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Commons Chamber

Volume 745: debated on Monday 19 February 2024

House of Commons

Monday 19 February 2024

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

New Members

The following Member made and subscribed the Affirmation required by law:

Genevieve Victoria Kitchen, for Wellingborough.

The following Member took and subscribed the Oath required by law:

Damien James Egan, for Kingswood.

Member Sworn

I understand that the hon. Member for Romford (Andrew Rosindell) wishes to take the Oath to the King.

The following Member took and subscribed the Oath:

Andrew Richard Rosindell, for Romford.

Oral Answers to Questions


The Secretary of State was asked—

EU Permanent Structured Co-operation Projects

1. What assessment his Department has made of the potential merits of participating in further EU permanent structured co-operation projects. (901512)

The Department’s priority is to finalise entry into the permanent structured co-operation military mobility project before considering involvement in other projects. However, we assess that the EU’s standard “third country” terms for PESCO projects involving procurement or capability development will continue to impose significant constraint on UK involvement.

I appreciate that the UK Government’s attitude to PESCO is to take each project on a case-by-case basis, but may I suggest that publishing criteria for that case-by-case assessment would be useful? It is obvious to the dogs in the street that PESCO will evolve at light-speed, and the UK risks missing out on a lot of important co-operation that could be beneficial. Will the Minister publish that guidance? Otherwise, I will be tabling 68 parliamentary questions to cover each of the 68 PESCO mechanisms.

I note the hon. Gentleman’s suggestion, and I fear that my answer will give him encouragement to table the 68 questions, because it is right that we consider each opportunity in PESCO on its merits. PESCO is a vehicle for increasing military mobility around the continent. Non-EU NATO partners support that fully, and the UK is among them, but industrial or technological co-operation will not always be in the UK’s interest, or in the interest of UK industry, so it is right that we consider these things case by case.

Ukraine: Military Support

During his visit to Ukraine on 12 January, the Prime Minister signed an historic UK-Ukraine agreement on security co-operation with President Zelensky, illustrating our long-term commitment to supporting Ukraine. The Prime Minister announced that the UK will provide £2.5 billion in military aid to Ukraine in 2024-25—a £200 million increase on the previous two years—to cover rapid procurement and gifting of equipment, development of international capability coalitions, and training through Operation Interflex.

I thank the Minister for that response. There is clearly widespread support in this House and the country for helping Ukraine to resist Russian aggression, but there are concerns, given that President Zelensky has recently identified a shortage of arms and ammunition, particularly in the light of the impasse in the US Congress. What discussions has the Minister had with his counterparts in the EU and other European nations about helping to bridge the gap in the short term, and on how we will deal with it if, in the longer term, the election of President Trump reduces NATO spending in general, and its spending on Ukraine in particular?

Of course, we are aware of the scepticism among Republican presidential candidates and in the US Congress about funding for Ukraine. That is why UK Ministers—the Foreign Secretary, the Secretary of State for Defence, the Prime Minister and I —have been in Washington to make the case for the US continuing to support Ukraine, no matter the outcome of the election. Second-guessing the outcome of the US electoral system is probably not sensible, but notwithstanding the fantastic efforts, led by Prime Minister Kallas of Estonia, to increase the manufacturing of ammunition in particular, it is clear that European manufacturing capacity is not yet at even half the target set. That should be cause for all of us to consider how we might urgently ramp up manufacturing if the worst comes to the worst.

Ukraine can win the war, and must win the war. The Minister touched on the provision of ammunition and equipment, but Ukraine also needs hundreds of thousands of trained personnel. I very much welcome the extension of Operation Interflex, and the work that we are doing, but could we not be doing far more of that with our allies to assist Ukraine?

My right hon. Friend is right to point to the importance of the training effort. That gives me the opportunity to reflect on this week being the 10-year anniversary of the Russian invasion of Crimea, which gave rise to Operation Orbital. Since then, across Operation Orbital and Operation Interflex, 60,000 Ukrainian troops have been trained. Continuing to train them, not as individuals but increasingly as formations, is undoubtedly the key to unlocking the real potential of the Ukrainian armed forces.

We have all seen the events that have taken place in the past few days regarding the Russian offensive in Ukraine. They must act a wake-up call to all of us. This is our problem, and our fight, with the Ukrainians, to defeat Putin. We need to make sure that we step up the amount of ammunition and arms that we ship to Ukraine. We need to do that with our European partners, and we need a plan, not just for the short term but for the long term, so that we defeat Putin. What talks are the Minister and the Cabinet Secretary having with our European allies to ensure that Ukraine wins this war?

Such conversations happen all the time. Only last week, the Secretary of State was at the latest donor conference, followed by NATO Defence Ministers. I was in Norway a week or so earlier, having exactly those conversations with allies. As the right hon. Gentleman suggests, while traditional armaments such as artillery ammunition are important, so too, increasingly, are the novel precision weapons systems that the UK is very much at the forefront of supplying to our Ukraine friends.

Is it not time that both sides of the House came together to agree on a common policy of increasing defence expenditure, so that by increasing our support for Ukraine, we can set an example to our American allies, without whose help there can be no future for peace and security in Europe?

My colleagues on the Opposition Front Bench know that I try not to throw gratuitous punches in the House, and I know that they are enthusiasts for military spending, but their colleague the shadow Chancellor has thus far declined to say that she would adopt anything other than the 2% target for NATO spending, which is not the same as what the Government are currently spending, or what they currently intend to increase spending to, so the suggestion made by my right hon. Friend the Member for New Forest East (Sir Julian Lewis) is timely. It would be fantastic if, in the next hour, the shadow Secretary of State were to make the same commitment as we have.

In the last year of the last Labour Government, we were spending 2.5% of GDP on defence, a level that has not been matched in any of the subsequent 14 Tory years.

Like the Defence Secretary, the Leader of the Opposition and I were in Munich at the weekend, and the urgency of the need for more help for Ukraine ran through every discussion. Everyone was also profoundly moved by the words of Yulia Navalnaya, speaking even after the news of her husband’s death at Putin’s hands. This is the brutality that the Ukrainians are fighting, and this is why UK support must not falter. We strongly back last month’s UK-Ukraine security agreement, which the Defence Secretary has described as “a 100-year alliance”. Will the Government take the necessary next step and provide an implementation plan for this year and future years, to ensure that Ukraine receives the help that it needs now and for tomorrow?

While I am grateful for the history lesson on what was spent under the last Labour Government, the commitment to match our spending in a future Government was conspicuously absent from the right hon. Gentleman’s question. However, let me return to the collegiate spirit in which Defence questions are normally conducted. I absolutely agree that what the Secretary of State set out in his speech about the partnership with Ukraine requires a strategic approach, with very long horizons set for what our co-operation, both industrial and military, could look like.

Long horizons are fine, but Ukraine needs more help now. I am concerned about the £2.5 billion for Ukraine that was announced last month and described by the Prime Minister as

“the biggest single package of defence aid to Ukraine since the war began”.—[Official Report, 15 January 2024; Vol. 743, c. 578.]

The Minister has said much the same today. In response to a question from me last week, however, he would not rule out using that money to cover the UK’s operational costs at NATO bases. Will he rule that out today? Will he confirm today that every penny and every pound of the £2.5 billion for Ukraine will go to Ukraine?

I fear that the right hon. Gentleman has missed something over the last two years. The £2.3 billion that the Government have provided for operations to support Ukraine has always included not just the gifting in kind that takes the headlines, but Operation Interflex and other avenues through which we support the Ukrainians. The fact is that next year’s spending and that of the year after will match exactly what we did in previous years, in terms of the breadth of that contribution. It is also true that the long-term strategic alliance that the Secretary of State set out and the commitment year on year to spend more than any other European ally are not mutually exclusive; we are doing both.

On 17 February, at the Munich conference, Prime Minister Frederiksen of the Kingdom of Denmark said:

“If you ask Ukrainians, they are asking for ammunition now, artillery now. From the Danish side, we decided to donate our entire artillery.”

Does the Minister not agree that allies should be a little more like Denmark when it comes to recognising the consequences of not meeting Ukraine’s needs?

We are full of admiration for our Danish colleagues, but the reality is that the UK has provided almost its entire heavy artillery capability, in terms of AS-90s. Those that we have held on to are those that service the battlegroup in Estonia and the very high readiness armoured battlegroup. Similarly, we have been generous with our ammunition stocks, while retaining those that we need for our very high readiness forces. More than that, we have catalysed the production of 155 mm ammunition in the UK, and even further, we have been buying up as much 152 mm and 122 mm ammunition around the world as we possibly can. The UK’s contribution to the Ukrainian artillery fight is not confined to what we have in our own ammunition stockpiles; it is much, much bigger, and amounts to hundreds of thousands of rounds.

To paraphrase a former Member, the Government’s response has been weighed in the balance and found wanting. Given the Czech Republic’s profound donations of artillery and shells, on top of the Danish donation, as well as a commitment of over 1 million shells from the EU, I hope the Minister can come to the Dispatch Box and correct the balance. Can he advise the House on how much of this new investment, which is welcome, is in tactical armaments and artillery?

The overseas ammunition acquisition plan from previous years remains broadly as it was, which amounts to about 300,000 rounds bought on international markets and provided to Ukraine. The 155 mm manufacture acceleration is subject to a different funding package that the Secretary of State and his Ukrainian counterpart have been working on. It is important to note that the £200 million additional money from last year to this is focused on the provision of drones, and those tactical drones are proving to be most significant, in terms of their impact in the battle space.

Army: Size

The latest figure for the full-time strength of the Army is 73,520. The Army is continuing to work towards its “Future Soldier” structure of 73,000 regular and 30,000 reserve personnel. There are no plans to change this. The good news is that provisional figures suggest that January had the highest number of Army applications for six years.

Media reports have suggested that white men have been actively discriminated against in recruitment, and that security checks may be relaxed due to promoting ethnic diversity within the Army. A number of senior military figures have purportedly warned that the pervasiveness of woke ideology being pushed on to the armed forces is a real and present threat to national security, and will give aid and comfort to the King’s enemies. Will the planned review of diversity policies seek to address those concerns?

I am grateful for the hon. Gentleman’s remarks, but I do not recognise the situation that he describes. We take security extremely seriously and ensure that all personnel have security clearance appropriate to their job. Checks normally require at least three years’ UK residency, but Commonwealth candidates are permitted to accrue qualifying residency while serving, although they cannot take up roles and ranks that require higher levels of vetting. This policy has been in place for several years, and it has not changed.

Figures in The Times last month showed that the British Army will shrink to as small as 67,000 by 2026 due to the crisis in recruitment and retention. As threats to the UK increase, will the Minister finally commit to halting the cuts that he continues to make to the Army?

The Government are sticking to 73,000 regular and 30,000 reserved personnel, as I said earlier. Those figures are in “Future Soldier”, published in 2021, and they remain unchanged.

Gaza: Humanitarian Aid

The Ministry of Defence continues to stand ready to support the effort, led by the Foreign, Commonwealth and Development Office, to pursue land, air and maritime routes to deliver urgently needed humanitarian aid.

Many of my constituents in Stoke-on-Trent South are extremely concerned about the humanitarian crisis in Gaza and want to see much more aid getting into Gaza. It is vital for the innocent civilian population there. Will the Secretary of State update us on what more is being done to ensure additional routes, and particularly a sea route, into Gaza for humanitarian aid to innocent civilians?

My hon. Friend will be pleased to hear that I have been to the region on a number of occasions—I have visited Israel and Cyprus twice, as well as visiting Egypt and Saudi Arabia—with the specific intention of trying to resolve the problem that he describes. We have already delivered 150 tonnes of aid, but the problem is getting that aid into Gaza. Although we have persuaded the Israelis to open Kerem Shalom, we desperately need Ashdod to be opened, too. As we have discussed with the Cypriots, we could then create a humanitarian aid route from Cyprus direct to Ashdod and straight into Gaza via Kerem Shalom.

“Living in our Shoes” Report

5. If he will continue to issue online updates on the implementation of accepted recommendations from the “Living in our Shoes” report, published on 30 June 2020. (901517)

Families are an integral part of the armed forces community. Our commitment to them remains strong and is reinforced by the Haythornthwaite review, the defence Command Paper refresh, the families strategy, which was published in January 2022, and my hon. Friend’s excellent “Living in our Shoes” framework for delivering more family-sympathetic policies.

The families of armed forces personnel have to put up with more separation, relocation and danger to their loved ones than the families of any other public servants, and they often feel slightly disenfranchised. They might not know their Member of Parliament, and they might fear to approach them because of the impact it might have on their spouse or partner’s career. Does my right hon. Friend agree it is incredibly important that the public can see the follow-through on the 86 recommendations that the Ministry of Defence accepted in full and on the 20 recommendations that it accepted in part?

My hon. Friend will be interested to hear that I have a slightly different number. My number is that 106 of his report’s 110 recommendations have been accepted. Regardless of the exact figure, I entirely agree on the importance of making sure that armed forces families live in decent accommodation. When we ask armed forces personnel to fight abroad, they should live in good accommodation when they come home.

My hon. Friend is familiar with the steering group, which includes families, federations and the authors of his excellent report, and he will be pleased to hear that it meets again on 28 February.

Armed Forces Recruitment

In a challenging labour market, we continue to apply an array of measures to support recruitment and retention and to refine the armed forces’ offer. These include the biggest pay rise in 20 years, flexible service and an improved accommodation offer. The Haythornthwaite review has a key part to play, and teams have been stood up across the Ministry of Defence to implement all 67 recommendations, working to establish a reward and incentivisation architecture that will attract and retain the skills we need.

I am grateful for the Minister’s answer, but the quality of forces accommodation is also an important factor in both recruitment and retention. Will he consider giving local commanders greater agency in getting small repairs done locally if the national contractors fail to act quickly enough?

I absolutely agree with my hon. Friend. Heads of establishment can access an approved funding pot to address minor maintenance works, up to a maximum value of £25,000 per item, which is extremely helpful and gets away from some of the bureaucracy involved with the prime contractors.

Seven experienced personnel are leaving for each five recruited. Despite the diversity and inclusion policies, some of which are counterproductive in my opinion, and in addition to Capita’s initiatives, last year there was a net loss of 310 servicewomen. Falling retention rates are overshadowing operational effectiveness. Can the Minister outline what he is doing on retention?

I am grateful to my hon. Friend and ministerial predecessor. Over the past two years, the Ministry of Defence has put servicewomen at the heart of developing and delivering a range of initiatives, from uniform policies to the provision of accessible sanitary products, mentoring, the introduction of flexible service, wraparound childcare, parental leave, and zero tolerance of unacceptable behaviour. There will be further measures in response to the Wigston review, the Gray review and my hon. Friend’s report. I pay tribute to those who have been driving change, but it is far from job done.

The armed forces, including the 14th Signal Regiment based in Pembrokeshire, continue to provide fabulous career opportunities for young people. Does my right hon. Friend agree that, now more than ever, we need to encourage Army visits to schools, and that the long campaign by nationalists in Wales to stop those visits damages social mobility and aspiration?

I share my right hon. Friend’s enthusiasm entirely. The armed forces are a huge engine for social mobility. In the last year, the Army achieved over 5,000 school engagement visits across the United Kingdom, each at the school’s request. The British Army is the public’s Army. It is important it engages with the people it serves, despite the best efforts of some on the left and the nationalists, to whom he refers.

The London Borough of Bexley is home to several excellent cadet and reserve units that teach vital life skills. Will the Minister update the House on progress on the cadet expansion programme and what work is being undertaken to strengthen the pathways into His Majesty’s armed forces?

I am grateful for the opportunity to do so. The joint Ministry of Defence and Department for Education cadet expansion programme is progressing extremely well, with over 54,000 cadets in school cadet units. The cadet expansion programme has focused on growth in the state sector. Since its introduction in 2012, the number of cadet units in state schools has grown by over 400% to 268 schools. Some new units have also opened in independent schools, where there has been a 12% increase. I am sure my hon. Friend will join me in welcoming that transformation.

Local service personnel routinely cite issues in service accommodation as a barrier to recruitment and retention, so I was disappointed to hear that the Government have no plans to improve the quality of the nearly 900 single-living accommodation bed spaces in my constituency at Chicksands that currently fall into the lowest grades. Will the Minister commit to revisiting that decision to ensure we do right by all service personnel serving on the base before it closes?

The hon. Gentleman is right to highlight the importance of service accommodation. He will be aware of the huge Government investment to improve the quality of both service-family accommodation and single-living accommodation. Our people deserve the best. It is public knowledge that they have not had the best for some considerable time, but we are committed to remedying that for his constituents.

Does the Minister not wake up in the morning sometimes and want to check in on reality? We have had seven Secretaries of State for Defence since 2010 and absolute turmoil in our armed forces. Why would people join the British Army when this Government have run us down to 72,000 serving personnel? I campaigned when the number went below 100,000! The Minister should wake up and invest in the defence of our country in a troubled world.

Those are interesting reflections. I suggest the hon. Gentleman has a word with the shadow Ministers on his Front Bench, particularly the shadow Chancellor who, to date, has failed to commit to the level of spending on the defence of this country to which the Government are completely committed.

The rise of so-called “woke” culture has been infecting our society for many years and it should be unsurprising that it is now infecting our military. Does the Minister think that the rise of “woke” makes it easier or more difficult to recruit the right sort of people into our armed forces?

I completely reject the premise of the hon. Gentleman’s question. If he is talking about increasing the number of women in our armed forces, Lord Etherton’s review into LGBT personnel in our armed forces historically, or our ambition to make our armed forces more reflective of the society from which they are drawn and that they serve, then I am guilty as charged.

The Minister and others will be aware that recruitment across Northern Ireland to the Army, the Royal Air Force and the Royal Navy has always been exceptional. However, the number of personnel in Territorial Army regiments is set at a figure that those regiments cannot go above. Will the Minister look at increasing the number of TA soldiers to ensure that recruitment in Northern Ireland can exceed the current numbers?

I pay tribute to the people of Northern Ireland who, as the hon. Gentleman says, have disproportionately contributed to the defence of our country. He will know that we are committed to growing our reserve forces across the United Kingdom.

We have 24,000 fewer troops, 4,000 fewer sailors, 200 fewer aircraft and the removal of one in five ships. The Conservatives have failed our armed forces over the past 14 years, missing their recruitment target every year since taking power in 2010 and hollowing out our military. Does the Minister honestly believe that he can look the public in the eye and claim that five more years will fix the mess that they have created, or is it time for a fresh start?

Oh, I think the hon. Gentleman knows what I am going to say in response to his question, and that is to invite him to have a conversation with the shadow Chancellor to see whether she will commit to the same level of spending on defence that this Government are committed to and, indeed, are spending right now. Will he make a spending commitment here and now in the House of Commons? If so, I am all ears.

Rotary Wing Enterprise

The rotary wing enterprise programme seeks to improve aircraft availability across support solutions for Apache, Chinook, Merlin and Wildcat from within existing budgets. It will do so by driving synergies between platforms, modernising support solutions and pursuing delivery-focused commercial mechanisms.

Mr Speaker, as you know, Fleetlands in Gosport has been the home of military helicopter maintenance for more than 65 years. This highly skilled engineering work is really key to levelling up the area, providing much-needed jobs and opportunities. Does the Minister agree that the MOD’s rotary wing enterprise and new medium helicopter programme would benefit greatly from these generations of expertise and skills right there in Gosport?

I know from my recent visit that my right hon. Friend is a champion not only for defence in her constituency, but for defence jobs in particular. She is right about StandardAero Fleetlands, which is a valued actor in the maintenance of our rotary wing platforms. The rotary wing enterprise is due to enter its detailed design this year. As part of that, it will consider wider social value, including the extent to which economic prosperity is supported. But as this is a specific potential procurement, I cannot comment any further. I also cannot comment on the role of particular companies in the new medium helicopter programme, but we hope to say more on that very soon.

The Government have delayed producing the information required for the invitation to negotiate for the new medium-lift helicopter four times since September 2022. Can the Minister explain what has caused this 18-month delay? Given the reports last week about his Department freezing capital spending until at least the new financial year, when will the Government get their act together to get this competition under way? Can he promise that the delay will not push back the delivery date for this vital capability for our forces?

I am pleased to say two things to the hon. Lady. First, we will have the announcement on the next stage of the new medium helicopter very soon. I am also pleased to confirm that we have been clear on our spending position. To echo my right hon. Friend the Minister for Defence People and Families, if the hon. Lady wants to talk about stuff that is rumoured in the press—we do not have those sorts of capital spending controls—can she confirm whether the shadow Chancellor will honour our defence spending commitments?


AUKUS partners continue to make good progress on the optimal pathway to deliver conventionally armed nuclear-powered submarines to Australia and to develop the advanced capabilities required.

I thank my right hon. Friend for his answer. AUKUS is a bold project that rightfully identifies the greater need for co-operation in the Pacific between our great nations. However, I do not think that it should be limited just to defence. In my own report for the 1922 foreign affairs policy committee, we found that there is not only a need, but an appetite for wider scope—the inclusion of Canada, for example. Does my right hon. Friend agree that AUKUS cannot just be about defence policy. Will we be reaping the maximum benefits for Britain by consigning this to be just a defence procurement exercise? Where is the Foreign, Commonwealth and Development Office in all of this?

My hon. Friend is right to say that AUKUS can and should be a programme that extends beyond the three core nations—the UK, the US, and Australia—but that is very much a matter for pillar 2 arrangements rather than pillar 1, which the House will know is about the nuclear-powered submarine for Australia and the joint procurement. He will be pleased to hear that, in November, I was in the US signing up to a programme of pillar 2 work, which could ultimately extend to others, including Canada and New Zealand.

Royal Navy Capabilities

10. What assessment he has made of the adequacy of the Royal Navy’s capabilities to engage land-based targets. (901524)

The Royal Navy has a range of capabilities to support the engagement of land-based targets. Specific threat planning is considered for every deployment or contingency, and measures are taken to reduce or mitigate those expected threats as dictated by operational priority.

My right hon. Friend asks an excellent question. I know that there has been a lot of interest, following the deployment in the Red sea, in what the lessons are. I can confirm that the Sea Viper capability has been at the forefront of this, being the Navy’s weapon of choice in the first shooting down of an aerial threat in more than 30 years. It is a cutting-edge weapons system, and I can confirm that Sea Viper will be upgraded, to further enhance this capability against the more complex and evolving threats that we face, including the ability to intercept missiles in their terminal phase.

Defence Manufacturing: Employment

11. What assessment he has made of trends in levels of employment in the defence manufacturing sector in the next 12 months. (901525)

In 2022-23, the Ministry of Defence spent £25 billion with UK industry. The most recent estimate shows that that supported 209,000 jobs across the country, of which 47,000 were in manufacturing.

My Tewkesbury constituency contains a lot of aerospace manufacturing, particularly for the defence sectors, but those companies have long complained to me that they cannot attract enough young people, particularly to take engineering jobs. The all-party parliamentary group on aerospace, which I co-chair, has the objective of enticing young people to go into engineering or at least consider it as a career. Will the Government do anything more to persuade young people to consider taking up the engineering opportunities that are there?

My hon. Friend asks an excellent question. It helps that we have lots of school groups and young people in the Gallery today, it being half term. I can confirm that last year’s defence Command Paper identified skills as a priority, including the shortage of engineering, digital, cyber, STEM, nuclear, and space-based skills. The defence head of profession for engineering, who also supports the Government science and engineering head of profession, has a defence youth engagement strategy that drives STEM outreach activities and the encouragement of engineering uptake in individuals aged four to 14.

Ukraine: Military Support

13. What recent discussions he has had with international partners on future military support for Ukraine. (901528)

Everything that I had intended to say in response to the hon. Gentleman was covered in response to the supplementaries to Question 2.

Lord Ismay said of NATO that it existed, among other things,

“to keep the Soviet Union out”

and “the Americans in”. The Foreign Secretary was misunderstood on a recent visit to the United States when he proposed that Congress should pass a new military aid package for Ukraine, and he was rebuffed by some Republicans in the House of Representatives. What can the Defence Secretary do to encourage the US to maintain its commitment to Ukraine and to NATO?

Again, we covered this earlier, but it is an important issue. The Secretary of State and I, and other Ministers from the MOD and across Government, put our shoulder to the wheel whenever we are in Washington, to impress on the US not only the importance of its continued commitment to Ukrainian security, but that Euro-Atlantic security is integral to US security. The US cannot simply look towards the Pacific; it needs to remain engaged in the Euro-Atlantic, in its own interests as well as those of NATO allies.

On my last visit to Ukraine a couple of weeks ago, I had several meetings with Ukrainian Ministers, who voiced their frustration and concern about the delay in setting up joint operations with UK defence manufacturers. Will my right hon. Friend assure the House that he is doing everything possible to speed the process up to allow the Ukrainians to produce their own kit, with our help, to help win the war?

The Secretary of State and the Minister for Defence Procurement have both been heavily engaged in this; indeed, the Minister for Defence Procurement led a delegation to Kyiv to catalyse exactly the idea that my hon. Friend mentions.

Emissions: Armed Forces

The MOD has already started its decarbonisation journey in support of the UK’s net zero commitment. At the Royal International Air Tattoo last year, I was pleased to sign the defence aviation net zero charter on behalf of the MOD. Working closely with our industrial partners, we are moving to cleaner and more efficient technology. The Army is building solar farms, and has invested £14 million in battlefield electrification. The Royal Navy’s cutting-edge catalytic systems are reducing emissions of greenhouse gases in its patrol vessels by up to 97%. Finally, the RAF is pioneering the use of sustainable aviation fuel.

It was a pleasure to attend the Global Charge dinner last October, and to see so many members of the armed forces, from all ranks, committed to tackling the climate crisis. However, the Defence Committee has described the MOD’s current reduction targets as “insufficiently demanding” under the greening government commitments—they are the lowest across all Departments. Will the Minister ensure that the next round of CC commitments will contain more demanding targets, not least to reflect the real ambitions and for members of the armed forces on the ground to see the devastation of climate change?

I know the hon. Lady is very passionate about this issue. I have just listed the ways in which the individual services are taking steps to reduce their emissions, but we always have to balance that against our overwhelming priority as a Department, which is to support the ability of our armed forces to defend these islands.

Innovative Defence Technologies

Defence is investing over £6.6 billion in advanced research and development. We are working with UK industry and academia to identify and invest in innovative technologies, ensuring that we have the capabilities we need to defeat our adversaries.

The RAF has traditionally had a very poor record when it closes bases in Lincolnshire—just walking away, leaving them to go to rack and ruin—but at RAF Scampton we had wonderful schemes for innovative defence technologies, such as a spaceport. Will the Minister now work with the Home Office and me to try to release the bulk of that base so that we can get all these exciting technologies going? The MOD cannot just wash its hands of the base, now that it has been passed to the Home Office. We are supposed to have joined-up government.

My right hon. Friend makes an important point. As he knows, RAF Scampton is no longer part of the defence estate, which means we do not have formal responsibility for it. What I would stress to him is that we are investing in innovation in Lincolnshire, including the significant investment into RAF Waddington associated with our Protector capability.

Trident Renewal

The Dreadnought submarine programme remains within overall budget and on track for the first of class, HMS Dreadnought, to enter service in the early 2030s. Inflation has remained higher than expected for an extended period and has had an adverse impact on the cost forecasts for the programme compared with the forecasts from a year earlier. As the programme is in its preliminary phases, it is too early to provide cost estimates for the replacement warhead programme.

I think that means the Minister does not know what the total lifetime cost of Trident replacement is going to be. Budgets in Government Departments and households alike are under immense pressure because of rampant inflation. Why do everybody else’s budgets have to be under pressure but there seems to be a blank-cheque approach to the renewal of Trident?

That is an extraordinary thing for the hon. Gentleman to say. He knows that we will shortly be publishing, before the end of the financial year, our supplementary estimate for the defence nuclear enterprise for the financial year. But as he knows, there is a cost in not having a deterrent. That is his policy: to do away with the deterrent on a unilateral basis, despite all the terrible threats we can see in the world and the nuclear sabre-rattling from Russia. His policy would be abject folly. We will invest in providing that ultimate guarantee to the people of the United Kingdom.

I know that the Minister and most of the House, leaving aside those on the Scottish National Benches, will agree that the continuous at-sea deterrent is absolutely central to the defence of the realm—there is no question about that at all. Does he agree that we must find a way of replacing Trident within budget, and that the worst possible thing that could happen to Trident would be an SNP Government in Scotland?

Topical Questions

This year I visited the United States—the White House and Capitol Hill—to lobby on behalf of Ukraine, as discussed today; Saudi Arabia and Egypt, given the crisis in the middle east; HMS Diamond, to thank the ship’s crew; and our sovereign base at Akrotiri, to thank the Typhoon pilots. Cyprus itself was also visited. Last week I was in Brussels for the NATO meeting and in Munich for the security conference. The whole House will know that defence never sleeps and will wish to join me in thanking the brave men and women who make that possible.

Will my right hon. Friend update the House on progress made at the NATO Defence Ministers meeting, particularly with regard to support for Ukraine?

Alongside the NATO meeting, there was the Ukraine defence contact group—a group of 52 countries, all of which support Ukraine. The big concern, of course, is ensuring that Ukraine has the things that it needs now and the planning to ensure that it can sustain the fight and push back against the enemy in 2024. That is why I have announced £200 million for drones, and why we have a 15-nation coalition for MPI—the multinational procurement initiative. At my request, we have also welcomed Australia to the international fund for Ukraine, with its commitment of 50 million Australian dollars to a fund that is now worth £900 million.

The agonies of the Palestinian people are extreme. We all want the fighting to stop now, for hostages to be returned now, for aid to be ramped up now, and a ceasefire that lasts permanently. What is the Defence Secretary doing to help his Israeli counterpart to accept that their threatened offensive against Rafah just cannot happen?

I agree with the right hon. Gentleman about the seriousness of the situation. As he has just heard, I visited Israel before the new year and had those conversations directly. I believe that it is in Israel’s interest, obviously in Gaza’s interest, and in the world’s interest to see that immediate cessation followed by a permanent ceasefire. We are doing everything we can to persuade the Israelis of that necessity and to put pressure on Hamas, who still hold hostages—if they were to release them, this thing could finish very quickly. We are also helping by ensuring that we work on plans for what happens in the north of the country and in southern Lebanon.

T4. Carshalton and Wallington is home to more than 1,700 veterans who have provided, and continue to provide, amazing service to our great nation. What steps are we taking as a Government to provide better support for veterans in our country? (901548)

Since 2011, the armed forces covenant and its consequentials have been the absolute lynchpin of public commitment to those who have served, and they have materially improved the lived experience of the service community. The Ministry of Defence is responsible for a number of services for veterans. The Veterans Welfare Service, for example, supports around 50,000 veterans every year, and the Office for Veterans’ Affairs co-ordinates across Government to advance support for veterans and their families.

The number of veterans claiming welfare benefits is rising steadily, and more than 52,000 are now in receipt of universal credit. Does the Minister find that a cause for celebration or concern?

I am a veteran, and I talk to veterans all the time, as does my right hon. Friend the Minister for Veterans’ Affairs. I do not recognise the picture that the shadow Minister describes. Since 2011, we have materially improved the lived experience of our veteran community and their families, and we will continue to do so—of that, he can be absolutely sure.

T7. When defence contracts are awarded, a 10% to 20% weighting is given to social value, which is the benefit that the contract would have for the local and wider community. Does that community benefit apply entirely for the UK, or are overseas companies and their communities considered equally? (901553)

That is a very good question. The distinction is between the Cabinet Office social value rules, which are applied across Government and are irrespective, and the rules that the Ministry of Defence applies to our procurement. There was discussion of the new medium helicopter earlier, for example. When that comes out, as I hope it will soon, we will be clear that we are looking to incentivise a strong commitment to the UK industrial base.

T2. The MOD recently published the findings of the inquiry into the fatal accident involving a Scimitar fighting vehicle on Salisbury plain, in which a young soldier tragically lost his life. One of my constituents was a witness to the accident, which has inevitably had a profound impact on him. The Government have said that they do not plan to make a formal response to the inquiry report, which is a harrowing read, but they have accepted all 52 recommendations. Does the Minister not think that the report requires a full and formal response from the Government, with a detailed action plan for adopting the 52 recommendations, given the seriousness of the incident and the wider implications— (901546)

Order. Please, just remember that this is topical questions and I have to get other Members in.

Very simply, I read that report and, as the hon. Lady has rightly pointed out, accepted all of its findings. We do not usually take it further, but I will certainly be happy to take a look at the case she has raised.

On the subject of recruitment and retention, on 7 November the Chief of the General Staff, Patrick Sanders—arguably the best general of his generation—told the Defence Committee:

“We are taking 400 soldiers out of the field army to put them alongside recruiters, because—guess what?—it takes a soldier to recruit a soldier.”

Never was a truer word spoken. So when are we finally going to sack Capita?

I thank my right hon. Friend for his question—I knew he would get Capita in there somewhere. He will be familiar with the Engage to Recruit programme, which is currently underway and having some success in getting soldiers to recruit soldiers. That is probably why, as I touched on in my earlier answer, we are now seeing some extremely promising recruiting figures, including in January—the best figures for six years.

T3. So far, Israel has ignored international appeals to not indiscriminately attack civilians and not take steps that are basically razing Gaza to the ground. It now looks as though it is going to ignore international opinion about entering Rafah, so has the time not now come for us to consider not selling to Israel arms that can be used in those totally unacceptable ways? (901547)

Arms deals and export licences are dealt with in the normal way, but the hon. Member will be interested to hear that actually, not many arms sales take place in the direction of Israel at all. Off the top of my head, I think it was just £42 million last year, and that was mostly for protective equipment.

Late last year, diesel got into the water supply at the Trenchard Lines camp near Upavon in my constituency. I commend the resilience of the families who live there, and also of the MOD, which acted very quickly to ensure that there was a temporary supply of water. Those families are still living on that temporary supply, so can the Minister assure me that attention is being given to sorting out this problem and ensuring a permanent supply of clean water?

I am very grateful to my hon. Friend for raising this matter—he is a champion of the defence community in his constituency, and I thank him for his early engagement on it. I understand that the local authority regulator, following the completion of rigorous testing, has confirmed that the water quality at Trenchard Lines is acceptable, and it is now safe for personnel working and living there to use the mains supply. I will double-check that and write to him, but I am grateful for his comments on the performance of the Defence Infrastructure Organisation in that regard.

T5. Today we have seen news of another serious attack by the Houthis on a commercial vessel in the gulf of Aden. Do Ministers think that more Royal Navy ships will need to be deployed to the region, given the ongoing threat to merchant shipping? (901551)

The hon. Gentleman will be familiar with answers I gave last week or the week before at the Dispatch Box, when I said that we will always look at what is happening in the Red sea. I have been there to meet the crews myself, and will make a judgment based on the reality on the ground. There is now also input from a conglomeration of EU countries that are coming to join Prosperity Guardian, and we welcome that input.

In the debate on the Red sea on 24 January, I asked for confirmation that HMS Albion and HMS Bulwark would not only not be scrapped, but would not be mothballed. The deputy Foreign Secretary, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), with the Secretary of State for Defence alongside him, said in response that I was

“absolutely right to detect the supportive view of the Secretary of State for Defence.”—[Official Report, 24 January 2024; Vol. 744, c. 402.]

However, a journalist was subsequently told by the Ministry of Defence that nothing had changed, so are those ships going to be mothballed or not?

My right hon. Friend can rest easy: I have been down to visit HMS Albion since those questions, and I can confirm that one of those ships will always be being made ready to sail. He can therefore be very relieved.

T6. Suicide rates among veterans under the age of 24 are two to four times higher than in the civilian population, but figures show that this group is less likely to be in touch with mental health services. How will the Minister ensure that young veterans can access the support they need? (901552)

I am grateful to the hon. Lady for her question—she has been consistent in her inquiry into this matter. She will be reassured to know that across the service community, the rate of suicide is lower than we would expect in the civilian population. There is a subset of young men within the serving population for whom there is an excess, and we are looking very closely at that. I very much commend to the hon. Lady the suicide action plan that we have published, which lays out what Defence is doing to drive down the suicide rate in our armed forces. Whichever figure it is, it is too high.

The whole House would like to see a larger Army, Navy and Air Force—there is unanimity on that point. Central to that must be not only the armed forces recruitment programme, but the Army centralised training scheme. Will my right hon. Friend confirm that the pause in capital spending by the MOD, which was announced last week in the press, will not affect those two schemes, and that they will continue in as full-blooded a way as they are at the moment?

T8. The Royal Navy carriers HMS Queen Elizabeth and HMS Prince of Wales entered service six and seven years late respectively, with their cost rocketing to over £8,000 million—more than 20 times that of Scotland’s ferries—while being plagued with problems and a lack of aircraft. What assurances can we have that these hugely expensive carriers will provide the defence capability for which they were designed? (901554)

The whole House recognises the irony of an SNP Member talking about ships being delivered late. The whole House will want to welcome the extraordinary work done by those on HMS Prince of Wales who got the ship ready to leave not at 30 days’ readiness, which is what they were ranked for, but in eight days. I would have thought that congratulating the ship’s company would be the right thing to do.

Does the Secretary of State remember that the British Army used to be the biggest trainer of young men and women in the country and that we produced so many skilled people? When can he take us back to those balmy days?

Since 2014, we have been training 60,000 Ukrainian troops, proving that we know how to get troops trained. We still train extraordinary numbers. I think I am right that, on all forms of training more broadly, we are breaking some of those records. We will ensure that we have armed forces that are fit for the 21st century.

UK Economy

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the UK economy entering recession.

High inflation remains the biggest barrier to growth, which is why halving it is still our top priority. Thanks to decisive action supported by the Government, inflation has fallen from over 11% to 4%. The Bank of England is forecasting that it will fall to around 2% by early summer, in only a matter of months, which is much faster than previously thought.

It is important to put all this in context. Just over a year ago, the Bank of England was forecasting the longest recession in 100 years. That has not happened, and the British economy has proved resilient in the face of unprecedented shocks. Forecasters, including the Bank of England and the International Monetary Fund, agree that growth will strengthen over the next few years, with the IMF forecasting that we will grow faster than Japan, Germany, France, Italy and many others, on average, over the next five years. Wages have been higher than inflation for six months in a row, unemployment remains very low, and we are backing British business by delivering the biggest business tax cut in modern British history and rewarding work by cutting taxes for working people.

These are all reasons to be positive about the economy turning a corner. If we stick to our plan, we can be confident of seeing pressures reduce for families and of achieving healthy economic growth. At the autumn statement, we unveiled 110 growth measures, including unlocking £20 billion of business investment. This includes a substantial labour market package, delivering a tax cut to national insurance for 27 million people, as well as reforming pensions and extending investment zones. The real risk to economic growth and prosperity in this country is the fact that the Labour party has no plan for growth—no plan at all. While they may pretend that they have abandoned their £28 billion pledge, they are still committed to their damaging 2030 energy policy, which, as the Leader of the Opposition has said, costs £28 billion. All of us across this House know what that means: higher taxes and lower growth with Labour.

The Chancellor should be here explaining why Britain has fallen into recession. Will the Minister explain why he has been left to answer these questions, and where exactly the Chancellor is? The Chancellor should be accountable to MPs and to our constituents, and answer for his failure in the House. What an insult to all those people who go to work every day and experience the reality of 14 years of Conservative economic failure that he has simply failed to turn up.

Does the Minister accept that the Prime Minister’s promise to grow the economy is now in tatters? Will the Minister explain why the economy is now smaller than when the current Prime Minister entered 10 Downing Street? Does the Minister accept the misery that this Government have caused homeowners with their kamikaze Budget, leaving a typical family renewing their mortgage paying an additional £240 every single month?

The Chief Secretary is also notable for her absence today, and was last seen refusing or simply failing to recognise that their target measure of debt as a share of GDP is rising, not falling. Following her rebuke this morning from the chair of the UK Statistics Authority about misleading the public, can the Minister inform the House whether the Chief Secretary will again be relying on incompetence as her best defence?

It is not good enough. The whole country knows that the economy is not working for working people under the Conservatives. It is time for change. If the Government seriously think everything is fine, why do they not take their record of failure and let the British people decide?

I am coming to that.

The right hon. Lady started by talking about the Chancellor; as Economic Secretary, I am perfectly entitled to answer on behalf of the Department and I will do so today. The main thrust of her remarks was on growth; let me deal with that in detail.

The first point to recognise is the international context that we all find ourselves in. [Interruption.] It happens to be true. For example—to describe that international context—10 EU countries were in recession in 2023. In relation to forecasts, the Office for Budget Responsibility’s original forecast was that there would be a contraction of 1.5% in the economy; we have significantly outperformed that. As I have said, the Bank of England forecast the longest recession in 100 years; we have significantly outperformed that. On wages, I think this is the sixth month in a row when wages have been higher than inflation, which, as I have said, we have more than halved.

On the Chief Secretary, what she was explaining is that we were and are meeting our fiscal rule, which is that debt will be falling in the fifth year of the forecast excluding the Bank of England. That is what she explained, and that is what I am reiterating for the House. [Interruption.]

Labour Members do not like hearing this, but they have absolutely no plan on the economy. We have been clear about our plan, and it is starting to bear fruit with wages, with cutting taxes for working people starting in January, with higher business investment as a result of our full expensing in the autumn statement. The shadow Chancellor does not have to take it from me; the Office for Budget Responsibility said that the two fiscal events in 2023—the Budget and the autumn statement—would represent the largest increase to GDP that it has ever scored. What I say to her and the House is this: our plan is working; stick with the plan and do not throw it away with the Opposition.

It is good news that unemployment has stayed low by European standards, and the economy is still generating plenty of job vacancies. Will the Government take more steps to help more people into those jobs, so that we can get faster growth, bring down the benefit bill and boost their incomes?

The whole House knows that my right hon. Friend is somewhat of an expert on matters relating to the economy. To answer his point specifically, the national insurance tax cut was scored at the last fiscal event—the autumn statement—as significantly increasing the number of people in work. Although I will not speculate on fiscal events, that point has been very much noted by me and the whole Treasury.

The Minister spoke about resilience, but the fourth quarter contraction in the economy was the biggest quarterly fall since early 2021 at the height of the covid pandemic, so I am not sure he is quite right about resilience. He also spoke about growth, but the Government told us in November that growth is not forecast to exceed 2% in any year in the forecast period. How modest the Minister’s ambitions are.

National debt is still approaching 100% of GDP—£3 trillion. The consequences of Brexit are suppressing growth, and that poses a challenge to the UK Government’s fiscal targets. Although it is welcome that inflation has fallen, prices remain high. Prices are not falling; they are simply going up slightly less steeply than they were a month or two ago. It is obvious that what the economy needs is growth, and the investment to generate that growth, but given that business investment, according to the Government, is forecast down this year by 5.6%, private dwelling investment is forecast down this year by 6%, and flat at 0% next year, and general Government investment is forecast down in ’25, ’26, ’27 and ’28, where will the investment for growth come from?

I deeply respect the right hon. Gentleman, and I will take his points one by one. On resilience, the way we get resilience for ordinary people and for households is to ensure that real household incomes increase. Since 2010, they are up 12%. We are trying to increase business resilience with our full expensing regime, which is revolutionary in the advanced world. Full expensing will enable more businesses to invest and will deal with the chronic weakness of the British economy, which is weak investment. That is why we are doing that.

The right hon. Gentleman mentioned growth. Growth is not as high as we would like, and that is the case across the whole of Europe and the whole of the industrialised world. That is why the Chancellor in the last fiscal event put in place 110 growth measures. We have a plan for growth over the long term, and we will deliver it. The right hon. Gentleman mentioned debt. To repeat the point I made to the shadow Chancellor, debt is falling in the fifth year of the forecast according to our fiscal rule, which excludes the Bank of England. That is not just the fiscal rule now; it has always been the fiscal rule.

The right hon. Gentleman makes the fair point that lower inflation does not mean that prices are falling. Indeed, lower inflation is a lower rate of increase. We all know that in this House. That is why bringing down inflation is so important, and the Opposition, with their plan to recklessly jack up borrowing and taxes to the extent of £28 billion, will increase inflation.

I repeat that investment has been a long-term weakness of the British economy. We are taking long-term measures to deal with it, and I hope that in the next fiscal event—the Budget—we will continue in that vein.

May I thank my hon. Friend for his distinguished service as a voice of His Majesty’s Government? I refer him to what the former chief economist of the Bank of England, Andrew Haldane, said today, referring to a “double blow” to the credibility of the Bank of England, which was late to put interest rates up and missed inflation, and has been slow to reduce them, hammering the economy. Does my hon. Friend agree that the Bank of England is no longer showing itself to be competent and that its independence must be questioned?

I do not think that I will quite agree with my right hon. Friend. It is very important that we leave the Bank of England to do its work and respect its independent mandate, but that, from the Treasury, we do what we can to bring inflation down and support it in that mandate. As I said, the Labour party’s plans—whether it claims to have dropped them or not—will lead to an increase in borrowing or an increase in taxes, which will significantly damage that aim.

I think the Minister is failing the audition. Labour will not take lectures from him about borrowing, which was at 67% of GDP when we left office and is now nearly 100%. He is claiming that somehow growth is happening, but we are actually in a recession, which means that there is no growth; in fact, there is negative growth. GDP per capita fell in every quarter of last year, meaning that everybody is getting worse off under his appalling stewardship of the economy. Is it not time that the junior Minister went back to his boss and told him, “It’s all over. Time’s up. Call the general election.”?

It is definitely above my pay grade to call elections. In relation to GDP per capita statistics, which are important—the point of them is to try to get a sense of what is happening to individuals or to individual households and families—I would say—[Interruption.] Let me—[Interruption.] I wish the shadow Chancellor would allow me to respond. Real household incomes, which are as good a measure as any to see what is happening to individuals and families in our economy, are up 12% since 2010. If we are looking at people at the bottom of the income scale, the rise in the national living wage that comes in in April will mean a rise since 2010 of about 30% in real terms for people on full-time minimum wages. Those two statistics are examples of what has happened to real people on the ground.

I thank the Minister for updating the House. Does he agree that people in Redditch and elsewhere are concerned about negative economic news—although it almost always turns out to be wrong? Most of all, does he agree that the greatest risk to my constituents in Redditch and those across the country is a Labour Government? Labour has said it can somehow magically get £28 billion of green growth benefits without paying for them. We all know that my constituents will be paying for that through extra borrowing and higher taxes.

The Minister says the Government’s priority is backing British business, cutting inflation and reducing the pressure on British families. When the Government admit this measure will increase inflation, when British business is tearing its hair out at the chaos caused by not knowing what the charge will be and who will pay it—with less than 10 weeks to go—and when British consumers will find that it causes food shortages and an increase in food prices, why on earth are the Government going ahead with the Brexit border tax? Will the Minister commit here and now to cancelling it, so that we can stop this inflationary measure—yes or no?

I thank the hon. Lady for focusing on inflation. She is right that it is critical, and bringing it down is a focus for the Government. The House has heard her point about the European Union, but I would add that we have a clear plan for bringing down inflation, which we will continue to carry out. She has to ask those on her Front Bench why they do not have one.

For too long, too many people in the Treasury—not my hon. Friend, who is an excellent Minister—have thought that the best way to grow the economy is to fill the country with more and more people. Will the Government recommit to insisting that anyone who comes here to work should earn the average UK earnings of around £33,000 a year? That means no shortage schemes and no exemption for care workers or the NHS, but that in those sectors we pay proper wages, we get people off benefits—too many people are on them, dragging down our economy—and we seriously cut mass legal migration; and, by the way, if there is a general election, let us give our people something to vote for.

My right hon. Friend makes an important point about migration. I completely agree that we need higher earnings for British people, not an economy where we import too many people and keep earnings down. That is why we have been focusing on raising the national living wage and ensuring that ordinary household incomes will go up as a result of this Government’s policies, as I have explained. It is worth pointing out that certain things happened last year, such as people fleeing Ukraine and Hong Kong, which meant that the immigration numbers were particularly high. The broad thrust of what my right hon. Friend said is correct: we want a high-skill, high-wage economy.

I do not know whether the Minister realises quite how infuriating people find watching his Government tell them, “Everything is fine”, “It is all going really well” and “There’s nothing to see here”, when every day they feel poorer and small businesses are closing. If the Prime Minister and the Chancellor cannot face reality, how on earth can anyone trust them to solve the economic crisis that their Government created?

Let me be clear with the hon. Lady, whom I have a huge amount of time for as a very good Member of Parliament: it is not our position that everything is okay. There has been a challenging international context: a once-in-100-years pandemic, and an energy crisis caused by Putin’s war in Ukraine. This Government have done everything we possibly can to build an economy for growth, and I hope we have her support.

What distinguishes this recession is the 800 jobs that have been created every day since this Government came to power in 2010—the very antithesis of anything ever achieved by a Labour Government, who have always left unemployment higher than they found it—is it not?

It is—and I would add something else: the figures for home repossession were much higher when there was a recession under the Labour Government in 2008-09, in comparison with our record now, and unemployment now is much lower than it was then. Though we are in challenging times, the economy is turning a corner. Our record compares very favourably Labour’s.

The Chancellor said last May that he was comfortable with the prospect of a recession. Now that my constituents in Selby and Ainsty are suffering under that recession’s effects, would the Minister chalk it up as a job well done?

The hon. Gentleman will do well. There is nobody on the Government Benches who welcomes adverse economic situations for anybody. That is why we are doing everything we can—straining every sinew—to grow the economy. All the measures I have laid out will continue, but they would be put at risk by those on his Front Bench being in office.

Before I came to this House, I was a director of quite a large retail group in North Norfolk. No one has made the point that in the last quarter of the year the country saw Babet, Ciaran, Debi, Elin, Fergus and Gerrit—six major storms and floods. How many were there in the previous year? Absolutely none at all. Will the Economic Secretary tell everybody that of course the economy will not function properly in the grip of storms and floods every fortnight? We are not in recession, but the more we talk it up, the more we will be.

I thank my hon. Friend for that question—I would say that the loss of large retail groups in Norfolk is the House’s gain. His point about the international context is serious and important. Although Labour Members do not like to hear it, facing a once-in-100-years pandemic and Putin’s illegal war in Ukraine, which caused energy prices to skyrocket, will have adverse impacts on the economy. The country understands that and the House understands that; the Labour Front Bench should also understand it.

This recession is a direct result of the choices that this Government have made. Years of potential growth have been missed, and the Government have failed particularly to capitalise on the green transition. Green investment will be worth £1 trillion globally by 2030, including half a million jobs in this country. When will the Government bring forward a green investment programme to match the ones in the US or in Europe?

First, our record on decarbonisation beats anywhere else in the G7, so we do not take lessons from the United States or any other country in that regard. In relation to the green investment plan by 2030, the hon. Lady should direct her ire at those on the Labour Front Bench for not being clear as to what their plan is. The Leader of the Opposition says—[Interruption.] Well, it is important because politics is a contest of ideas, as indeed it is a contest between two parties. If Labour Members believe they can spend an extra £28 billion without that having an impact on taxes and borrowing, they are trying to pull the wool over the eyes of the British people.

The past couple of years have been very difficult economically, and I certainly do not treat the state of our economy as the giggle-fest that Labour Members seem to be having today. Over the past few weeks, I have met many businesses in my constituency—large and small—and a number have told me that they feel conditions are getting better, demand is growing and orders are coming back. Constituents have also told me that they have noticed food prices dropping in our supermarkets. Does the Minister agree that the most damaging thing that could happen to our economy now would be for those on the Labour Benches to continue to talk our economy down?

My right hon. Friend is correct that things are starting to get better for many people across the country, including small businesses. We have more than halved inflation, which is now down below 4%; we think that in the coming months it will go to 2%, which is the target. Of course, once it hits that target, we hope that interest rates will also start coming down, which will make a big difference to ordinary people up and down the country.

I applaud the Minister’s willingness to take on this unenviable assignment, unlike his right hon. Friends. The international context that he refers to is that Japan and the UK are the only G7 countries in recession. Inflation in the UK, which he has referred to, is the highest in the whole G7. Why is the UK economy doing so much worse than comparable economies elsewhere?

The right hon. Gentleman makes an interesting point, but I would say that our economy entered difficult times at a different point in the cycle from certain other economies. To fully assess the performance of all economies, we have to wait for the end of this whole period, so I would not prejudge exactly at this stage. I simply say that the difficulties we are facing have affected every single economy, although the nature of different economies means that they are affected at different times. We are putting in place comprehensive growth measures and comprehensive measures to bring inflation down. I also note that UK interest rates are roughly middle-of-the-pack compared with other countries of comparable size. We will keep all this under review and, at the next fiscal event, will take further measures to increase our potential growth rate over the long term.

Does the Minister welcome the news that the South Yorkshire Mayor has finally recognised the economic importance of Doncaster-Sheffield Airport and is at last starting to use the powers given to him to begin the process of getting it up and running again? Does he agree that that has taken far too long—it is years since the airport closed —and that the South Yorkshire Mayor should have used his powers years ago, rather than waiting until nine weeks before he is re-elected?

I thank my hon. Friend for pointing out once again what a brilliant champion he is for his constituency. I am sure his constituents have heard that comment, and that he will continue to make that point.

Lordy, lordy! It is like listening to the Red Queen in “Alice Through the Looking Glass”, who invented six impossible things before breakfast! How on earth can we have confidence in what the Minister says when the UK Statistics Authority had to tell off the Chief Secretary to the Treasury, the right hon. Member for Sevenoaks (Laura Trott), for making false claims about tax cuts; when Evan Davis had to school her at length and she refused even to understand how wrong she was about debt falling as a percentage of GDP, when it is going up; and when the Minister himself actually said that the NHS accounts for 42% to 43% of everything the Government spend, when it is only 15%? Can he confirm one fact: these two years will see the biggest fall in living standards since records began? That is why people are going to vote the Government out, isn’t it?

I have already explained the Chief Secretary’s comments. In relation to my own, I was referring to current spending and not overall spending. I clarified that as well. Look, there have been difficulties for so many millions of people across the country and, as the hon. Gentleman knows, I have never sought to minimise that from this position or from any other position in the House. We have faced once-in-a-hundred-years challenges. The Government have faced them and taken the right action to deal with them. The cost of living support package is worth over £100 billion, to the tune of more than £3,700 per person. We have dealt with those challenges and we have a plan now to grow the economy to grow our way out of them. I am afraid that Labour Members and the Labour Front Bench do not have that sort of plan, which is why I would not make the assumption that he makes about the election.

The number of those who are on long-term sickness benefits in Blackpool has increased fourfold over the last few decades. That represents an enormous loss of potential, and it is also hurting economic growth and productivity. The Government’s proposed reforms in this area are to be welcomed, but rather than delaying them until next year, what is preventing the Government from bringing them in this year?

I will take that point away. I think the hon. Gentleman is referring to the next financial year. At the next fiscal event, the Budget, the Chancellor will bear what he has said in mind.

Fourteen years of Conservative mismanagement of the economy are having disastrous impacts on working people. For example, musicians are waiting months to be paid because HMRC is failing to process A1 forms on time for musicians touring in Europe. The trade body LIVE—Live music, Industry Venues and Entertainment—told me that in one case 26 musicians, performers and sound engineers were not paid for more than three months after their tour to Spain, due to delays in processing A1 forms. Even worse, in response to written questions, I have been told that service standards for those forms will not be met by HMRC until at least April 2024. Does the Minister agree that those delays are totally unacceptable, particularly when our musicians are already having to cope with a challenging financial landscape, made worse now by the news of a recession?

I agree that we need to speed up the processing of A1 forms, as the hon. Lady describes. I am sure the Treasury heard that point and I will ensure my ministerial colleagues take what she says very seriously indeed.

Whatever spin the Government may put on it, forecasts show that the economy has officially entered a recession. However, people out there have been suffering grinding economic pressure for years. Average energy bills are 59% higher than they were in 2022, and more than 600,000 Welsh households are in fuel poverty. Meanwhile, the profits of energy companies such as British Gas have increased tenfold to £750 million. This is the Minister’s chance to make a difference to every household. He has referred to the next fiscal event. Will he act to extend and backdate the windfall tax on energy companies that are currently profiteering from households everywhere?

The right hon. Lady is right that many people have had very challenging times over the last couple of years. Let me correct something that I previously said to the House: the increase in real household incomes since 2010 is actually 8%, while the increase in GDP per capita is 12%. I wanted to put that on the record. As for taxes, I cannot speculate about what will happen at the next fiscal event.

According to the forecast, in five years’ time debt will be higher than it is now. Is this a reasonable time to be talking about tax cuts, and does their doing so not suggest that the Government have learnt nothing from the Budget of September 2022?

I assure the hon. Gentleman that this Chancellor and this Government are very different from those in September 2022 to which he refers. As for debt, I repeat that we are keeping to our fiscal rule, which is and has always been that debt will be falling in the fifth year of the forecast—falling, once we exclude the Bank of England. That has always been our position, and it will continue to be the case.

The Minister has made no mention of the importance to the UK Treasury of North sea oil, and indeed the danger to the Scottish economy of the closure of Grangemouth Refinery. Given that the UK Treasury received £8 billion in revenues from the North sea last year and is expected to receive £6.1 billion this year, can it not find the tens of millions—not the tens of billions that it will receive in revenue—to ensure that the HydroCracker can be restarted and the profitability of the refinery increased threefold?

I will take away the hon. Gentleman’s specific point and ensure that the Treasury gets back to him, but his broader point about offshore oil and gas in the North sea is very important. It is critical that we support the oil and gas sector, not just for the tax revenues but for the livelihoods and prosperity of the United Kingdom, and this Government stand four-square behind it.

There is overwhelming evidence that the lower the economic inequalities, the higher economic growth will be. We know from the Office for National Statistics that between 2021 and 2022 the disposable incomes of the poorest fifth of households shrank by 3.4% while those of the richest fifth increased by 3.3%, and that reflected the position in the preceding 10 years. What assessment has the Minister, or the Chancellor, undertaken to estimate the impacts of these increasing inequalities on our shrinking growth?

When we are talking about people at the bottom end of the income scale, it is important to note that those on the full-time national living wage—which we will be increasing by the largest ever amount in April this year—will be 30% better off than they were in 2010.

News that the UK is officially in recession comes as no surprise to my constituents, who have been battered by this Tory cost of living crisis. Food inflation is still double the headline rate of inflation, and that is not only affecting the price of the weekly shop but having a hugely negative effect on my local pub and hospitality sector, with many businesses on the brink. Instead of their fantasyland spinning that everything is going fine, what measures will the Government introduce to bring food inflation down?

As I have said many times this afternoon, inflation is a target for this Government: we aim to ensure that we continue to bring it down, and indeed we expect it to get to 2% in the coming months. In relation to food inflation specifically, at the last fiscal event we introduced full expensing, which will enable food manufacturers, supermarkets and others to increase their investment hugely, because it completely nets off against their tax—100% of the cost of their investment is netted off. The impact will be increased investment that will reduce their costs and reduce the cost of food in our shops. That is one of many measures that we are introducing to reduce food inflation.

The Prime Minister said he was going to grow the economy and he has obviously failed: we are now in recession. In my constituency, families and small businesses are under severe pressure. Can the Minister possibly explain how he is going to address these very serious problems?

All I would say to the hon. Gentleman is that we are in a very challenging international context and we have performed better than the international forecasts. We had high inflation, which really bedevilled this economy a couple of years ago, but we have more than halved it. We have a plan to grow our way out of this, as was shown by the last fiscal event, where we unveiled, I think, 110 growth measures. That is our plan. The Labour Opposition do not have a plan. If this country sticks with our plan, we will grow our economy significantly over the coming months and years.

The Minister keeps trying to hide behind the war in Ukraine and the impact of the pandemic, but the reality is that those are affecting every country in the world. Would he not admit that the exacerbating factor—the thing that has led most to economic decline, to massive labour shortages and to rampant inflation here in the UK—is Brexit?

The economy is in recession and the consequences for the public finances are not the fault of those people infected and affected through the contaminated blood scandal, the largest treatment disaster in the NHS. I was hoping to ask the Chancellor this question, but can the Minister confirm whether money has already been ringfenced to pay compensation to those people, as set out in the final recommendations on compensation by Sir Brian Langstaff in April 2023?

I believe that the right hon. Lady asked a similar question of the Chancellor at the last Treasury questions, and the Chancellor responded by saying that he was absolutely clear about the need to compensate people in the way that she has described. He will update the House in due course and indeed update her with further details in response to her question.

The Prime Minister has failed to get growth and industry has completely lost confidence in this Government. With projects cancelled, HS2 cancelled, Building Schools for the Future cancelled, hospitals never built and an absolute failure to bring down high energy prices, it is no wonder that business investment forecasts are down. With the US and the EU incentivising investment, what is the Minister now going to do to get the investment we need in the green manufacturing industries of the future?

To increase investment we brought in full expensing at the last fiscal event, which should represent an increase over the forecast period of £14 billion of investment and deal with the chronic weakness of our economy over generations. That is what we are doing to increase investment. In relation to green investment in particular, what we are not doing is having a huge unfunded £28 billion plan—or maybe now it is not Labour’s plan; maybe it is a secret plan or maybe the Labour Front Benchers have stopped their plan. We have a responsible costed plan to increase investment; the Opposition do not have one.

Let’s try this again. Public sector net debt is set to rise from 89% of GDP this year to 92.8% of GDP in 2028-29, according to the most recent Office for Budget Responsibility forecast. In case the Minister does not understand, that number is higher than today’s. The Prime Minister promised to reduce debt, but it is increasing. The plan isn’t working, is it?

The Prime Minister and the whole Government are committed to reducing debt as we get to the end of this economic forecast period, which is what we are doing.

The Minister’s rosy picture of the economy shows a complete lack of awareness of what is actually going on in this country. He claims that the Labour party is somehow a risk to growth, but it is his party that has taken the country into recession. That shows a complete lack of self-awareness, too. That is the nub of the matter.

We are in a recession, yet the Chancellor is nowhere to be seen. I would have thought this was important enough for him to be here to answer questions. Given that growing the economy is yet another of the Prime Minister’s pledges that has not been met, who does the Minister think should carry the can for this failure: the Prime Minister or the Chancellor?

I will have to take the hon. Gentleman’s criticism of my self-awareness on the chin, but his broader point is serious. He is asking whether the Government and I are light-hearted or think that everything in the economy is absolutely fantastic, but it is not. That is why we have taken the measures that we have. It is why we cut tax for working people, beginning in January. It is why we are increasing business investment. It is why we had a more than £100-billion package of cost of living support, because we know how much many ordinary people in this country are suffering. And it is why we are trying to grow our economy overall, because that will result in greater prosperity for the country and more money for our public services. The Labour party puts all that at risk.

The Government are failing. An 81-year-old constituent told me that he cannot remember the economy and living standards ever being this bad. Can the Minister not see that, under his Government, Britain is worse off?

I do not agree with the hon. Lady. I will not repeat everything I just said to the hon. Member for Ellesmere Port and Neston (Justin Madders), but this Government and this Treasury are sticking to our plan for growth. That is all put at risk by the Labour party.

The Office for Budget Responsibility assessed Boris Johnson’s trade and co-operation agreement, which sets out the trading relationship between the UK and the EU, at the beginning of last year, and it said that the TCA has reduced long-run productivity by 4%. Why does the Minister think that is?

We built on the trade and co-operation agreement through the Windsor framework, and the Opposition do not propose to change it. Indeed, the TCA is fundamental to the stability of our relationship with the European Union, and I do not think the country would benefit from unpicking it once again.

I thank the Minister for all his answers. The questions have not been easy. The Office for National Statistics has revealed that there was a 0.3% decline in GDP between October and December 2023. Given that the strength of the economy was, and still is, the subject of one of the Prime Minister’s pledges, what steps is the Minister taking to reverse this decline, and to re-instil confidence in the Government’s economic plans?

I have already laid out the steps that we are taking, and there is a critical need to make sure that all the regions of our country benefit from those steps. That is one of the reasons why we put so much effort and focus into investment zones over the last couple of years. We hope that these investment zones will continue to increase growth in the economy, not only at a macro level, but for people in every region of this country—particularly in Northern Ireland and the other regions that perhaps did not benefit from this country’s previous growth. We are committed to strengthening that regionally.

Post Office Governance and Horizon Compensation Schemes

With permission, Mr Speaker, I shall make a statement about Post Office governance and the Horizon compensation schemes.

Over the weekend, several serious allegations were made against the Government, my Department and its officials by Henry Staunton, the former chair of the Post Office. The allegations are completely false, and I would like to make a statement to the House so that hon. Members and the British public know the truth about exactly what has happened. I would like to address three specific claims that Mr Staunton made in his Sunday Times interview—claims that are patently untrue.

First, Mr Staunton alleges that I refused to apologise to him after he learned of his dismissal from Sky News. That was not the case. In the call he referenced, I made it abundantly clear that I disapproved of the media breaking any aspect of the story. Out of respect for Henry Staunton’s reputation, I went to great pains to make my concerns about his conduct private. In fact, in my interviews with the press, I repeatedly said that I refuse to carry out HR in public. That is why it is so disappointing that he has chosen to spread a series of falsehoods, provide made-up anecdotes to journalists and leak discussions held in confidence. All that merely confirms in my mind that I made the correct decision in dismissing him.

Secondly, Mr Staunton claims that I told him that “someone’s got to take the rap” for the Horizon scandal, and that was the reason for his dismissal. That was not the reason at all. I dismissed him because there were serious concerns about his behaviour as chair, including those raised by other directors on the board. My Department found significant governance issues. For example, a public appointment process was under way for a new senior independent director to the Post Office board, but Mr Staunton apparently wanted to bypass it and appoint someone from the board without due process. He failed to properly consult the Post Office board on the proposal; he failed to hold the required nominations committee; and, most importantly, he failed to consult the Government, as a shareholder, which the company was required to do. I know that hon. Members will agree with me that such a cavalier approach to governance was the last thing we needed in the Post Office, given its historical failings.

I should also inform the House that while Mr Staunton was in post, a formal investigation was launched into allegations made regarding his conduct, including serious matters such as bullying. Concerns were brought to my Department’s attention about Mr Staunton’s willingness to co-operate with that investigation.

It is right that the British public should know the facts behind the case, and what was said in the phone call in which I dismissed Mr Staunton. Officials from my Department were on the line; the call was minuted, and a read-out was sent after it took place. Today, I am depositing a copy of that read-out in both Libraries of the House, so that hon. Members and the public can see the truth. In those minutes, personal information relating to other Post Office employees has been redacted. For all those reasons, an interim chair will be appointed shortly, and I will, of course, update the House when we have further details.

Finally, Mr Staunton claims that when he was first appointed as chair of the Post Office, he was told by a senior civil servant to stall on paying compensation. There is no evidence whatsoever that that is true. In fact, on becoming Post Office chair, Mr Staunton received a letter from the permanent secretary of the Department for Business, Energy and Industrial Strategy, Sarah Munby, on 9 December 2022, welcoming him to his role and making it crystal clear that successfully reaching settlements with victims of the Post Office scandal should be one of his highest priorities. That letter is in the public domain. The words are there in black and white, and copies of the correspondence will be placed in the Libraries of both Houses.

The reality is that my Department has done everything it can to speed up compensation payments for victims. We have already made payments totalling £160 million across all three compensation schemes. That includes our announcement last autumn of the optional £600,000 fixed-sum award for those who had been wrongfully convicted. It is the strongest refutation of those in this House who would claim that we acted only after the ITV drama, “Mr Bates vs The Post Office”, was shown. British people should know that a dedicated team of Ministers and civil servants have been working around the clock for many months to hasten the pursuit of justice, and bring swift, fair redress to all those affected.

To that end, I am pleased that all 2,417 postmasters who claimed through the original Horizon shortfall scheme have now had offers of compensation. The Post Office is dealing promptly with late applications and cases where the initial offer has not been accepted. My Department has also established the Horizon compensation unit to ensure that money gets to the right people without a moment’s delay. Last autumn, we announced an additional £150 million to the Post Office, specifically to help it meet the costs of participating in the Post Office-Horizon inquiry and delivering compensation to postmasters. In all, we have committed around £1 billion to ensure that wronged postmasters can be fully and fairly compensated, and through forthcoming legislation, we are taking unprecedented steps to quash the convictions of postmasters affected by the Horizon scandal.

In short, we are putting our money where our mouth is, and our shoulders to the wheel to ensure that justice is done. It is not fair on the victims of this scandal, which has already ruined so many lives and livelihoods, to claim, as Mr Staunton has done, that things are being dragged out a second longer than they ought to be. For Henry Staunton to suggest otherwise, for whatever personal motives, is a disgrace, and it risks damaging confidence in the compensation schemes that Ministers and civil servants are working so hard to deliver. I would hope that most people reading the interview in yesterday’s Sunday Times would see it for what it was: a blatant attempt to seek revenge following dismissal.

I must say that I regret the way in which these events have unfolded. We did everything that we could to manage this dismissal in a dignified way for Mr Staunton and others. However, I will not hesitate to defend myself and, more importantly, my officials, who cannot respond directly to these baseless attacks. Right now, the Post Office’s No. 1 priority must be delivering compensation to postmasters who have not already been compensated. There were those who fell victim to a faulty IT system that the Post Office implemented, and that it turned a blind eye to when brave whistleblowers such as Alan Bates sounded the alarm. We said that the Government would leave no stone unturned in uncovering the truth behind the Horizon scandal, and in pursuing justice for the victims and their families. We are delivering on that promise, while looking for any further possible steps that we can take to ensure the full and final settlement of claims as quickly as possible.

It is right that we reflect, too, on the cultural practices at the Post Office that allowed the Horizon scandal to happen in the first place. It was a culture that let those in the highest ranks of the organisation arbitrarily dismiss the very real concerns of the sub-postmasters who are the lifeblood of their business and pillars of the local community. Although the Post Office may have failed to stand by its postmasters in the past, we are ensuring that it does everything that it can to champion them today, and to foster an environment that respects their employees and their customers. That is how we will rebuild trust and ensure that the British public can have confidence in our Post Office, now and in the future. I commend this statement to the House.

I firmly agree that the revelations in The Sunday Times at the weekend could not be more serious. In particular, if true, the claim that the Post Office was instructed to deliberately go slow on compensation payments to sub-postmasters in order to push the financial liability into the next Parliament would be a further outrageous insult in a scandal that has already rocked faith in the fairness of the British state. If that is the case, it cannot be allowed to stand, and if it is not, it must be shown to be false in no uncertain terms. We have two completely contrasting accounts: one from the former chair of the Post Office, and one from the Secretary of State. Only one of them can be the truth. I hope that we are all in agreement that Parliament is the correct place for these matters to be raised and clarified. What we need now is transparency and scrutiny.

Will the Secretary of State categorically state that the Post Office was at no point told to delay compensation payments by either an official or a Minister from any Government Department, and that at no point was it suggested that a delay would be of benefit to the Treasury? Will there be a Cabinet Office investigation to ensure that no such instruction or inference was given at any point? Crucially, is the £1 billion figure for compensation, which the Secretary of State helpfully just repeated, already allocated, and sat in the accounts of the Department for Business and Trade, ready to be paid? If it is not, will compensation payments be specifically itemised in the upcoming Budget?

The Secretary of State will also understand that following the story at the weekend, victims of other scandals—especially of the contaminated blood scandal—feel that they need to ask whether they have been the victims of deliberate inaction. Will the Government provide assurances that no such obstruction has been placed on any payments of this kind? If so, can they explain what the delay is in some cases? In the full interests of transparency, and to fully ascertain the veracity of any allegations for sub-postmasters and the general public, will she publish all relevant correspondence, and minutes of meetings between the Department, the Treasury, UK Government Investments and the Post Office during this time? Finally, when can we expect the legislation on exoneration that was promised by the Prime Minister?

I cannot stress enough that the last thing that was needed in this scandal was any further allegation of cover-up or obfuscation at the very top of Government. People’s faith in Government, already damaged by scandals such as Hillsborough, Bloody Sunday and Windrush, is hanging by a thread. This miscarriage of justice has shown the devastation that can occur when institutions are allowed to operate without oversight or are shrouded in secrecy. We should all agree that that secrecy must end, and that the full sunlight of public scrutiny should be brought to bear. If everything the Secretary of State has told us today is correct, surely there will be no objection to that happening fully.