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Commons Chamber

Volume 613: debated on Tuesday 19 July 2016

House of Commons

Tuesday 19 July 2016

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

I must inform the House that I have received written notification from the Chair of the Culture, Media and Sport Committee, the hon. Member for Hereford and South Herefordshire (Jesse Norman), and from the Chair of the Science and Technology Committee, the hon. Member for Oxford West and Abingdon (Nicola Blackwood), of their wish to resign from the Chair following their ministerial appointments. In accordance with Standing Order No. 122C, I therefore declare that the Chairs of those two Committees are vacant. I shall announce the arrangements for the elections to those two posts as soon as practicable. I hope that it will be possible to hold those elections during the September sitting.

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

EU Referendum: Economic Situation

1. What assessment he has made of the (a) extent of and (b) economic effect of assets and capital being moved out of the UK as a result of the outcome of the EU referendum. (905943)

2. What steps he is taking to update the Government's long-term economic plan in response to the outcome of the EU referendum. (905944)

7. What assessment he has made of the near-term effect of the outcome of the EU referendum on economic confidence and growth in the UK. (905950)

While it is clear that the referendum decision represents a shock to the UK economy, thanks to the actions taken over the past six years by my predecessor, the economy is well placed to respond. I will work closely with the Bank of England to provide immediate stability and to maintain confidence in the fundamental health of the UK economy as we prepare for the autumn statement. As further post-referendum economic data are published, the economy’s short-term response to the Brexit decision will become clearer. If further measures are required, they will be announced in the autumn statement.

Given colleagues’ anecdotal evidence of capital flight, the recent vote to leave the EU has plunged the economy into volatility and uncertainty. The Conservative Government have been slow to act and have yet to provide an economic strategy, so will the Chancellor tell the people of the UK when they will get an insight into the scale of capital flight following the Brexit vote?

The hon. Gentleman is right to say that the shock of the exit vote at the referendum has created short-term turbulence in the UK economy, but we are well placed to manage it. In answer to his question about data, a series of data publications during the late summer and autumn will inform a proper response at the autumn statement.

The Conservative Government’s so-called long-term economic plan has resulted in their failing on key economic indicators and missing the targets that they set for themselves. Will the Chancellor tell the Chamber whether we will witness an end to this disastrous era of austerity?

The UK continues to run a very large fiscal deficit by international standards and we will have to address that deficit. We have already announced that we will no longer seek to bring the budget into balance by 2019-20, but that does not mean that we can go forward without a clear framework for achieving fiscal balance over an appropriate timeframe. We will address that issue in the autumn statement.

I welcome the new Chancellor to his place and wish him all good luck—for all our sakes, he is going to need it. A Deloitte survey of 132 FTSE 350 chief financial officers found that nearly two thirds of them expect revenues to fall. As the Financial Times puts it, business confidence is now lower than at the time of the collapse of Lehman, with 82% of companies expected to reduce capital spending. This crisis has been caused by Brexit. What tangible steps will the Chancellor take to restore confidence? Don’t just give us waffle—give us real plans.

The hon. Gentleman is right; the figures that he quotes are right. The evidence is anecdotal in the early stages, as he would expect. As he would also expect, the initial response to this kind of shock must be a monetary response delivered by the Bank of England. In announcing that interest rates were not to be lowered last week, the Governor made it clear that the Bank is developing a monetary package that will be announced in due course.

The Chancellor’s certainty that the purchase of ARM by SoftBank is good for the UK following the EU referendum is not shared by its founder Hermann Hauser, who said it means that

“determination of what comes next for technology will not be decided in Britain any more, but in Japan”.

Why does the Chancellor think that the company’s founder is wrong?

I suspect that the founder of the company has not had the benefit of discussions with the acquiring company. I have met the leader of the current management team, who are wholeheartedly supporting the purchase by SoftBank. We have achieved some very hard guarantees—these were volunteered without our having to extract them—about the future autonomy of the company, headquartered in the UK, and about its commitment to double the number of UK employees over the next five years. What became very clear from a discussion with the founder and CEO of SoftBank is that it firmly believes Cambridge will be the global centre for developing the internet of things and ARM will play a key role in developing that industry.

I warmly welcome the Chancellor to his new role. It is probably the job he always wanted—unless of course he wants eventually to move next door. I note that to most questions so far he has said he is going to wait until the autumn statement, so I am hoping I get an answer to this one a bit earlier. Sticking to the fiscal surplus rule has rightly been scrapped by the previous Chancellor, and the automatic stabilisers have been allowed to kick in. The higher deficit implied by that decision will have to be plugged sooner or later. From 2010, the Chancellor’s predecessor planned an 80% consolidation of that to come from spending, with only 20% coming from tax. [Interruption.] There is a question coming, if hon. Members can be patient. Does the Chancellor intend to stick to his predecessor’s target of 80:20 or is he going to vary it?

My right hon. Friend will know that the surplus rule always came with the caveat that if the Office for Budget Responsibility forecast four rolling consecutive quarters of less than 1% annualised growth, the target would be suspended. The consensus among pretty much all forecasters is that that is likely to be what they forecast this autumn statement, so my predecessor’s announcement was merely pre-empting something that almost everybody expects to happen. I am afraid to tell my right hon. Friend the Member for Chichester (Mr Tyrie) that how we are going to respond over the longer term to the resulting deficit will be set out at the autumn statement.

In the hope that the hon. Gentleman will provide a masterclass in the asking of a question, I call Mr Jacob Rees-Mogg.

Thank you, Mr Speaker. I congratulate my right hon. Friend on his appointment. I accept that that is not a question but a statement. May I go on to point out to him that Brexit provides a great opportunity? The £24 billion purchase of ARM by SoftBank is a sign of that. The trade deals that are being offered are a sign of that. Will he grasp this fantastic opportunity and lead us through to the “broad, sunlit uplands”?

My hon. Friend rightly points to the fundamental strengths of the UK economy. Britain is still one of the most attractive places in the world to do business, to start a business and to invest money, and it is right that we should focus on those positive aspects. But it is also right that we are conscious of the short-term turbulence that we will inevitably experience and of the need to manage that carefully over the next 18 months.

I, too, welcome the Chancellor to his place. As has been mentioned, SoftBank has made a huge investment in a fantastic Cambridgeshire business. It has done that because Cambridgeshire is at the forefront of technology and innovation. The company has said, as the Chancellor has mentioned, that it is going to double the workforce. Cambridgeshire can continue to attract investment such as this only if we have the infrastructure to support it, so will he confirm that he will be committed to infrastructure investment in roads such as the A10?

My hon. and learned Friend is absolutely right; raising the UK’s productivity is the long-term challenge of our economy, and infrastructure investment is one of the ways we do that. I draw attention to another point: the success of Cambridge today, not only as a centre of academic excellence but as an innovation hub of global importance, has arisen because of the very foresighted decision of Cambridge City Council many years ago to allow development around the city and the creation of the Cambridge business park, which is now a world magnet for investment.

I, too, congratulate the Chancellor on his ascension. One of the key flows of capital that is likely to increase post-Brexit is the £300 million or so that is invested every year in gilts by those seeking a UK investor visa. This is of little productive value to the UK economy. I wrote to the previous Treasury team suggesting that this money would be better invested in drug discovery but, amazingly, I got the brush-off. May I impose myself upon the Chancellor of the Exchequer and ask for a meeting to explain the merits of requiring these people to invest in the productive part of the UK economy?

I anticipate that there will be a need to fund UK Government gilt issuance for the foreseeable future, but I understand my hon. Friend’s point and I would be happy to discuss it with him.

Mr Speaker, I am sure you will allow me to extend my congratulations to the Chancellor. He will remember that I welcomed him as a very fresh-faced Back Bencher to the 1997 Budget, when he already showed great promise, which he has more than fulfilled now. Does he agree that the major current threat—there are many—from Brexit is in fact the interruption to investment in British industry and in Britain, and therefore that the purchase by SoftBank of ARM is to be welcomed? In view of the undertakings that ARM has given, that is the best antidote to the prevailing doubts.

The hon. Gentleman is right and I thank him for his kind words. We need to remind ourselves that we are running a 6.9% of GDP external account deficit, and that has to be funded somehow. It has been funded by an extraordinarily successful run of foreign direct investment into the UK—more than into any other country in the European Union. That has slowed as uncertainty around the referendum has been created. We now need to generate the confidence to allow it to resume.

I take this opportunity to welcome the Chancellor to his post, and also the Chief Secretary and other new Treasury Ministers. There is a real concern that the uncertainty surrounding Brexit is forcing many businesses and international banks to consider moving their core operations and the jobs that go with them overseas. Banks in particular make use of their EU banking passport arrangements to operate within the UK, so what measures will the Chancellor be taking to avoid the loss of those arrangements?

The hon. Lady is right to say that passporting is an important feature of the arrangements we have with the European Union. In the negotiations that we will have in the future with the European Union about Britain’s future relationship with it, protecting those rights for our very important financial services sector, which I should emphasise is not just about London—two thirds of financial services jobs in this country are outside London—will be a very important part of those negotiations.

Moving back to the issue of ARM, analysts this week have predicted a raft of foreign takeovers linked to the fall in the value of the pound following Brexit. The Chancellor stated this week that Britain is open to foreign investment, barely a week after the Prime Minister wanted to oppose such takeovers, so has the Government’s approach to securing new investment been reduced in the space of a week from an ambiguous industrial policy to merely slashing corporation tax and hoping for the best?

No. The UK remains very much open to foreign investment, but we are very clear that we want investors who will invest in British technology, British jobs and businesses headquartered, based and directed from the UK. We are not open to asset-strippers.

Infrastructure Development

There are 40 schemes in the west midlands in the infrastructure pipeline, with a total value of £7.6 billion. More than 300 infrastructure schemes have been delivered in the west midlands since 2010. There are 88 projects in the north-west in the infrastructure pipeline, with a total value of £34.5 billion. More than 240 infrastructure schemes have been delivered in the north-west since 2010.

I congratulate my right hon. Friend on his new role. The Rugeley B power station site is truly a hub of connectivity, where the national grid, broadband and rail infrastructure all come together, and it is an ideal location for redevelopment. Will my right hon. Friend outline the assistance that the Government can provide to ensure the speedy redevelopment of the site, and will he meet me to discuss the possibility of creating a Rugeley enterprise zone on this strategically important site in the west midlands?

I thank my hon. Friend for her kinds words, and for her question. It is not the first representation that I have received in the few days in which I have been doing this job, and I suspect that it might not be the last I receive today. I would be delighted to meet her to discuss the enterprise zone and the site that she talks about. It is important that we have world-class infrastructure. If we can bring that together in various forms on particular sites, it will enable us to make further and faster progress. I look forward to discussing that with her in future.

May I too congratulate my right hon. Friend on his promotion? The recently announced infrastructure bonds will help to improve productivity and promote economic growth across the north-west. Will he outline the projects that could be eligible for this funding?

I am not sure that this morning is the point at which I can provide specific examples, but I can say that this Government are very ambitious about infrastructure. As my right hon. Friend the Chancellor has pointed out, infrastructure is one of the ways in which we can drive up productivity. That is one of the great challenges that we face, but we as a Government are determined to address it.

The Minister has reeled off a list of moneys going to infrastructure projects in the west midlands. Will he publish a list of all those moneys that he is delivering? Who is going to be accountable for this public money—the local enterprise partnerships, the combined authorities, the local authorities, or HS2 Ltd?

It was not just the money—I also rattled off the numbers. I would be delighted to provide the hon. Lady with details of the projects that have been delivered, with, as I say, 300 infrastructure schemes delivered in the west midlands and 240 infrastructure schemes delivered in the north-west. Accountability depends on the specific nature of the schemes. Clearly, over the past six years we have delivered on infrastructure, but there is more to do and we are determined to do it.

One of the absurdities of the previous Chancellor’s tenure was the fiscal rule that forbade borrowing money for infrastructure investment even when the return on that investment would have grossly exceeded the cost of the borrowing. Instead, the former Chancellor ended up borrowing billions to compensate for low growth and the cost of failure. That orthodoxy was strongly challenged in the Conservative leadership election, so will we now see a more rational approach from this Chancellor’s team?

As my right hon. Friend the Chancellor has made clear, and as, indeed, the previous Chancellor made clear, in circumstances where there is a projection of growth less than 1% over a 12-month period, that fiscal rule does not apply. The fact is that we inherited a very high deficit, and we have shown very strong determination over the past six years to bring that deficit down. As we face the challenges that we now face in terms of Brexit, had we not taken the tough decisions on public spending over the past six years, we would be in a much more vulnerable position than we are now.

The previous Chancellor announced a new light rail link between the midland metro and the new enterprise zone in Brierley Hill in my constituency. Will my right hon. Friend meet me to discuss how we can extend that to the main line rail link at Stourbridge so that we can support businesses, communities and jobs in my constituency?

I note that my prediction that I would receive further representations and diary request appears to be holding true. I am happy also to meet my hon. Friend to discuss the project that he mentioned.

I, too, welcome the Chancellor to his position, and I welcome his whole team. It is a deserved promotion for the Chief Secretary, whom I believe I promoted only a month ago in a speech to the House.

EU funding for the regions comes to £10 billion a year. At the recent Local Government Association conference, councillors from all parties expressed their concern over the potential loss of these structural funds. Will the Chief Secretary clarify whether he plans to make funding provision equivalent to that received through the EU structural funds in the event of the UK leaving the EU?

First, I thank the shadow Chancellor for his kind words. Yes, his description of me as Chief Secretary last month proved to be ahead of its time. That is not a phrase I often use about the shadow Chancellor, but he was right on this occasion.

On the structural funds, of course we need to make an assessment of value for money and so on. We will make announcements in due course. I recognise the case for wanting to address uncertainty, but it is right that we follow due process before we make any announcements.

I am grateful for that, but may I ask the Chief Secretary that, in the interests of local government stability, that statement is made sooner rather than later?

The vote to leave also affects the UK’s access to European Investment Bank funds, which last year came to £6.5 billion across the country. With business investment falling even before the vote to leave, and with Government investment scheduled to fall until the end of this Parliament, what action is the Chancellor taking to ensure that Britain retains its stake in the European Investment Bank?

First, on the general point, I recognise what the hon. Gentleman is driving at in terms of uncertainty and the desirability to resolve the issue sooner rather than later.

It is the case that the UK did very well from the European Investment Bank in recent months in terms of attracting investment. There is no evidence as yet that the UK will be discriminated against during the period that we remain members of the EU, but the hon. Gentleman is right to raise the issue. We will continue to monitor the situation and we want to ensure that we continue to do well from the EIB.

Support for Businesses

The Government are committed to ensuring that Britain has a competitive corporate tax system that encourages innovation and business investment. We have already announced a reduction in corporation tax to 17%—the lowest rate in the G20—and we are reducing the business rates burden by £6.7 billion. The Government have also increased the rate of research and development tax credits and set the annual investment allowance at its highest ever permanent level.

I thank the Chancellor for his response and congratulate him on his new role. Many small businesses in my constituency face difficulties. The Costcutter on Claremont Road in Seaford employs four people, but the store is too large to benefit from the Government’s extension of small business rates relief to properties whose rateable value is less than £12,000. Will the Chancellor therefore consider reintroducing the retail rate relief, which last year helped such businesses with a £1,500 discount on their rates bill?

The retail scheme was a temporary arrangement until the current proposals were fleshed out fully, so I am afraid that we will not be able to reintroduce it. Many businesses that benefited under the old, temporary retail scheme will benefit from the permanent scheme that we have introduced to reduce the burden of business rates, but I am afraid that some may slip through the net.

20. May I congratulate the Chancellor and his team on their appointment? On supporting businesses, PricewaterhouseCoopers yesterday said that growth in Northern Ireland is likely to remain at zero, the worst in the United Kingdom. Will the Chancellor put in place some mechanisms—he has already discussed enterprise zones such as Belfast international airport—to help us? (905963)

One of our priorities, in the interests both of social fairness and of improving the productivity of the economy, will be to address the huge—one might say almost grotesque—disparities between economic performance in the different regions and nations of the UK. That will be a central part of our productivity agenda, which will be a key cornerstone of our long-term economic plan.

Since the referendum, some businesses in my constituency have put investment and recruitment on hold due to uncertainty. They welcome the policies that my right hon. Friend has mentioned. I also welcome the indication that he will look at further fiscal stimulus in the autumn statement, but that is some time off. May I press him to reveal a bit more about the options that he might consider to support the economy and businesses?

I am afraid that I shall not be tempted by my hon. Friend to speculate on the content, or even the date, of the autumn statement. What I can say is that the Bank of England is well equipped with the tools necessary to deal with the short-term needs of the economy following the shock of the referendum, and the autumn statement is well placed, after the batch of economic data that will be published this autumn, to provide a longer-term response.

I welcome the right hon. Gentleman to his new position. He may recall that his predecessor cut corporation tax for business to allow the living wage to be introduced. As we speak, Marks and Spencer is consulting on cutting overtime payments and Sunday and bank holiday pay, in order to do just that. What will the Chancellor do to ensure that my constituent, Mrs M, does not lose £2,000 a year because of the introduction of the living wage?

Very clearly, the intention of the introduction of the living wage was not to make people worse off; it was precisely to support the living standards of those on the lowest wages. I will look carefully at the case that the hon. Lady has drawn to my attention.

I welcome the Chancellor to his post. A report published in March illustrated that someone who lives in a deprived area is 50% less likely to start a business on a self-employed basis, and it highlighted the barriers they face to starting such a business. Will my right hon. Friend consider the recommendations in the report and work with me to reverse that trend?

I am very happy to do that. One of the great strengths of the UK economy is our innate entrepreneurialism. We need to foster that, and we need to make sure that it works in all areas, regions and nations of the United Kingdom.

May I congratulate the Chancellor and the Chief Secretary to the Treasury on their new roles? The problem we have seen over many years is that fiscal policy occasionally works against the interests of business. Innovation funding has been converted from grants to loans, and there has been a cut during this Parliament to the UK Trade & Investment budget. I ask the Chancellor, who is new and fresh to the job, to look again at those policies, in particular, to make sure that innovation and export support funding is aligned with innovating and exporting businesses.

I assure the hon. Gentleman that I will be looking comprehensively at all areas of the portfolio as I prepare for the autumn statement, in the context of the economic situation that we face post this shock.

I welcome that, and I ask the Chancellor to look again at one other thing. One of the problems that business and the economy face is a lack of demand. May I ask the Chancellor to look again not just at headline corporation tax cuts, but at an intelligent use of allowances—for example, the reintroduction of industrial buildings allowance—to build demand for construction now and long-term supply side capacity to boost what we do, particularly in terms of exporting, in the future?

I assure the hon. Gentleman that when we look at the corporate tax environment, we will not just be looking at headline rates. We will be looking at the marginal effective rates of corporate tax for investors in the UK, because that is what we want to target—more investment, more jobs and the creation of more wealth in the UK.

Business Rates

As my hon. Friend knows, in Budget 2016 we announced the biggest ever cut in business rates in England, worth £6.7 billion over the next five years. The package cuts business rates for all ratepayers, and 600,000 of the smallest businesses will not have to pay business rates again. The Government are also looking to modernise the administration of the tax to make sure that it is fit for the 21st century.

I congratulate my hon. Friend on her new role. Have the Government decided whether car park business rates will be devolved to local authorities? That would offer a significant reduction in council overheads, which could enable Wiltshire Council in my constituency to reduce parking fees and improve the economies of our local market towns.

I congratulate my hon. Friend on taking such a close interest in what will boost her local economy. The Government have announced that they will devolve 100% of business rate revenues to local government. The details are subject to consultation, and the consultation document was published by the Department for Communities and Local Government earlier this month. She and her local council may well want to contribute to that consultation, and she may want to make the point that she made so well just now.

Some of the richest areas in the country find it easiest to raise money through the business rate system. If we are not to perpetuate poverty and the gap between rich and poor parts of the country, do not the Government, if they are going to proceed with this, have to make sure that there are proper balancing mechanisms? Otherwise, the problems that we have seen in so many parts of the country, which feel completely forgotten and left aside, will be perpetuated for future generations.

I am very well aware of the point that the hon. Gentleman makes. In my previous role, I had responsibility for the public health grant, and those points were made in that context on several occasions. We have an open consultation on business rates retention. We are aware of that issue, and the existing system of redistribution will be continued in some form. Obviously, that is something at which we will look closely.

The business rates system sometimes interacts with the planning system to leave premises empty, but incurring tax. Will the Government work to ensure that councils are appropriately incentivised to ensure that premises are productively occupied so that business owners have a chance of paying the tax they incur?

I hear the point that my hon. Friend makes. That is clearly something to which further consideration will be given.

Any help that small businesses get from business rates reform will be very welcome in my constituency of Huddersfield, but that does not outbalance the fact that my university and my manufacturing businesses have been hard hit by Brexit. I know that the Minister is not one of the guilty Brexiters, but what will the Government do to help manufacturing industry and universities so hard hit?

The Chancellor has already made a number of comments about how we will deal with and address this situation, and more will clearly be said in the autumn. It is important that we recognise that, while we undoubtedly face some risks and have to look to manage them, we must also seize the opportunities we can take from the situation we are in.

To return to the point about business rates, taking 600,000 of the very smallest businesses out of business rates altogether is a good thing. It has not taken effect yet. It is important to make it clear that although that has been announced, it has yet to take effect. We all have a job to do in the spring to make sure that our local businesses get the maximum benefit.

Northern Powerhouse

A northern powerhouse will be built by connecting up the cities in the north so that the whole is greater than the parts. We have committed billions to new transport investment and devolved powers to the cities, and we are promoting science and culture. According to one recent survey, the result is that the number of foreign direct investment projects in the north is up by 127% since 2014. The employment rate is now close to its record high, and unemployment has fallen faster than in the south.

May I add my congratulations to the new Front-Bench team? In medieval times, the north was ruled from the great city of York. Even in Yorkshire, things do move on, but the need for well-connected transport links is still fundamental for every thriving city. Will my right hon. Friend ensure that sufficient funding is in place to deliver the key infrastructure needs, such as the upgrading of the York northern ring road, which will allow the city to fulfil its true potential in the new enterprise zone?

This Government are determined to ensure that we have strong transport infrastructure in the north of England, but I very much hear the points my hon. Friend has made. We have committed to investing an extra £161 million to accelerate the transformation of the M62, and £75 million to improve other road links, including the A66 and the A69. We very much recognise the case he is making and, as I say, as a Government we are determined to ensure that the north of England can fulfil its potential.

May I congratulate the right hon. Gentleman on his promotion to the Cabinet? Earlier, he was very vague about the European structural funds. Some £800 million of European structural funds were part of the north-east devolution deal. Without a guarantee from the Government, the loss of that money will drive a coach and horses through the deal. [Interruption.] I will give the Minister time to listen to what the Chancellor is saying in the hope that he can come to the Dispatch Box and say that the Government will guarantee the £800 million.

As I said earlier, we recognise the need to bring any uncertainty to an end as soon as we possibly can. In the circumstances, it is right that we take a moment before making any guarantees, but let me be absolutely clear that as a Government we remain committed to doing everything we can to strengthen the northern powerhouse and to ensure that the north of England fulfils its full potential, which includes transport infrastructure. On the specific point, we will make an announcement in the not-too-distant future.

Despite his sudden shyness, the man in the cream suit has an identical question, and I want to give him his opportunity. Mr Alec Shelbrooke.

17. Since 2010, my city of Leeds has seen hundreds of millions of pounds invested in its transport infrastructure. I wonder whether my right hon. Friend can confirm that the billions of pounds that were to be put into the northern powerhouse to invest in transport infrastructure across the whole of Yorkshire and the Humber will still be delivered. (905960)

This is one of those rare occasions when the Chief Secretary can be like the man from Del Monte and say yes.

The northern powerhouse plans in south Yorkshire are at risk. In the 1980s, our economic regeneration was kick-started by funding from Europe and it still supports small businesses, training and apprenticeships, so may I give the Chief Secretary another chance? Will he guarantee that the £174 million that has been pledged to south Yorkshire under the current programme will be paid in full?

The right hon. Gentleman will understand, as a former Treasury Minister, that there is a need for consistency. My answer remains that we will make an announcement soon. We recognise the point that he is making and the desire to remove uncertainty, but I am not in a position to make an announcement this morning.

21. There are nine enterprise zones in the north-west of England, including the magnificent Sci-Tech Daresbury in Weaver Vale, which employs more than 500 scientists. Does my right hon. Friend agree that enterprise zones are essential to the Government’s commitment to rebalance the economy, close the north-south divide and build a great northern powerhouse? (905964)

My hon. Friend makes a very good point. Enterprise zones, which were reintroduced by the Government in the last Parliament, are important in creating a clustering effect and a culture of enterprise. They are making a big contribution to the northern powerhouse and playing a role in the increase in investment in the north of England.

May I welcome the new Ministers to the Front Bench? Five northern powerhouse combined authority leaders have requested a meeting with the Prime Minister in Manchester to discuss the serious implications of Brexit for the northern economy, given its massive contribution to the country as a whole. In advance of the Brexit vote, will the Chief Secretary tell the House how many civil servants were working on regional plans, or any other plans for that matter, for such an eventuality?

First, I thank the hon. Gentleman and welcome him to his post. I am delighted to see that the shadow Front Bench is almost up to full complement.

We obviously face a number of challenges in terms of the new situation, but there are also a number of opportunities. As I have made clear repeatedly today, the Government are determined to ensure that, whatever the consequences of the Brexit vote, we will enable the northern cities to prosper and work together. That remains a Government priority.

Early Intervention

11. If he will commission research on the potential long-term savings to the public purse of greater investment in cross-departmental schemes to promote early intervention; and if he will make a statement. (905954)

The Government recognise the benefits of early intervention to ensure that all children and young people receive the best possible start in life. The Government worked with the hon. Gentleman and others to establish the Early Intervention Foundation. We continue to provide funding to the foundation to develop and share the evidence base in this area. The Government have also invested £770 million in the troubled families programme, which aims to achieve sustained positive outcomes for 400,000 families with multiple complex problems by 2020.

I welcome the new Treasury Front Benchers to their duties. I hope that they will take the opportunity over the summer to reorient the Treasury’s thinking away from late intervention, firefighting and paying excessively to put things right, and consider an early intervention philosophy that allows the Treasury to invest early and make a lot of money. They should look at Big Society Capital and its terms of reference, and consider the possibility of improving the market for social investment bonds. Will the Chief Secretary meet me and colleagues from all parties to discuss those issues?

I am very happy to meet the hon. Gentleman to discuss those issues. To be fair to the Government, we introduced social impact bonds and the troubled families programme, which seems to be working. There are good signs in terms of improved school attendance and reduced youth crime and antisocial behaviour. We do recognise the benefits of early intervention, but I am happy to discuss it with him at greater length over the weeks ahead.

I add my congratulations to the Chief Secretary and commend to him last year’s “Building Great Britons” report by the all-party parliamentary group for the first 1,001 critical days, which I chair. The report revealed that the cost of getting it wrong on perinatal mental health and child neglect is some £23 billion. Does he agree that investing in young people at an early stage is every bit as beneficial to the economy as investing in roads and infrastructure? Will he allow the all-party group to give him a presentation on how we can save him and the country a great deal of money and give our children a better future?

I would be interested in seeing such a presentation, whether with the hon. Member for Nottingham North (Mr Allen) or separately—I am happy either way. The Government have already demonstrated a willingness to look at any such case and will respond to the evidence, which I look forward to hearing.

Global Tax Evasion

I am really proud of the role that the Government and the UK have played in recent years. The country has taken a leading role in tackling tax evasion and avoidance, driving fundamental reform of the international rules and standards. For example, we led the development and early implementation of the new global standard for automatic exchange of information on offshore accounts. I am sure we will continue to offer global leadership on this vital issue.

The Panama papers revealed what most of us had long suspected—that the super-rich enjoy manipulating the tax system—but I was astonished to learn in a written response from the former Chancellor that the £10 million multi-agency taskforce set up to investigate those revelations still does not have the Panama papers in its possession. Will the Minister clarify what the £10 million has been spent on, or is it another example of creative Tory accounting?

I understand that there may be some logistical barriers to acquiring the papers—[Interruption]with the journalists, in fact. I will write to the hon. Lady with more detail, but I do not believe there is any fault on the part of Her Majesty’s Treasury.

15. Does the Minister agree that one strand of activity in the campaign is to continue to reduce corporation tax? Does she agree that we should have an aspiration to have the lowest corporation tax of any country in Europe? (905958)

Obviously, the effective rate is what really matters. We have set out a sensible and good ambition for 2020, but internationally what matters is what people pay. I return to the point that the UK has led the world. More and more countries have signed up to looking at how we ensure that multinational corporations pay what they should.

When it comes to corporation tax, we can only get the take that we should if we know what is going on in those companies. I welcome the Prime Minister’s words on tackling the Amazons, the Googles and others. May I suggest to the Minister—I welcome her to her new post—that the Treasury team reconsider introducing in the Finance Bill when it returns to the House in the autumn a public country-by-country reporting amendment, so that we can see what is going on, and so that whatever the corporation tax rate is, we get what we deserve?

I am aware of the right hon. Lady’s interest in the matter and of previous debates. The key thing is that that has to happen on a multinational basis—that is what we feel. It will be an issue at the forthcoming G20 Finance Ministers meeting and we will have more to say about it. I return to the fact that the UK has a world-leading position and will continue to push the global community to go further.

Employment Levels

The employment level stands at 31.6 million, which represents more people in work than ever before. Over the past year, employment growth has been driven by full-time workers and by high and medium-skill occupations, showing that the recovery has produced high-quality employment, helping to boost productivity and raise living standards across the country.

I congratulate my hon. Friend on his well deserved appointment. In Stafford, employment is at record levels and the jobseeker’s allowance claimant rate has fallen since 2010 from 3.2% to 1.1%, but employers point out to me that there are increasing skills shortages. Will he have discussions with colleagues in the Department for Education about strengthening engagement between employers and schools on that subject?

My hon. Friend, as ever, makes an excellent point. Unemployment in his constituency has fallen by 2,700 since 2010. Skills are absolutely important and I will be having the conversation he suggests.

I welcome the new Economic Secretary to his role in the Treasury. I am sure he will bring a much-needed dash of colour and flamboyance.

Employment is incredibly important in my constituency and across Scotland. Will the Treasury give an absolute commitment today that not one penny of research and development funding that goes to the wonderful higher education institutions across Scotland, and particularly in my constituency, will be lost as a result of the EU Brexit decision?

The hon. Gentleman is, as always, very entertaining. The Chief Secretary has said that we will make an announcement in due course.

Topical Questions

My priority is to ensure the stability and prosperity of the UK economy. That means a combination of near-term measures to respond to the shock that the economy has received, and longer-term measures to manage the impact of transition out of the EU and to reposition the UK economy to maximise its potential in the new circumstances we will then face.

I add my congratulations to the new Front-Bench team. Leicestershire County Council is one of the lowest funded local authorities in the country. The council is reaching the point where it may not be able to meet all its statutory obligations. Given that, will my right hon. Friend help to arrange an urgent meeting between his counterparts in the Department for Communities and Local Government and council officials to discuss this matter?

As my hon. Friend notes, that is a CLG lead, but I am very happy to facilitate such a meeting for him.

The Chancellor will, I hope, have seen the research published by the Institute for Fiscal Studies this morning. It shows that young people in work are still earning 7% less than before the crisis, while older workers have seen no improvement in their earnings for seven years. Will the Chancellor take this opportunity to put an end to what is becoming a lost decade of austerity, deliver the public investment that can provide well-paid, secure jobs across the country and scrap the anachronistic fiscal rule?

Since this is our first outing together, let me take the opportunity to make it clear to the hon. Gentleman that I do not believe in the money tree; I am clear that we have to pay our way in the world. We have a very large fiscal deficit that we have to address, but while doing that we also have to ensure we maximise the productive capability of the UK economy. That means targeting our investment into skills—that does largely mean young people—and infrastructure, and encouraging capital formation in private businesses.

T2. Last year, the former Chancellor came to Hastings and committed to extending high-speed rail from Ashford to Hastings and Bexhill. This investment is the key to delivering local housing, a labour market and business expansion. I welcome the Chancellor to his position and ask for his commitment to this vital project. (905934)

I am grateful to my hon. Friend for his question. On the particular proposal he sets out, he is a strong champion for his constituents. If he will forgive me, in my new position of trying to control the purse strings all such matters have to be looked at. As I have made very clear, however, the Government are committed to improving transport infrastructure throughout the country, including in Sussex.

T4. I voice my compliments to the new Front-Bench team and my acknowledgement of the old. The prospect of moving to an ultra-low corporation tax rate has already been aired. That, of course, has huge implications for the revenues of developing countries. Will the Chancellor undertake to carry out and publish a spill-over analysis of the effect of UK tax rates and rules on developing countries, as the Governments of Ireland and Netherlands have done? (905936)

The position of the UK Government on corporation tax and the impact on developing countries is very clear. We believe in taxing the profits of economic activity that occur here, and that is as far as it goes. Over the last six years, we have consistently helped to build up tax capacity in developing countries and provided support to their revenue authorities so that they might be better able to collect the taxes that are due. The international system is moving towards helping those countries as well.

T3. I congratulate the Chancellor on his appointment and ask that when he looks through his in-tray, he pick up the recent report from the all-party group on financial education for young people. I chaired the inquiry that produced the report, which concluded that while it was a positive step that financial education was included in the national curriculum, delivery was still too patchy, meaning that millions of children were ill-equipped to deal with money when they left school. Will my right hon. Friend commit to making that issue a priority? (905935)

I know that my hon. Friend takes a keen interest in this interesting and increasingly complex matter. It is very important that people have the skills they need to help them to navigate financial matters, which is why in 2014 the coalition Government made financial education part of the national curriculum in English schools. That said, I am quite happy to concede that there is more work to be done.

T6. Even excluding cuts to welfare and capital spending, the Office for Budget Responsibility forecasts that funding for day-to-day public services will fall between 2009-10 and 2019-20 by the equivalent of about £1,800 per head, while between 2014-15 and 2019-20, day-to-day spending per head is forecast to fall by £1,000 per head. What plans does the Chancellor have to reverse this dangerous trend? (905938)

I have no plans at the moment to reverse the spending plans set out by my predecessor. Any such plans will be announced in the autumn statement. I would say to the hon. Lady, however, that Scotland now has devolved taxation and spending powers and can consider addressing the balance within its own competence.

T5. The Chancellor got his first job in my constituency, so it is a pleasure to welcome him to his latest job. The borough of Rushcliffe has now produced two excellent Chancellors of the Exchequer. In truth, however, Britain has not had a Chancellor since Nigel Lawson who has taken tax simplification seriously. As we prepare the economy for Brexit, will my right hon. Friend make it one of his priorities and consider, in the eight months before the next Budget, creating a commission on tax simplification? (905937)

We have created the Office of Tax Simplification and are currently legislating in the Finance Bill to put it on a legislative basis. It is setting out more and more ambitious plans for how the tax system could be simplified, and a large number of its recommendations have already been implemented, but there is still more to be done.

T7. As a proud Londoner, I believe that we must have greater control over taxes and public services, especially in the light of Brexit. I know that my friend Sadiq Khan has ambitious plans for London. Will the Chancellor commit to an initial devolution deal for London in his first autumn statement? (905939)

I am afraid that I will have to disappoint the hon. Lady, as I cannot commit to anything in the autumn statement at this stage, but I am meeting the Mayor of London later this week and look forward to a constructive discussion with him.

I congratulate the Chancellor and his new team. Do they agree that we need a broad coalition of countries around the world if we are to ensure that big businesses start to pay their taxes? Will he give his full support to the work in the OECD, the G20 and the G7 that started at the G8 summit at Fermanagh in 2013?

Yes, as one of my colleagues has already said, if we are to tackle the issue of profit shifting by global corporations, we have to do it on a global basis. This is an important topic on the agenda of the G20 Finance Ministers meeting this weekend in Chengdu, China, in which I intend to take a full part.

T8. What positive consideration will the new Treasury team give to the implementation of fiscal flexibilities to assist and underpin our tourism industry? (905940)

We will look in the autumn statement at all sectors of the economy, and where we believe that additional fiscal support is necessary, we will announce appropriate measures.

I welcome the Chancellor to his place. Does he agree that big business needs to change and that large multinational companies, including Amazon, Google and Starbucks, have a duty to put something back and pay off a debt to their fellow citizens, and a responsibility to pay their taxes?

T9. In a new report on living standards, poverty and inequality in the UK, the IFS finds that young people in their twenties are still earning 7% less than before the financial crisis, yet we know that the pressures on their incomes, particularly housing costs and student fees, are higher than ever before. What are the Government going to do to help this generation that is being left behind? (905941)

We have already had this question from the shadow Chancellor. Of course, we have introduced the national living wage, which will make a difference to people on low earnings at the bottom of the income scale. Interestingly, the hon. Lady perhaps hints at something else—questions of inter-generational fairness. The Prime Minister signalled early on in her tenure of office that that is one of the areas that she wishes to address.

I congratulate my right hon. Friends and indeed the entire new Treasury team.

With some softening of the market in house sales, will my right hon. Friend commit to looking at the data and consider whether the 3% additional stamp duty on second property purchases is necessary, desirable or indeed raises any additional revenue at all?

I can certainly commit to looking at the data, and I can tell my hon. Friend that my approach to taxation is that it is there for a simple purpose: to raise revenue for the Exchequer. I expect the taxes we put in place to achieve that.

T10. In the Queen’s Speech, the Government said that they will continue to support the northern powerhouse. Why, then, of the 15 infrastructure projects with the most public funding is only one in the north? (905942)

Some of the numbers quoted on regional impact do not take into account national projects such as HS2, which clearly benefit a number of regions. Let me be clear that, as I set out earlier, we have a very large commitment to infrastructure projects in the north of England, with something like 240 in the north-west and 300 in the midlands.

As part of the west of England devolution deal, business rates will be devolved to a combined authority. Will my right hon. Friend commit to full implementation of the previous deal on business rates and recognise the importance of this deal to the regional economy?

We have no plans to announce any changes to the business rate plans that are already in place.

The Government have announced that they are going to give £375,000-worth of banking fines to the Jo Cox fund that was set up by her family and friends to support charities that mattered to her. That fund has already raised £1.5 million in just a month. May I welcome the Government’s decision to allocate banking fines to support that fund? Will the Chancellor join me in encouraging people to give to the fund, which supports the White Helmets, Hope Not Hate and the Royal Voluntary Service?

I am delighted to join the hon. Lady in making such an appeal. I am glad that the Government have been able to support this very valuable fund in memory of Jo Cox, and I am sure that members of the public, seeing the Government contribution, will now want to redouble their efforts to support it.

I add my welcome to the Chancellor and the new Treasury team.

There is a great need in the south-west to provide more high-skilled jobs to boost productivity. In order to do that, we need to attract the right businesses. In this post-EU world, could the Chancellor kindly give his commitment, much praised so far, to the A358 upgrade for those in Somerset?

I am rapidly learning that, when it comes to road programmes and other transport infrastructure projects, it is for me to respond. We remain enthusiastic about improving our transport network, whether it be in the south-west of England or elsewhere.

Given the Supreme Court’s ruling earlier this year, does the Chancellor have plans to review the Financial Conduct Authority’s failure to enforce the prospectus rules in the Lloyd’s enhanced capital notes case? One of my constituents has been fighting hard for pensioners, who have lost over £3.3 billion.

As indeed have constituents of mine, so I am familiar with this case from the point of view of a constituency MP. I have not yet had a chance to look at it from the point of view of a Treasury Minister, but I promise the hon. Lady that I will do so.

Given the fall in long-term borrowing costs, the ability of infrastructure investment to show that we mean business and the enthusiasm shown by the Front-Bench team, will Ministers meet me to discuss an acceleration of the dualling of the A303?

That will be me again.

My diary is filling up, and I was planning to take a summer holiday, but I may need to reconsider. I should be delighted to meet my hon. Friend.

Two infrastructure projects are critical to the north-east: increased airport capacity at Heathrow, and an expanded Metro system. What funding commitment can the Government make to those projects today?

As I think has been made clear, a statement on airport capacity in the south-east will be made in the autumn. As for the Metro, I cannot add much to what I have said before, but the Government obviously want to support transport infrastructure throughout the country, and are looking at all good projects.

Order. I am sorry to disappoint remaining colleagues, but we have had 20 topical questions, and we must now move on.


I thank the hon. Lady very much for applying for the urgent question.

As Members on both sides of the House will have seen from events unfolding on their television screens, it became clear on Friday evening that a military uprising was under way in Turkey. In plain terms, it was an attempted coup, which we condemn unreservedly. It was ultimately unsuccessful, and constitutional order has been restored, but 210 people have reportedly been killed, and some 1,400 injured. I am sure that the whole House will join me in expressing our sympathies and condolences to the people of Turkey on the tragic loss of life.

Her Majesty’s Government have, of course, been closely engaged throughout the weekend. Foreign and Commonwealth Office consular staff worked tirelessly throughout Saturday and Sunday to support British nationals who have been affected, and they continue to do so. We have thankfully received no reports of British casualties. Our advice to British nationals remains to monitor local media reports and to follow FCO travel advice, including the advice provided by our Facebook and Twitter accounts.

My right hon. Friend the Prime Minister spoke to President Erdogan last night. She expressed her condolences for the loss of life, and commended the bravery of the Turkish people. She underlined our support for Turkey’s Government and democratic institutions, stressing that there was no place for the military in politics, and also underlined the importance of our co-operation on counter-terrorism, migration, regional security and defence.

My right hon. Friend the Foreign Secretary was regularly updated by officials as events unfolded. He visited the teams in the FCO’s crisis centre who responded to Nice on Friday morning, and visited those responding to Turkey on Saturday morning. He spoke to his Turkish counterpart, Mevlüt Çavusoglu, on Saturday to express our concern and our support for Turkey’s democratic Government and its democratic institutions, to urge calm, and to encourage all parties to work to restore democratic and constitutional order quickly and in an inclusive way. Her Majesty’s ambassador in Turkey has been in constant touch with his Turkish counterparts. I spoke to him myself yesterday, particularly in order to express our concern for the welfare of embassy staff, and I plan to visit Ankara tomorrow.

The Foreign Secretary attended the Foreign Affairs Council yesterday, and participated in a discussion about Turkey. There is a strong sense of common purpose between us and our European partners. The Foreign Affairs Council has issued conclusions strongly condemning the coup attempt, welcoming the common position of the political parties in support of Turkey’s democracy, and stressing the importance of the prevailing of the rule of law and its rejection of the death penalty.

The Turkish Government now have an opportunity to build on the strong domestic support that they gathered in response to the coup attempt. A measured and careful response will sustain the unity of purpose which we have seen so far, and which was so evident on the streets of Istanbul and Ankara. The United Kingdom stands ready to help Turkey to implement the reforms to which it has committed itself, and to help the democratically elected Government to restore order in a way that reflects and supports the rule of law.

I thank the right hon. Gentleman for his answer, and may I take this opportunity to welcome him to his new position? It is unfortunate that he and his team have had to be brought to the House and did not think it right to make a statement themselves. I hope that the emergency landing at Luton of the right hon. Gentleman’s boss is not a bad omen, but we do wish the all-male ministerial team well at this crucial time.

Turkey is of pivotal cultural, political and strategic importance to the world, straddling as it does the east-west divide with borders to eight countries. It is a vital NATO ally and has important minorities, particularly Kurds and Armenians, as its citizens. Half a million people of Turkish or Kurdish descent live in the UK and they are desperately worried about their families. With 2 million British visitors a year, Turkey is greatly loved in this country, and the interests of our two countries cannot be separated.

How many British citizens have been arrested, if any, and what support is being provided to them? What is the current advice to British nationals within Turkey and to those who may be booked to travel over the next few days and weeks?

On Friday we saw the Turkish people, whether they supported the current Government or not, coming out to support democracy and making a clear statement that military coups have no place in modern Turkey. The question is whether President Erdogan will use this as an opportunity to deepen and strengthen democracy or to undermine it. The signs so far are deeply worrying, with 9,000 police officers and a third of the generals dismissed, 7,500 people arrested, including the most senior judges in the country, and the death penalty being introduced.

What reassurances has the right hon. Gentleman had that there will be fair trials for those accused of complicity in the attempted coup? Was the Foreign Office taken by surprise by this attempted coup? How big is the Turkish team in the Foreign Office? Does he have plans to expand it? What will happen to this vital ally—what will happen next to this partner, this friend? It is vital that we work together to ensure that Turkey has a secure foundation of democracy, freedom of speech and human rights into the future.

I thank the hon. Lady for her warm welcome—to me at least—but I respectfully point out to her that the noble Baroness Anelay, who is also a Minister of State at the Foreign Office, was, when I last spoke to her, a woman. From a personal point of view, may I point out that I am also able to add to the spectrum of choice the hon. Lady would like to see in our ministerial team? [Interruption.] I might say to the hon. Member for Rhondda (Chris Bryant) that he, of all people, should be aware of how exactly I add to that spectrum.

I am not aware of any UK citizens having been arrested, but obviously that is a very serious consular objective for us to pursue, find out and make sure that it remains the case. I think the whole House will agree with the hon. Lady’s point about the importance of wanting the due process of law to be upheld, and for any trials, should they happen, to be fair, and to make sure that the highest principles of democratic standards are upheld, for which of course one needs a functioning and independent judiciary.

I will be discussing all these matters when I go to Ankara tomorrow, and I very much hope that in the reaction Turkey displays to this coup attempt it will be able to remain a very important member of NATO and a partner to other countries in Europe. The answer to the hon. Lady’s straightforward question about whether we were taken by surprise is, yes; I am not sure there is anybody who was not.

The Prime Minister appears not to have mentioned the arrest of nearly 3,000 members of the judiciary in her conversation with the Turkish President. It seems a rather strange way to uphold the rule of law, and The Independent is reporting today that NATO’s leadership has made it clear that a commitment to uphold democracy, including tolerating diversity, is one of the four core requirements for members of the alliance. Is that the position of Her Majesty’s Government?

I am grateful to my hon. Friend, and indeed Secretary Kerry made similar such comments yesterday. As I have just said, retaining an independent judiciary, which will of course require judges working to apply the due process of law, is absolutely essential if we are to see the standards we wish to see upheld in Turkey. I note what my hon. Friend says about NATO. Turkey remains an important ally within NATO and a very valued UK partner, so we encourage Turkey to maintain its democratic institutions and the rule of law as a fundamental part of NATO’s value agenda.

I welcome the right hon. Gentleman to his place, and the spectacular late flowering of his ministerial career. We suspect that he may well be at the Dispatch Box on many occasions, substituting for the absent Foreign Secretary. We also remember the Foreign Secretary’s film, “The Dream of Rome”, in which he advocated Turkey’s immediate succession to the European Union—an argument he later used to justify Brexit and the UK’s removal from the European Union. Can we be assured that there will be no such ambiguity in the messages that now go to Turkey, and that while no responsible Government can support a military coup against a democratic Government, no responsible democratic Government engages in the suppression of civil liberties, the persecution of minority communities such as the Kurds, the imprisonment of thousands of people, the suspension of parliamentary rights, and the reintroduction of the death penalty? Will the Minister make it clear unambiguously to President Erdogan that it is not only membership of the European Union that is at risk from such actions, but also NATO membership?

I am grateful to the right hon. Gentleman for his description of me—I had never quite seen myself as a hardy perennial in quite the same way. My right hon. Friend the Foreign Secretary, who has been described as absent, is working furiously. Having been to Brussels already he is due to go to Washington, and he is meeting many European Foreign Ministers today in advance of meetings on Syria and Yemen. It is ill-judged of the right hon. Gentleman to criticise him for deputing me to answer this urgent question.

Well I have a job too, which I hope I am doing to the satisfaction of the House as the Foreign Secretary’s deputy. Turkey’s accession to the EU is clearly a long way off, and it is far too soon after events to start making long-term judgments about it. Some might think that it is less of a matter for the UK than it was before 23 June.

My right hon. Friend may know that 41 students from the Arthur Terry school in my constituency were caught up in the airport, together with seven members of staff. Thanks to the outstanding leadership of the headteacher, Neil Warner, and the senior member of staff on the team, Sue Bailey, who showed excellent and responsible leadership in extraordinarily difficult circumstances, all 48 were able to leave at 1 o’clock the following morning, and head to South Africa where their school is twinned with the Rondevlei school. Through my right hon. Friend, may I pay tribute to the outstanding service that the Foreign Office provided to my 48 constituents, and in particular to Matt Jordan, a Foreign Office official who was in the airport at the time and who rendered full Foreign Office and consular services to all my constituents in an outstanding way?

My right hon. Friend is always fully on top of anything that affects his constituents in Solihull, and I know that on this matter he was closely in touch with them. I completely share his commendation of the initiative and leadership—

I beg your pardon. Yes—it is important that I get my geography right, and not just in the United Kingdom. What those teachers did was absolutely commendable, and the natural thing is for the Foreign Office to send people to an airport, which is a natural hub, in response to a sudden outbreak of concern. I am full of praise for the manner in which staff in our embassy reacted so promptly and with such initiative to the sudden and unexpected military uprising.

Yesterday, I and my hon. Friend the Member for Hornsey and Wood Green (Catherine West) met the chairman of the British Alevi Federation. It raised deep concerns with us about the tension that has been rising in the largely Alevi and Kurdish populated neighbourhoods, due to attacks and demonstrations by apparently pro-Erdogan supporters. Many of my constituents have heard frightening reports from friends and family in Turkey who fear that they are being targeted. Will the Minister impress on President Erdogan, and on whoever he meets tomorrow when he goes to Turkey, the need to ensure as far as possible the safety and protection of all citizens, especially ethnic and religious minority communities who feel vulnerable at the moment?

I appreciate the concerns that the right hon. Lady has expressed. It is important that the leadership of Turkey includes all its citizens in the same climate of proper human rights and fair treatment within that country.

I warmly welcome my right hon. Friend to his position. He has formidable diplomatic and business experience, and he will add strength to a formidable Foreign Office team. President Erdogan used social media in the difficult hours immediately after the coup attempt was launched to rally the support of the Turkish people against the illegal attempt to seize power. In the past, however, the Erdogan Government have been restrictive in their approach to the use of social media by their people and critical of press freedom. Will my right hon. Friend take this opportunity to ensure that President Erdogan and his allies appreciate that press freedom and freedom of speech are among the values that those behind the coup wished to crush and that he should seek to uphold?

I thank my right hon. Friend for his comments about my appointment. He is absolutely right to say that freedom of speech and freedom of the media are essential to the proper working of any democracy and indeed of any country. He is also right to say that the use of social media on this occasion proved very useful for quelling the uprising. I am sure that the irony of what he has said will not be lost on many people.

Some of us have always been sceptical about the suitability of Turkey as a safe country to which refugees could be returned under the EU deal. Can the Minister confirm that that EU deal is kept under review? Will he also impress upon the Turkish Government that the continuation of the deal, and the many advantages that stand to go to Turkish citizens under it, will be judged according to their response to human rights in particular?

The UK is committed to the successful implementation of the EU-Turkey migration deal, which I think is what the right hon. Gentleman was referring to. We have seen no indication that the treatment of refugees in Turkey has been affected by the recent events. We will of course continue to monitor developments closely, but we want to see the deal continuing to work properly.

I congratulate my right hon. Friend on his return to the Front Bench in a role to which he brings considerable expertise and experience. Hon. and right hon. Members have rightly focused on the geopolitical and political implications, and the implications for UK nationals, of events in Turkey, but will he acknowledge that UK embassy staff in Ankara and the consular staff in Istanbul have played and continue to play a huge role in managing the implications of those events? Can he update the House on the situation and safety of our diplomatic and consular staff in Turkey?

I am grateful to my hon. Friend for his question. All our staff in Ankara and Istanbul will be grateful to him for raising this topic. One of the main reasons that I wish to visit Ankara tomorrow is to reassure the staff of the Foreign and Commonwealth Office. They had a shocking and unpleasant experience when suddenly, out of the calm, jets were overhead, shooting, and they heard the sound of explosions very near to the embassy. Some of our staff were separated from their children. For this to happen so suddenly and in such circumstances is a traumatic experience, and I consider it important as a Minister to exercise a proper duty of care. It is therefore perhaps my top priority to do that when I go to Ankara tomorrow.

There are still some questions about the origins of the attempted coup that took place last Friday evening. It is encouraging, however, that all the opposition parties in Turkey, however critical they might be of the Turkish President—they certainly are critical of him—made it clear that they were totally opposed to any military dictatorship and that military government was not the answer to Turkey’s problems. Would it not also be useful if the Government here made the Turkish authorities, and particularly the President, aware of the fears that the Turkish Government, led by the President, will use what occurred on Friday as a means of exercising further repression and arresting people who were in no way involved in the coup? It is difficult to understand why 2,700 judges have been arrested, for example. How could they have been involved, directly or indirectly, in what happened last Friday?

It is not entirely clear exactly who was behind the coup attempt, but I appreciate the hon. Gentleman’s concern about the breadth of the reaction and the rounding up of a lot of suspects. However, we do not want to speculate beyond that. I should like to make it clear to the House that the Prime Minister said yesterday:

“We call for the full observance of Turkey’s constitutional order and stress the importance of the rule of law prevailing in the wake of this failed coup. Everything must be done to avoid further violence, to protect lives and to restore calm.”—[Official Report, 18 July 2016; Vol. 613, c. 559.]

I would add that we are watching closely to see that proper due process is applied in Turkey.

I represent a borough with a significant Turkish-speaking community, and on behalf of my constituents I should like to express solidarity with the Turkish people at this difficult time. What is the Government’s assessment of the alleged involvement of the Fethullah Gülen movement in the coup? What is the Minister’s understanding of the involvement of and links to that movement in this country?

It is far too early to say, although we quite understand that Gülen’s name has been in the spotlight and that Turkey has applied to the United States for his extradition. That is of course a matter for Turkey and the United States. However, it is important, as my hon. Friend has said, to understand that people living in the UK who have friends and family in Turkey will have concerns, and we need to issue reassurance to them that Her Majesty’s Government are taking a proper interest in what has happened in Turkey and are fully engaged in trying to ensure that calm will prevail there.

The Minister has rightly stressed the importance of Turkey as a significant NATO ally. Will he tell us what efforts are being made through the institutions and organisms of the NATO alliance to make it clear to the Turkish Government that democratic norms and adherence to the rule of law must be upheld?

I imagine that pretty well every NATO country will have been in touch with Turkey. Of course we want the conduct of the Turkish Government to be fully compatible with membership of NATO, and NATO has its own standards and democratic requirements, to which we want to see Turkey fully adhere.

As a member of the Council of Europe, I was in touch with Turkish MPs over the weekend. Turkey plays a vital role in the Council of Europe. What practical support will the UK Government give to Turkish MPs to help them through this crisis?

Again, it is difficult to say at this early stage. However, I hope that our clear voice has been heard. One of the things that we have rightly said, and which the hon. Member for Walsall North (Mr Winnick) pointed out a moment ago, is that we welcome the fact that all the parties in Turkey have joined together to make it clear that they condemn the coup and that they wish to see democratic institutions prevail in Turkey. That echoes our own thoughts and beliefs, and I hope that our influence as diplomats and on the world stage can continue to encourage Turkey to step in that direction.

I warmly congratulate the Minister on his resurrection in all his glorious diversity. I am glad that he referred to consular staff in particular, because it was only in 2003 that the British consul general in Istanbul was murdered in a terrorist attack there. It has been our long-standing policy to bring Turkey into the European family of nations, whether within the European Union or more broadly through NATO, and to ensure that it faces west as much as, if not more than, it faces east towards Russia and Iran. With our leaving the European Union, how can we ensure that we enhance and strengthen that process of encouraging Turkey and pro-European Turkish politicians to face west?

Perhaps that could also be translated as “brevity”, Mr Speaker.

I commend the hon. Member for Rhondda (Chris Bryant) for the reputation that he enjoys as a former Foreign Office Minister and for the concern that he always showed for those who work in the Foreign and Commonwealth Office, often in very difficult circumstances. In the future, we will have bilateral opportunities with Turkey and, notwithstanding our imminent departure from the EU, I think that any way in which Turkey can replicate the standards that we wish to see in other democratic countries across the European mainland is something that will help it to achieve exactly the objectives that the hon. Gentleman has just described.

As my right hon. Friend said, we have an important relationship with Turkey, including our commitment to giving over £250 million in aid to support the 2.7 million refugees living there. Will the Government use that relationship to exert pressure on President Erdogan? He must not use the coup to legitimise a crackdown on all opponents of his regime, whether they were involved or not, and he must not further suppress freedom of speech.

I share my hon. Friend’s concern. Turkey has taken an enormous number of refugees, for which we should commend and thank it, and the plight of Syria has been partly shouldered by Turkey. The Government and everyone in the House would urge that the reaction to this failed coup does not lead to unacceptable consequences.

I congratulate the Minister on his appointment. President Erdogan has repeatedly refused to rule out the return of the death penalty in response to this event. What discussions have the Minister or the Foreign Secretary had—or what discussions do they intend to have—with the Turkish Government to make it clear that such a change of heart would be regressive and wrong?

I am grateful to the hon. Lady for her comments. I absolutely agree with her on this rare occasion. Her Majesty’s Government strongly opposes the death penalty, which is the view of all like-minded Governments. It would be a deeply retrograde step, causing incalculable damage to Turkey’s standing at a time when it is important to embrace it within the world community and not see it become more isolated.

I welcome my right hon. Friend and other colleagues to the Front Bench. We have heard today about democracy, due process and the rule of law, but we are talking about a repressive regime that has arrested thousands. Does he share my concern about the conditions that these men and women and being kept in? When he goes to Turkey, will he ensure that their human rights are respected?

I assure my hon. Friend that when I am in Ankara tomorrow I will not be mealy-mouthed in saying what we think needs to happen. Human rights, not reintroducing the death penalty and the proper due process of law will of course form a large part of what we will urge upon the Turkish Government.

I am glad to hear the Minister talk about the importance of the rule of law and human rights. The last time I was in Turkey I went with the Inter-Parliamentary Union to get 10 imprisoned Members of Parliament out of jail, and I am glad to say that that was successful. Many of them were from the south-east of Turkey, and the situation in Kurdistan—south-east Turkey—is dire with appalling conditions. The military should be reined back and human rights need to be emphasised. We have particular concerns about parliamentarians given the attack on the Turkish Parliament, and I am sure that the Minister will convey this House’s concern for them and our hope that Turkey will continue as a democracy.

The right hon. Lady understands the region extremely well and has a long-standing reputation for defending human rights and understanding Kurdistan, which has an effect on Turkey. I will convey her thoughts. It is important to ensure that everything that we have been talking about on human rights is properly conveyed to the Turkish Government given that the region is complicated and has some acute and difficult pressures to handle.

I welcome the Minister to his role. I have every confidence in his ability to answer questions in this House on the many occasions when the Foreign Secretary will quite rightly be promoting Britain’s interests abroad, which is his job.

I ask the Government to reiterate again that our commitment to democracy in Turkey is tied in with our commitment to women’s rights, gay rights and the rights of Turkey’s other political and religious minorities, who may well be feeling threatened at the moment.

My hon. Friend is right to comment on the hard work of the Foreign Secretary. His list of important rights is something that we could apply to pretty much any country in the world, including Turkey.

I congratulate the right hon. Gentleman on being one of the House’s great comeback kings. He will definitely be able to keep the Secretary of State on the straight and narrow.

Does the Minister recognise the concern in constituencies such as mine, which has the largest Turkish-speaking population in the country, that the manner in which the west behaves towards Erdogan is frankly similar to how we behaved towards Mubarak? Erdogan is stretching democracy beyond belief—putting Syrians into Kurdish areas to dilute the Kurdish influence in his country cannot be right. Will the Minister be clear about how Erdogan treats the Kurdish minority in his country?

I understand what the right hon. Gentleman says. Given the Turkish population in his constituency, I am happy to offer him a face-to-face meeting to talk through the issues. We share the same value system and will have some difficult problems to resolve in the region with a collapsed Syria and terrorist pressure on Turkey, which is not free of such pressures and must work out how to handle them. We must appreciate that the issues are complicated, and I would welcome the right hon. Gentleman through the door of my office to discuss them in person.

I welcome the Minister to his post—he will do a brilliant job—and welcome his statement in support of the democratically elected Government in Turkey. However, the international community has in the past supported military Governments in Pakistan under General Musharraf and in Egypt under General Sisi. Is it now the positon of the UK Government always to support democratically elected Governments?

We obviously support democracy and all the values and rights that go with any properly functioning democratic state. It is a reality of the world that many countries are not perfect, and I hope that we can use our diplomatic pressure to improve countries and make them understand what world pressure really is. You made a comment about shortness, Mr Speaker, and I hope that means that I am able to punch above my weight as Minister of State.

The Turkish Government have already instituted oppressive measures towards Kurdish people in eastern Anatolia, including the unwarranted arrests of lawyers, politicians, journalists and members of the public, leading to the death of many civilians—women and children—which goes largely unreported in this country’s press. Will the Minister impress upon the Turkish Government when he meets representatives tomorrow that the failed coup should not be used as a pretext for further repression of democratic people?

I hope that I pretty much said that in my opening remarks. The failed uprising must not lead to perverse consequences along the lines that the hon. Gentleman describes. However, when it comes to terrorist acts, we need to understand that the Turkish Government have a legitimate right to defend themselves against those who would attack them.

I welcome my right hon. Friend’s well-deserved return to the Front Bench. Does he understand that it is difficult to characterise the arrest of thousands of judges as a proportionate response to an act—however outrageous? Turkey’s membership of the Council of Europe must hang in the balance if it does not respect the independence of the judiciary.

My hon. Friend points out the potential consequences of certain courses of action, on which it is too early to form a judgment. It is absolutely true, however, that judges are necessary for a functioning judiciary, so we look forward to seeing that there is a functioning, independent judiciary that can properly apply the rule of law.

I welcome the Minister to his place. EU Commissioner Johannes Hahn has expressed concern that the swift round-up of judges after the failed coup indicates that Erdogan had a pre-existing list of enemies, suggesting that much of Turkey’s response is predicated on score-settling. That mirrors the trends in recent years of suppression of free speech and civil liberties, of putting down political opponents and of fighting a brutal war against the Kurds. Will the Minister impress upon President Erdogan that the upholding of human rights and the rule of law is more important now than ever?

Yes, I will. Three days after this attempted coup, it is inevitable that there will be lots of speculative judgments about what was planned, what was pre-planned, whether there was a previous list and so on. It is impossible to know these things at this stage, which is one reason why I look forward to visiting, but the Government will speak out very strongly for human rights and for the equal and proper treatment of all citizens in Turkey.

I welcome my right hon. Friend to his Front-Bench post. He brings formidable experience and intellect, and will serve the country well. The NATO Parliamentary Assembly annual session is due to take place in Istanbul this November. Does he agree that unless the security situation becomes untenable, that should go ahead in Istanbul, because despite the difficulties that may be ahead in where Turkey is heading, it will be far better to steer that if it stays in organisations such as NATO, rather than if it is exiled?

I commend my hon. Friend for what he has just said, which is both wise and practical. One of the most important ways in which Turkey can be engaged and persuaded is through the forum of NATO. We wish Turkey to remain a full and compliant member of NATO, and I hope that that meeting continuing as he suggests would provide a powerful platform for bringing about the kind of positive developments we would wish to see.

Turkey is democratic, but successive elections have shown that it is becoming increasingly authoritarian. How concerned is the Minister that President Erdogan will use this coup as a blank cheque to go against any or all of his opponents? The UK is leaving the European Union but we should still be concerned that Turkey gets its wish and eventually becomes a member. Will the Minister make it clear to President Erdogan on his visit tomorrow that if the death penalty is introduced, that will totally negate any ambitions Turkey has in that direction?

I believe I am right in saying that if Turkey were to reintroduce the death penalty, it would be disqualifying itself from membership or future membership of the EU, so this would be a self-defeating act and against the objective the hon. Gentleman has just described of Turkey’s potentially joining the EU. I think it is fair to say I have already largely answered the other questions he asked.

I congratulate my right hon. Friend and his colleagues on their appointments. Turkey is a major NATO ally and partner, so how is it that we appear to have been completely blindsided by this military coup? What can be done with our partners to improve our situational awareness?

In a troubled country with pressures of that sort, when their own Government are completely blindsided, it is probably not surprising that we were unaware that this was going to happen. I put it to my hon. Friend that there may have been nobody across the world, whatever the scope of intelligence, who had firmly predicted that this was going to happen on Friday night.

I know that the Minister will impress on President Erdogan how important it is that people get a fair trial, regardless of how serious the offence someone is accused of committing—indeed, the more serious the alleged offence, possibly the more important it is that they get a fair trial. It is difficult to see how that can happen when so many judges have been arrested. What practical help will the Minister be offering to the Turkish Government to make sure that anyone who has been arrested and is going to be put on trial gets a fair trial, in accordance with the proper rule of law?

The most practical influence we can have on this is to join with like-minded countries and make our view clear collectively, be it through the EU or other forums that join together countries such as our allies in the United States. The collective and singular voice calling for upholding of the rule of law and the proper functioning of a democratic state is what we can most effectively provide at this early stage. The point about NATO has already been made. The point about the long-term objective of Turkey wanting to join the EU has already been made. I hope that bilateral discussions, the likes of which I hope to have tomorrow, will also impress on the Turkish Government exactly the point the hon. Gentleman has put to the House.

I, too, congratulate the Minister on his appointment. Will he say a little more about the fact that, as we know, human rights abuses against the Kurdish people have been increasing over time, and that the Kurdish people play such an important role in the fight against Daesh? Will he point that out in his conversations tomorrow? What more will he be saying about it?

The hon. Lady raises a very important point, because the UK and Turkey work in a close partnership to prevent extremist travellers from reaching Iraq and Syria, involving practical co-operation between our police and security forces. We want that to continue and we hope that it will, and we stand ready to help Turkey in any way we can during this difficult period.