and the costs of such an incursion would be catastrophically high. This needs to be a co-ordinated effort between partners to maximise its impact. I have no doubt that the incoming German Government will have a key role to play, and that is precisely why the Prime Minister spoke to the leaders of France, Germany, Italy and the US yesterday to make sure that the message being given by President Biden to President Putin today is a co-ordinated one.
We were very clear in the integrated review that Russian actions pose an acute and direct threat to the national security of the UK and its allies, and we have shown that we take that threat seriously. The current relationship with Russia is not the one that we want, but we will continue to respond to, and call out, Russian aggression wherever it occurs.
I will not have been alone in being chilled by today’s Financial Times article mentioning an essay written by Vladimir Putin that ends with the words:
“For we are one people”
when talking about Ukraine and Russia. Well, that is not what international law says. We have seen this pattern of behaviour from the Russian state in cyber-attacks in Latvia, in the use of migrants on the Polish border to foment a crisis, in Bosnia and in the continued illegal annexation of parts of eastern Ukraine. There must be consequences to further action, and the Scottish National party will be part of that coalition. I am glad to hear of the international co-ordination that is going on.
I have two concrete proposals and a plea. We have heard already—we have not had an answer—that the SWIFT payment system and Nord Stream 2 must be on the table. Magnitsky sanctions will do so much, but we are dealing with people who do not greatly care, so there must be an elevation of the sanctions available.
I have just pledged SNP support for UK Government actions, so I am not trying to make a political point. However, we are two years out from the publication of the Intelligence and Security Committee’s Russia report. There is credible evidence of dirty Russian money washing around the UK’s democracy, and the Conservative party in particular. There are Members of the House of Lords who I do not believe should be there, and there must be consequences at home as well as abroad. When will we see serious action on implementing the Russia report recommendations? Vigilance must start at home, as well as abroad.
I thank the hon. Gentleman for his support for the UK Government. He raises a number of issues. On disinformation, we have seen time and again from the Russians transparent attempts at disinformation and at providing a pretext for reckless and illegal military action.
On tackling illicit finance and dirty money, this Government continue to step up our activity both domestically and internationally to tackle illicit finance entering our country. We cracked down on illicit finance through the groundbreaking legislation introduced in 2017, the Criminal Finances Act, and we published our economic crime plan in 2019. However, we are going further in tackling dirty money. The National Crime Agency has increased the number of investigations into corrupt elites. Let me be clear: serious criminals, corrupt elites and individuals who seek to threaten the security of the UK and its allies are not welcome here. I am afraid I cannot comment on the SWIFT payment system, as I understand it is also a US issue.
Does my hon. Friend agree that the UK has a special responsibility as a signatory of the Budapest memorandum, which guaranteed the territorial integrity of Ukraine? Indeed, Russia was also a signatory. Will the Government look to increase the support we give not just to the Ukrainian forces in the Donbass region, but to those defending the Ukrainian ports on the Black sea from any possible incursions from Russian-occupied Crimea?
Russia is very clearly in breach of the commitments it signed up to under the Budapest memorandum through its failure to respect Ukraine’s sovereignty and territorial integrity and through its use of force against Ukraine. We remain willing to engage in consultations, as provided for under that memorandum, as we did back in March 2014 in Paris after Russia’s illegal annexation of Crimea. Russia is refusing to engage, despite the fact that the memorandum obliges it to do so in circumstances where the memorandum is questioned.
We will stand by the people of Ukraine. We are considering extending the support we are giving to Ukraine to help it defend itself, but I need this to be clear: there is nothing in that support that could be construed as offensive or as a threat towards Russia. NATO is a purely defensive organisation and itself poses no threat to Russia.
The difficulty is that Russia under Putin has behaved with extraordinary consistency. If we look at what it did in Georgia and its activities in Greece, in North Macedonia and in Republika Srpska, in so many different places it has engaged in a deliberate act of semi-war, trying to engineer difficulties in each of those democracies. Do we not need to match that consistency with internal consistency of our own, tackling the dirty money in the British public and ensuring that the whole of our democratic and political system is safe from assault by the Russians?
I have been very clear, and it is very clear in the integrated review, that Russia’s actions pose an acute and direct threat to the national security of not only the UK but its allies. We maintain functional channels of engagement with the Russian Government to ensure we can make points to them on those issues, and as a fellow permanent member of the UN Security Council we engage with them, but that does not mean we do not call them out. The Foreign Secretary met Foreign Minister Lavrov last Thursday, 2 December, when she absolutely restated the UK’s support for Ukraine’s sovereignty and territorial integrity, and urged the Russians to de-escalate the situation. The Ministers also discussed Belarus, Iran and Afghanistan.
Ukraine, Bosnia, Ethiopia, the Solomon Islands—the time for a cross-Government atrocity prevention strategy is now. Will the Minister please advise whether we have seen any build-up of Russian troops around Mariupol to block off the Black sea? Will she also confirm that, if Republika Srpska and Russia try to use hostilities in Ukraine to hide aggression in Bosnia, we will stand firm behind our friends in both Ukraine and Bosnia?
We are monitoring the situation very closely and are deeply concerned by the pattern of Russian military build-ups on the border of Ukraine and the illegally annexed Crimea. We call on the Russian Government to uphold the OSCE principles and commitments: they signed up to them and they should uphold them, but they are violating them through their aggression towards Ukraine. We stand by both the people of Ukraine and the people of Bosnia and Herzegovina, as I made very clear from this Dispatch Box just last week.
The Minister has made clear, I think in the same words that President Biden used, that there would be “catastrophic” consequences were there to be any Russian invasion of Ukraine, but one thing we know is that we already have Russian-activated troops in the Donbass region. They may not wear Russian uniforms, but they come under Russian control. If we see a hybrid attack on Ukraine, will there be catastrophic consequences then? That is the really important issue.
I completely agree with my hon. Friend the Member for Isle of Wight (Bob Seely) that the Budapest memorandum means we have a special obligation towards Ukraine. Can the Minister give us an update on the membership action plan, the prelude to NATO membership? When Poland joined in 1999, we were told it was a step too far; when Romania joined NATO in 2004, we were told it was a step too far. Is not now the time to start a debate on whether we can give our Ukrainian allies membership of this important defence pact?
We stand firm in our support for Ukraine’s NATO membership aspirations, in line with the 2008 Bucharest summit declaration, in which NATO allies agreed that Ukraine will become a member of the alliance. Allies have reiterated that commitment at every summit since.
The White House statement released yesterday after President Biden’s call with his European counterparts did not mention sanctions. Although I appreciate they are not a magic bullet, significant sanctions might serve as an effective deterrent. Can the Minister confirm that on yesterday’s national security call, the Prime Minister pushed for significant and co-ordinated sanctions? Can she also confirm that any such sanctions would target those in Putin’s inner circle, limiting their ability to travel and potentially cutting off access to US, UK and EU banking and credit card systems?
We never speculate on future sanctions designations; to do so could undermine their effectiveness if they are put in place. However, we are closely monitoring the situation. We have taken action against Russia for its illegal annexation of Crimea, in co-ordination with international partners. We worked closely with the EU, the US, Australia and Canada to impose costs on those facilitating Russia’s illegal annexation of Crimea and Sevastopol through sanctions. We will continue to work closely with international partners to ensure that those sanctions remain in place as long as Russia’s illegitimate control of the peninsula continues.
President Putin is clearly testing us. If there is a strong enough reaction, he may back off this time, but the softer our response, the more likely he is to go. That makes this an important test of our ability to engage in collective action. We need to reach and make public a consensus on specific sanctions that would apply in the event of Russian action. At the moment, I hear from the Minister and the other world leaders stern words, but not specific sanctions that will apply in the event of Russian aggression.
Let me be very clear: the Russian Government’s intent is to destabilise Ukraine. Beyond that, we cannot speculate, but we are monitoring the situation closely. We are deeply concerned, but it is critical that we avoid miscalculations. We call on the Russian Government to abide by their international commitments—the commitments to which they have signed up. Any military incursion would be a strategic mistake by the Russian Government and they should expect massive strategic consequences, including severe economic sanctions.
Experience shows that President Putin respects only strength of purpose and resolve. Many Members have raised the issue of the SWIFT system. I am not asking the Minister whether that is a sanction that the Government are proposing to take, but I would like to know how that decision would be reached. When Iran was excluded from the SWIFT system in 2012, it required an EU regulation to make SWIFT do that, because SWIFT is incorporated under Belgian law. Would such a regulation be required this time if the UK Government and other Governments decided to proceed with excluding Russia from the SWIFT payment system?
I congratulate my hon. Friend the Member for Isle of Wight (Bob Seely) on being granted this urgent question, but may I express my disappointment that this matter has had to be raised in an urgent question and that the Government have not volunteered a statement? There was a NATO Foreign Ministers’ meeting last week. We have a crisis in the Balkans. We have Russia spiking our gas supplies. We have Russia creating the migration crisis in Belarus, and we have Russia on aggressive military manoeuvres around Europe with its massively renewed military hardware. When will the Government take on board the fact that we are in a hybrid war against Russia now and that there needs to be a comprehensive and united western response, because, at the moment, NATO is weak and divided?
We have been very clear about the threat that Russia poses not only to our own security, but to the security of our allies as well. That is precisely why the Foreign Secretary and the Prime Minister have been working so closely with our friends and allies. The priority of our foreign policy is to build that network of liberty with our friends and allies, working on the defence not only of our own country, but of that of our allies. We absolutely stand by those on the Russian borders, including those facing the situation in Belarus, the Baltic countries and Poland—which I discussed only last week—as well as our friends in Ukraine.
Given that our energy strategy, which stems from the climate policies followed by the EU and the UK, has made us dependent on Russian oil and gas, does the Minister not accept that President Putin, with his ability to use energy blackmail against the west, has no belief that we can implement effective sanctions against Russia?
We have continually voiced our concerns about the Nord Stream 2 pipeline, and we will continue to do so. It has serious implications for undermining European security, especially energy security, and as a destabilising tool. It allows Russia to tighten its grip on those nations that rely on Russian gas. We will continue to voice our serious concerns about this reliance on Russian gas.
If Ukraine had been a member of NATO, there would now be a grisly roll call of British Army dead. Economic sanctions, yes, but will the Minister confirm that the frozen steppes of eastern Ukraine, with all its historical complexities, are not worth the life of a single British soldier? Like it or not, Russians know that, for 300 years, Crimea was part of Russia. It is almost entirely Russian speaking, as is eastern Ukraine, so we should be aware of Russian opinion. We may not agree with it, but let us not be dragged into any military confrontation.
It is vital that we stand by countries that share our vision of being free and democratically run. That is why we are unwavering in our support of Ukraine’s sovereignty and territorial integrity, why we are working with NATO partners and why we are considering an extension of purely defensive support to Ukraine to help it defend itself. Defending itself against any Russian incursion will be vital, but let me remind Members what I have said again and again: making an incursion into Ukraine would be a massive strategic mistake for Russia.
This is an extremely concerning situation both in Ukraine and across other parts of our continent. May I urge the Minister and the British Government to do all that they can to ensure that NATO speaks with one voice? Russia feeds off mixed messages and, while we have a very strong voice coming out of the United States, the NATO Secretary-General, Stoltenberg, is saying that NATO has no obligation to defend Ukraine. Those are the mixed messages that do not help. What more can Her Majesty’s Government do to ensure that the alliance speaks with one voice?
The hon. Member is right: it is vital that we speak with one voice, which is why our Prime Minister was speaking with the leaders of the US, Germany, France and Italy yesterday. The message is clear: any incursion by Russia into Ukraine would be a strategic mistake. The costs of such an incursion would be catastrophically high and result in massive strategic consequences, including economic sanctions.
The Minister has said several times during this session that any incursion into Ukraine would be catastrophic for Russia and a big strategic mistake. Can she confirm that all diplomatic channels are being used, as well as economic sanctions that may come in, and that we are doing our very best to make sure that Ukraine is safe as a sovereign country?
As well as being concerned about the situation in Ukraine, I know that the Minister is also concerned about the situation in Bosnia and Herzegovina and about the involvement of Russia in Belarus. Does she think that there is a need for the Prime Minister to speak not just to individual Governments, but collectively to NATO and collectively to the European Union to make sure that we have a truly united front?
Foreign policy begins at home—our ability to project influence around the world depends on the credibility, integrity and transparency of our Government and our economy here at home—and yet London is awash with dirty Russian money, and the Government have failed for almost two years to implement the recommendations of the Russia report. Will the Minister explain why the Government are dragging their feet on that, because it connects directly to our ability to achieve the objectives that she set out on Ukraine and beyond?
I absolutely refute the suggestion that we are dragging our feet. We already have a number of sanctions in place. We work with our international partners—we are a leading voice, for example at NATO last week—and we will continue to do so. I will not comment on specific future sanctions, because to do so would make them ineffective. However, I have made it very clear that any incursion into Ukraine by Russia would be a massive mistake and would lead to severe consequences, including severe economic sanctions.
I welcome my hon. Friend’s tone and particularly the training of the 21,000 members of the Ukrainian armed forces by our armed forces as an important game-changer over the past five years. However, in return for our very strong support, will she continue to remind the Ukrainian authorities that they need to address the issues of corruption and human rights in their country so that we can be properly proud in giving them full support?
I agree with my right hon. Friend the Member for Leeds Central (Hilary Benn) that Putin has consistently responded to strength and taken advantage of weakness. Although the Minister has continually told us today that she is being very clear, the extent of any British boots on the ground in defence of the Ukrainians is unclear, as are the sanctions that she will propose. Will she be a bit clearer about the defensive posture that we may ask members of the British armed forces to take in Ukraine in support of a country that we all wish to express our support for?
The UK and our allies are providing a range of support to Ukraine, including through work that is enhancing Ukraine’s defence capability. It is really important that we continue to reiterate that the support is fundamentally defensive in nature and that neither NATO nor Ukraine pose any aggressive threat to Russia.
As we see the build-up of troops on the Ukraine-Russian border, I would be keen to know whether the grey zone sub-threshold attacks, such as cyber and disinformation, are also increasing at the same pace. What do the Government have in place to deal with those attacks to ensure that we control the threat?
Russia’s actions are deliberate, not accidental, and they are against a clear strategy and sequence. The threat to Ukraine’s sovereignty is clear, but so is the threat to our NATO allies in the Baltic states. Will the Minister set out very clearly that the article 5 protection of our NATO allies in the Baltic states stands firm and will be unquestionable, and that Britain will not renege on our enhanced forward presence, which is protecting the Baltic states from any Russian aggression?
The Foreign Secretary has tweeted that
“allies stand with Ukraine and will defend the frontiers of freedom and democracy.”
Will the Minister confirm that we will use every tool to ensure that our NATO allies stand just as steadfast in ensuring that Ukraine is protected, including in relation to the suggestion that Putin will deploy 175 Russian troops to the area?
I recently returned from the Lithuanian-Belarus border, where I saw at first hand the malign behaviour of Russia on Europe’s borders. We understand that this situation is clearly very grave and I am not sure that that was reflected in the Foreign Secretary’s photo opportunity with a tank in Estonia. If the issue is taken very seriously, can we get a grip on the Putin wallets running amok in London, with free rein to do whatever they like? That is how we will get some attention to the situation.
I am very proud to represent a vibrant Ukrainian community in my Colne Valley and neighbouring Huddersfield constituency, and I will celebrate Ukrainian Christmas with that community in January, as I do every year. It will be watching what we are saying here today very closely. Will the Minister again reaffirm that we will work with our NATO allies to send out an unequivocal message that we steadfastly support the sovereignty of Ukraine?
Ukraine and NATO are concerned that Russia will seize the Suwalki corridor by pushing migrants into the area and stoking unrest. That would allow Russian forces to join Belarus. What assessment have the Government and allies made of the likelihood of that scenario, and what humanitarian support would be provided to migrants caught in the fold?
We have no doubt that there is Russian action in Ukraine and in other countries that attempts to destabilise Europe, NATO and our allies. We are absolutely clear in our integrated review that Russian actions pose an acute and direct threat to national security. As I said from the Dispatch Box last week, we are providing humanitarian aid to those caught up in the middle of the crisis.
I very much welcome the Minister’s strong statement of support for Ukraine today. Will she confirm that the firm deterrent and clear warnings that she is giving in this Chamber about President Putin’s behaviour towards Ukraine are also being delivered directly to the Kremlin in a manner that cannot be misunderstood?