Wednesday 22 May 2019
[Mr Laurence Robertson in the Chair]
Leaving the EU: Extension Period Negotiations
I beg to move,
That this House has considered negotiations on the UK leaving the EU during the EU extension period.
Although I have contributed to many Westminster Hall debates, it is an honour to lead my first one this morning and to do so under your chairmanship, Mr Robertson.
In my maiden speech nearly two years ago, I spoke of the “delicate gift” that is our “parliamentary democracy”, which is
“the sum of the toil”
“sacrifice…that generations before us have made”.
I also said that this “dynamic system” has worked on “trust”, with each cohort of parliamentarians vowing to “fine-tune” and reform our laws and institutions
“to reflect the needs and desires of the citizens they represent.” —[Official Report, 6 July 2017; Vol. 626, c. 1392.]
I made my own vow two years ago, standing on a manifesto to leave the single market and customs union, in an election at which nearly 85% of votes went to parties promising to fulfil the referendum result. I was elected to a House that had already triggered the two-year countdown to our departure from the EU, and I took leadership from a Cabinet that repeated in one voice that no deal was better than a bad deal.
On the eve of European elections, we should all reflect with regret on the fact that this generation of parliamentarians is now on the cusp of losing the trust that is so fundamental to democratic legitimacy. Could there be a more poignant symbol of that devastating loss than the scaffolded shroud that this mother of Parliaments now wears? How disappointing to those who flock to this place in admiration that they find not a confident institution but one where Big Ben—the icon of our democracy—is silent, its clock face peeping on to a Parliament that is being incrementally fortified against rising anger from the streets.
I do not wish to downplay the magnitude of the decision to leave the EU or the complexity of extracting ourselves from the EU some 40 years after entry. However, it should have been our role as parliamentarians to address and manage those complexities. Instead, it is an indictment of this place that, three years on, the question of whether we shall leave the EU at all is not even a settled one. There remains no clear vision of our future relationship with the EU or of our new role in the world to underpin Government strategy. In the absence of that vision, we have become increasingly desperate just to deliver the word Brexit, even if an unholy fudge to obtain our withdrawal binds us into the very systems that the electorate rejected while denying our voice within them.
I sought this debate not to argue about the merits or otherwise of leaving the EU, because that decision has been made, nor to pick over the bones of a withdrawal agreement that has thrice been rejected. Instead, I want us to take stock, ask ourselves how we got here and then—most importantly—ask how we can make use of the period until 31 October to deliver on the referendum and gear our country to its new future.
There are many and varied reasons why people voted to leave, but one of the turning points for me as a floating voter was the conclusion of the attempted renegotiation of our membership. In my opinion, the preference of many swing voters would have been to stay in the EU and reform it from within. However, the renegotiation was the point at which it became clear that British influence, and the threat of the third largest member of the EU walking away from it, was going to be an insufficient driver in making the EU more dynamic and accountable. Instead, the eurozone members were likely to require further political integration, creating a deeper divide with non-eurozone nations and an even more pronounced loss of influence for our nation when it comes to addressing the concerns of our own citizens.
Since then, we have spent three years effectively trying to carve out a bespoke association agreement with the EU, with Chequers being the Prime Minister’s attempt to obtain a half-in, half-out option. The EU dubbed that cherry-picking, and in reading the UK’s political dynamic, it has banked our offers of cash and a comprehensive security partnership, while holding us to a backstop in Northern Ireland that in the next stage of talks will ultimately pull us into a customs union and large parts of the single market. If it does not do that, it risks splitting our country.
I am listening with great interest to the hon. Lady’s comments. She does not want a Northern Ireland backstop. Could she tell us her proposal to respect the Good Friday agreement if we leave the customs union and the single market? Does she accept that the Government’s own view is that such a solution does not yet exist?
I will go on later in my speech to talk about some of the alternative arrangements that are already being worked up. There is a group within Government that actually has the resources now to deal with that issue, and the EU is also looking at alternative arrangements. I think that the question now becomes this: do we make those alternative arrangements now, or after we have signed a withdrawal agreement that is effectively an international treaty that will bind us into a number of things that are not in our country’s interest?
Tied into EU rules on goods, we will find that we have little leverage in negotiating access for our critical services, either with the EU or with new trading partners. However, there is absolutely no point in directing our frustration over this substandard withdrawal agreement at the EU. We have been out-negotiated, hoisted by the petard of an article 50 process that British diplomats designed; this poor outcome has come about through our complicity in its sequencing and design.
However, the withdrawal agreement has been neither signed nor ratified, so there remains a chance for us to pause and read the writing that the British public—if not Britain’s politicians—have seen on the wall for some time, namely that if we go ahead with this agreement, we will give up our ability to secure an attractive future relationship with the EU and instead will find ourselves in an unsustainable, asymmetric relationship with the EU, which will arguably leave us with less say over the rules and regulations that govern us than we have now. The transition period will only extend political uncertainty, and therefore economic uncertainty, because we do not know to what we are transitioning. That will throw a blanket over an economy that desperately wants a sense of direction. Whatever Bill now comes before us in Parliament will not change what has been negotiated in Brussels; we must not waste the next four months attaching funereal adornments to a thoroughly dead horse.
The public also know that the EU is unlikely to reform any time soon because the existing system benefits its most influential members. The EU will not draw up, at least in these current negotiations, a bespoke relationship with the UK, because it has decided that it values the integrity of the single market over frictionless trade with us, and it has also determined—quite correctly—that it has the leverage to reject our overtures regarding special treatment.
Parliament has so far done its job in judging this agreement to be against our interests. However, it has not accepted the consequences of that judgment. Despite attempts by parliamentarians to suggest practical amendments, the Prime Minister and the EU have made it quite clear that no other withdrawal agreement is available. They have also made it clear, through the sequencing of talks, that there can be no negotiations about the future relationship, beyond the broad-brush political declaration, until we have formally left. To put it another way, we will only be permitted to move to stage 2 once we have tied our hands behind our backs in stage 1.
I say with deep regret that we are left to face an unavoidable question: will we leave without a formal withdrawal agreement, with the economic challenges that presents, or will we vote to revoke article 50, and face the democratic consequences of that action? If parliamentarians wish to revoke article 50, let them vote for it and explain to their electorates why they now seek to overturn the inexorable logic of what they themselves put into law. Alternatively, we must face leaving without a withdrawal agreement and use the time before we leave to do our damnedest to make that work, while leaving the door firmly open for discussions with the EU on an alternative withdrawal agreement. Such an outcome, however, will require more than cosmetic preparation and jingoistic mantras about WTO terms. It will need major policy prescriptions, strong Government direction and co-ordination, transparency about the state of our preparedness and potentially even a fresh mandate if Parliament contrives to frustrate this process.
I am grateful to have the Minister for no deal here this morning so that he can set out with honesty and clarity the challenges that we would face in delivery, and how we can best mitigate them, while maximising the leverage of any advantages that this freedom might provide.
The urgent priority for Government in such a scenario would be to address the absence of an underpinning philosophy about Britain’s place in the world. My concern at this absence is reflected in Friday’s National Audit Office report on future trading policy, which effectively said that the UK will not get what it wants if it does not know what it wants.
The Brexit vote has often been misinterpreted as a misty-eyed reflex to return us to Britain past, but I see it instead as a judgment about the future—about where the world is going and whether the trajectory of the EU puts us in the right place to tackle the new challenges ahead. We are moving into an era of substantial regional trading blocs, in the form of China, the US and the EU. However, the UK has ultimately been unable to reconcile itself to Guy Verhofstadt’s vision, which he expressed this week, of an EU empire as the best way to flourish in this era, because we believe that the nation state still has fundamental relevance in maintaining the social and economic pact between Government and citizens that safeguards our cohesion.
Leaving the EU must not mean simply jumping into the arms of an alternative bloc. We must set ourselves up as a dynamic, open trading nation like Australia, Singapore and Canada, with strong links to all major powers and co-operation with the most forward-thinking, mid-tier nations on global standards for new technologies and data, the rule of law, security, and constantly evolving free trade agreements that break new ground on environmental stewardship, sustainable development and people-to-people exchange. Globally, we can be a bridge, a mediator and a thought leader; domestically, we can be a place of safety, liberty, creativity and prosperity, comfortable with the value of our nationhood and proud of our collective, modern identity.
Secondly, we need to move with speed—but not haste—in drawing up a new independent trading policy, ensuring that we avoid entering substandard agreements out of political imperative. We need to quickly establish whether the EU is genuinely interested in rapidly striking a comprehensive FTA along Canada lines, or whether it would seek to drag that process out to stifle talks with other nations. As things stand, it has been difficult for us to roll over existing FTAs, for example, because third countries want to see the shape of the future UK-EU trading relationship: how much flexibility over our own rules we are going to have, and how much access to the EU market.
Before making that approach to the EU, we have to undertake a hard-nosed assessment of our negotiating leverage, be it money, access to goods and financial markets, or co-operation on research and security. We must then answer broad strategic questions such as whether we have the capacity to attempt parallel negotiations with other countries, and whether to roll the Department for Exiting the European Union into the Department for International Trade so that the Government speak with a consistent voice. Immediately after tomorrow’s elections, we will require swift diplomatic analysis of how the new make-up of the European Parliament and Commission has changed the European power dynamic, and the extent to which that alters the landscape of future talks.
Thirdly, we need to accept that future access to the EU market will not be as good as our current arrangements, or is unlikely to be. Trading on WTO terms is not a cure-all, otherwise Governments would never seek to improve those terms via FTAs. We need urgently to identify which businesses will be most affected by that change in access and mitigate its impact, whether through a bold programme of tax cuts, greater regulatory freedoms that can drive competitiveness, or specific short-term support packages from the state. I would be grateful if the Minister explained what cross-departmental work has already been done in this area.
There also needs to be an analysis of long-term impacts. In financial services, for instance, the EU will want to avoid immediate shocks to its own institutions, but will then try to create a medium to long-term drag for firms so that they base themselves in the single market. What is our strategy to provide an even more compelling pull for services firms to retain, or move, bases here? How ready is our trade remedies regime, and are we really prepared for dealing with our own defensive producer interests, which we have hitherto hidden behind the EU to arbitrate?
Fourthly, Northern Ireland will require intensive and sustained focus. All parties, including the EU and Ireland itself, have agreed that there cannot be a hard border, so political impetus and financial resourcing need to be given to the alternative arrangements working group on how existing techniques—not new technologies—to check and clear goods away from the border can be implemented. I would appreciate the Minister’s update on that work, as well as on the state of preparedness at Dover and other major ports; on progress in rolling out authorised economic operator and trusted trader schemes; and on HMRC support for businesses dealing with new paperwork requirements.
If we are to take a tighter approach to immigration from the EU, we will need a major boost to our domestic skills agenda, including the adequate resourcing of our vocational education and college system; intensive investment in recruitment to the health and social care sectors; and incentivisation of businesses to train UK workers. What discussions has the Minister had about the preparedness of the labour market to tackle any impact of no deal?
To make this policy effort work, we will need to rally businesses, citizens and the civil service. Enough of the attacks on one another. Civil servants are just that: dedicated, professional citizens with a desire to serve. However, they cannot compensate for an absence of political direction. Once that has been provided, we must trust them to deliver.
That change of attitude must also translate to our dealings with the EU. Enough of the constant wartime references, and of speeches made in the UK that we think are not being heard in Brussels. The EU is not an enemy, but an organisation comprised of treasured partners; we need a reciprocation of that attitude, while reassuring the EU that it should not fear contagion. For Brits, our membership of the EU has always been more transactional, because as an island nation our borders are comparatively well defined. A desire for political stability, even if at times it comes at the price of economics, takes precedence for many continental European nations.
This new era therefore allows for a renewal of our relationship that will let each party move in a trajectory with which it is more comfortable. That relationship will require the establishment of fresh diplomatic frameworks for dialogue on issues of shared importance, and I would be grateful if the Minister explained what discussions he has had with the Foreign and Commonwealth Office about how we are gearing up our presence across the continent. The National Audit Office has also identified that DIT is under-resourced for the new relationships we wish to build. Can the Minister advise us on how quickly we might step up our presence in those countries with which we wish to deepen trading ties?
There are many other areas of no-deal preparations that require intensive focus. However, as other hon. Members wish to contribute, I will conclude by raising a bizarrely under-discussed aspect of Brexit that goes to the heart of this nation’s political malaise. Representative democracy works by citizens effectively subcontracting political decision making to a class of people in a way that gives those citizens the freedom to live their lives and prosper. They then endorse a framework and strategic direction for those decisions via a general election, or—in the case of Brexit—a referendum. In many ways, contempt for the political class has grown over these past few years in line with politicians’ avoidance of the kinds of decisions that they are explicitly elected to make, and their insistence on blaming institutions like the EU for failings.
Brexit was a signal to this place that the public want us to make more of our own decisions and then be accountable for them, but it is astonishing how few parliamentarians welcome the raft of powers that will soon make its way across the channel. We have not even begun to contemplate what that restoration of powers will mean for Parliament, and how it can be used to reinvigorate our pact with the electorate. In that vein, I would be grateful if the Minister could tell me what urgent thought is being given to rebalancing with the legislature the power that has been transferred to the Executive from Brussels via Henry VIII clauses in this period as a means of managing short-term Brexit challenges. Such power vested in Government may seem expedient now, but will rapidly seem less attractive under a Corbyn Government.
I fear that for some time, our political class has harboured a simultaneous inferiority and superiority complex about this nation’s abilities. One group of politicians consistently talks down our country’s inherent strength and resilience, while another parrots slogans of exceptionalism that diminish the practical challenges ahead. The public believe in this nation’s future beyond the EU, but expect us to be clear-eyed in its delivery. The Prime Minister has indicated that she will not take us forward in such an endeavour should her withdrawal agreement fail again, so the duty will fall upon any leadership contender to set out with resolve, and in forensic detail, their response to some of the issues I have highlighted. In doing so, I hope they will place service to nation, rather than personal ambition, at the heart of their task.
Regarding the latest EU extension period, EU President Donald Tusk warned
“do not waste this time”,
but it is not his wrath about which we should be worried. If on the road to 31 October, we do not employ the lessons we have learned over these past three years, the electorate may well indicate tomorrow that they are more than willing to bestow democracy legitimacy on another group of people.
I congratulate my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez), who has eloquently opened this debate and set out some pertinent questions that I hope the Minister will try to answer—probably with limited time.
The referendum was a vast vote of confidence by our people in the future of our country—a vote of confidence not entirely shared by the political class, who seem to suffer from a collective Stockholm syndrome: they cannot see a way forward without trying to hold on to nurse for fear of something worse. A lot of the problems we face in our democracy at the moment have arisen because although Parliament’s role is different from that of a referendum, we have to facilitate the decision, and I do not think Parliament has done the job that the people expected it to do when they elected it in 2017. Somehow, those of us who wish to enact the referendum have to try to find a way through.
A lot of the deal that the Prime Minister has agreed with the EU is not controversial; it is quite sensible, and is eminently voteable for. However, there is a big problem with that deal. There were no conterminous trade talks, so where we are going to land becomes a vacuum, into which the EU has very helpfully placed the backstop. That backstop should not be in the withdrawal agreement; it should be part of the trade talks. Nearly three years after the referendum, we are still arguing about whether we are going to be in the single market and what the relationships are going to be. That problem arises first from the EU’s response, but secondly from the Government’s response in accepting the EU response.
It is manifestly clear to me that 12 to 18 months ago, we should have walked out of the talks and gone for no deal, because the agreement is not fair and equitable. The fundamental problem in getting the deal through the House of Commons is the backstop and the fact that there is still great doubt about where we are going to land. Most of us want a good relationship with the Irish Republic and most of us want an open border. Had there been coterminous trade talks, we probably would not be very far away from having that as part of the agreement. Not doing coterminous trade talks was a monumental mistake, but it was made in the EU and in Downing Street. There were times in the negotiations where we needed a bit of handbagging, and we did not get it.
That leaves a problem. The one proposition that would go through the House is the deal without the backstop. If the backstop is taken out of the withdrawal Bill on Second Reading, I will vote for it, and I think the House will vote for it, but I suspect that the backstop will still be there, and that fundamentally is a problem. We have properly to prepare for no deal, because there are not many options if Parliament does not support the Prime Minister’s deal. As always, the people walking through the Lobby to vote against are those who do not like the deal, but they are also those who want to revoke or overturn the referendum. It is no doubt an unenviable and difficult task for the Prime Minister, because there are many swirling tensions and arguments over Europe that have been in the House for 20 years, and they are bedevilling the chances of our getting a deal and getting on to trade talks.
Moving on to no deal, a lot of preparation has been undertaken. Every time I used to read in the Sunday papers that some disaster would befall us, I would ask the then no-deal Minister, of which the current Minister is one of a succession, “Is this true and what we have done about it?” The no-deal Ministers have been doing a massive risk assessment of what could go wrong and what we should do about it. One Minister mentioned to me one day that a lot of British information was kept in southern Ireland, and they would have to repatriate it to British servers otherwise we could not access some of the things to do with pensions, benefits and everything else. I think we can all reassure ourselves that the civil service and the no-deal Ministers have done a pretty good job.
Pertinently, one of the no-deal Ministers said to me, “You can make lots of preparations. Clearly, if you go on to WTO terms overnight, there will be problems for exporters and businesses. That requires the Treasury effectively to underwrite some of our businesses for a period of months.” We did that with the banking collapse, and we have done that at certain times in our history. For example, in the second world war when ships were being torpedoed, the British taxpayer paid for merchant shipping. We need to underwrite any kind of change with the resources of the UK Treasury. The problem many of us face is that people in the Treasury spend most of their time worrying about no deal and saying it will be a disaster, rather than preparing for it and backing what the British people want to do.
I am confident that a lot of things have been done by the Government. I am a little less confident that preparations for no deal have been undertaken by many private businesses, but the problem many of them have is that they prepared for no deal at the end of March. They are now left with large inventories. They have expended millions of pounds, and they do not know whether we will have no deal in October or maybe later. We may have a worse scenario with no deal because we put it off in March when people were preparing for it, because businesses now have to take some hard political decisions. If we look at the banks’ reports, they have all been lending money to their customers so that they can make preparations. There is of course a limit to what the banks will put forward and what companies will do.
There have been good preparations by no-deal Ministers. A no deal needs to be planned, organised and underwritten by the billions of the UK Treasury. I do not think it is a question of costing lots of money. The wheels of business turn, and if people find that a ship going to South Korea suddenly gets landed with tariffs or turned around, that will drive British exports to bust.
We need vision in British politics. Not only is there a vacuum in our future trade arrangements, but British politicians should be looking ahead with an optimistic view of how we are going to put our place in the world. There is an awful lot for us to do, but we desperately need to fulfil the terms of the referendum. The only way we will be able to do that, if things continue as they are, will be in a prepared, organised, and packed no deal where we get where we want to get. My view is that if the Prime Minister had stuck to the end of March, we would now be getting through the problems, rather than being up to our neck in them, but the fact that we are having an unwanted, uncalled-for European election is probably an awful indictment of where we are.
I am confident in the Minister, but it boils down to a question of trust. Unfortunately, many of my colleagues do not trust the EU, looking at the track record, but there are severe concerns and question marks over the Prime Minister, and we see that, even when her own Cabinet have arguments. Sometimes people can vote for a deal they do not feel comfortable with if they feel that the person in charge is going to bat for them. Too many of my colleagues feel that that is not taking place. I am looking forward to the Minister’s response. I am grateful to my hon. Friend the Member for Hornchurch and Upminster for securing the debate. Many of us think we have to proceed, if necessary with a no-deal scenario that is well-organised, well-funded and successfully undertaken.
Before I call the next speaker, I am going to limit speeches to seven minutes so I can get everyone in.
That could be difficult, Mr Robertson. It is a pleasure to serve under your chairmanship. I thank my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) for securing this debate. Little did she know that it would serve as an opportunity to release some of the anger I feel following the announcement last night, but more of that later, perhaps.
As is often the case when I get to my feet here or in the Chamber, my audience first and foremost is the good people of Walsall North, because I am here to speak on their behalf and also to speak to them. They will be slightly perplexed, because tomorrow, we will take part in the European elections. That might sound like a fairly uneventful thing, but let us go over it again: tomorrow, we will take part in the European elections. Some 1,062 days ago, 17,410,742 people voted to leave the European Union, yet this Government have so far, after 1,062 days, been unable to deliver that. How do we think the people of Willenhall, Bloxwich and Walsall North are feeling? Not too good, I would say, and that was 24 hours ago. I am not sure how they are feeling after they heard from the Prime Minister yesterday.
Let us talk, however, about why my constituents might have voted to leave in the first place and how optimistic they might have felt. What grounds did those people have for their optimism, which we seem to have misplaced on their behalf? First, let us think about what was happening in 2010. In 2010, Merkel, the German Chancellor, was talking to Sarkozy, the French President, about reform of the Lisbon treaty. They wanted a little photo opportunity, so they took a walk along the beach in Deauville. They were able to do that without their advisers present. Why was that? We know that Merkel does not speak French and Sarkozy does not speak German, but they both spoke English. It is the universal language of business. What a great opportunity we have, because we speak a lot of English in this country. It is a handy place for people to locate their business.
Hiroshi Mikitani, the chief exec of Rakuten, certainly thinks that. He runs a business in Japan that employs 7,500 people. There must have been something in the air in 2010, because he told his business that from then on, it would conduct all its business transactions in—you guessed it—English, because he understood that it was the language of business across the world. The people of Walsall North understand that, too, which is why they believe that people come to locate their businesses in the great United Kingdom.
People right across the globe know where Liverpool, Manchester and London are. We know that because the premier league is broadcast in 221 areas across the world. It is the most successful football league anywhere on the planet. It is broadcast to 640 million houses, with a possible viewership of 4 billion. People right across the planet know where England is. They know where the constituent cities of our great country are because we have great advertising through the premier league.
If those people come here, will they be studying in great universities? According to the Centre for World University Rankings, they damn well will be. Those rankings put two of our universities in the top 10. Unfortunately, they did not have any room for any other European universities in the top 10.QS, on the other hand, put four of our universities in the top 20, and, once again, it did not have any room in the top 20 for other European universities. We have the best universities in Europe as well as having the premiership, and, conveniently for my speech today, the two teams contesting the final of the champions league happen to be from England.
A great nation has a fantastic opportunity and great optimism. People went to the polls and voted to leave because they damn well knew that the UK could make its own way in the world. They also knew that we were leaving the European Union, but not leaving Europe. They knew that nine out of 10 of our holiday destinations were to Europe. They will continue to take their holidays there and they expect us to continue to trade. We will still be friends and will still need each other’s products.
Why is Thomas Cook in danger of going bust if people are still booking holidays in Europe?
I do not know the answer to that. I am not aware of the story, but I do know that a couple of weeks ago Which? magazine published an article that said that TUI should not describe hotels that are not on the beach as being on the beach, so perhaps there are some other practices going on. I am not sure what the reasons are, but I am damn sure that we will continue to holiday in Europe: mostly in Spain, as it turns out. Perhaps the hon. Member for Glenrothes (Peter Grant) will share his travel plans for the summer with us later. I am going off course—we are a great nation with a great opportunity that has not been delivered by the Government so far.
So what happened? I came to Parliament and went along with my dear friend, my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), to see the then Immigration Minister. We said, “We don’t think you are making good enough preparations for no deal, because those pesky people from mainland Europe will spot that, although we are telling them we are preparing for no deal, the fact that we have not submitted a single planning application to build any new infrastructure at our ports will probably give the game away that we are not actually committed to it.” It was like playing cards with somebody who had a mirror behind them. They were looking at our hands and saying, “We know you do not have aces. You are not building anything, and that puts us in a great position to negotiate a very weak deal for you and a very strong deal for us.”
Margaret Thatcher said she had the patriotic belief that the British people could achieve anything. If only our Prime Minister had that same belief in our great nation, we might not be in the position that we are in today. When we look forward to any future negotiations, let us believe in this great country, let us understand the reasons why 17,410,742 people voted to leave, and let us deliver on what they voted for because they deserve better.
I rise to support my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez). If we were allowed standing ovations, I would give one to my hon. Friend the Member for Walsall North (Eddie Hughes).
Most frustratingly, the Prime Minister had it all together in her Lancaster House speech in 2017 when she talked about negotiating a “bold and ambitious” free trade deal with Europe that would give us the ability to strike out around the world. She did not pretend it would have all the same benefits of membership, because we were going to leave, but we would have a different and positive relationship. She was going to take back control of our money, borders and laws. She was quite right when she said that those things were highly important to people’s decision to vote leave in the referendum. Importantly, one of the few messages that really struck a chord with people out there in the country—a message that they heard and believed—was that
“No deal is better than a bad deal.”
If the EU would not give us something that worked for the United Kingdom, we would walk away and succeed on our own merits. There is no point now in wishing that things were different, but it is heartbreaking that we have ended up here, when the Government had the right approach two and a half years ago—an approach that has long since been abandoned.
The referendum vote was a massive vote of confidence in the United Kingdom and in the Government. The people of Britain said, “We do not want people in Europe telling us what to do. We know and we believe that our Government in the United Kingdom has the strength and the power to deliver this difficult decision and to get it right for us as the population of the UK.” That huge trust is a burden that we should bear here in Parliament. We should have delivered. My hon. Friend the Member for Poole (Sir Robert Syms) is absolutely right when he says that politicians have not shared that optimism and confidence, and have eroded that trust over the past three years.
The Brexit party seems likely to wipe the floor with us in the European elections tomorrow, because the promises have been broken. The deal was not good enough. We should have stuck to the words in the Lancaster House speech and left on 29 March. That is what I voted for in this House, and it was perfectly within the Prime Minister’s power to do it if she genuinely believed her own words in 2017.
I will not go into great detail on the new deal—it seems almost irrelevant. I cannot for the life of me understand how anybody in Government can think that slight variations on a theme, and the increasingly muddled and contradictory plan that we are now presented with, are the answer.
Time for change.
It is time for change, as my hon. Friend says from a sedentary position. There are two ways we can proceed: either we revoke article 50, which is totally unacceptable, or we stand firm in our commitment to leave on 31 October, come what may. A good deal would be great; no deal would be okay. Either way, we have to leave and we have to honour the promise that we made to the public.
It is clear that the Prime Minister cannot get a better deal, as she has shown that she will not leave without the EU’s agreement. A new leader might be able to do something different, but the vital thing is that there can be no more delay and no more trying to fudge the withdrawal agreement into something acceptable, because it will not happen and is wasting time.
My hon. Friend the Member for Hornchurch and Upminster is absolutely right about what needs to happen now. She went into great detail about plans that need to be put in place for our exit on 31 October. We should keep trying to agree something; we have time, so we should keep trying. However, if the European Union sticks to its word, at the end of October we will probably be faced with the decision to leave without an agreement, or to stay in the EU. I will certainly not be a part of any party or group that tries to block or overturn Brexit at that point. We have to leave.
I ask my hon. Friend the Minister to reassure me on the points raised by our hon. Friend the Member for Hornchurch and Upminster. Will he assure us all that we are planning properly for our departure; that we will lay out our plans for the UK’s key priorities for trade and future relationships if we leave on WTO terms; that we have put in motion plans to mitigate the short-term adverse impacts; that we will ensure we have the necessary agreements in place to keep things moving; that we are looking at the practical delivery, not just the theory, of alternative proposals for the Irish border; and that the attitude of the Government and the civil service will be one of steely determination to deliver the smoothest possible exit on those terms, as it now seems the most likely outcome? It should be perfectly possible, as we will have had six months more to prepare than we had expected. The Minister’s predecessor, my hon. Friend the Member for Daventry (Chris Heaton-Harris), was adamant at the time of his resignation that we are as prepared as we could be, and I trust that that remains true.
We cannot start to heal the divisions that exist in this country until we have left the European Union. We cannot seek to restore trust and reaffirm democracy in this country until we have left the European Union. Anybody who wishes to lead this country and start to implement the positive, small “c” conservative agenda that those of us on the Government side of the House crave must first get their hands dirty with Brexit solutions, not just soundbites. They need to deliver and get us out on 31 October at the very latest, or we can be sure that, come the next election, no Conservative leader will deliver anything for a very long time. I know the Minister understands that.
It is not only faith in the Prime Minister and the Conservative party that has been shaken by broken Brexit promises; it is faith in our entire political system and its institutions, and in politics as a whole. That faith is not lost forever, but every day that we drift on without showing clear determination to honour the referendum result makes it harder to recover that trust. I hope the Minister can assure me that in his role with responsibility for preparing our leaving without an agreement, and in the absence of a deal that works for the UK, he is confident that everything is being done to ensure that we are in a position to leave on 31 October.
It is an honour to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) not only on securing this timely debate, but on her extremely thoughtful and persuasive opening speech. That wonderful speech illustrates why she is one of the rising stars of the Conservative party.
I am honoured to stand alongside the exceptionally talented 2017 intake of Members of Parliament. It is particularly fitting because we are all dealing with the consequences of decisions that were taken, in many cases, before we were born, and certainly many years ago. Those of us who speak from the back row in this debate are all post-referendum MPs. I was the first of them, so I take a slightly different attitude from many Members. My role is not to fight old battles or to justify why I took a particular position at the time, because I was elected, as all Conservative MPs were in 2017, on a manifesto committed to implementing the referendum result, that in/out referendum having being called on the back of a clear promise in 2015. That is the historic charge that we have been given, and it is an enormous honour for us to do it.
Fundamentally, Brexit is not a policy; it is a constitutional question. It is the fundamental issue of how this country is governed and by whom—whether it is by elected politicians in this place, whom the people can judge, and hire and fire as they desire, or by a supranational layer of government in Brussels. We will start to bring the country back together only by understanding that we were going to have to deal with that question, or one like it, at some point.
Anybody who voted at the time of our entry to the then Common Market in the early 1970s will say, “I thought I was joining a trading arrangement. I thought I was joining a common market.” Nobody thinks that now. Everybody now accepts that the European Union is a political union. People may have different views about how far it should stretch, but clearly it is no longer a trading organisation; we need only to look at the recent comments, which I do not need to repeat, by Guy Verhofstadt about a European empire, and President Macron’s calls for further integration and a European army.
At some point, Britain had to deal with the logical consequences of joining a political union while trying to persuade itself, even to this day, that it is only a trading bloc. It is not a trading bloc, and we had to deal with that. We could not forever have remained reluctant passengers in a car going in a direction that we do not want to go in, constantly asking the driver to slow down or change direction. We had to decide whether we were going to be passengers or get off.
The issue was thrown into stark relief when Britain decided not to join the euro. From that point, some major, fundamental parting of the ways was going to happen, because a monetary union cannot exist without fiscal and political union. The European Union will have to integrate or accept that the euro will not survive. We wish them well with their project, but nobody in Britain wants to be part of a United States of Europe—or, at least, nobody who does want that has ever had the courage to make that argument.
A fundamental reassessment of our relationship was therefore going to have to happen, but that did not have to mean leaving. As I think my hon. Friend the Member for Hornchurch and Upminster said, I was a firm supporter of David Cameron’s policy of remaining in a renegotiated European Union—one in which we could remain at the table but outside the political structures, in a second tier of membership. However, that question was settled when David Cameron’s renegotiation could not produce enough to persuade the British people to remain.
It would do all of us in this House, and the country, a lot of good to take some of the heat out of the issue, and accept that we were always going to have to renegotiate in some way our relationship with the European Union; and that once it became clear that the European Union would not budge and allow us to be part of a looser outer tier, we were probably going to have to leave. However, that does not mean that we raise the drawbridge, that we are not friends with our European neighbours, that we do not co-operate, or that we do not trade.
I take the slightly controversial view that the two sides of the argument are not as far apart as they think. Whenever I speak to someone in my constituency who wants to remain, I ask them why. They say, “Because I want to work with our European neighbours. I want us to trade closely with them. I want us to co-operate.” When I speak to somebody who voted to leave, I ask them what they want. They say, “I want to trade closely. I want to be part of a co-operative relationship. I want to be friends with our closest neighbours. I simply don’t want to be part of a political union. I’m comfortable with the concept of the nation state, and I want our decisions to be made here by our politicians—people we not only elect but can get rid of.” If people cannot dispense with those who govern them, they are not living in a proper democracy.
Let us now accept all that; let us accept that we have a historic charge that we have to carry out. It was not of our making; it was probably preordained to some extent, in many cases before we were born, and certainly before we became MPs. It would do us a lot of good to understand that and to ensure we have a close relationship, but that close relationship must have democratic accountability. If MPs exist to do one thing it is to defend our democracy. People want to see a direct link between their vote, their constituency MP and the rules that govern them.
I am conscious that I have run out of time; there is much more that I would love to say. My final point is simply that we can establish that relationship in a number of ways, but let us please have a spirit of optimism. We have to stop looking at Brexit as a damage limitation exercise. We are recovering full democratic self-government. That is something to be proud of—now let us get together and shape it.
I congratulate my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) on securing the debate, not least because it really has lived up to the quality that we hoped for. The debate has showcased voices from across our country—London, the midlands, the south and, now, the north-east—talking about the issues that matter to our constituents.
My hon. Friend the Member for Walsall North (Eddie Hughes) referred to his constituents. When I was talking to mine on the 2017 election trail, I was able to make three firm promises to them: first, that we would leave the single market and the customs union; secondly, that we would leave the European Union at the end of the two-year period under article 50, which turned out to be until 29 March; and thirdly, that we would not, under any circumstances, allow a second referendum. Those three promises all seem, in different ways, to be in jeopardy today, which is a source of grave concern. Most of my constituents have been left somewhere between bemusement and anger that we are in this situation.
On 12 February, my hon. Friend the Member for Basildon and Billericay (Mr Baron) asked the Prime Minister whether we were “sufficiently prepared” to leave the EU on 29 March with no deal. The Prime Minister responded unequivocally, “We are indeed.” Given that colleagues had been calling for no-deal preparations from day one, and the Government had 9,000 civil servants with an extra £4.2 billion of funding working on those preparations, that answer was no less than we should have expected.
It was therefore both surprising and disappointing that on 13 March the Government supported a motion in the name of the Prime Minister to delay our exit from the EU on the ostensible grounds that we were not yet prepared. They argued that we were not ready to leave because approximately one third of UK businesses that trade with the EU had not yet registered with Her Majesty’s Revenue and Customs. They also claimed that the border inspection posts for agricultural goods at Dover and Calais were not yet operational.
Despite repeated promises that the UK would leave the EU on 29 March, we now find ourselves in a six-month extension period. Although it is deeply regrettable that the promise was broken, the unexpected extra time affords us an opportunity to address those issues, as there must be no further delay beyond 31 October. However, one of the first actions the Government took after delaying our departure was to stand down
“no-deal operational planning with immediate effect”.
Brilliant. At the same time, the Government have wasted lots more valuable time in predictably futile negotiations with Labour MPs, too many of whom take the view that the same people who elected them are, in fact, stupid and should be ignored. The complete absence of those MPs today speaks volumes.
Those few in the Labour party who still notionally claim to respect the referendum mandate have decided, for reasons not well understood, to advocate the worst-of-all-worlds position of staying in the customs union. Entering into a customs union would hand Brussels total control of our trade and customs policy, and preclude our right to sign trade deals with the rest of the world. Worse, when the EU signed a trade agreement with another country—for example, China—we would be compelled to make all the concessions agreed to by the EU.
Does my hon. Friend agree that a customs union does not actually deliver frictionless trade?
Indeed it does not. It has become a holy grail—a totemic example of our determination somehow to be in and half-out at the same time. As other hon. Members have pointed out, that is a fundamentally untenable position. Making the decision to leave the European Union means embracing the choices, challenges and opportunities that come with that; the same would be true of the decision to be part of the European Union. There are trade-offs to be made in either position. In that respect, there has been a fundamental lack of honesty throughout the entire debate.
The European Commission’s own website states:
“The Customs Union is a foundation of the European Union”.
I am clear that continued membership of the customs union would be not only a serious misjudgment, but a breach of faith with the referendum result. It was therefore with absolute incredulity that I watched the Prime Minister yesterday promising to adopt both the customs union and a second referendum as official Government policy if Parliament votes for them. Frankly, that position represents a devastating failure of politics, leadership and statecraft. Indeed, the only redeeming feature of the situation is that this desperate attempt to win the Labour party’s support must be the final one.
Many of us have advocated a Canada-style trading relationship with the EU, with frictionless trade and a high level of customs facilitation. In such an arrangement, we would be fundamentally responsible for controlling our internal affairs. Regrettably, we have encountered the twin misfortune of having a leader who never asked for it and an European Union that would rather turn us into a colony. Unless and until both those facts change, it is incumbent on us all to prepare for no deal. Indeed, on the very same day in March that Ministers stood at the Dispatch Box warning of the lack of preparedness for no deal, the European Parliament in Strasbourg voted through no-deal measures on, among other things, social security, road freight connectivity, basic air connectivity, the fishing fund, fishing vessels authorisation, railway safety and connectivity, and road haulage. There is no reason why there should be any interruption to or shortage of goods coming into the UK in a no-deal scenario.
Is it not a little ironic that the European Union’s no-deal preparations are much clearer than ours?
There is a bitter irony in that, as my hon. Friend rightly says. It speaks to the choices that we have made, but choices they were—it needs to be recognised and understood that there is nothing inevitable about the situation in which we have placed ourselves.
It is entirely up to us what barriers to impose on imported goods in any scenario. The Government have already said, quite rightly, that in the event that we leave with no deal, we will prioritise maintaining the flow of goods—even at the risk of losing some customs revenue—until long-term arrangements are in place.
Foreign countries and ports have also demonstrated their keenness to co-operate in a no-deal scenario. For example, Xavier Bertrand, president of the Hauts-de-France region, said in January that
“the ports of Calais, Boulogne and Dunkirk, as well as the Eurotunnel and airports,”
“have 100 per cent fluidity on day one in the event of a no-deal Brexit.”
We need to intensify our preparations, as my hon. Friend the Member for Hornchurch and Upminster said, and look at dynamic policy responses. People on Teesside are intrigued and excited by the possibility of a free port, which would really boost our connectivity in the event of our actually getting free of the European Union. These are the things that we need to be doing. These are the choices that we need to be taking. That is the leadership that we need to be showing.
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) on securing this timely and important debate. I would particularly congratulate her on the timing if I thought that she had had any knowledge of what would happen yesterday, but given that I do not think that my Government had any knowledge of it, I am not sure that I can accord her that credit.
I welcome the Minister to his place. I have a huge amount of time for him; he is an amazing man who has done great things in our party, and I am sorry for him, because he is a good man about to defend a bad deal. None of my remarks will be directed against him personally.
Here we go again. Twenty-four hours after the latest catastrophe—the latest stupidity—we are being asked to manage down, mitigate away, split the difference and trample over our manifestos yet again, as if that has worked so well over the past year or so. It is absolutely outrageous that we are even having this conversation, and it is inappropriate that we are not out of the European Union. I am tired of standing up and expressing the frustration of my constituents in North East Derbyshire about the abject failure of this Government to do anything about their core manifesto commitment. We should not be here.
Two years ago, I made a series of commitments to my constituents, and I will not break those commitments even if the Prime Minister breaks hers. I said that we would leave on 29 March; I voted to leave on 29 March. It was because of the Prime Minister’s choice, not the highly inappropriate meaningful vote 3 that was scheduled for that date to embarrass people like me, that we did not leave on 29 March. I said that I would not support a customs union; now my own Government seek to put a customs union to the country. I said that I would not support a European election; tomorrow there will be a European election that should not happen. I said that no deal was better than a bad deal; I will continue to believe that, even if my Prime Minister no longer does. Fundamentally, I said “No second referendum”—and what did I see yesterday? I saw a Prime Minister who is willing to chuck every single principle out of the window to push forward a deal that just will not get the support of this place and, more important, that does not have support outside it.
Every single principle is being put on the fire to get the deal through. It is absolutely outrageous—it is a fundamental misreading of what the people think. The Government are paralysed by inaction, every principle is being shredded, trust is shattered, and what is the apparent answer? Some kind of pick-and-mix, choose-your-own, go-your-own-way Brexit? Some kind of smorgasbord of stupidity? Some kind of Brexit of the shadows, where we push anything through and then let it get amended in Committee, where we think our constituents will not see it, will not comprehend that it is not Brexit, or will not understand that they have been lied to?
I am being asked to endorse something—anything, whatever—as Brexit, simply becomes somebody stands in front of a lectern and tells me it is so. I am being asked to coalesce—to unify—around a cult of stamina that goes nowhere and uses that Protestant work ethic to drive us off a cliff. I am being asked to look a fourth time at a deal that I have already rejected three times, when it has absolutely no coherence, absolutely no understanding and does not respect the will of the people.
We are not a parish council. We are not arguing for 20 years about where a bench should go in the local park. We have a unique responsibility to deliver what people have told us to deliver. I will keep that deal. I will ensure that the residents of North East Derbyshire understand that I am going to deliver my promises even if the leader of my party has decided to break hers. Where do we go from here? The deal will not pass—that is blatantly obvious. The frustration will not go away. The difference will not be split.
Each of us is charged with a unique responsibility as an elected official to ask ourselves a series of deeply personal questions. How long will we allow this tragedy to persist in our name? How long can we look at a wreckage of a Government decaying before our eyes, when the principles that I came into politics for—those good Conservative principles—need to be used to make the constituency of North East Derbyshire and my country better? What will we say in a few years’ time, when it becomes painfully obvious that the abject failure of leadership over the past year was never going to get us anywhere?
My hon. Friend the Member for Hornchurch and Upminster highlighted a statement that Donald Tusk, the President of the European Council, made a few months ago. He said to us:
“Please do not waste this time.”
I agree with him. It is a Conservative Government—a Conservative Government!—who are wasting this time, failing to demonstrate leadership on the most important thing that we promised the people, and allowing trust in the entire democratic system to be shredded.
There is no dignity in this impasse. There is no honour in the abdication of this responsibility. There is no thanks for what we are doing. Wake up! Wake up before it is too late, and deliver what our country told us to do three years ago.
Before I call the SNP spokesperson, I remind the Chamber that I would like to leave two minutes for the mover of the motion to wind-up at the end. I call Peter Grant.
Thank you, Mr Robertson. I am pleased to begin summing up.
I do not think anyone will be surprised that I disagree with quite a lot of what I have heard in the last 59 and a half minutes. In fact, most people in here, and a lot of people back home, would be extremely disappointed if I did not.
I congratulate the hon. Member for Hornchurch and Upminster (Julia Lopez) on securing the debate. She spoke very passionately and I have no doubt whatsoever that she spoke with complete sincerity, but I have to say that, far too often, she just does not get it. There was no recognition at all in her outline of how we got here that it was her party and her Government that put us here. Her party called a referendum to solve the endemic infighting within its ranks. We can see from this morning’s debate what a complete and abject failure that has been. Her party unilaterally changed its own manifesto mid-term, from one that gave it a majority Government and said we would stay in the single market and the customs union, to one that lost it that majority and said we are going to come out.
When I asked the hon. Lady what alternative she suggests to the Northern Ireland backstop, she promised to come back to it later. She then referred to the need—I think it is correct; I wrote it down—to “check and clear goods away from the border”. That would be a violation of the Good Friday agreement and incompatible with the Northern Ireland peace process.
How can it be that three years after the referendum and more than 20 years since the peace process was secured —a process that is still happening; it is not an event that is finished and done and dusted—we still have people leading debates in this Parliament, and speaking knowledgeably about other aspects of the relationship with the European Union, but not understanding what a catastrophic mistake it would be to think that border checks carried out somewhere away from the border would be good enough? They will not be. Nobody but nobody has suggested a solution that comes anywhere close to answering that contradiction. We cannot avoid a customs border between two countries if one is in a customs union and one is not. When the Government set out something that has been tested, and works, that will allow that to happen, then they can credibly say they will come out of the customs union and respect the Northern Ireland peace process and the Good Friday agreement. I do not think it is possible and I have seen no credible suggestion that it is.
It is not good enough to continually make the European Union out as the villain. The European Union did not force anybody to call a referendum. The European Union did not force anybody to trigger article 50 before anyone in the UK Government had a clue how they were going to deal with it. The European Union did not force the Prime Minister to unilaterally paint herself into a corner with red lines. The European Union did not force the Prime Minister to call an unnecessary election to enhance her majority and end up throwing it away. Those have all been mistakes that have been made by this and the previous Prime Minister. It is high time that the Conservative party accepted its collective responsibility for putting those Prime Ministers into power and supporting them through all those catastrophic mistakes, simply because it thought it might enhance the party’s chances of holding on to power for a wee bit longer.
Given that the hon. Member for Walsall North (Eddie Hughes) was so glowing about trade and tourism between the UK and the European Union, I asked him why Thomas Cook was in trouble. He suggested it was because TUI had been criticised by Which? magazine. TUI is Thomas Cook’s biggest competitor in the United Kingdom. We might have thought that if TUI was being criticised and getting bad publicity that would help its biggest rival, rather than push it further into difficulty.
There are many reasons that a business can go bad. It can be down to management or other changing circumstances. The idea that anyone could solely identify anything relating to Brexit as the reason for business failure seems—I don’t know—imaginative, at best.
Sadly, it is not imaginative that British Steel has cited Brexit-related issues as one of the reasons why, as of about half an hour ago, it is now in insolvency and 25,000 direct and indirect jobs are under threat. That is not something anyone can celebrate or be happy about. Surely it is time for everyone who continues to push us towards the possibility of a no-deal Brexit to stop and ask the question: would the 66% of people in and around Scunthorpe who voted to leave in 2016 have done so if they had understood what it might mean for their town’s biggest employer? I do not know the answer to whether they would have voted the same way, but I would like to give them the chance to answer the question again.
Comments have been made in this debate and others about the 80%-plus of the electorate who voted for pro-Brexit parties in 2017. Some 80%-plus of the electorate voted for pro-remain parties in 2015, because Labour and the Tories were both remain parties in 2015. We are saying that in the space of two years, 60% of the electorate changed from voting for remain to voting for Brexit, but three years after the referendum, we are not allowed to consider the possibility that 5% of the electorate might have changed their minds between remain and leave. It simply does not add up.
The hon. Gentleman has said that surely it is time for us to understand the consequences of the issue. Surely it is also time for him to acknowledge that he should not use business examples to extrapolate, as he did with Thomas Cook. He will know as well as I do that it has had a massive debt pile for a number of years, that most of its operations are external, that it was previously a German company and that it is seeking to sell off its German airline as much as its British one. These are wide trends and it is just not correct to use these debates to try to extrapolate things that are not directly linked.
Again, I hope that nobody would suggest that the problems in the UK travel industry are completely unrelated to Brexit or that the problems in the British steel industry are completely unrelated to Brexit. It is not the only problem—in manufacturing, we have not kept up with the advances in productivity of our European neighbours, for example—but anyone who would suggest that this catalogue of company failures is not in any way related to the damaging Brexit that the Conservatives are leading us through really needs to face up to reality.
I understand the desire to respect the result of the referendum. I want the 62% result in my country to be respected as well. My national Government put forward a compromise as long ago as December 2016, which was laughed out of court at the time—to the extent that the Prime Minister has actually forgotten that it ever existed. When we are talking about negotiations that might happen now, after the March deadline, is it not a pity that there was not proper negotiation before the red lines were painted?
We have an electoral system in these islands that is deliberately rigged to turn minority popular support into majority Government. When the people choose not to give a big majority Government, the system cannot cope. The Prime Minister came back in 2017 and acted as if she had a huge majority in Parliament, when most of the time she has struggled to maintain a majority within her own party, and that is why she has never been able to get any kind of deal through.
It is not just about trade. Most of the contributions we have heard today have been about trade deals. World Trade Organisation terms—assuming we are allowed in to the WTO, which is not automatic—do nothing about Horizon, Erasmus, the European Medicines Agency, security co-operation, the rights of 4.5 million citizens, the ability to share data to cloud storage in the European Union, or about a million and one other things that the European Union brings us as benefits that have hardly, if at all, been mentioned in the debate this morning. The European Union is not simply a trading organisation. Membership has brought massive economic, social, cultural and educational benefits to our people and it is a tragedy that in the lead-up to the referendum, so few politicians in this place had the courage to stand up and say that.
I was asked about my holiday plans. I will be holidaying in the country that, according to “Rough Guides”, is the most beautiful country in the world, and I would encourage lots of other people to do the same.
As far as what will happen if and when the withdrawal agreement Bill comes back, the position of the Scottish National party is as it has always been. We will oppose any Brexit that takes away the rights of our citizens. We will oppose any Brexit that makes our people poorer. We will oppose any Brexit that takes us further away from the Scotland that we want to be and that our people have told us they want us to help to build.
While tomorrow it is quite possible that the far-right Brexit party will secure a significant victory in other parts of the United Kingdom, the polls suggest that even after 12 years in Government, the Scottish National party will have its most successful European election ever. That is what happens if a party of Government is prepared to show leadership and to face up to the myths, lies and misinformation that Mr Farage and his party and his previous parties have spread for so long.
If tomorrow the results in the rest of the United Kingdom are taken as a message about discontentment with the European Union among the population of some partners in this Union, the results north of the border will give a clear statement about the dissatisfaction of the citizens of my country with the Union that we have been part of for 300 years too long.
It is a pleasure to take part in the debate, although I feel that it has been something of an internal Conservative party discussion. To sum up for the Minister, I do not think his colleagues are very happy. It is a pleasure, too, to follow the hon. Member for Glenrothes (Peter Grant). I have a great deal of time for many things he said. Perhaps with the exception of the Minister, most hon. Members here in Westminster Hall agree that the Government have mishandled negotiations and served up a deal that is unsupportable by a majority in the House.
The hon. Member for North East Derbyshire (Lee Rowley) used some memorable phrases. He talked about the situation being a “catastrophe” and “stupidity”, and said “the Government are tired”. He said that it is a “Brexit of the shadows,” that there is a “cult of stamina,” and that we have a “wreckage of a Government decaying before our eyes”. That is pretty damning from a fairly new MP about the one job on which the Prime Minister said she should be supported: delivering Brexit. That is what Conservative MPs think about it. It is a pretty incredible situation for us to have reached.
I congratulate the hon. Member for Hornchurch and Upminster (Julia Lopez). Although I did not agree with everything she said, I found the manner in which she said it, the tone she used and the considered way she formed her argument quite refreshing. It is not the way these discussions have often been carried out in this place and outside. If we could have had a bit more of that kind of discussion, perhaps we would have avoided getting to where we are, three years after the referendum.
The hon. Lady spoke of her maiden speech, which I do not think I caught. She made me think of my maiden speech nearly 10 years ago, in 2010. I remember speaking about cuts to education and about serious crime, and I promised that I would always put my constituents first, which is something that is felt by everybody who gets elected to this place.
I regret some of the comments that have been made. I think the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) said—I wish I had written it down, because I cannot remember the exact words he used—that we despise our constituents if we do not happen to agree with some of them on Brexit. I find that unhelpful, and it misrepresents the relationship we have with our constituents, which is absolutely one of respect and understanding. We attempt to represent the whole of our constituencies, even though they are inevitably divided on this issue at the moment.
This is really important. Every constituency in the Tees valley voted to leave by more than 60%. In some cases, it was nearer 70%. That was a very clear mandate to leave. Of the six Tees valley MPs, I am the only one who is voting to leave the European Union and trying to deliver on the referendum mandate. Can the hon. Lady inform the House what she is doing to support any meaningful exit, or is she in fact determined to prevent it?
In fact, my constituents in Darlington did not vote by more than 60% to leave the European Union.
Can the hon. Lady give the percentage?
Fifty-six. My constituency boundary is different from the borough boundary, as the hon. Gentleman probably knows. Nobody really knows what percentage of my constituents voted to leave, but that is not really the point. The fact is that, like all hon. Members present, a large number of my constituents wished to leave the European Union, which is why I voted to trigger article 50. I campaigned to remain. I believed that being part of the European Union would serve this country better in the future than leaving it, but I promised—as did many of my colleagues—to respect the outcome of the referendum. I have done that, and I voted to trigger article 50. I did not agonise about it; I saw it as my job and duty, and I did it with a clear heart. I then stood to be re-elected in 2017, as did we all, and I said that the kind of Brexit I wanted was something that at the time we all referred to as a soft deal. I would have voted for that. We would have left the European Union had that been on offer, but it never has been.
There was no deal until very recently, and we now find ourselves with something that the hon. Gentleman will not support, so I do not quite understand how he can have a go at me for not supporting it. It seems that no hon. Members present, apart from the Minister, want to support the existing deal.
Will the hon. Lady give way one more time?
Oh, one more time. Go on.
Can I clarify that the Labour party manifesto is clear about leaving the single market and the customs union? It was clearly implied in the Labour manifesto that freedom of movement would end, and that there would be a free trade policy.
We are saying that following the referendum and the general election, we need to have a close, collaborative relationship with the European Union. We want the benefits—as were promised by the then Secretary of State—of a customs union and the single market. I do not know—perhaps the Minister can tell us—how we achieve such benefits, particularly of a customs union, without being in a customs union. How do we get frictionless trade? The hon. Member for Hornchurch and Upminster is completely right to say that we will not get frictionless trade via a customs union alone, but we sure as hell cannot have such trade without one.
There is not a customs border between two different jurisdictions anywhere on the planet that does not have infrastructure. That really gets to the heart of this issue. Despite all this stuff about alternative arrangements, no one has been able to tell me what alternative arrangements we could put in place that would avoid infrastructure. We talk about Northern Ireland, because there are very obvious reasons why we want to maintain an infra- structure-free border there, but the same problems would arise at other ports of entry.
Alternative arrangements just do not exist. If somebody could persuade me that alternative arrangements could be put in place that would mean we do not need a border, it would be a really interesting conversation. If we could leave a customs union without infrastructure, and Ministers showed how that could be done, I would be obliged to seriously consider voting for that. However, that case has never been made, and alternative arrangements have never been outlined. We have never seen an example of how they would work. Nobody is persuaded, which is one of the reasons why we find ourselves where we are.
It struck me that hon. Members, particularly the hon. Member for North East Derbyshire, object to the Prime Minister’s suggestion that we should have a customs union or another vote. I understand where he is coming from—he is being completely consistent. He thinks we are being offered a customs union and a confirmatory vote, but one of the problems that the Opposition have with the Prime Minister’s speech yesterday is that but we do not think that is what is being offered. The lack of clarity and the attempt somehow to speak slightly differently to people who have different perspectives is one of the reasons we find ourselves in this position. There is a lack of trust, a lack of faith and a lack of confidence that this Prime Minister will be able to see the deal through. I find myself wondering—I am sure I am not alone—whether we will hold a vote on the Bill in the first week of June. It would be true to form to get quite close and then the Government think better of it and withdraw the proposal—in the end, we would not get to vote on it.
I want to give the Minister sufficient time to respond to questions, particularly those from the hon. Member for Hornchurch and Upminster on our preparedness for a no-deal Brexit. Given everything we have learned from listening to industry, I venture to guess that we are nowhere near ready to leave without a deal. We do not have the infrastructure, IT or staff, and we do not have the procedures or any of the things that we will need in place to leave without a deal, certainly not by the end of October. I will be fascinated to hear how the Minister thinks we will leave.
The hon. Member for Hornchurch and Upminster said one thing that really struck me: she pleaded that service to nation, not political ambition, should drive decision making as we go forward towards the end of October. I worry about that a great deal. Looking at the people who are putting themselves forward from the Conservative party to be Prime Minister, it strikes me that its members might prefer the candidate who takes the hardest position, is the most enthusiastic about leaving the EU without a deal, and promises that we will prorogue Parliament until the end of October to ensure that we get to leave without a deal.
I caution the Conservatives that that would be a disaster for the country and my constituents. I know what industrial decline looks like, and what being cavalier about these things can do to communities. They do not recover for decades, if ever. I worry about that for the country, and for the health of our democracy, too. Our democracy needs a well-functioning multiplicity of parties competing and holding each other to account. If the Tory party did that to itself, satisfied as I would be that it would be out of power for a generation, I do not think it would be the healthiest thing for our democracy. I am surprised to hear myself saying those things, but I really hope it does not elect an extreme no-deal Brexiteer to be the Prime Minister of this country. I look forward to the Minister’s response.
It is a pleasure to serve under your chairmanship, Mr Robertson. I thank my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) for securing this very important debate at such an interesting point on the road to delivering Brexit. She raised a number of interesting and important issues. I will attempt to address them in the limited time that we have, but I also want to give her time to respond to the debate that she initiated.
I remind hon. Members that the Government, much like the majority of MPs, want to deliver on the result of the referendum and leave the European Union promptly and in good order. The British public are justifiably frustrated—that is an understatement—and the tone and passion of this debate is reflective of the public mood. They want us to act together in the national interest, end this impasse and deliver Brexit. Delivering Brexit was never going to be simple or straightforward, but the Government firmly believe that the best way to leave the European Union is with a good deal.
At the most recent European Council, the UK and the EU agreed an extension to article 50 until 31 October. It was also agreed that if we successfully brought forward a withdrawal agreement, we would be able to leave earlier. That is why the Prime Minister put forward a range of options hopefully to build a consensus that can secure a vote for the withdrawal agreement so the UK can leave the EU promptly.
The Prime Minister has worked hard to find a way forward that accommodates concerns from across the political spectrum, and yesterday she presented a new deal to MPs to settle the core issues of the debate. MPs must now work together to deliver the result of the 2016 referendum.
A number of hon. Members cited the Prime Minister’s words,
“No deal is better than a bad deal.”
The Government’s position is that the deal that has been negotiated over the past few years is a good deal, but hon. Members have criticised it. If you will forgive me, Mr Robertson, I will dwell briefly on why it is viewed as a good deal. It protects citizens’ rights for UK nationals living in the EU and EU nationals living here. It delivers an implementation period until 2020 to allow businesses to adjust to the new situation. It ensures a fair financial settlement of less than half of what was initially expected and demanded, which reinforces our global reputation as an honourable and honest international player. It ensures that Gibraltar is covered by the withdrawal agreement. It guarantees that geographical indications such as Scotch whisky and Welsh lamb will be protected until a future economic partnership is put in place. It allows the UK to negotiate, sign and ratify new trade deals during the implementation period, to be brought into force once it ends.
Alongside that, the accompanying political declaration sets out the scope for a bold and ambitious future trade relationship between the UK and the EU, to be built on for the next stage of negotiations. Hon. Members reminded us that there was a commitment to take back control of money, borders and laws. The agreement allows the Government to introduce a new fair skills-based immigration system, taking back control of our borders and ending free movement. It ends the jurisdiction of the European Court of Justice UK and means that our laws will be made in Parliament and enforced by our courts. It also protects security and sets out a close relationship on defence and tackling crime and terrorism. It ensures that we will leave the common agricultural policy and the common fisheries policy, delivering a good deal for farmers and fishermen up and down the UK.
I will address some of the points that my hon. Friend the Member for Hornchurch and Upminster made. She asked about border preparation work. My officials and I have regular meetings to ensure that the UK border is operational and in good order, and that trade flows can continue with the minimum amount of friction in the event of a no-deal Brexit, with a cross-Government borders programme. All Departments will be able to set up fully and partially operated systems, processes and resources to ensure disruption is minimised as far as possible.
My hon. Friend asked about labour market preparations. We are in the enviable position of having incredibly low levels of unemployment. The Government will ensure that any changes in the labour market are reflected in Government policy.
My hon. Friend asked about the use of Henry VIII powers. The use of statutory instruments came after a decision by Parliament during the passage of the European Union (Withdrawal) Act 2018. Every SI using those powers is scrutinised by Parliament in the usual way, and there is a new sifting mechanism.
Unfortunately, I will not be able to answer all the questions I was asked, because I want to address the broader point about no-deal preparations. Although Parliament has rejected the UK leaving the EU without a deal multiple times, that remains the legal default position if a deal is not agreed. As a responsible Government, we have been preparing for more than two years to mitigate any negative effects and any disruption as far as possible in the event of no deal. Those preparations are well developed and ongoing. We continue to prepare for all Brexit scenarios. Some £4.2 billion of funding has been allocated to help the UK prepare for all eventualities. It is only sensible that we do that.
Although the Government’s preparations continue, many of the most important mitigations require businesses and citizens, not just the Government, to act. There are also consequences that are simply not within the Government’s direct control, such as the actions of third countries. We should be under absolutely no illusion that not leaving the European Union would have a significant negative social, political and economic impact. That is another reason why leaving with a deal is the best option.
People want politicians to act together and honour the result of the 2016 referendum so we leave the European Union in good time and good order. The hon. Member for Darlington (Jenny Chapman) highlighted the fact that Labour is uncomfortable with elements of the deal. The only way it could have influence on the future deal is to vote on Second Reading for the withdrawal agreement Bill. I therefore encourage all hon. Members to do what the people of Britain demanded of us, ensure we leave the European Union in the national interest, and back the deal.
I am incredibly grateful for the thoughtful contributions from Members across the Chamber. My hon. Friend the Member for Poole (Sir Robert Syms) talked about the need for handbagging during negotiations, and said that our leadership has too often been for turning. He also highlighted how hamstrung the no-deal preparations have been by the Treasury’s reticence.
My hon. Friend the Member for Walsall North (Eddie Hughes) released a lot of tension this morning. It was a wonder to behold. He is an eternally optimistic champion of an eternally optimistic constituency. Hearing that optimism being misplaced is a matter of profound regret.
The description of Government’s negotiating style as being like playing cards with a mirror behind us was painfully accurate. My hon. Friend the Member for Mansfield (Ben Bradley) talked of broken promises and the increasingly muddled and contradictory withdrawal agreement, which he doubts has any life left in it. He is right that we have no further time for delay.
My hon. Friend the Member for Witney (Robert Courts) highlighted the different perspective of the 2017 intake. He is absolutely right that how we dealt with the challenge of the EU’s political ambitions was always going to lead to a fissure. He said that the two sides of the divide in our country are not so far apart, and that we can heal.
My hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) talked of our collective shame that we have not delivered on the promises we made to our voters, and said that too much time has been wasted. We all want to leave the European Union in an orderly way, but that option has been closed off by ineptitude.
My hon. Friend the Member for North East Derbyshire (Lee Rowley) has been in a perpetual state of outrage since Chequers in July. We have had many quiet moments to share that. I appreciate his support. I thank everybody for a very good debate.
Motion lapsed (Standing Order No. 10(6)).
Information Disclosure: Pre-trial Abuse of Process Hearings
I beg to move,
That this House has considered the disclosure of information in pre-trial abuse of process hearings.
As usual, it is a pleasure to serve under your chairmanship, Mr Robertson. I am pleased to welcome the Minister, who will respond. I am very pleased to have secured this debate, to raise a matter that concerns a constituent of mine, Mr Tom Perry.
The Minister will be aware of the problems arising from failures of disclosure that continue to confront the criminal justice system. Those problems received the attention of the Attorney General in his 11 December 2017 review, which reported on 15 November last year. One of the worst cases, which was reported in The Times on 21 May last year, concerned five defendants who spent seven years in jail after being wrongly convicted of the murder of Mohammed Afsar. Unfortunately, there is another aspect to that disclosure problem, which, despite repeated requests from my constituent, the Attorney General has so far refused to examine to his satisfaction. I applied for this debate to try elicit a response to the concerns of my constituent, who is in the Public Gallery.
Although my constituent’s case is long since over, the abiding issue is the dual and interconnected problem of a non-disclosure by the defence in criminal proceedings in situations where a duty of disclosure rests on the defendant and his or her legal team, and the apparent impossibility of procuring corrections by solicitors and counsel of such failures of disclosure and of erroneous submissions consequently made by them to the court. The procurement of such corrections is part of the professional disclosure obligations that counsel must make to prevent the possibility of a court being misled.
Generally, in criminal proceedings, the duty of disclosure rests not on the defendant but on the prosecution. Exceptionally, however, in cases where the defendant wishes to make an application for an indictment against him to be stayed on permissible grounds under our criminal law and procedure—principally, that to allow the indictment to proceed to trial would amount to an abuse of process—a duty of disclosure rests on the defendant and their legal team to make a full disclosure of all relevant matters, whether or not they are entitled to such an order being made for their benefit.
One class of case in which that frequently occurs is that of non-recent child abuse. Applications for stay indictments in those cases are most often heard in non-evidential proceedings, in which oral submissions are made to the judge only, without any evidence actually being given. As the judge is wholly dependent on the oral submissions made to him, the absence of the production of evidence makes it easier to mislead a court than would otherwise be the case. I am told that there is growing evidence of malpractice arising from this procedure.
I thank the right hon. Lady for giving way—I spoke to her beforehand to seek her permission to intervene. Does she agree that, although the courts have an overriding duty to promote justice and prevent injustice, the duty to stay an indictment must be used only in extreme and clear circumstances, to ensure that there is no abuse of the judicial process?
In the context of the debate, the hon. Gentleman makes a very valid point.
My constituent, Mr Perry, was heavily involved in the case of Caldicott School, which was heard in Aylesbury Crown court. As a pupil there in the ’60s, he and many other boys suffered very considerable and grave child abuse that has been the subject of criminal proceedings. The Minister may recall that in that case, the defendant, former headmaster Mr Wright, was eventually tried and convicted on 17 December 2013, and was sentenced to 8 years imprisonment on 6 February 2014.
I say “eventually”, because there were two indictments brought in this case. The first was in 2003 and the second in 2012—tried in May and June 2013 and re-tried in November 2013. Of the two indictments, only the second proceeded to trial. The first was stayed by an order made by his honour Judge Connor, following the application of the defendant and his legal team, at a non-evidential pre-trial abuse of process hearing in Aylesbury Crown court on 26 September 2003.
In criminal proceedings, an order to stay an indictment results in the termination of that indictment. The counts that related to the extensive abuse suffered at Caldicott School by my constituent, as well as by four other former pupils, were contained in the first indictment, which was stayed. That meant that the history of abuse suffered at the school by my constituent and the other former pupils was never heard in open court. Not unnaturally, my constituent and the other former pupils were deeply unhappy with that outcome.
My constituent was even more unhappy about that negative outcome because it later emerged that the court had been gravely misled by the failure of the defence, which applied for the stay, to disclose relevant information to the court. With that information, his honour Judge Connor might not have considered the stay of the indictment justified. My constituent tells me that all the details of that were set out in correspondence with the Crown Prosecution Service at the time and copied to the office of the Attorney General.
It emerged in particular that before the hearing in September 2003, the defence solicitors, Blaser Mills, had engaged in private correspondence with the school on the subject of the availability of the school pupil records to the defence. Had that correspondence been disclosed to the court, it could have assisted the prosecution in opposing the application for the stay and, in all probability, would have undermined the grounds of the application to stay the proceedings on the indictment. However, neither the judge nor the prosecuting counsel ever saw the correspondence because it was never produced in open court, even though, according to the transcript of the proceedings, the counsel for the defendant, AJ Bright, QC, had it with him in court and was aware of its contents.
The contents of the hidden correspondence only became known publicly five years later, when in November 2008, the school released it into the public domain. It then became apparent to everyone involved in those proceedings how the non-disclosure meant that the court had been misled and, in effect, deceived into making the order for the stay of the original indictment. That situation was bad enough, but according to my constituent, what followed was arguably worse still.
With the trial on the second indictment looming, my constituent and his co-complainants, who had resigned themselves to the impossibility of their cases ever being heard in open court, were naturally concerned about the position of the other five former pupils whose abuse at Caldicott School was the subject of the second indictment. Their concerns grew when it became known that the defence intended to argue that the second indictment should be stayed on the same grounds as had applied to the first indictment. Accordingly, they repeatedly pressed the CPS to ensure that those submissions made to the judge and accepted by him in the September 2003 abuse of process hearing should be formally corrected to the court.
Their argument was that those submissions, which the defence already knew to be false at the 2003 hearing, were now known to be wrong by all parties and the public at large following the release into the public domain of the correspondence between Caldicott School and the defence solicitors, Blaser Mills. Formal correction of those false submissions was needed to prevent the possibility of the court being misled in the same way that it had been in 2003.
Attention was drawn to the explicit wording of both the Solicitors Regulation Authority handbook and the Bar Standards Board handbook—I have made the relevant sections of both available to the Minister—and to the professional obligation resting on all solicitors and counsel, as officers of the court, to correct submissions of fact made to the court once they are known to be erroneous, to prevent the court from being misled further. It was noted that no one, not even those responsible for making the wrongful submissions in the first place, has been heard to deny that false submissions had been made at the September 2003 hearing or that the effect of that was that the court was misled and proceeded to rule on the basis of false information.
To my constituent’s complete and abiding astonishment, the CPS did absolutely nothing. While not disagreeing that the defence had acted improperly by telling the judge that the pupil records could not be obtained from the school, or even tacitly accepting that the court had been misled by that, it took no action at all. However, not only were the records available but, in the hidden correspondence that the judge never saw, the defence had actually relinquished its request to be given them.
In addition, the Solicitors Regulation Authority and the Bar Standards Board took no action. Likewise, the Office of the Attorney General, from which at least my constituent might have expected some intervention, given the failure of the regulatory bodies to deal with the situation, did nothing. Only at a much later stage, when the defendant, following his conviction and sentence, applied for leave to appeal to the Court of Appeal, did the CPS finally agree with the complainants that, if leave to appeal conviction were granted and if the defence were to argue that the grounds of the imposition of the stay of the indictment in September 2003 were relevant to the appeal—in fact, it transpired that the defence did intend to argue exactly that—it would finally take action. It would require corrections to be made to the false submissions made in 2003 by counsel and solicitors for the defence in order to ensure that the Court of Appeal would not be misled in 2014. However, the appeal did not proceed and in the event, therefore, those corrections were never made.
At the request of my constituent, I have referred to what he considers—as I do—the embarrassing irregularities that unexpectedly and unusually came to light in the Caldicott School case, and those have a public profile. I have been led to believe, however, that similar problems were experienced in a number of other cases of lesser profile. My constituent has generously offered to provide the Minister with the details, if she so wishes.
It is too late now for the complainants in the Caldicott School case to be accorded the simple justice of the correction of known false submissions that were made to the court, that derailed the first indictment and that they believe denied them justice in 2003.
Will my right hon. Friend give way?
I would like to make progress.
The abiding concern of those complainants, however, is that to their knowledge nothing has been done to prevent the distressing situation in which they found themselves recurring in other cases, concerning other abused children. The men involved feel rightly aggrieved about the wrongfulness of the Law Society and the Bar, and their respective regulators, holding out to the public the existence of certain published professional standards intended for the protection of the public, while at the same time appearing in this case to have had no intention of taking any action at all, even when the published professional standards were found unarguably to have been breached. Throughout this case, those men have felt that they have been stonewalled. They have now lost faith in the so-called professional standards.
Such matters are the responsibility of the Office of the Attorney General. That can be seen clearly in the “Protocol between the Attorney General and the Prosecuting Departments”, at page 7, under the heading “4(d) Superintendence of casework”:
“The Attorney General’s responsibilities for superintendence and accountability to Parliament mean that he or she, acting in the wider public interest, needs occasionally to engage with a Director”—
the Director of Public Prosecutions—
“about a case because it…has implications for prosecution or criminal justice policy or practice; and/or reveals some systemic issues for the framework of the law, or the operation of the criminal justice system.”
In the Minister’s response, I trust that she will provide the reassurance that is sought by my constituent, together with many of his former school colleagues, who were the subject of such appalling abuse at Caldicott School. I trust that she will now agree to include in her review the dual problem: first, non-disclosure of relevant facts and matters by the defence in criminal proceedings in situations in which a duty of disclosure rests on the defendant and his legal team; and, secondly, the apparent impossibility my constituent faced in attempting to procure corrections of the records of the court to solicitors and counsel, and the refusal of the Solicitors Regulation Authority and the Bar Standards Board to assist him in any way.
I look forward to hearing the Minister’s comments on those failures to disclose and on the misleading of the court consequent to the erroneous submissions made to it. The formal confirmation of the Minister is needed to reassure my constituent that solicitors and counsel are professionally obligated to make such corrections as soon as possible, and that in future, where necessary, robust and firm action will be taken by the Solicitors Regulation Authority and the Bar Standards Board in order to prevent the possibility of any court being misled in that way in the future.
I hope that the Minister, in responding, will bear in mind that I have known my constituent, Mr Perry, for 20 years. I have been dealing with his case and other matters pertaining to him for a long time. He is a man of great honour and integrity, and he has come forward to speak out in public about some horrendous abuse he suffered in childhood, thereby hoping to prevent something similar happening to other children in the future. This is just part of that pattern. I hope that the Minister will give a positive response in this debate.
It is a pleasure to serve under your chairmanship, Mr Robertson.
I thank my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) for raising these important issues. I acknowledge the hurt and anger of her constituent, and how he feels as a result of what happened to him at school many years ago. Sexual abuse of children by those in positions of authority or power who abuse their position of trust is a devastating crime.
I cannot imagine what Mr Perry has been through, but I commend him—as my right hon. Friend has done —for his courage in continuing to speak out about his experiences so as to contribute to the debate on how we improve the criminal justice system for victims. I also understand what she says about her relationship with him, and I am pleased that he has been able to contribute to improvements and to the future of those who have suffered as he has. I am pleased that we have the opportunity today to discuss the concerns expressed by my right hon. Friend about disclosure of information in pre-trial abuse of process hearings.
My right hon. Friend the Member for Chesham and Amersham spoke about the broader issues in relation to disclosure. Like her, we are concerned about the broad issue. It is imperative that disclosure in a case is made properly. She correctly identified the fact that last year the Attorney General published a review of disclosure, and will be publishing further guidelines in due course.
My right hon. Friend referred in some detail to the case of her constituent, Mr Perry. As she knows, it is not appropriate for me as Solicitor General to comment on decisions made by members of the independent judiciary in the two prosecutions of Peter Wright. I understand, however, that the allegations made about the conduct of those representing Peter Wright during the original criminal proceedings in 2003 have been considered by the police, as she said, the Bar Standards Board and the Solicitors Regulation Authority. Those are the correct bodies to look at allegations of that nature.
Furthermore, in 2012, one of my predecessors as Solicitor General personally considered whether to bring contempt proceedings arising from what the judge was told in 2003, but he concluded that there was insufficient evidence to do so. I understand that the trial judge in the proceedings that led to Peter Wright’s conviction in 2013, as my right hon. Friend said, also considered the arguments that had been employed in the abuse of process application in 2003 but declined to lift the stay on proceedings.
I am not aware of any adverse findings made against any lawyers involved in the criminal proceedings arising out of the abuse at Caldicott School between 1959 and 1970. None of that is in any way designed to diminish the profound effect that those crimes must have had on Mr Perry’s life, or to detract from our commitment as Law Officers superintending the prosecuting departments to promote best practice in the care that victims of sexual abuse receive from the criminal justice system. However, the issues that Mr Perry continues to raise have not been ignored and have received serious consideration in the past.
As Members know, it is open to a defendant to argue that a prosecution is an abuse of process—for example, because of the effect of delay on the fairness of the trial—and that proceedings should therefore be stayed. That arises from the overriding duty on courts to promote justice and to prevent injustice. In these cases, the burden lies on the defendant to prove on the balance of probabilities that there has been an abuse and that a fair trial is no longer possible.
There is clear authority from the Court of Appeal that there is a strong public interest in the prosecution of crime, and that ordering a stay of proceedings is a remedy of last resort, even where there has been significant delay in bringing proceedings. As the hon. Member for Strangford (Jim Shannon) pointed out, the bar for a stay is very high. Even when a judge imposes a stay of proceedings, the prosecution can apply to lift the stay in future. As my right hon. Friend the Member for Chesham and Amersham mentioned, such an application was made in Mr Perry’s case in 2012. Although the judge declined the prosecution application to lift the stay on the 2003 proceedings, she allowed the fresh allegations against Peter Wright to be tried by a jury, and also allowed details of the abuse that Mr Perry suffered to be admitted as bad character evidence during the trial. As a result, the jury found Peter Wright guilty of abusing five pupils during the 1960s and he was sentenced to 8 years’ imprisonment.
My right hon. Friend makes some important observations about disclosure in the criminal justice system. Hon. Members will be aware that the Attorney General recently carried out a review of disclosure and made recommendations to improve performance across the criminal justice system. In our criminal justice system there is a statutory duty on prosecutors to disclose to the defence any material or information that may assist the defence or undermine the prosecution case. That duty applies to abuse of process hearings as well as trials. There is also a residual duty on the prosecution at common law to disclose any information that would assist the accused in the preparation of the defence case. That duty applies from the outset in criminal proceedings and requires the disclosure of material that might enable an accused to make an early application to stay the proceedings as an abuse of process.
The Minister is quite properly setting out the duties on the prosecution entirely accurately and fairly. Does she agree that there is a duty, however, on all parties to ensure that what they submit does not in any way mislead the court, and that applies to the defence just as it does to the Crown?
My hon. Friend makes an important point that I will come on to. It is absolutely right that counsel or solicitor must not mislead the court, as officers of the court with a primary duty to the court and not to their client, but the disclosure of evidence is a different obligation on the defence. There is no corresponding legal duty on the defence to disclose information that is harmful to its case, because that is consistent with the fundamental principle that it is for the prosecution to prove its case and not for a defendant to prove their innocence.
As my right hon. Friend the Member for Chesham and Amersham rightly identified, there is an important duty on counsel and barristers; they have a professional code of conduct that includes the requirement to act ethically and with integrity at all times. That includes a prohibition on knowingly or recklessly misleading anyone, including a court, and a positive duty to behave in a way that maintains public trust and confidence in the proper administration of justice. My right hon. Friend mentioned that her constituent may have details of other cases where a court has been misled; I strongly encourage her to share those details with the CPS and the professional bodies responsible for barristers and solicitors.
I am grateful to the Minister for the way in which she is responding. She mentioned that it is important to maintain trust in the regulatory bodies. In the light of the circumstances of this case, does she agreed that trust has been shaken? I will provide her with those details once my constituent provides them, so she may pass them on to the relevant authorities or look at them herself, because it is from her office that I believe my constituent wishes to have a response.
I appreciate that my right hon. Friend’s constituent feels that trust in the criminal justice system has been shaken. That is of concern. I reiterate that as far as I am aware no misconduct has been found by the Bar Standards Board in relation to the case, but I would be very happy—as I am sure it would—to receive any further information that she can provide.
I would like to underline the additional safeguards that exist for defendants and victims when a stay application is brought. There are a number of rules and regulations that ensure that the hearing should be conducted with due notice and in the interests of justice. The Criminal Procedure Rules 2015 set out clearly the timetable that the defence and prosecution should adhere to when preparing for the hearing. For example, the defence application must be in writing and provided to the prosecution and court as soon as practicable after becoming aware of the grounds for applying. The application must include or identify all supporting material, specify all relevant events and identify any witnesses the defendant wishes to call in support of the application. The prosecution must do likewise within 14 days of receiving the application. Both parties must serve skeleton arguments on each other and the court in advance of the actual hearing, so that everyone knows the issues to be determined at the hearing.
Victim care is important in cases of sexual abuse. Mr Perry’s experience demonstrates why it is so important that we continue to make victim care priority in our criminal justice system.
I agree with the Minister that victims should have priority in our criminal justice system—that is most important. She mentioned at the beginning of her response that she is working on new guidelines that will come out shortly. Could she give us a greater indication of when we can expect those new guidelines? Would there be any possibility of looking at the draft guidelines before they are finalised and published?
A review of disclosure has already taken place. Further guidance will come out in due course. I am happy to update my right hon. Friend on any further details on that and will take on board any points that she might like to make.
We are not just focusing on disclosure, although that is very important. The CPS has almost doubled the number of specialist prosecutors in its dedicated rape and serious sexual offence units, and is working with the Ministry of Justice and the Home Office to revise the victims code, to improve the support and care offered to victims. It is important to remember that these issues do not just affect the Attorney General’s office but are cross-departmental, and we are working together with Departments on those. Debates on this area make an important contribution to the ongoing work to improve the experience of victims in the criminal justice system. I thank my right hon. Friend the Member for Chesham and Amersham and her constituent for raising important issues that affect our criminal justice system.
Question put and agreed to.
Pension Funds: Financial and Ethical Investments
[Mr George Howarth in the Chair]
I beg to move,
That this House has considered financial and ethical risks of investments in fossil fuel companies by pension funds.
I refer Members to my entry in the Register of Members’ Financial Interests, in which I disclose my interest in renewable energy, particularly solar.
Parliament has declared a climate emergency. I welcome that tremendously, but it prompts the question: how do we solve that emergency? The good news is that many of the technologies we need are already here, and they are developing fast. From solar to wind to storage, their price is coming down fast—far faster than many people expected—and their reliability is increasing dramatically. On top of that, massive innovation will propel those technologies further forward, and we will enter a cheap green energy age.
The barriers to dealing with the climate emergency are no longer technological; they are more about policy, leadership and cash. We need politicians to show leadership, but we also need to ensure that investment funds get behind the new technologies at a speed and with an urgency that currently we are not seeing. That is why we, as a country and as the world, need to disinvest from fossil fuels and dirty technologies, and reinvest in clean green technologies. The question is how we propel that as fast as possible.
I believe we need a system-wide approach. We have to decarbonise capitalism at a fundamental level across the whole of the City—the debt markets, the stock exchange, the banks, the Bank of England’s own balance sheet and the pension funds. The Committee on Climate Change has asked for Britain to become carbon net zero by 2050, but we produce only 1% to 1.5% of global greenhouse gas emissions. However, 15% of the world’s greenhouse gas emissions are funded in London, so not only do we have the power to get our own country’s greenhouse gas emissions down to zero, but we can help spread that around the world and be a real leader. We could be the green finance capital of the world and say, “We will no longer finance the climate crisis in our country.” If we did that, we would show dramatic leadership in the world on this emergency. We should start with pensions.
The right hon. Gentleman is making a cogent argument. Can he assure me that the parliamentary pension fund, which has long been looking at this issue, is now clear of fossil fuels? We should ensure that that is completely the case.
I believe that is not the case. We need to ensure that the parliamentary pension fund becomes zero-carbon. We as Parliament need to say, “Divest Parliament.” That would show leadership both to public schemes, particularly in local authorities, and to the wider sector. Let us remember that we have already discovered four to five times the fossil fuels the world would need to exceed a climate change budget. We already have too many fossil fuels. We should not invest in more. We should disinvest now.
The previous Government target to cut carbon emissions by 80% by 2050 is no longer relevant because we have to cut our emissions to net zero, so fracking, which is a source of carbon fuel, is no longer an option for this country. Should not the Government reflect that new reality and issue new planning guidance for local authorities or give them new powers? Such leadership would have an immediate consequence: investment in fracking as a source of fossil fuel would no longer be an option or attractive to investors.
I totally agree with my hon. Friend. In government, we placed tough regulations on that sector, which were based strongly on environmental considerations. It has not been able to grow to meet them. It has nowhere to go.
I congratulate the right hon. Gentleman on securing this important debate. I agree entirely that Parliament should take the lead in not investing in fossil fuels. Yesterday, BP’s investors decided that it should adopt a totally different strategy on carbon fuels so it fits in with the Paris agreement on climate change. Does he agree that other companies should take that way forward?
I saw what happened at the BP annual general meeting yesterday, and I welcome it, although a second motion, which was a bit stricter, did not carry. I would have liked that motion to carry.
That brings me to my argument. Not only is there a moral imperative for us to divest, given the threat climate change poses to our planet; there is also a financial risk for pension funds and their beneficiaries. We need to explore that. We need to make it clear to pension fund managers and trustees that pulling out of fossil fuels is the right thing to do in financial terms. The real issue is often called the carbon bubble. We are investing in more fossil fuels than we could possibly need if we were going to stay climate change compliant. At some stage, that bubble of investment in carbon that we do not need will burst, leaving pension funds and the wider economy in a serious mess. Those assets would be worthless; they would be stranded assets, which would cause huge disruption in our financial sector.
I agree completely with what the right hon. Gentleman is saying. I think he is coming to the heart of the matter. I, like many other people, have a private pension fund, and I instruct my broker to ensure that it is directed into ethical investments. Of course, the broker has always said, “You’re not going to get as much of a return as you might get if you invested in other things.” The time has come for that paradigm to be reversed. We have to explain to investors that, over the next 10 to 15 years, increasing governmental action against fossil fuels and dirty technology will make their returns worse. Now is the time to jump ship and to disinvest from dirty technology.
I totally agree. Indeed, analysis by the Grantham Institute shows that if someone had not held fossil fuels in their portfolio for the last 50 years, their overall returns would not have been any different. The idea that we have to invest in fossil fuels to have a return was not true in the past, and it is not going to be true in the future.
I am grateful to the right hon. Gentleman for giving way. I thought I would intervene at this stage to try to frame the debate, because I think some colleagues will not be aware of the Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018, which the House passed in September last year. Those regulations require environmental, social and governance matters to be taken into consideration as part of the statement of investment principles, and require individual pension fund trustees to take into account ESG factors when considering their strategic process to invest. I suggest that is one of the reasons why BP, the parliamentary scheme and others are beginning to change their approach. Those regulations will come into force in October.
I am grateful to the Minister for his intervention. Those new ESG guidelines are helpful, but I am afraid I do not think they are quite up to the scale of the task we face. I will come to that in a second.
We have this carbon bubble; the question is how we are going to deflate it. How will we move from where we are now, with this big risk to our economy, to the low-carbon economy we need? One option is to say, “Well, it will sort itself out. We don’t need to worry now. We can delay it all and it will be all right. We can allow the fossil fuel companies to keep investing in exploring and getting even more fossil fuels, and inflate that bubble even more.” How risky would that be? That is one scenario that some people seem to think is possible. I reject it entirely.
Another approach is to say, “Let’s reduce, and ultimately stop, exploration for further fossil fuels. Let’s not inflate that bubble any more. Let’s gradually deflate it, so we can have an orderly transition for our economy, our energy sector and all the communities, towns, cities and people who depend on it.” That is the solution, and that is why I have concluded that we must disinvest and reinvest in a thoughtful, careful way. If we do that, we can tackle the climate emergency and avoid a financial and economic catastrophe.
That brings me to the Minister’s point. There are three possible approaches to disinvestment and investment. One is what I would call the gentle, market-led approach, which says, “If you have a bit more transparency and disclosure and a few ESG guidelines, it will all take care of itself.” I am in favour of all that stuff, but it is nowhere near up to the task. It is not urgent enough. We have people talking about voluntary disclosure. No, we need mandatory disclosure now, regulated by this House. I applaud the ESG guidelines, but they are a little woolly and poorly defined. They are little nudges when we need more than a nudge, because this is an emergency.
There is a second, state-led approach advocated by at least one Front-Bench team, involving wholesale nationalisation and dismantling capitalism. That would be the wrong approach, because it would delay action and not enable us to take the power of capitalism, with market forces, innovation and competition, to help us solve the problem.
We need to make capitalism our servant, not our master, and that comes from laws and regulations in this House. I propose a five-point plan systematically to decarbonise capitalism and tackle the disinvestment and investment challenge of the pension funds. First, there should be mandatory disclosure from all fossil fuel companies on how much carbon their business plans would see emitted and how much carbon is in their reserves. That should be coupled with a legal requirement to show how they will become compliant with the Paris treaty, with timed targets, so that fossil fuels can unwind the pollution they cause.
Secondly, there should be new climate accountancy rules for accountants and auditors on fossil fuels and pension funds, which would require accountants and auditors to produce Paris-complaint accounts, where assets and activities not aligned with the Paris treaty are written down to zero by 2050 at the latest. I think that would change the valuation of a number of companies. We would see a lot more transparency, really know what was going on, and be able to take better decisions.
Thirdly, there should be new, mandatory requirements on all pension fund managers and trustees to report on whether their portfolios of investments are aligned with Paris or not—really strong transparency and disclosure. Fourthly, there should be new powers for pension regulators, and the Bank of England if required, to challenge funds and other investment operations on their climate risk management. Where that is found wanting, the regulators should be able to take action to ensure proper alignment.
Fifthly, we need to develop a register—probably Government-led—of all the low carbon, green and zero carbon investment opportunities for the capital to go to. We cannot just say disinvest; we must show where investments and that capital should go. The good news is that there are a huge number of very attractive low carbon and zero carbon investment opportunities in this country and around the world, so we can ensure that our pensioners of the future get the pensions that they need and that those pensions are far less risky because they will be based on climate-friendly assets.
The right hon. Gentleman seems to be advocating a reduction of investment in energy companies. Does he recognise—I am sure he does from his time as Energy Minister—that many such companies, and particularly the larger international oil companies, are investing in new technologies, cleaner technologies and research and development in renewable energy?
I am not trying to get rid of energy companies; I am trying to get them to switch. We have a couple of examples of big energy companies switching out of fossil fuels and into green technology. Some have done that around the world successfully. Unfortunately, most of the majors to which the hon. Gentleman refers have not done so on any serious level at all. I did some calculations that showed on average their capital expenditure on green technology in the last decade or so is just 1.3% of their total spend. That is just not serious. I hear what he says, but we must get those energy companies to take this far more seriously. Some are beginning to shift, but we need to show that they must step up to the plate.
We have a climate emergency, and it is great that we are seeing people—young people in particular—coming out and protesting. I celebrate what they have done. There is a thirst for Governments to take action. The question is: are our actions up to it? The only response to what people are arguing for and what the science says is a quite dramatic systemic change. In the disinvest and reinvest approach and the policies I have outlined, I want to argue for something very radical but practical.
Those who go to the City and talk to pension funds such as Legal & General, Allianz and Axa will find that a number of them are doing what I am talking about. Those who talk to the Governor of the Bank of England, Mark Carney, as I did four weeks ago, will find that he is absolutely on to this case. There is a coalition of willing people in the City who want to go this way; it is just that this Government and Parliament are behind the City and the regulators. We must get in front of them, because they want us to show true leadership. Let us today give that leadership.
Order. Before I call the next speaker, in view of the importance that people rightly attach to this issue, a large number of people want to speak. Accordingly, I will have to impose a time limit on speeches of five minutes. I may have to reduce that later.
I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on obtaining this debate, which is relevant, timely and of key interest to many Members across the House, not least those who are members of the parliamentary pension scheme. I draw attention to my entry in the Register of Members’ Financial Interests and highlight that I used to run the pensions business for a significant UK asset manager before coming to the House and that, along with my hon. Friend the Member for North East Hampshire (Mr Jayawardena) and the hon. Member for Sheffield South East (Mr Betts), I am one of the three current Members of the scheme’s board of trustees.
I have three points to highlight. First, this is a challenge for all pension funds not just in the UK but across the world. The rules and regulations by which pension funds are governed have changed significantly, not least under this Conservative Government. The Law Commission reports of 2014 and 2017 are relevant: 2014 was the first time that pension funds had in effect an obligation to take ethical or environmental issues into account. The 2017 changes allowed for some social investment. The parliamentary guidance to which my hon. Friend the Pensions Minister referred, which came in last autumn, made a significant change in requiring trustees to report, as part of the statement of investment principles, on the portfolio’s effect on climate change and what trustees intended to do about that. That is the background.
The parliamentary pension fund is conscious of its obligations under the 2018 regulations. We have had several meetings and discussions with different advisers to consider how we might best tackle the challenges and how to amend our statement of investment principles. The three existing Members who are trustees—me, my hon. Friend the Member for North East Hampshire and the hon. Member for Sheffield South East—had a separate meeting, and we also met one of the world’s leading green asset managers to look at what sort of investment vehicles are available to schemes that want to take a greener approach.
That leads to my second point. In trying to make a pension scheme greener, we have to be honest about the scale of the ambition that the right hon. Member for Kingston and Surbiton set out. I think I heard him correctly when he said that pension schemes should invest in new technologies to try to be carbon free. I challenge that gently, because I do not believe there is a company in the world that is completely carbon free and has never used a single vehicle, train or aeroplane that uses fossil fuels or any form of heater or boiler that runs on gas. It is virtually impossible, at this stage, to measure the complete carbon footprint of any business of significant scale.
As an illustration of the proof of that pudding, which shows the challenge for individuals, the chairman of Ecotricity—whose headquarters is in the constituency of my neighbour, the hon. Member for Stroud (Dr Drew)—is an outspoken champion of everything green, but he clocks up a huge number of air miles every year as a global ambassador for sport, for some United Nations subsidiary. My guess is that he does not travel economy class. There are challenges at an individual and at a corporate level.
To clarify, I was focusing on ensuring that companies were compliant with the Paris treaty. That does not mean that they need to be zero carbon now—that would be impossible—but they need to be on a pathway that is Paris compliant, and that is the case for many companies already. We just need fossil fuel companies and others to catch up.
I am grateful for the clarification. I think the right hon. Gentleman understands that, from a personal investor or a pension fund investment point of view, finding an entirely fossil fuel-free investment would be very challenging.
My third point is that there is a challenge not just for pension funds, but for the wider financial sector. The most innovative green energy projects in the UK, particularly those looking at how we can mobilise some of the most powerful tidal streams in the world—including wave technology in the north of Scotland and cases being worked on in Cornwall, Hampshire and the west coast of Wales—are not easily accessible investment vehicles and are not at the scale that a significant pension fund could easily invest in. It would be useful to look at challenges around some investment regulations, including how major investors, such as large insurance companies that manage huge pension assets, could be allowed to invest more money almost in creating businesses to invest in new technologies.
I am conscious that time is running out, so let me move to my final point.
Order. I am sorry; the hon. Gentleman has exceeded his time limit.
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the right hon. Member for Kingston and Surbiton (Sir Edward Davey) for bringing this important debate to the Chamber.
Pension funds are hugely important—they are also personally important to me—because they are major stakeholders in the UK and global investment markets, with £2.8 trillion invested in assets and more than £90 billion invested a year on behalf of 84% of UK workers. That is why leadership is so important in this sector. In 2015, when I was a councillor at Warwickshire County Council, I wanted the council to show leadership and go fossil fuel free in recognition of what the Rockefeller Brothers Fund and several other major investors had done at that time by diverting from the fossil-fuel industry into the renewable sector. I felt that if that necessity was recognised by the once all-important Rockefeller company and family, we should look to follow. Sadly, that motion was put to the vote and lost.
The motion failed because of the rules of the local government pension scheme, the LGPS, which are set nationally but administered locally. Its responsibilities include managing the investment funds within a statutory framework. The 2014 Law Commission report on “Fiduciary Duties of Investment Intermediaries” concluded:
“Where trustees think ethical or environmental, social or governance (ESG) issues are financially material they should take them into account. However, while the pursuit of a financial return should be the predominant concern of pension trustees, the law is sufficiently flexible to allow other, subordinate, concerns to be taken into account.”
For me, that is important. More recently, I checked the Local Government Association legal advice, which says that
“the precise choice of investment may be influenced by wider social, ethical or environmental considerations, so long as that does not risk material financial detriment to the fund.”
Mark Carney, the Governor of the Bank of England, recently wrote about that. He said meeting the Paris targets
“requires a massive reallocation of capital. If some companies and industries fail to adjust they will fail to exist.”
He pointed out that fossil fuel investments carry major financial risks since overvalued carbon assets may be left stranded. This stranding could cause a global wealth loss of $1 trillion to $4 trillion, posing major risks to pension funds.
One does not have to look just in the UK or at what happened with the Rockefeller Brothers Fund. The California Public Employees’ Retirement System and the California State Teachers’ Retirement System divested themselves of any holdings of thermal coal in 2015. Norway’s sovereign wealth fund is dumping investments in firms that explore for oil and gas. This strategy shift, on the back of advice from the country’s central bank, will affect 1.2% of its holdings, worth about 66 billion Norwegian krone, which is a significant amount. According to Norway’s Minister of Finance:
“The objective is to reduce the vulnerability of our common wealth to a permanent oil price decline. Hence, it is more accurate to sell companies which explore and produce oil and gas, rather than selling a broadly diversified energy sector.”
More recently, the Environment Agency decarbonised its £2.9 billion pension fund by increasing climate positive investments, reducing its exposure to the coal industry by 90% and greatly reducing its exposure to oil and gas. More parochially, Southwark Council has moved £450 million into passive funds that track low-carbon and fossil-free indices produced by MSCI. It has invested £30 million in the Glennmont Partners clean energy fund III, which invests in western European wind and solar companies. For me, that shows great leadership and is to be commended.
Sadly, according to the 2018 report of the parliamentary contributory pension fund, its largest holding is in BP. The fund has no positive investments that are committed to bringing about a zero-carbon world, which is a real shame. Hence, 244 serving and former MPs have signed the Divest Parliament pledge calling on the trustees to phase out investments in fossil fuel companies; I have signed that pledge. As if to underline this move, the Church of England’s General Synod—its parliament—voted 347 to 4 in favour of removing its holdings in fossil fuels. That type of leadership is widespread and it is something we should follow.
In following the leadership of others, and going for socially, environmentally and economically advantageous investments, let us ensure that we are Paris compliant. Almost 20 years ago, BP rebranded as Beyond Petroleum. Let us go beyond petroleum, beyond BP and show leadership.
It is a pleasure to serve under your chairmanship, Mr Howarth. I join others in congratulating the right hon. Member for Kingston and Surbiton (Sir Edward Davey) for his efforts to bring this important debate to the House. I found his five points interesting and inviting.
The question we are looking at today might seem divorced from the emergency that Parliament has rightly declared in respect of climate change, but in fact it cuts to the heart of the issue. There is a causal and consequential link between finance and the environment, as we have heard, as well as environmental implications of investment strategy and supply chains.
As Members will be aware, article 2 of the Paris agreement states the need to make
“finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”
The fact that it is not merely ethically and environmentally better but more financially prudent to move away from fossil fuel investments is a welcome sign that the systemic change we need is slowly coming together. Along with an ever-growing number of MPs from all parties, I signed and fully support the Divest Parliament pledge. Parliament must lead the way, lead the debate, lead by example and lead by action.
If we are to achieve a net zero target before 2050, we require not only political will but the active support of all sectors of society. The low-carbon sector and its supply chain now provides nearly 400,000 green-collar jobs in the UK—more than aerospace—and is growing considerably faster than our main economy, with estimated potential exports of more than £60 billion by 2030. Lord Deben, chair of the Committee on Climate Change, said that the CCC had been deliberately cautious in drawing up its 2050 target and had deliberately excluded the impact of technological innovations, as we heard earlier, which could hasten the UK’s progress towards a net zero target in ways that cannot currently be anticipated. So our progress in meeting our environmental targets directly depends on the prosperity of our green economy.
We know that the personal is increasingly becoming the political, and vice versa. Few things would more erode the channels of communication between Parliament and the public than our asking one thing of them while tacitly endorsing something else ourselves. We cannot just talk the talk; we also have to walk the walk. If we are to work alongside our constituents and harness their energy in eliminating net UK emissions, it is vital that we divest the parliamentary pension fund of fossil fuel investments. I therefore welcome the recent pledge by the fund trustees to
“prepare a climate change policy”
and to “show ambition” in formulating a responsible business plan that is in line with the principles being discussed today. As we have heard, this is not just about the parliamentary fund but about the broader symbolic implications of such a step.
The Governor of the Bank of England and the Environmental Audit Committee have publicly warned of the dangers of over-exposure to carbon assets in the light of the international drive towards net zero. Hon. Members will be familiar with the 2006 Stern review and the pivotal role it has played in shaping understanding of the interaction between climate change and the economy. Lord Stern recently suggested that the economic models under which current projections are produced systematically underestimate the economic implications of climate change and its effects. A study published last year by the co-director of the Oxford University climate econometrics project describes the catastrophic economic consequences of a 2° C jump in the global temperature, and how, beyond that headline figure, the poorest countries will suffer the direst economic effects.
Since the introduction of auto-enrolment in 2012, the percentage of UK workers in a pension scheme has mushroomed. Ignoring the effects of investment strategies really is disastrous short-termism. The parliamentary fund needs to demonstrate the beautiful truth that long-term measures to mitigate climate change and long-term investment strategies are not incompatible—far from it. In fact, they can form a fabulous virtuous circle, and one that I hope will be beneficial to us all.
Order. To give people time to adjust their speeches, I say now that I will reduce the time limit to four minutes after the next speech.
I welcome this important debate, secured by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). It follows the Environmental Audit Committee’s inquiry into green finance, which he clearly read because his recommendations seem to mirror our own. It is good to see Committee members who served on that inquiry in the Chamber.
The physical impacts of climate change, such as rising sea levels and increased frequency and intensity of extreme weather events, will pose increasing economic risks for a range of businesses and investments, from food and farming to infrastructure, homebuilding and insurance. In the UK alone, climate change is projected to increase the risk that business assets and operations are damaged and disrupted by flooding, degrade some of our most productive agricultural land, to reduce water supplies, to increase the frequency and intensity of heatwaves, and to stress transportation, energy and water infrastructure. There are a great many risks for investors to consider.
For instance, climate change may result in liability risks when those who suffer losses as a result of climate change take legal action to recover damages from those who can be found responsible. For example, the city of New York is currently seeking to recover costs from BP, ExxonMobil, Chevron, ConocoPhillips and Shell as a result of flooding. Transition risks could also be faced by companies in high-carbon sectors that fail to diversify and adapt to policies introduced in response to the Paris climate change agreement. Firms that do not make a timely transition and remain over-invested in climate-changing activities could face costly regulatory action, suffer reputational damage, or see their assets become stranded as carbon prices rise. Our inquiry found several examples of stranded assets, such as oil refineries or fracking infrastructure. A Bank of England paper published in 2016 warned that
“a sudden, unexpected tightening of carbon emission policies could lead to a disorderly re-pricing of carbon-intensive assets”.
These are real challenges for pension providers and pension investors.
Our Committee heard about a range of worrying practices in the pension industry, including the fiduciary duty of pension scheme trustees often being misinterpreted as a duty to maximise short-term returns; remuneration for investment consultants and fund managers encouraging a pursuit of short-term returns rather than long-term value creation; and a tendency to under-invest in physical assets, technology innovation and employees’ skills in preference for nearer-term gains from financial mergers, acquisitions or restructuring. In the context of our climate change risk, we want none of those things.
It is really good to hear hon. Members talk about climate change and greenhouse gases, but there are in fact nine planetary boundaries, of which greenhouse gases are one. I wonder whether people understand that it is entirely possible that we save the planet from climate change yet kill ourselves through eight of the other planetary boundaries, two of which we are in the red for. Is it not the case that financial markets, pension schemes and so on actually need to see their remit as wider than just greenhouse gases, also covering a range of other areas, including biodiversity and carbon?
Absolutely. A range of factors, including air quality and the insect population and pollinators, should be taken into account. It is not just about fossil fuels, but as the debate mainly concerns fossil fuels and climate change, I will concentrate on those. I recently led a debate on insect populations. It is good that we are looking at all of that in the round.
There are structural incentives in the UK for maximising short-term returns over long-term investments, which are much more climate-sensitive. The Government should clarify that pension schemes and company directors have a fiduciary duty to protect long-term value and should consider environmental risks in the light of that. Some pension companies are taking that up, and investors are also looking for better, fossil-free pension options. A 2017 YouGov poll for Good Money Week found that more than half of 18 to 34-years-olds—the pensioners of tomorrow—would like fossil-free investments offered as standard.
We need to make progress, and the Government need to bring in stricter rules. The Committee found that the current rules are that trustees or governance committees legally must have good reason to think that scheme members would share their concerns, and that decisions should not involve a risk of detriment to the fund. However, the European Commission’s action plan on sustainable finance proposes that institutional investors and investment managers should consult their beneficiaries on their sustainability preferences and reflect those in their investment decision making, regardless of whether they are financially material. The European Commission plan states that
“institutional investors and asset managers do not sufficiently disclose to their clients if and how they consider these sustainability factors in their decision-making. End-investors may, therefore, not receive the full information they need, should they want to take into account sustainability-related issues in their investment decisions.”
I call on the Government to adopt the action plan in full; the Minister intervened earlier to say that the Government have only partially adopted it.
Pension savers should be given the greatest opportunity to engage with decisions about where their money is invested. As I said, younger generations want fully fossil-free pension options. Divesting from fossil fuels makes sense not just in terms of ethics and the climate, but as a sound long-term financial strategy As soon as I joined the parliamentary pension scheme, I also became a supporter of Divest Parliament. According to the latest annual report, as my hon. Friend the Member for Warwick and Leamington (Matt Western) said, the fund includes stakes in BP at £ 733 million, Shell at £6.6 million, Rio Tinto at £3.67 million and Total at £2.93 million. Our own funds are being invested in those companies. It is time our own trustees heard our voices in this debate and in this place, divested our pension funds and reinvested in renewables and clean tech for our future and for the planet.
In 2018, the Government said they would update the law to require trustees to consider the impact of their investment on a changing environment. That has now been implemented. I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on securing this debate, He clearly set out the changing environment in the world of fossil fuel companies. Pensions funds are investments for many years. Our job in this place is to ensure that people who invest in a pension fund, but who do not necessarily have the power to decide where their money is invested, can be confident that their pension is secure and will provide the retirement that they expect.
Is a pension fund in a fossil fuel a sound investment? Evidence suggests it is not. The Government, for example, are introducing a ban on carbon-fuelled new cars in 2040. Calor, which I met last year, has committed to 100% BioLPG by 2040. This month, a whole week went by in which no energy generation came from coal-fired energy plants. Our focus should be on ensuring a secure future for pension fund savers, and investment in fossil fuel does not provide that. It should also be on the choices that pension fund owners want to make. Many employees have no choice in where their pension contributions end up, and increasing numbers of people would be horrified if they thought that the funds they hold were invested in fossil fuels, when at home they do all they can to reduce their carbon footprint.
I heard what was said earlier about the need to invest in companies for research and development to provide cleaner and carbon-free fuels. I am sure that, given a choice, people would welcome that, but they need to be given a choice about where their funds end up, and they need their funds to be secure and invested in something that they feel comfortable with. The Government have a real opportunity to support employees and to ensure greater transparency in where their money ends up and where the pension funds put their money, as well as greater choice in pension markets. Empowering consumers will have a greater impact when it comes to caring for our natural environment.
I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on securing this debate. I think he slightly understated the carbon bubble in his opening remarks. The carbon bubble—basically the evaluation of assets that we know will never be realised—is not something that might burst in the not too distant future. It will inevitably burst because energy companies have systematically overvalued their assets and put them on their balance sheets. Not only will the historical overvaluing be in question, but all the valuing for the future will be in question, basically in line with where we now know we have got to go on net zero in our economies.
I prefer to call the carbon bubble a carbon boil. I am afraid the image is rather poor, but what we can do with a boil is lance it before it bursts, and that is the exercise we should be engaged in right now. The suggestions that the right hon. Member for Kingston and Surbiton put forward for doing that were sound. However, pension funds are complicit in the carbon boil/bubble because, by and large, they consider their fiduciary duty to be about getting the best for their pensioners over the next few years. They do not generally look at the long term, and do not think they are required to do so as far as their funds are concerned. The Governor of the Bank of England recently described it as
“the tragedy of the horizon”.
To reassure the hon. Gentleman and others, it is perfectly possible for pension fund trustees to take the view that their fiduciary duty of obtaining good returns to deliver the pensions expected is not incompatible with taking into account huge amounts of other issues, including climate change. It is important that we all recognise that. We have a duty to look at that as well.
I agree with the hon. Gentleman that some pension funds are beginning to take a different view. Indeed, that different view is becoming more possible, but the general consideration of the fiduciary duty remains a short-term gain for pensioners in the funds. Of course, the people setting out on their working lives will not get the benefit of those pension funds for 30 or 40 years. During that time inevitably we have to move to the net zero carbon economy. It is therefore essential that pension funds have a duty to look at the long term.
I want to help the hon. Gentleman on one point. He needs to understand that the ESG regulations are not voluntary, as the right hon. Member for Kingston and Surbiton (Sir Edward Davey) suggested. They are mandatory. If the trustees fail to follow them, specific sanctions follow.
My understanding of the 2018 regulations is that it is mandatory for people to look at such things, but not mandatory for people to do things. That is the difference. In fact, I welcomed the regulations.
Pension funds should in future have a duty to protect the long-term value of the funds as well as consider the short-term issues of making money for their pensioners. We therefore need to clarify in law the fact that pension funds have a duty to protect the long-term value of the funds. Indeed, a recommendation that the Environmental Audit Committee made in its 2018 report has not been acted on, even though those regulations were introduced. That is something we need to move to urgently.
Having said that pension funds tend to invest in bonds and various other things that are primarily about energy bonds, on the assumption that there will be value, which we know will not be there in future, there is then the question of moving towards investment in things that do make a difference to climate change. Pension funds have a genuine problem in terms of the Solvency II regs, which tend to guide pension funds away from investing in the schemes that are capital-intensive up front and revenue less intensive behind, that are at the heart of the green investment revolution.
We need to do two things: first, make it much easier for pension funds to invest in long-term schemes, and secondly, ensure that they have a duty to ensure that they do not invest in short-term schemes. I have addressed the practical aspects of what pension schemes have done. I have not touched on the moral aspect. We simply have to leave dirty energy in the ground. We have got to invest in clean energy for the future, and pension funds ought to be at the front of that. If pension managers take that view in addition to the legal responsibilities that they have, I am sure they will go a long way to helping the green revolution succeed.
Order. To get the three remaining speakers in and leave enough time for the Front Benchers, and a moment of two at the end for the right hon. Member for Kingston and Surbiton, I shall have to reduce the time limit further to three minutes.
I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on securing this important debate. I could not agree more that we must harness the power of capitalism as a force for good—because it can be a force for good. I agree that wholesale nationalisation is the wrong approach to the emergency. It will not provide the creativity, investment or innovation that we need to tackle what is a huge problem.
I agree with my hon. Friend the Member for St Ives (Derek Thomas) that it is important to give people information, so that they can make informed choices. They will want to know not only that their pension investments are working to secure them income in retirement, but that those investments are a force for good in the world. That is especially true when people are making so many sacrifices at home to reduce their carbon footprint.
I pay tribute to the Minister who, I know, completely gets this issue. In an article in The Times today he talks about the potential to be gained from unlocking the huge investments in pension funds to tackle climate change, and he makes a good case. Picking up on that, I ask him to work with his colleagues, particularly in the Department for Business, Energy and Industrial Strategy, and to look at the opportunity to harness through local industrial strategies the potential for investment by local authority pension schemes in clean growth.
We have set clean growth at the heart of our economic growth in Cornwall. Cornwall Council sits on a pension fund well in excess of £1 billion. Many people in Cornwall would like to think that the council was making safe, wise decisions by creating well insulated, environmentally friendly new homes and communities that are affordable for people to live in. They would want it to invest in the excellent, growing, high-tech, clean growth industries in Cornwall, as well as in existing organisations such as Kensa, which is Europe’s favourite supplier of ground-source heat pumps. There are plenty of organisations that would deliver good returns for the pension fund in Cornwall, and which would use the money locally for the benefit of local people. There is an opportunity through the industrial strategy for the local growth strategies to link the need for finance with the need for local growth.
I ask the Minister to bear in mind what has been said today and give local authorities clearer guidance, so that they can meet their responsibilities and use the huge opportunity of their pension funds to deliver the clean growth and decent homes that people in their communities want.
It is a pleasure to serve under your chairmanship, Mr Howarth. I shall cut from my speech anything that anyone else has already said, and try to focus on things that I hope are new to the debate.
The parliamentary contributory pension fund, into which I believe we all pay, continues to hold fossil fuel investments, despite the wish of many parliamentarians and many of the people we represent. However, it is not easy to find out the full list of PCPF holdings. The 2018 annual report lists only the top 20 holdings, which account for only 21.6%, so I wrote last week to the trustees with a specific request, as a pension contributor, for a complete list so that I could prepare for the debate. I was disappointed by the response that I got today, informing me of what I already knew—that the fund publishes the top 20 holdings—and giving me a link to the website, which I was already aware of. The response mentions fiduciary responsibilities, and I accept that point, but it ignores the long-term threat of fossil fuel use to the economy.
The website also mentions environmental, social and corporate governance, but the documents available on it do not appear to me to provide any explanation of what efforts have been made to identify non-fossil fuel holdings that could replace the fossil fuel holdings with an equivalent financial benefit. It is disappointing that my specific request for information on the other 78.4% of the holdings was not met. I respectfully ask the PCPF to provide full, detailed disclosure after the debate. If I am mistaken about where it is on the website, I ask forgiveness, but I have searched and searched, and cannot find it.
People around the world are wising up to the risks of fossil fuels, and my constituents want me to do everything I can to get Parliament’s contributory pension fund to lead by example. The University of Bristol has already done so by divesting from its climate change-inducing fossil fuel funds. Investing in fossil fuel funds is, as we all know and as has been said, bad for the planet and for business. I do not want my pension to be invested in funds that jeopardise the future of the planet and the future of my nephews and nieces and their children. As a pension fund contributor I urge the trustees to change their investment strategy and to be fully transparent. In responding to the climate change emergency Parliament must get its own house in order.
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on securing this important debate.
I commend the climate change protesters who have taken to our streets in recent weeks, including many schoolchildren from my constituency who will be out again on Friday. They have succeeded in putting climate change where it should always have been, at the top of the political agenda. They are right to protest and they are right not to rest until the action that we need is taken and carbon emissions are falling.
It is good that Parliament has declared a climate emergency, but we need action now that is commensurate with an emergency. Divestment is critical to that. One of the essential systemic changes that we need to make is to look at the big flows of investment finance in our economy, divert them away from harmful, polluting and exploitative fossil fuels and reinvest them to scale up sustainable zero-carbon change.
My hon. Friend is making an excellent speech. There are hundreds of billions of pounds in UK pension schemes, and asset owners sit on top of the investment scheme without realising the financial power that they wield. Should not it be made mandatory, so that there can be a transition to a low-carbon economy, for them to examine the situation and take action on the climate risks?
My hon. Friend is absolutely right. To my mind, divestment is a no-brainer. As far as we can we must keep fossil fuels in the ground. We do not have the luxury of doing anything else. Yet for as long as the fossil fuel giants can draw down big investment finance they will keep extracting and selling their damaging products. As long as the development of sustainable alternatives is starved of investment finance, limiting their availability and keeping their cost high, consumers will remain addicted to fossil fuels. It is that simple.
Divestment is a big, systematic change that we can make now. I pay tribute to both local councils in my constituency, Lambeth and Southwark, which were among the first local authorities to divest their pension funds from fossil fuels. I am proud of their commitment, which shows that divestment is completely possible within the strict fiduciary duties of pension fund trustees. More than that, retaining funds in fossil fuels is increasing the risk of those investments over time. At City Hall Sadiq Khan is also showing great leadership on divestment, divesting the Greater London Authority’s assets, working to support boroughs and encouraging them to divest.
The parliamentary pension scheme remains invested in fossil fuels. Five of the top 20 investments of our pension fund are in fossil fuel companies. The pension fund trustees have been far too slow to react to calls for divestment and are still refusing to do so, despite the fact that more than a third of MPs have written to them about it. The divestment of our pension funds is a straightforward leadership action that Parliament should take. No increased risk is entailed and in fact the opposite is true. The climate change emergency demands it.
Finally, we need the law to drive a further change in divestment. Although arguably the law currently requires pension fund trustees to invest in line with the Paris agreement, new legislation is needed to clarify and strengthen the duty. Reporting of fossil fuel-based investments should be mandatory and there should be a duty on all investors to report on the alignment of their portfolios in relation to the Paris agreement. This cannot be left to chance. We will not tackle climate change by retaining the status quo and fiddling around the edges. We need systemic change and it must start with our own leadership and a legislative framework that drives investment finance nationally and globally away from fossil fuels and towards the sustainable investment we need.
It is always a pleasure to serve under your chairmanship, Mr Howarth, and I congratulate you on managing to fit in nine Back-Bench speeches, as well as the one by the right hon. Member for Kingston and Surbiton (Sir Edward Davey) and several interventions. That demonstrates the importance of this issue to hon. Members across the House and their constituents.
I congratulate the right hon. Member for Kingston and Surbiton on securing the debate, and on framing it in such an interesting way that enabled us to consider both the ethical and the financial risks of investment in fossil fuels. As well as risks, however, there are immense investment opportunities. We have an important chance to get this right and to build a cleaner, greener and more sustainable future for us all.
The subject is of considerable concern to many of our constituents—I have certainly received emails about it, and people have come to my surgery to speak to me, which is always a demonstration of the importance that people attach to an issue. The divestment campaign has been running for a considerable time. In 2014 there was a successful campaign at the University of Glasgow in my constituency, since when the university has made a concerted effort to divest away from polluting and fossil fuel technologies.
As the extremity of climate events increases, the urgency becomes clearer and the momentum behind the campaign continues. Hon. Members have mentioned that energy companies and other such industries are willing to engage with that momentum, but they also need support and incentives. The declaration of a climate emergency is crucial because it helps to reframe that policy debate. We in Parliament have declared a climate emergency, civil society is doing so, and Glasgow University and Glasgow City Council have done so. The Scottish Government and the SNP have also made that declaration, but I think I am right in saying that the UK Government have not done so yet. They may have accepted the motion that was passed but they have not yet declared a climate emergency, and that is a missed opportunity to show leadership.
Does my hon. Friend agree that consistent, reliable policy frameworks from Governments are essential when encouraging investors to take up the ethical investment opportunities that I know they are keen to take up?
My hon. Friend is right, and I hope we will hear that point from the Minister.
Difficult decisions will have to be made. The Scottish Government have halted their plans to cut departure tax at airports, and the First Minister said in the Chamber that we will have to look again at our stance on the expansion of Heathrow. Those are the ways that we can begin to make that just transition, and that is the importance of the Divest Parliament pledge, which I and the vast majority of SNP Members have signed and are happy to endorse.
Will the hon. Gentleman give way?
I am conscious of the time, and as the Chair said, we must ensure there is time for the Minister and shadow Minister to respond.
We must lead by example, and starting with our own pension funds is one of the best ways to do that. Like the hon. Member for Bristol East (Kerry McCarthy), and others, I hope that the trustees are listening to this debate.
It is right to place an emphasis on both the ethical and the financial risks. The ethical risks are there for us all to see. The impact of over-reliance on fossil fuels over the years most affects people in developing countries, whose consumption of fossil fuels has been the least, but who are feeling the impact of climate change first and hardest. As the hon. Member for Somerton and Frome (David Warburton) said, this is not just about financial prudence; there is also a financial logic to switching investments towards clean, green and diversified technologies. Even without a reduction in emissions for reasons of climate change, fossil fuels are a finite resource, and one day they will run out. We must make the transition.
While we still use fossil fuels, we must do so as cleanly as possible. That means investment in things like carbon capture and storage, on which the UK Government have again been woefully lacking. Governments have a responsibility to create a climate-friendly investment environment. The Scottish Government are doing their part with solid environmental and ethical considerations and procurement guidance, as well as the establishment of the Just Transition Commission, which will seize those transition opportunities while ensuring that communities are not left behind as they were during the deindustrialisation of the 1980s.
The UK Government must play their part, and we heard interesting proposals from the right hon. Member for Kingston and Surbiton about aligning decisions to the Paris agreement targets. I suggest that aligning decisions to the sustainable development goals would also make a lot of sense. In reserved areas, the Government should fully operationalise carbon capture technologies and accelerate action to decarbonise the gas grid. They should redesign vehicle and tax incentives to support industry, and commit to adhering to future EU emissions standards, irrespective of our future status within the EU. They should reduce VAT on energy efficiency and home improvements, and support the renewables industry more generally. All that would create a more incentivised investment environment for new, clean and green technologies.
We should listen to the future generations and climate change school protesters. If they wish to claim a pension in a sustainable environment in decades to come, that will require action now to tackle climate change and build a financially viable and sustainable pension fund. For them we must seize this opportunity and look not just at financial and ethical risks, but at the financial and ethical opportunities of a cleaner, greener and more just world.
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the right hon. Member for Kingston and Surbiton (Sir Edward Davey) for securing this vital debate. I also thank the nine Members who made speeches, as well as those who intervened.
It is not every day that I agree with the Liberal Democrats, but we certainly have common ground on this issue. We are in a climate emergency, and when we talk about moving towards a greener economy, we must be clear that the time for debate and discussion alone has passed. It is now time for clear, concrete and urgent action. As my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) so powerfully argued, we must make no mistake: this is a climate emergency; this is a crisis.
One could argue that climate change has never been so prominent in public consciousness and political discourse. Despite the Brexit-related dramas in Parliament, which still continue, between 15 and 25 April, climate change was high on the news agenda in response to Extinction Rebellion protests in London, a major BBC documentary presented by Sir David Attenborough, and the visit to London of a Swedish schoolgirl. They led the way for many of us.
Over the past 12 months, according to pollsters, the environment has risen in public concern. In a YouGov poll conducted on 29 and 30 April, 24% of people placed the environment among the top issues facing the country—about the same level as concern about the economy and immigration. That is a stunning development. We know from our postbags the levels of concern among the public about the climate emergency. Nothing short of a major transformation from fossil fuels to renewables will be good enough. Changing the ways that pension funds invest will not solve the crisis on its own; it must be part of a much wider approach—a new green deal, or a green industrial revolution. We have made some progress but, my God, we need to make considerably more if we are genuinely to tackle this emergency.
My hon. Friend the Member for Warwick and Leamington (Matt Western) highlighted the fact that the Labour-led Southwark Council has moved £450 million into passive funds that track low-carbon and fossil-free indices. It has also invested £30 million in Glennmont’s green energy fund, which invests in western European wind and solar companies. Many trade unions—I declare an interest as a member of Unison—have produced excellent and accessible guides to divesting away from fossil fuels, and I know that has been welcomed by representatives on local government pension committees and schemes up and down the country.
Parliament has started to take this issue more seriously and put its own House in order. In June last year, 11 hon. Members, including the shadow Chancellor, called for Cambridge University to remove its £377 million fossil fuel investments. In addition, 244 serving and former MPs have signed the Divest Parliament pledge, calling on the trustees to phase out investments in fossil fuel companies. The trustees are developing a climate change investment policy, but not quickly enough, as highlighted powerfully by my hon. Friend the Member for Bristol West (Thangam Debbonaire). We want that policy to commit to phasing out investment in fossil fuel companies in the earliest timeframe possible and to reinvest the money in funds aligned to the Paris agreement.
This country’s pension assets, as highlighted by my hon. Friend the Member for Warwick and Leamington, total some £2.8 trillion. Pension savings should be at the forefront of the fight against climate change. Pension savers have money invested for the long term, so it is particularly exposed to climate risks, as powerfully argued right across the Chamber. This concern is now relevant to more of us than ever.
Given the clear threat that climate change poses, we would all hope that it would be the norm for pension schemes to manage the risks. Unfortunately, research from the charity ShareAction finds that, for many, their retirement savings are unlikely to be sufficiently protected against climate risks. In a survey of some of the UK’s largest defined-contribution corporate pension schemes, just two of the 15 participating schemes had changed their default investment strategy specifically to reduce the exposure of employees’ savings to climate change risks. Although ShareAction found that a handful of schemes are considering further policy developments in this respect, the fact that a gulf exists between the strategies of schemes means that workers face a lottery from one job to the next as to whether their savings are sufficiently protected against climate change.
As the Minister stated in an intervention, the new pensions investment regulations, in force from October 2019 and to be strengthened in 2020, go some way towards addressing the issue. Scheme trustees will need to update policies to show how they take climate change into consideration as a financial risk. However, as my hon. Friends the Members for Norwich South (Clive Lewis) and for Southampton, Test (Dr Whitehead) argued powerfully, we need to go considerably further.
Financial regulators have a major part to play. Trustees in charge of managing schemes need enhanced guidance from the Pensions Regulator on how best to manage climate risks. The Financial Conduct Authority, in charge of regulating contract-based schemes, needs to provide clarity on the need for consideration of and reporting on climate risks, through both investment and stewardship, to ensure that no savers face weaker protections because of the scheme in which their employer happens to have enrolled them.
Greater transparency about the actions that schemes are taking to manage the risks should result in better decisions being made.
The hon. Gentleman is making a very good point about transparency. A large reform is going on in the audit industry at the moment. Does he agree that there is an opportunity for us to look at the whole of financial services and financial infrastructure and look at how we value investments, so that we value intangibles along with tangibles and ensure that our environmental and sustainability investments are getting their appropriate value? This is not just a trade-off between short-term returns and long-term investments; we can achieve both if they are valued correctly.
That is a very good point, which I will come on to.
Pension schemes should be required to report on their management of climate risks in line with the Task Force on Climate-related Financial Disclosures. Transparency could also be enhanced by mandating scheme member representation—I think that my hon. Friend the Member for Leeds North West (Alex Sobel) argued for this—on the governance boards of the new auto-enrolment schemes, as well as by requiring pension schemes to consult their members on key policies.
We need to send clear signals that tackling climate change and other environmental, social and governance risks is not distinct from the core purpose of financial markets, but an integral part of it, as the hon. Member for Ochil and South Perthshire (Luke Graham) argued in his intervention. Of course, as we divest from fossil fuels, we must ramp up investment in clean and green technology. Labour has set out plans to fit 1.75 million homes with electricity-generating solar photovoltaic panels, creating thousands of quality skilled jobs across the UK. That is a Labour green deal that will shift energy generation via renewables to 85% by 2030. It will provide a major boost to an industry that is still recovering from the effects of the coalition Government’s ill thought out slashing of feed-in tariffs, which was such a blow to a growing and vital industry.
Does my hon. Friend agree that to really address this issue, we need legislation like that in Wales, the Well-being of Future Generations (Wales) Act 2015, which is transforming how the public sector takes decisions? Legislation like that could and would address this very issue if we had it in the UK.
I do agree with that point, which was powerfully made.
Labour will transform corporate environmental responsibility by making compliance with key environmental criteria a condition of firms listing on the stock exchange, so we will be applying that more broadly. Of course, to deliver the change needed to respond to this emergency, all parties need to show leadership.
Does the Minister agree that we are in a crisis, an emergency, and that nothing less than transformational, revolutionary change is needed? If that is the case, does the Minister believe that rolling out the red carpet for the current President of the United States, who is perhaps the most high-profile and influential denier of climate science in the world today, sends the right message? Will the Minister look at giving further strength to the ESG regulations? They are a welcome step forward, as we have already said, but we could go considerably further. Will the Minister offer Government support for the parliamentary schemes divesting from not only fossil fuels but environmentally damaging investments more broadly and doing so as quickly as possible? Finally, if the Government support the move away from fossil fuels, why do they continue to support the fracking revolution, as highlighted in their party’s 2017 manifesto? We need more than warm words. We need emergency action now.
This Parliament accepts that there is a climate emergency, and this debate, which I am delighted so many colleagues have embraced this afternoon, has focused on the following key issues: the change that clearly is taking place in our climate; the role of the consumer; the choices that are available to the individual parties that we are dealing with; and, ultimately, the role of capitalism and its ability to assist in addressing these particular problems.
We should trumpet the success of successive Governments of different persuasions, leading up to the coalition and this Government, in leading the way in the G20 and reducing our CO2, and we should celebrate the quadrupling of our renewable capacity, but we clearly must do more. We should celebrate the fact that, as my hon. Friend the Member for St Ives (Derek Thomas) said, on the May bank holiday Britain had burned no coal for electricity for a week—the longest period without coal since the industrial revolution.
Although we celebrate these good things, they are patently not enough. Although we will plant more forests, recycle more and, crucially, try to engage our consumers, our citizens, our constituents to change their behaviour, we do, I suggest, need capitalism to save the day. I agree with my hon. Friend the Member for Truro and Falmouth (Sarah Newton) that we need to urge local authorities to focus on the clean growth strategy that has been set out by the Government to address the way we do housing and the way we do energy on a localised basis. I believe very strongly—any Conservative will make the case—that capitalism is a force for good, because we need technological innovation to solve the climate change issues, and innovative start-ups will be needed to address the access to capital and the changes that are required.
Many hon. Members have spoken about the need for transparency regarding the kinds of companies that are being invested in. Does the Minister agree that that transparency should include the work already done by large oil and gas companies to invest in the innovation he is talking about? It is not only small start-ups that do this innovation; the large companies with large resources behind them are already investing in it heavily. As the right hon. Member for Kingston and Surbiton (Sir Edward Davey) mentioned, the 1.3% invested by the 13 or so companies that are part of the oil and gas climate initiative works out at approximately $100 million a year. That is a very large number, even though the percentage sounds small.
I accept my hon. Friend’s point. The crucial point is that natural gas had been one of the biggest parts of reducing carbon dioxide in the electricity sector. Hydrogen derived from natural gas will decarbonise heating for homes and transport. The large companies are leading the way on carbon capture and storage. We must work with them to ensure that the successes, which we all want to see, continue.
We can see the changes that are taking place. Individual companies must answer for themselves. Last year, Shell, one of the largest companies that we are debating, agreed to link its executive pay to its carbon emission targets, in direct response to particular shareholders. The Minister for Energy and Clean Growth, my right hon. Friend the Member for Devizes (Claire Perry), would be here if she could, to make the case for the Government’s clean growth strategy and the green agenda. Like her, I urge individual consumers—anybody who has a particular pension—to make the case to their trustees as to how that is being invested.
I am going to make some progress and then I will try to take the greatest hits—bear with me one second.
I accept that the technological changes require capital, long-term thinking and a lack of political agenda. I strongly believe that the pension industry has those attributes. I urge the House to accept that the Government’s regulations—namely the ESG regulations, which come in this year, but were passed in September 2018—which require a pension fund to update its statement of investment principles and take into account environmental, social and governance regulations, are key to the change to the strategic progress of investment.
To address the point made by the hon. Member for Norwich South (Clive Lewis), those occupational pension schemes regulations require that trustees must—the emphasis is on “must”—set out their policies on environmental, social and governance matters, including climate change, and how they engage with the companies in which they invest. Those regulations also introduced a requirement for trustees of DC schemes, where the member bears the financial risk of poor investment decisions, to report on how their investment policies are being put into action and make all of that information publicly available online.
For too long there has been a perception by too many trustees—I am happy to clarify this as a Government Minister—that the environmental practices of the firms they invest in are purely ethical concerns, which they do not need to worry about: that is utterly wrong. Aside from the ethical considerations, there are real financial risks resulting from climate change. With the long-term horizons of pension investing, trustees must now consider that when they set out their investment strategies. Trustees who do not consider those matters will be breaching their statutory and potentially their fiduciary duties not only to current but future members.
I will give way to the hon. Gentleman, who has not had a chance to speak.
There is consensus that divestment from fossil fuels makes both financial and environmental sense. Further to the point that the Minister has just made, does he think that those changes will be sufficient to ensure that the industry actually makes that transition, or does he envisage further measures in the future?
I will come on to some of those particular points. In terms of regulatory guidance, which has been raised by several hon. Members, there is no doubt that the Pensions Regulator is planning to publish further guidance on managing the climate change risk in advance of those regulations, which come in to place in October. A key point is that non-compliance with those regulations can potentially lead to sanctions from the Pensions Regulator, which is acutely mindful of its obligations and what it needs to do to address this particular point.
As a Government, we will respond shortly to the advice from the Energy and Climate Change Committee on the target for net zero emissions by 2050. That advice was only published two weeks ago. Colleagues will be aware of the 25-year environmental plan, which has been set out in detail. It commits to using resources from nature more sustainably and effectively, and achieving a clean air, water and wildlife approach.
The Minister began by saying that Parliament has declared a climate emergency. Do the Government also recognise and declare a climate emergency? His remarks on the recent report from the Energy and Climate Change Committee indicate that the Government must declare a climate emergency.
The hon. Gentleman and I went into the same Lobby when we voted on that matter. He has heard that the House gave universal support to the debate that was taking place. I am not here to make policy on behalf of the whole of the Government, but the Government will respond formally to the 2 May report shortly. He will have to bear with us until that stage.
Will the Minister give way?
I will not give way again, because I have very little time left.
I want to address a couple of points made by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). He asked whether we are creating a coalition of the willing. I strongly suggest that we are. We are working with the Institutional Investors Group on Climate Change, ClientEarth, ShareAction—which I have met on several occasions—and the UK Sustainable Investment and Finance Association. There is a serious amount being done to ensure we are aligned with the Paris agreement. The widespread global commitment to the Paris agreement suggests that trustees have a responsibility to align their investment strategies with its aims.
However, it is fair to say that there is no definitively agreed consensus on what being aligned to those aims of being below 2° mean for a specific pension fund and its asset allocation. That is why I am delighted to see the initiative of the Institutional Investors Group on Climate Change, which is developing a common understanding of what such alignment means for pension schemes, and the Government will work with it on that point.
Green finance is a key priority for my right hon. Friend the Minister for Energy and Clean Growth, who set up the green finance taskforce which, with the clean growth strategy, will drive economic growth as part of industrial strategy, to ensure that the UK remains a driving force in enabling the global transition to a low-carbon economy. A green finance strategy paper will be launched later this year, which will set out the Government’s green finance objectives on an ongoing basis.
I want to talk about consumers. It is absolutely the case that members can make individual choices. They can choose to move their individual pension into a self-selected fund that aligns with their own objectives, such as an ethical fund. We massively support such an approach and feel that it is the right thing to do.
On transparency, which my hon. Friend the Member for Banff and Buchan (David Duguid) mentioned, the Government intend to announce further transparency measures on the topic of responsible investment in the coming weeks, in respect of the shareholder rights directive. This Government absolutely accept that there is a climate emergency and we are addressing this. I thank the right hon. Member for Kingston and Surbiton for bringing forward this vitally important debate, which all of us have engaged with and embraced as the right way forward. I look forward to updating the House on further developments, particularly in October after the regulations kick in.
I thank everyone who has contributed to this debate, which has been really good. There is some degree of consensus emerging. I agree with what the Minister said on carbon capture and storage. I was disappointed that the former Conservative Chancellor, George Osborne, got rid of the CCS projects that I had been developing as Secretary of State for Energy and Climate Change, particularly the gas CCS which was a world-leader. I regret that, because I think it was an extraordinarily bad decision for the gas industry.
I want to return to the issue of consensus. We need to act. I set out a five-point plan today. There were other ideas. I hope the Government will listen to those ideas. While the ESG guidelines are helpful—I know some of the work that the Minister for Energy and Clean Growth is putting forward on green finance—I think we have to be bolder and go further. The Minister has heard that today.
In the context of the role of the UK and the City of London internationally, we need to go further. If we can lead from the City of London, we can decarbonise capitalism not only here, but globally. That will be the biggest contribution that Britain can make to tackling global climate change.
Question put and agreed to.
That this House has considered financial and ethical risks of investments in fossil fuel companies by pension funds.
Adult Survivors of Child Sexual Abuse
[Mr Philip Hollobone in the Chair]
I beg to move,
That this House has considered achieving quality information and support for adult survivors of child sexual abuse.
It is a true pleasure to serve under your chairmanship, Mr Hollobone. I declare an interest as an ambassador for the National Counselling Society. Child sexual abuse in the UK is a public health crisis. The number of victims is simply staggering: 7% of people aged between 16 and 59 report being sexually abused as a child, which equates to more than 2 million survivors in England and Wales alone.
The all-party parliamentary group for adult survivors of childhood sexual abuse, which I chair, recently published the results of a six-month inquiry into the impact of abuse, and the support and information that survivors need to recover. Of the 365 survivors who responded, 90% said that their intimate relationships had been negatively affected by abuse, 89% said that their mental health was negatively affected, 72% said that it was damaging to their career, 65% said that their education was affected, and 46% said that it had a detrimental impact on their financial situation.
It is common, if not typical, for mental health conditions triggered by the trauma of childhood sexual abuse to have a detrimental impact on all aspects of a survivor’s life if left untreated. They can cause survivors to fall out of employment, which jeopardises their financial situation and puts a strain on their family life. Some survivors accrue substantial debts while trying to pay for private therapy after they have failed to access appropriate support on the NHS. Others struggle to find jobs in the career they want to pursue, because their education was severely disrupted as a result of missing education because of abuse. For many survivors, the trauma of abuse makes it difficult to develop close trusting relationships.
The APPG’s report recommends that the Government publish an assessment of the economic and social costs of child sexual abuse, as the Home Office has recently done for domestic abuse. Having that information will help policy makers and the public to understand the scale of the issue.
The hon. Lady is making an excellent point. Of course, we have all seen many sufferers of sexual violence live with that for years and years, unable to express it, until a sudden trigger point means that they can come forward and say what has happened. Will she review those trigger points, so we understand them and can encourage them? Can she also tell us what she would recommend to encourage people to come forward as early as possible to discuss such issues? The earlier they are discussed, the easier it will be for the person involved.
The hon. Gentleman makes profound points that go to the nub of the argument. If survivors had confidence that the system would support them, I genuinely believe that they would come forward earlier. Early intervention is key—having a few sessions where people are listened to and fundamentally believed, and can then continue with the rest of their lives.
What tends to happen, however, as the hon. Gentleman has alluded to, is that survivors do not have that trust, so it can take decades for them to come forward, if they ever do. As a result, the spectre hanging over them infiltrates every aspect of their life. A trigger can be anything—the same aftershave that their abuser was wearing or a feeling of being enclosed in a space—so unless we address the actual issues and recognise that these people are victims of crime, they will not be able to lead their full lives and reach the potential that we all deserve to achieve.
I commend the hon. Lady for securing the debate and for her work on the subject across the House, in Westminster Hall and in the main Chamber, for which we greatly respect and are proud of her. I met a lovely lady who was repeatedly sexually assaulted in the worst imaginable ways. To say that she still bears the scars is an understatement. The support for her, and too many others like her, was not in place when it should have been. That failure has to stop. Does the hon. Lady agree that the time has come for us in this place to step up and do right by those who have been so terribly wronged? The system needs to be there at the beginning, and now, when they need it most.
I completely agree with those sentiments. It is a blessing that MPs such as the hon. Gentleman fight for people when they need it, but it should not come down to an MP fighting for an individual. They pay their taxes. We have a duty to support them. That support should be accessible to everyone as an automatic right.
Survivors told our inquiry that the impact of trauma caused by childhood sexual abuse is not widely recognised by professionals, which can make it hard to get the support they need. One survivor described visiting a GP as
“a lottery as to which kind of help they will get”
and said that there is a
“lack of diagnosis and failure to understand the significance of the disclosure…many survivors are misdiagnosed with lower level issues such as anxiety and depression.”
Survivors feel that the effects of the abuse are not well known in the NHS. Frontline staff are not equipped to deal with disclosures, and they do not have the knowledge to direct survivors to appropriate treatments. It is telling that, although 89% of survivors said that their mental health had been negatively affected by abuse, only 16% said that NHS mental health services had met their needs. Another survivor told our inquiry:
“I’m a survivor of childhood sexual abuse and of the mental health system.”
Recent studies have found that a wide range of social and environmental factors increase the risk of mental ill health, including growing up in poverty, early separation from parents and experiencing sexual abuse as a child. Professor Richard Bentall at the University of Sheffield has argued that the evidence of a link between childhood trauma and a future psychiatric disorder is at least as strong as the evidence of genetic causes. Solid evidence also shows that adverse childhood experiences can affect the brain structure, which then affects a person’s sensitivity to stressful situations and causes fluctuations in mood throughout adulthood. That has significant ramifications for adult survivors of childhood sexual abuse.
Survivors of childhood sexual abuse have two cards dealt against them. Because the trauma of the abuse increases their risk of developing psychiatric disorders later in life, their risk of experiencing adverse conditions as an adult also increases. The findings of that research were borne out by our surveys, which demonstrated survivors’ experiences of poor relationships, unemployment and financial hardship.
Survivors need the professionals they interact with, whether they are child protection social workers, jobcentre work coaches, GPs or judges, to be curious about the circumstances that led to their current predicament, rather than just dealing with the presenting symptoms. Survivors told the inquiry they want frontline professionals to ask not, “What’s wrong with you?” but, “What happened to you?”. That professional curiosity will allow survivors to build relationships with professionals that are oriented to meeting their needs. It is key to achieving quality support and, ultimately, securing justice. Will the Minister commit to developing guidance and training on trauma-informed practice for frontline professionals, in conjunction with the specialist voluntary sector and his colleagues across Departments?
Survivors told the APPG that the support they found most important to their recovery is specialist voluntary sector counselling and therapy; I will shorten this to “specialist services” for the rest of the debate. Specialist services provide a range of options tailored to meet the needs of the survivor, including counselling, support groups and advocacy. Survivors say they value these services for a wide range of reasons: the services provide them with support regardless of whether they report to police; they are met by knowledgeable staff in a welcoming, non-clinical environment; and the staff recognise that there is nothing intrinsically “wrong” with them and that the issue is the effects of the trauma caused by the abuse.
We need to continue to develop what we know about child sexual abuse, its links to mental illness, and the most effective forms of support and therapies for survivors. The APPG wants the National Institute of Health Research to commission studies into effective therapies for survivors of abuse and I urge the Minister to support us in that aim.
The inquiry heard that specialist services face unprecedented demand without a related increase in their budgets. SurvivorsUK reported a 30% year-on-year increase in people attempting to access its services in each of the last three years. In 2017, the National Association for People Abused in Childhood—NAPAC—answered 8,500 calls and emails on its national support helpline, but that is less than a tenth of the 90,000 inquiries that it received that year.
I am grateful to my hon. Friend for giving way and I congratulate her on securing the debate. She has mentioned one issue that we Rotherham MPs are all too aware of—without the proper services to support these people, justice will not be brought through the courts. If we look at the number of people who the Jay report says were abused, we can see that the number of people who come forward is far, far fewer than that, and without these types of services we will not get these people the justice that they deserve, and they all deserve justice.
I completely agree with my right hon. Friend, and I congratulate him, because as a Rotherham MP he has been an absolutely tireless campaigner, both to get justice for the survivors in Rotherham and to get the support services, which we are still waiting for.
The APPG’s inquiry into adult survivors of childhood sexual abuse found that the average male survivor waited for 26 years before disclosing abuse. Therefore, it cannot be right that, at the moment survivors are ready to speak about their abuse, they are forced to join the back of a queue, with waiting lists a year long, and sometimes waiting lists are closed, due to demand and the lack of funding to meet it. Across the country, the reality for survivors is a lengthy wait for support, or limits on the number of sessions available.
Although it was welcome that the Ministry of Justice increased by 10% the rape support fund, which provides grants to specialist sexual violence support services, specialist services are seeing demand increase far in excess of 10%.
I congratulate my hon. Friend on securing the debate, and I am really pleased to have this opportunity to intervene on behalf of survivors in Nottingham. She is doing a fantastic job. Does she agree that there needs to be a specific pathway, so that people can get referred to robust trauma therapy without having to tell their story again and again, and wait for months? Actually, there is a model for such a pathway, because one has been established for veterans. Should not the same level of care and support be given to these people who—to be honest—have already been failed by the system once? Providing such a pathway would go some way towards recognising that we have failed them, by allowing them to be victims of child sex abuse in the first place.
I completely agree with my hon. Friend, and it should go on the record that she has been such a fighter for the survivors in Nottinghamshire, which is hugely appreciated. Yes, she is right that victims should not have to battle and beg to get support services to enable them to live their life. They are a victim of crime; access to such support should be an automatic right. But victims having to tell their story time and again is something that we keep hearing about. The thing that I am most fearful of is that some of the people going through that fight will just step away from it, and who can blame them for that? However, as a society and as a Government, we need to address that situation and we need to do it now.
To that end, would the Minister consider developing a mechanism for pegging the funds to uplifts in demand, so that specialist services and survivors are not forced to bear the effect of any funding shortfall? Instead, the Government would pre-empt that need and fund it accordingly. We all have to admit that for too long the Government have been behind the curve on this issue.
If we acknowledge the prevalence of abuse and its devastating costs to the individual and society, the logical policy to adopt is a transformative funding package that funds services that redress the trauma of abuse and help survivors to recover. Minister, that requires more than an occasional 10% uplift.
Will the Minister commit to asking the Chancellor for a cross-Government strategic fund, which meets the core funding needs of specialist services, to prevent and respond to child sexual abuse? He may find that he is pushing against an open door, because in March and again in the main Chamber yesterday the Chief Secretary to the Treasury spoke about survivors, saying in March that
“because they have been traumatised and left in despair after suffering the consequences of crime…it should be government’s responsibility to prioritise support for these people”.
Both the NHS and the specialist voluntary sector have a vital role to play in supporting the recovery of survivors. On average, 17% of the budgets for specialist sexual violence and support services comes from the rape support fund, and 14.5% comes from NHS England and clinical commissioning groups, or CCGs. The APPG’s inquiry heard that CCGs have a responsibility for commissioning long-term therapeutic support for survivors. However, when I asked Ministers for an assessment of the effectiveness of CCGs in this regard, they told me that they do not even collect the data on it.
When survivors tell us that the support they need is not there, and specialist support agencies find many CCGs challenging to work with, I must say that this lack of data is extremely concerning. I therefore also ask the Minister to make representations to his colleagues in the Department of Health and Social Care to collect this data centrally, so that proper analysis of it can be made. If it is discovered that CCGs are failing in their duty to commission such support, will he consider ring-fencing funding for the long-term therapeutic support that survivors need?
There also needs to be research into the availability of appropriate services for black, Asian and minority ethnic survivors; for lesbian, gay, bisexual and transgender survivors; and for disabled survivors. During the APPG’s six-month inquiry, we found virtually no evidence, or indeed recognition, of those survivors’ specific needs, nor a desire to commission the services that they need, which is of considerable concern.
Minister, a nationwide public health campaign about child sexual abuse is required. It would raise awareness and—importantly—reduce stigma. It should also aim to direct both survivors and professionals to sources of information and support. In the absence of professional expertise, survivors said that they need quality information about the impact of abuse and about where they can access support. To date, professionals are described as being “caught out” by disclosures, and therefore as being unable to provide up-to-date, relevant and accurate information. In such a situation, survivors usually take it upon themselves to find information and services on the internet, which has mixed results.
In parallel with a public health campaign, the Government need to address the fact that existing sources of information and support are patchy and disparate. The Government could do more, in co-operation with the specialist voluntary sector, to provide online resources about the impact of abuse, and information about the support services that are available, both locally and nationally. This will necessitate cross-Government working and marshalling existing online information from police and crime commissioners, specialist service umbrella agencies, and the Ministry of Justice’s own Victim and Witness Information website. Survivors and professionals need to know where they can source information and support; currently, there is just no clear answer for them.
If the hon. Lady will forgive me for saying so, I just cannot congratulate her enough, both on securing this debate today and on her work with the APPG, which I am proud to be a member of.
As Members of Parliament, we come to this place to speak for others, but I am sitting here and the hon. Lady is speaking for me, as a survivor of child sexual abuse myself, through the things that she is saying and the way that she is articulating the difficulties in coming forward—in admitting it even to yourself; admitting it to others is even more difficult. She talked about people taking an average of 26 years to talk about their abuse as a child. For me, it took 40 years, and here I am—an articulate, sensible, educated man.
I urge the hon. Lady to continue this campaign for greater awareness. We all understand that the more we talk about this issue, and the more we break down the stigma, the more that people will come forward. Since I spoke about my own individual case, I have been inundated by people in the same situation contacting me to say, “Me too. We went through that.” I have even had people who work in this place come up to me and say, “You are speaking for us.” I congratulate the hon. Lady, but will she continue to fight for that awareness campaign?
First, I promise that I will continue fighting for that awareness campaign, as the Minister knows. Secondly, I thank the hon. Gentleman for being so outspoken on this issue and using his own, personal testimony, because that is what resonates. The reason we set up the APPG was that a staff member in Parliament came to me and shared his experience. Looking around this room, and holding the statistic that 7% of adults in the UK are survivors of childhood sexual abuse, the hon. Gentleman will not be the only one present. I admire him, and thank him for sharing his story to help other people. I turn to the Minister after such a testimony and ask him to please address this worrying shortfall, and commit to developing a public health campaign, with the associated website and the information we need alongside it.
I thank all MPs present and the Minister, who I know cares deeply about finding solutions to these issues and has done so much so far. I thank all the professionals and specialists in the voluntary sector and across the board who have contributed to the APPG’s report. Most of all, I thank the 400 survivors of childhood sexual abuse—some of whom are in the room, and many of whom are watching on telly—who have generously given their time and experience to try to make positive change for all victims and survivors in future.
I have illustrated today that child sexual abuse is a public health crisis. The number of affected adults is in the millions, scattered across the four nations of the United Kingdom. The trauma of abuse has severe implications for a survivor’s mental wellbeing, which in turn negatively impacts their relationships, work and financial security. Fortunately, the solution lies before us: the Government can ensure that frontline professionals are curious about a person’s trauma, and are able to recognise how that trauma may impact behaviour and wellbeing. They can fund specialist voluntary sector services to meet demand while continuing to improve NHS pathways. They can take responsibility for the information available to survivors, harness new technologies, encourage better collaboration, and prioritise child sexual abuse as a public health issue.
I will leave Members with the words of a survivor from my constituency of Rotherham:
“We need counselling and we need therapy. We need the little things. There’s nothing there. Just a chance to rebuild our lives. It’s. Not. Our. Fault.”
The debate can last until 4.30.
It is a pleasure to serve under your chairmanship, Mr Hollobone, as I do so frequently these days. I thank the hon. Member for Rotherham (Sarah Champion) for securing a debate on such an important subject, and I will start by briefly acknowledging her work and dedication to the cause of improving support for those who fall victim to the horrendous crimes of sexual violence and child sexual abuse. One of the very real pleasures of doing the job of victims Minister is that I have been able to work closely with the hon. Lady, with all the knowledge, passion and determination to improve things that she brings to all she does in this House.
As the hon. Lady highlighted, she has chaired two all-party parliamentary groups on these topics, producing two extremely useful reports with recommendations. I hope that at some point soon, with her permission, I might be able to meet the all-party parliamentary group for adult survivors of childhood sexual abuse. I welcome both reports, and commit to giving their recommendations the full and proper consideration they deserve and that the hon. Lady would expect. I will respond to her in due course about the detail of those reports.
I also thank all survivors who took the time to share their experiences to inform the report. I know it takes great courage to speak out about such difficult issues, and I commend them for coming forward for the benefit of other victims and survivors. In that context, I particularly recognise the bravery of my hon. Friend the Member for Burton (Andrew Griffiths) in speaking up very movingly in this House on a number of occasions about his own experiences, and his commitment to doing everything he can to ensure no one else has to suffer in that way. I want to ensure that we do not lose momentum in this space, and that we build on recent achievements such as the victims’ strategy.
While the Minister is being nice to me, let me just draw out one point in relation to compensation. I know that we are due to meet—I had to reschedule our meeting—but compensation for victims for child sexual abuse is simply not good enough. Of the 6,861 convictions for child sexual abuse in 2017, compensation orders were issued in only 26 cases. Will the Minister keep that at the forefront of his mind, and make sure that victims of child sexual abuse get the compensation they deserve?
I know that my hon. Friend has recently made this issue the subject of a ten-minute rule Bill. Although the imposition of those orders is a matter for the judiciary, he is quite right that I am due to meet him shortly, when we can discuss what more can be done to raise awareness of the ability to use them.
We know that these crimes can have lifelong, life-changing impacts on victims, as the hon. Lady has set out. It is therefore essential that high-quality support and information is available to those who need it, when they need it, to do what is possible after such a horrendous crime to help individuals rebuild their lives and come to terms with the trauma.
On a point of information, the Minister may be aware of the Beecholme children’s home scandal of the 1960s. Victims of that scandal have told me that they have had difficulty with the co-operation of, and getting access to information from, local authorities. Does he believe that local authorities should have a responsibility to be as fulfilling and forward with information as possible?
My hon. Friend makes his point well and powerfully. I hope he will forgive me for not commenting on the detail, as it is still subject to a live investigation, but he has placed on the record his views on that important subject.
I believe we are making good progress, but there is much more to do. Since becoming the victims Minister, as the hon. Member for Rotherham alluded to, I have made it my priority to provide more funding to rape and sexual abuse support services. I wished to do three things: the first was to increase the amount of funding available, which we did by 10%. The second was to address the sector’s calls for a multi-year funding settlement, moving from one year to three years. The third, which we continue to work on, was to simplify the process for those organisations applying. The APPG’s report quite rightly highlights the need to pay for counselling as a barrier to accessing support, and I am happy to say that this funding ensures that victims of rape and sexual abuse can access any of the centrally funded support services free of charge in any of the country’s 42 police and crime commissioner areas, regardless of whether they report the crime. That is, of course, on top of £68 million of funding to police and crime commissioners to support victims of crime.
However, the hon. Lady has rightly highlighted a bigger picture. We must seek to replicate what we have achieved in that area more broadly across the funding space, with multi-year settlements, sustainable and appropriate funding levels, and simplification. When she talked about pegging funding to demand and cross-Government work, she highlighted that the most effective vehicle for that will, I suggest, be active engagement with the forthcoming spending review and with the Treasury. I will not pre-judge that spending review or the hon. Lady’s conversations with the Chief Secretary, but I know it is something that the Treasury are very much alive to, and rightly so—in large part because of her work in this area.
The hon. Lady also highlighted the importance of cross-Government working. Departments have joined together across Government to offer additional funding to support victims identified as part of Operation Stovewood in her constituency. We are also working to update and improve the information for victims on gov.uk.
I am conscious of the clock ticking, but I will conclude with a number of points. The first is that, of course, I am always happy to meet the hon. Lady if she wishes to pick this issue up separately. I will also commit to raising the specific issues that she has touched on about the NHS, CCGs, and training and standards in my regular meetings with my opposite number at the Department of Health and Social Care. Once again, I thank the hon. Lady for securing the debate, and look forward to working with her, all hon. Members, Ministers across Government, the sector, and survivors themselves to ensure that victims receive the best care and support we can offer.
Motion lapsed (Standing Order No. 10(6)).
International Education Strategy
I beg to move,
That this House has considered the International Education Strategy.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I emphasise that I will try to keep my remarks brief, because I know other Members with a high degree of expertise on this subject wish to contribute to the debate. In a previous incarnation as the Chair of the then Business, Innovation and Skills Committee, my Committee conducted an inquiry into this matter, and the issues we found and the potential solutions that we came to are as relevant now as they were then.
Before I go into the details, let me say clearly that I welcome the publication of the strategy. Whatever subsequent criticisms I may make, it is a welcome recognition and a very effective portrayal of the fact that education is not just a public investment in future skills in this country; the quality of our educational offer is such that, over and above that, it is a major income earner for this country, sustaining hundreds of thousands of jobs, often in the most economically disadvantaged regions.
To repeat some of the statistics in the report, we have four universities in the world’s top 10, and 18 in the top 100. That sector is only the peak of a globally recognised education system that provides for the early years foundation stage to A-levels. The net financial benefits to this country’s economy are estimated to be £20 billion, and the sector supports 940,000 jobs. It is estimated that somewhere between 50 and 58 current world leaders were educated at British universities. I assume that the vagueness in the figure is something to do with the vicissitudes of public life, with which we are all familiar. The quality of their British education and British experience is a valuable source of good diplomatic relations for Britain, and in a post-Brexit world, it will be even more important to sustain that if we are to develop our international trade.
In short, we have a great product that brings us enormous benefits in hard cash and soft power. That is allied to a rapidly expanding world market. Precise statistics are difficult to get, but all available evidence shows that students, particularly in the emerging economic powerhouses such as China and India, are increasing in numbers and are highly selective and mobile in their choice of destination to continue their studies. Not surprisingly, as English is the global business language, it is English-speaking countries that start with an advantage in attracting those students, as they can develop their subject expertise while polishing their English language skills.
Given all the advantages this country has, we must ask why our performance has been so limp. The Minister will say—I acknowledge this—that there has been an increase in the absolute number of foreign students being educated in this country, but since 2012 international student enrolments here have grown by 5%, compared with 31%, 67%, and 32% in the USA, Australia, and New Zealand respectively. In 2013, the Government set a target to have international students contributing a net £30 billion a year to the UK economy.
I congratulate my hon. Friend on securing this timely debate. International students can act as ambassadors for us in a funny sort of way, because they understand the culture of the country. More importantly, the two universities in my constituency, the University of Warwick and the University of Coventry, are involved in research and development in the motor car trade, medical facilities or medicines and other such things. Does my hon. Friend agree that when students go back to their own countries, their knowledge of what we can do and can produce may, in a roundabout way, help our trading relationship with those countries?
As a fellow west midlands MP, my hon. Friend will have shared the experience of the enormous investment that is coming to the region from Indian entrepreneurs who were educated in this country. That is a hard economic benefit that has accrued.
To get back to the point I was making, we have only achieved £23 billion of the benefit that was targeted way back in 2013.
My hon. Friend is making an important case. Has he seen the figures I have seen, which suggest that the number of students coming from India in the last year for which there is data—2017-18—is about half what it was in 2010-11?
I will touch on that when I talk about the impact the visa regime has had.
The revised target in the strategy is to have 600,000 students contributing a net £35 billion to the economy by 2030. That would require a growth rate of something like 4% per annum. Whatever the headline figures, that seems an unambitious target. It is lower than we achieved between 2013 and 2018, which in itself was a long way behind our major competitors. The target would perpetuate a system where we are lagging behind in building market share in the very important world market in education.
There is constant repetition within the strategy about the opportunities that we will have once we have left the EU. In all my dealings on this issue, I have never heard anyone say that we are losing our market share because of the EU. I have heard plenty of other explanations, but I do not want our discussion to become hostage to a more partisan debate on our membership of the EU. Whether we are in or out, it is vital that we take the right steps now to maximise the contribution of international students to our economy.
One of the flagship programmes for our student exchange is the Erasmus programme. Non-EU countries can take part in that, but they must accept freedom of movement. Does my hon. Friend agree that it would be hugely detrimental for the UK to leave the Erasmus programme and that the Government must do everything they can to ensure we remain within it?
Absolutely. I do not intend to go into the detail of the issues with the EU and students, but obviously the Erasmus programme is enormously attractive. Notwithstanding the Government’s good intentions to perpetuate it, there is still a huge degree of uncertainty. Any future strategy must involve perpetuating that programme.
In 2013, the tier 1 post-study work visa was abolished and stringent requirements were placed on international graduates who wanted to work in the UK following their studies. As a result, the number of students remaining to work following their studies fell by 87% between 2011 and 2016, from nearly 47,000 to just over 6,000. When the BIS Committee visited China in 2012, that was a big issue raised by our Chinese hosts. Similarly, in India it is a highly contentious issue, which I know has been raised by the host Government with our Government and business deputations ever since. The perception is that Britain no longer welcomes foreign students. However often the Government repeat the mantra that we are open for business, while we have a restrictive visa regime, and reported difficulties in obtaining visas, potential applicants will be deterred and our ability to compete with rival countries will be inhibited.
It is understandable that the brightest and best from other countries will want to come here not only for their education, but to use and contribute to our top class research, either in the private sector or the field of academia. From the UK’s perspective, it is ridiculous to invest money in developing talent only to then export it to other countries to use in their private sectors, sometimes in competition with companies in this country.
The fact is that far more generous post-study work offers are available in our competitor countries. That is why we are lagging. My disappointment with the strategy is that it does not identify the core problem, which explains what I consider to be our second rate performance, or provide evidence that the Home Office is willing to change it. The best the strategy offers are the so-called actions 3 and 4. Action 3 is:
“Government will strengthen the UK's visa offer for international higher education students”.
Action 4 is:
“The UK Government will keep the visa application process for international students under review”.
Those are warm words, but they are not strong or specific enough to motivate the brightest and best foreign students to choose the UK as opposed to other countries with a more generous and specific offer.
Why has this come about? The reason is the Government’s flawed and failed target to reduce net migration to below 100,000. The compilation of statistics of student movements within the net migration figures is worthy of a debate in itself. I do not have time to go into it in depth, but I will make two observations. First, there is considerable polling evidence that the public are far more supportive of the right of students to study and to work for at least two years thereafter than they are tolerant of other forms of immigration. About 75% of people support that approach.
Secondly, the statistical basis of compiling student immigration statistics using the international passenger survey, which was the basis used to introduce the visa policy, was seriously flawed. It overstated the number of students overstaying—the proportion is now considered to be less than 3%. In short, we have a student visa regime that is based on flawed statistics, that runs contrary to public opinion, and that undermines both our ability to recruit the maximum number of students and the economic benefits of our amazing institutions. That is one reason I will support the amendment tabled by the hon. Member for Orpington (Joseph Johnson), who I am glad is present, to the Immigration and Social Security Co-ordination (EU Withdrawal) Bill.
In chapter 1.7 of the strategy, titled “A whole-of-government approach”, different Departments are listed as supporting the strategy, including the Foreign Office, the Department for Education, the Department for International Trade, the Department for International Development, and the Department for Business, Energy and Industrial Strategy. The conspicuous absentee is the Home Office. Perhaps the Minister can explain why the Home Office is missing from the whole-of-Government approach, when its particular responsibilities are central to the policy’s success.
It is vital that the Home Office is signed up to both the policy and the processes if we are to meet, and hopefully exceed, our targets. The policy will be successful only if we have a visa regime that is competitive with rival providers. I ask the Minister what work the Department is doing with the Home Office to ensure that the visa offer, and the associated costs and processes, are at least as attractive—preferably more attractive—than other national providers?
I would like to discuss many other issues, but I will leave time for other Members to contribute. Unless the Minister can provide an adequate answer on the core issue, I suspect that in five years’ time our successors will debate it again, and we will be further behind in the vital race to secure the potential economic benefits from this market.
Order. The debate can last until 5.30 pm. I am obliged to call the Front-Bench spokespeople at no later than 5.07 pm. The guideline limits are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister. If the Minister leaves two minutes at the end for Mr Bailey to wind up, that will be appreciated. Until 5.07 pm, a small but select number of Members, with considerable experience, seek to contribute. To ensure that everyone gets a say there will be a five-minute limit. I call John Howell.
Thank you, Mr Hollobone; it is a pleasure to serve under your chairmanship and to follow the hon. Member for West Bromwich West (Mr Bailey). I agree with his description of what we have to offer. The UK has a lot to offer in this area.
As the Prime Minister’s trade envoy to Nigeria—I will concentrate on Nigeria in my remarks—I am committed to raising education standards around the world. That is important to strengthen our soft power regime globally, and to strengthen the international partnerships on which many things are based, including international business and everyday relationships.
I am pleased that we are looking at the value of our education exports, and that DFID is helping to promote them. In Nigeria, for example, DFID has been doing brilliant work in key areas, such as helping headteachers to develop their skills and to become much more effective. It has also helped to increase the competence of teachers within that country. Many schools are participating, and the number of those that want to do so has shot up enormously.
I gently take issue with the hon. Gentleman on market share, which I think should be seen not only in terms of bringing people to the UK, but in terms of what we can bring to the countries to which we are trying to export our education. I have been trying to encourage the sort of joint ventures with which I am familiar in the business world between educational establishments in the UK and in Nigeria. I will come to why I am doing that in a second, because I think it will be music to his ears. This debate is not just about straightforward education; it is also about skills, which is important to bear in mind.
In fact, there is a member of the Government who comes from Nigeria but was educated here, at Eton. That is to be applauded, but it is not the end of the story. We have the second largest diaspora in the world here, and we need to encourage them to participate in creating educational links. That is absolutely essential somewhere like Nigeria, because in parts of the country there is enormous resentment of foreign activity—particularly in the north-east, where Boko Haram will not accept British educational expertise for the sole reason that it is foreign. We are developing a two-tier system where the rich can come to the UK, but those who are not so rich have to stay in their home country. I am trying to establish these joint ventures because it is essential that we do something to help to break down that two-tier system and spread as much prosperity as possible in other countries—not just to provide people with a better education, although that is important, but because it is the only way to stop the terrorists in the north-east of Nigeria and elsewhere.
I am looking for British schools to go to Nigeria and set up in partnership with local schools. I hope that they will be able to deliver the prosperity on which we and so many Nigerians depend; I am quite encouraged by what I have seen so far. That ought to be taken into account in developing the market share idea, because it is an important part of developing their overseas strategy as well as ours.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I very much support the arguments that my hon. Friend the Member for West Bromwich West (Mr Bailey) made. I share his worry about our falling market share with respect to the overseas students we support in the UK. I want to speak about one problem that has particularly hit our performance.
In 2011, the Home Office gave a licence to the American firm ETS to deliver the TOEIC—test of English for international communication—in the UK. Over the following three years, more than 58,000 overseas students took that test to demonstrate that they spoke good enough English to study here. In February 2014, “Panorama” exposed the significant scale of cheating at TOEIC centres that took place with the connivance of their proprietors.
ETS responded by undertaking an analysis of its recordings of all 58,000 tests over the three years. It concluded that 33,725 candidates had definitely cheated and 22,694 had probably cheated, which adds up to virtually all of them. As a result of the allegations, more than 35,000 of the students lost their visas and many were thrown off their courses midway through. Appeals were not permitted in the UK, and the students involved lost all the fees that they had paid.
Five years later, the plight of many is dire. Last night in the Attlee Suite, the film-maker Tim Langford premièred “Inquisition”, a deeply disturbing and compelling short film about the plight of five students who are still in the UK. There is a moving article in The Guardian today about the plight of three students who gave up and left the UK and who are now in a terrible situation in their home countries. Those who are still here are not allowed to study or work. Many of them depend on support from friends. Some had invested their family’s life savings in obtaining a British degree and are now destitute, have no qualifications, and have apparently been found guilty of cheating by the UK authorities.
It is now becoming clear that many—probably most—of those who lost their visas in that way did not cheat. The National Audit Office has recognised the problem and is due to report on the scandal on Friday. I welcome the Home Secretary’s recent announcement that after the report is published he will make an oral statement in the House about proposals to address what happened. However, although the 58,000 students who sat the test were from a great number of countries around the world, the largest numbers came from the Indian subcontinent: 6,000 from Bangladesh, 8,000 from India, 10,000 from Pakistan, 1,000 from Nepal and 1,000 from Sri Lanka. Unsurprisingly, in the light of how we have treated those students, there has been a very big fall in the number of people who have come from those countries since the TOEIC scandal: 48.5% fewer started their first year of tertiary education here in 2017-18 than in 2010-11.
One very disappointing aspect of what happened is that students who were thrown off their courses and plunged into crisis received very little support from their universities. At the film première last night, a UK university immigration adviser said that the university that he worked for at the time had forbidden him to assist the students affected. It will take a lot of work to repair the damage that the scandal has caused to the reputation of UK higher education.
Where students are able to regain their visas, perhaps following a statement from the Home Secretary in the next couple of weeks, does the Minister agree that their former universities need to help them? In particular, does he agree that it would be wholly unacceptable for the universities to require those students to start their courses and pay their fees all over again?
I congratulate the hon. Member for West Bromwich West (Mr Bailey), the former Chair of the Select Committee on Business, Innovation and Skills, on giving us the opportunity to discuss this important issue.
As hon. Members have said, our world-class universities have been a great asset for our country for generations. They have attracted young, bright people from all over the world, giving them an opportunity to receive a first-class higher education and giving us an opportunity to inculcate an understanding of our culture and worldview. That has ensured that we do not recede as a cultural reference point, which is more important than ever now that we are doing Brexit.
It is a huge asset for us that more world leaders have been educated in the UK than in any other country but the US. Frankly, I am concerned that the next generation of world leaders—the next Bill Clintons, the next Benazir Bhuttos—may not choose to study in the UK. All of us in Parliament have a duty to ensure that they put the UK at the very top of the list of countries around the world where they want to study.
Frankly, one would think that a Government committed to global Britain and to extolling the projection of our values around the world would do more to cultivate the important opportunity that international students offer us. As hon. Members have made clear, however, part of the problem is that since 2010 we have included students in our net migration target, so we are doing precisely the opposite: through a welter of restrictive Home Office policies, we are deterring people from choosing the UK over other countries. That explains our substantial underperformance in comparison with core competitors around the world.
Of course market share is not the be-all and end-all of any activity, but it is an important indicator of competitiveness and we are losing it very rapidly: our market share has fallen from approximately 12% in 2010 to just 8% in 2016. We must look seriously at why that significant rate of decline is happening. As hon. Members have said, we are seeing some growth in absolute terms, but there has been a dramatic fall in the proportion of students from some of the most important countries in the market for international higher education, including India, which the right hon. Member for East Ham (Stephen Timms) rightly mentioned.
Like other hon. Members, I welcome the publication of the international education strategy: it is good that we have an ambitious goal for higher education and other education exports. My hon. Friend the Member for Henley (John Howell) was right to say that exports can come in many forms—not just students coming here, but transnational education, for example.
We should not be phobic about international students coming to study in this country, but I am afraid that is the impression that we have all too often given because of the Home Office’s restrictive approach. That is why I and the hon. Member for Sheffield Central (Paul Blomfield) have tabled a new clause to the Immigration and Social Security Co-ordination (EU Withdrawal) Bill that would acknowledge the important contribution of international students in two key ways. First, it would insure universities against the risk that a Government will decide to reduce net migration swiftly by slashing international student numbers. Any future Government who intend to cap numbers will first have to secure parliamentary approval.
Secondly, the new clause will ensure that we take a much smarter approach to post-study work. As hon. Members have already said, it has been severely restricted in recent years on the back of shoddy evidence produced by the Home Office back in 2012-13. Students will invest their time, money and human capital elsewhere if a competitive post-study work regime is not available in a particular country. Our core competitors—the US, Canada and New Zealand—offer international students the chance to work for up to three years after graduation, and Australia offers up to four years. Hacked back to just four months in 2012, our offer is simply not competitive. Although the international education strategy promises to increase that to six months, it is still not enough. Twelve months for some more advanced courses is also not enough.
While we wait for the Immigration and Social Security Co-ordination (EU Withdrawal) Bill to come back to the House on Report, I urge the Minister to look at the strong support the new clause has from MPs of all parties, and to assure me that the Government will take steps to welcome the clause and implement its recommendations.
It is a pleasure to serve under your chairmanship again, Mr Hollobone. I thank my hon. Friend the Member for West Bromwich West (Mr Bailey) for securing this extremely important debate and for his excellent opening speech, which reminded us all of the need to champion and support our higher education sector in the UK.
We know that almost 450,000 non-UK-domiciled students study in UK universities, which contributes about £19 billion to our economy—about £95,000 per student—and supports over 200,000 jobs. It is clearly a sector that we need to support. I welcome the Government’s international education strategy and their ambition to increase education exports to £35 billion and grow the number of international students to 600,000 by 2030. I hope we see in the report a change in the mood music coming from the Government, because we need overseas students to know they will be welcomed and supported in the UK.
I acknowledge the widespread support in the sector for the strategy, but there are a number of questions, too. It would be really good to hear the Minister respond to some of the issues that hon. Members have already emphasised. First, the Government need to do something about the visa system. Students find it too complicated, too bureaucratic and too difficult to access in their own countries. As hon. Members said, there is also a huge issue with post-study work visas and how long they last, compared with what our competitors offer. We know that countries such as Australia, Canada and the US have recently seen high growth in international demand for study, while the total number of international students enrolled in the UK has stayed flat. I would say to the hon. Member for Orpington (Joseph Johnson) that this is a hugely important point and we need to address it.
The chief executive of Universities UK, Alistair Jarvis, said in October 2018:
“Despite the quality and popularity of our universities as destination for international students, in recent years we’ve seen a declining market share in relation to competitors.”
If the Government are to deliver on their strategy, that clearly needs to stop. We also need to do something to ensure that we have reciprocal arrangements with Europe. The strategy does not say much about European students, and I would like to hear how the Minister intends to ensure that we do not lose students coming from Europe. The reciprocal arrangements are very important, as is identifying new markets.
I was very excited to read the industrial education strategy. There was something on regional priorities and I thought, “Great! The Government are going to look at our regional universities being a priority.” When I read it, I thought, “Oh dear, no.” Our priority is regions of the world. The middle east and Latin America are important for new markets, but we need to protect the markets we have as well as targeting cold spots. We have to recognise the importance of diversity in the sector. Durham University in my constituency brings to the city huge diversity, which would just not be there without it. That is something we need to celebrate and expand.
Hon. Members have talked about the importance of soft power. I have just come back from a Commonwealth Parliamentary Association Education Foundation conference. Many leaders across the world were educated in the UK, and we need to ensure that our higher education sector can attract future leaders. We need to do that by recognising the importance of global mobility for our young people as well. We need to support the British Council more effectively and look at how scholars from overseas, including postgraduate students, contribute to our research base and innovation. We need to ensure that we recognise the importance of transnational education.
In my remaining time, I thank the hon. Member for Orpington for tabling his amendment to the Immigration and Social Security Co-ordination (EU Withdrawal) Bill. I totally support it and hope it is approved in due course.
It is a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate the hon. Member for West Bromwich West (Mr Bailey) on securing this important debate. It has been very interesting to listen to all the speeches. All those who contributed to the debate were very erudite, drawing on their experience, and passionate about the problems that the higher education sector is experiencing across the UK.
I am a member of the Education Committee, which in 2017 published “Exiting the EU: challenges and opportunities for higher education.” Many of the issues that have been raised today were also raised in that report—they were mainly challenges rather than opportunities. Looking down the years, I do not think much has changed in that respect. It saddens me to think that we will not be able to move forward. The report is good and expansive, and it would be wonderful if its recommendations were carried forward.
The biggest issue for Scottish universities is that we have four-year degrees, so three-year visas will just not cut it. The impact on our ability to attract students will be severe. We really need a separate immigration policy for Scotland, and Scottish National party MPs are fighting constantly for that.
The other issue is that the UK Government promised to replace overall EU funding with a shared prosperity fund. Despite repeated promises, there has not yet been any detail on how this will be equitably established and implemented. We have been promised new regulations that will affect the Higher Education and Research Act 2017. This is really important to Scotland, because since 2014 we have succeeded in drawing down £533 million of Horizon 2020 research funding.
We punch above our weight. Scotland has been particularly successful, attracting more than 11% of all funding that has been won competitively by UK organisations. Per head of population, we are outperforming Germany. All this is put at risk by the visa system and the reluctance of EU nationals and other prospective students from abroad to come to the UK because of the hostile environment that this Government have brought about through their immigration policies. I, too, welcome what the hon. Member for Orpington (Joseph Johnson) is trying to do.
I am very worried that Scotland will lose out. The hon. Member for City of Durham (Dr Blackman-Woods) mentioned regions. Now, Scotland is frequently referred to in this place as a region. I do not think it is a region; it is a country. We have differences that must be addressed, because Scottish education does indeed punch above its weight and has had a well-deserved reputation for hundreds of years. Scottish higher education rose out of Scots’ outward European vision, going right back to just after the middle ages. Scots went to universities in Europe before there were any in Scotland, and brought back ideas and progress. Universities have been a major force in Scotland for 400 or 500 years. They are suffering because of the Government’s reluctance to do something about visas. That cannot be allowed to continue.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for West Bromwich West (Mr Bailey) on securing this important debate. I thank all hon. Members who spoke, including my right hon. Friend the Member for East Ham (Stephen Timms) and my hon. Friend the Member for City of Durham (Dr Blackman-Woods).
International student numbers have increased year on year, and the Government have been quick to celebrate their success in growing education exports. However, we should note that the Department for Education has acknowledged that accurate data does not exist, so we cannot fully ascertain the export success of the sector. Although the figures may be rising, our performance relative to our peers, including Australia, Canada and the United States, leaves much to be desired. Given the time constraints in this debate, I will get straight to the point that hon. Members have made about international students and visas.
The all-party parliamentary group for international students noted last year that the Government’s hostile environment has resulted in a marked drop in the UK’s attractiveness as an education destination for international students. It notes that between 2012 and 2015, the UK recorded just 0.7% growth in international student numbers, compared with 22.5% in the US, 26.9% in Canada and 18% in Australia. Researchers at University College London found that the UK has already slipped behind Australia and the United States as the biggest destinations for international students, and warned that Canada is poised to overtake it. Universities UK data shows that the number of Indian students coming to the UK has approximately halved in the past five years.
The hostile environment policy vigorously pursued and rigorously applied by the Government has seen thousands of students denied the right to work after graduation. Thousands who were in the UK legally have had their student visas revoked, as the Government unfairly attempted to clamp down on international students. Universities UK also found that 98% of overseas students complied with their visa requirements. What message does that send to prospective students? Many students come to the UK in good faith to undertake a course of study but find themselves the victims of unscrupulous fraudsters. Instead of tackling the fraudsters, the Government have criminalised the students, who now may be seen as criminals.
The recent TOEIC cases, which my right hon. Friend the Member for East Ham raised, highlight just how negligent and damaging the Government’s handling of this matter has been. Some 7,000 students have been found to have had their visas wrongly revoked over accusations of cheating. Students are left in a legal limbo, with their visas revoked through no fault of their own. They are barred from accessing public services and prevented from obtaining work or renting housing. Many find themselves barred from entering the United Kingdom for 10 years. The damage that that has done to our international reputation as a preferred destination for international students is clearly substantial.
The Government’s clumsy handling of trade talks with India will have done nothing to reverse that trend. The message is, “We want your business, but we don’t want your people.” The Government’s obsession with arbitrary immigration targets has slowed progress in talks about visa arrangements for students and workers. That is hurting our capacity to market UK education as an overseas export and sell Britain as a destination for foreign direct investment. It is likely to be a recurring issue in trade talks with other nations, given that the relaxing of mobility and visa arrangements is a key feature of modern trade agreements. Perhaps the Minister will tell us what the Government’s position on that matter will be, in respect of all the various trade agreements that they have promised, which have largely failed to materialise.
These issues have been compounded by the Government’s handling of Brexit. Since the EU referendum result, universities have reported a fall in the number of EU students—in particular, postgraduates—enrolling in British universities. EU students are reported to contribute up to £2.75 billion per year to the British economy through tuition fees and related costs. Additionally, approximately £1 billion in research funding to British universities is provided through the European Union.
It is now understood that the Government intend to withdraw home fee status from EU nationals from 2020 onwards, which is likely further to drive the decline in the number of international students. That is already squeezing the finances of many of our universities and stifling their capacity to plan for the future. Will the Minister set out precisely what the Government’s policy is in that respect? What impact will the proposed changes have on our education sector? That is in addition to the uncertainty about the future of Erasmus and Horizon 2020. How does the Minister intend to achieve the targets set out in the international educational strategy of boosting education exports to £35 billion a year and growing international student numbers by 600,000 by 2030?
It is a pleasure to take part in this debate. We have had well-informed contributions from across the House. I thank the hon. Member for West Bromwich West (Mr Bailey) for raising this important topic. When he chaired the Business, Innovation and Skills Committee and dealt with higher education, I chaired the Education Committee, and we worked in tandem.
As everyone has said, the UK has a wonderful education system. Despite its size, four of the world’s top 10 universities, and 18 out of the top 100, are here. We lead Europe in having the most highly rated universities. With early years, further education, our independent schools, our curriculum and syllabus providers, and so many assessment systems, we have a rich compost of educational provision in this country. It brings in £20 billion a year—significantly more than all sorts of large industries that we might think do a great deal more than education. It brings in real money, as has been said, and provides employment, often outside the areas we might expect. It provides well-paid jobs and opportunities in some of the more challenging parts of the UK, bringing expertise and people with certain skillsets to areas where they are most needed. It builds friendships around the world. As the investment Minister, I can say that it is extraordinary how often people choose to invest in this country because they or their family members have been educated here. That is an important part of our offer.
We have heard about the benefits that international students bring to the UK, and about the reputational risk of malign visa arrangements, but it is important to reflect, as the Minister just mentioned, on the fact that the economic impact of international students ripples out far beyond the locations of the particular universities. We know about the effect of universities such as Aberystwyth in my constituency, but a 2017 report showed that, in Wales, the impact of international students alone sustained more than 1,600 jobs in regions where there is not a university. That is an important point to bear in mind when we look at immigration policy.
I am grateful for that contribution.
Most countries on Earth—some 160—use UK international qualifications in their national secondary exams. Thousands of international schools use the UK’s K12 curriculum, and almost 25,000 students attend more than 40 overseas UK schools. As I have said, the latest figures show that our exports are worth almost £20 billion. That includes transnational education, which has experienced the most meteoric rise in value, albeit from a lower base. Some 67% of the value of those exports comes from higher education, much of it in the form of international students—that has mostly dominated the debate this afternoon—of whom there were around 442,000 in 2016.
That is a great record. We punch above our weight, but I think that there is unanimity in the Chamber that we are not yet fulfilling our potential, considering the quality of what we have and the need around the world for that kind of quality and service. Frankly, that is why we have a refreshed international education strategy.
Perhaps because of my background, I find that education is one of the most interesting sectors that I deal with as a trade Minister. Education gives almost no negatives. It brings real money and builds links, and people who come here to study then form part of teams or found companies and innovate, when they might not otherwise have done so. We must be restless, forward looking and ambitious—as everyone in this Chamber has been—to ensure that the potential of emerging opportunities in the global economy are used to their fullest.
The rapid shifts in economic and demographic power across the global economy are creating opportunities in precisely the areas where the UK enjoys a competitive advantage. As my hon. Friend the Member for Henley (John Howell) knows well, last year the Prime Minister set out an ambition that we should seek to become the largest G7 investor in Africa. We need to work with countries, such as Nigeria, across Africa—I just met an economic Minister from Tunisia—to bring companies of all sorts into Africa, and what better than companies that work in education?
We look to deliver through the strategy in several ways. The strategy recognises that it is not Government who export, but our educational providers and institutions. That is why it is a sector-led strategy. I am grateful to all colleagues across the House, whatever their criticisms of elements of Government strategy, for supporting this strategy, which has been well supported and much crafted by the sector. The sector-led strategy was developed in co-operation with educators and looks to address the practical barriers that they face to exporting, and to find the right tools to overcome them.
Yesterday, I met Destination for Education, which is a coalition of pathway providers—people who help others come into our system—including INTO, Kaplan and Study Group. We discussed their future engagement with Government and, in particular, how we can co-operate on changes to the student visa process and respond effectively to competition from rival markets, which so many hon. Members have mentioned. That is about Government listening to the needs of providers and adapting our approach as we go. Several key organisations and individuals have been involved in achieving that new level of engagement and dialogue.
If I may—without being invidious to some—I highlight the work of Universities UK International, the UK skills partnership, English UK and, in particular, the British Council and its chief executive Sir Ciarán Devane, for their invaluable help in setting up engagement sessions to allow us to take on board the views of a broad range of education providers. Those providers have a wide range of skills and experience when it comes to exporting, and the strategy is about catering to these diverse needs.
Since the Minister has mentioned Universities UK, does he agree with my point that students who get their visas back after losing them because of a TOEIC cheating allegation should be helped by the universities to which they return, so they do not have to go back to square one and pay their fees all over again?
If a student finds themselves in that position, I hope and expect that the university would be supportive of their students. One of the strategy’s central aims is to ensure that we have a more welcoming offer. Sometimes there can be misconceptions and myths, but we need to recognise where we need to improve what we do, how we do it and the way that it is communicated. We recognise the need to do that in various markets if we are to meet the targets that we have set.
The strategy sets out to look at export data that we hold for education so that we have a more accurate basis on which to judge our success. At the strategy’s heart is an ambitious goal of achieving an increase in the value of our education exports to £35 billion per year, and to increase the number of international higher education students to 600,000 per year.
A lot of the focus of the debate has been on the visa issue. Although that is a Home Office issue rather than a trade Minister’s day job, at the heart of the strategy is a whole-of-Government approach, to put in place the practical, advisory and promotional support to strengthen the UK’s position at the forefront of global education, connect international partners, open markets and unlock new opportunities in rapidly growing areas such as education technology.
When I found that we had an education strategy that dated back to 2013 and was not on target, one of the first things I did was go and see the Secretary of State for Education. He came absolutely on board and was super supportive. I also reached out to Home Office colleagues; I do not know where the misunderstanding about the Home Office involvement in this strategy has come from, but it has really come forward and is an important part of the team. We are working together.
Colleagues will be aware that the Migration Advisory Committee made its recommendations, and the Government chose to go further than what MAC had suggested in terms of post-study provision. That is an indication of the Government’s commitment to getting that right. Matters are being kept under review, and if I were in Opposition, I might call that warm words, but it is much better than their not being under review.
We have our educational strategy; we are working as a team across Government; and we are committed to making sure that we get the whole package right so that we are as welcoming and competitive as we can be. The Home Office is fundamentally part of that, and is committed to keeping the immigration aspects of that package under review, in order to deliver in the appropriate way.
I probably have very little time left.
A minute and a half.
Thank you, Mr Hollobone. Just to nail the Home Office point, action 6 sets out clearly that the UK Government will enhance the education sector advisory group, and that it will be supported with a representative from the Home Office. I hope it is embedded in there pretty clearly.
On the Indian visa front, during the year ending 18 December 2018, study-related visas issued to Indian students increased by 35%. Although colleagues were right to highlight the drop, there is a significant increase, and we are working hard to get that message out. Ninety-six per cent. of Indian students who apply for a visa get one. I appeal to everyone to challenge what is not right, but not to overemphasise the negative in a way that leads people to think that we are not open when we are.
The hon. Member for Motherwell and Wishaw (Marion Fellows), speaking for the Scottish National party, mentioned four-year courses at Scottish universities being matched with inappropriate three-year visas. That situation is only in the event of no deal. As with so many of the points made by colleagues across the Chamber today, the obvious way to avoid the downsides that they have highlighted is to support the deal. The failure to support the deal, after standing on manifestos that in most cases promised to get us out of Europe, has contributed, so there is no point in shedding crocodile tears over a result driven by Members’ own voting decisions.
On ETS, there was clearly significant fraud. Twenty-five people involved in organising and facilitating language-test fraud have received criminal convictions, so there was a real issue.
This debate merits a much longer time being spent on it, given the quality and expertise shown in the contributions. A whole range of issues was raised.
I accept what the hon. Member for Henley (John Howell) said about the importance of transnational education, but I do not think this is either/or. A better visa offer, generating more foreign students coming to this country, would of itself mean more capital and more experience for those higher education or other institutions to carry out work in other countries as well. Ultimately, there would be a more all-embracing educational offer from this country.
I accept that the Minister and his team are fully signed up to this particular approach. I welcome his comments about Home Office involvement, but the fact remains that in the actual strategy, under the whole-of-Government approach among the Departments listed, the Home Office is a significant absentee. However, we will judge the strategy by what comes out of it. I very much hope that subsequent involvement of the Home Office, the Minister’s Department and other relevant Departments will demonstrate that they are addressing the issues raised today, as I am sure he will raise those issues with them.
Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).