House of Commons

Monday 14th June 2010 Commons Chamber

Monday 14 June 2010

The House met at half-past Two o’clock

Prayers

Monday 14th June 2010 Commons Chamber

[Mr Speaker in the Chair]

Business Before Questions

Queen’s Speech (Answer to Address)

The Vice-Chamberlain of the Household reported to the House, That Her Majesty, having been attended with its Address of 25th May, was pleased to receive the same very graciously and give the following answer:

I have received with great satisfaction the dutiful and loyal expression of your thanks for the speech with which I opened the present Session of Parliament.

Sessional Returns

Ordered,

That there be laid before this House Returns for Session 2009-10 of information and statistics relating to:

(1) Business of the House;

(2) Closure of Debate, Proposal of Question and Allocation of Time (including Programme Motions);

(3) Sittings of the House;

(4) Private Bills and Private Business;

(5) Public Bills;

(6) Delegated Legislation and Legislative Reform Orders;

(7) European Legislation, etc;

(8) Grand Committees;

(9) Panel of Chairs; and

(10) Select Committees.—(The Chairman of Ways and Means.)

Oral Answers to Questions

Monday 14th June 2010 Commons Chamber

The Secretary of State was asked—

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

1. Whether he plans to increase the amount of information Jobcentre Plus advisers may share with local health practitioners and Sure Start children’s centres.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I have no current plans to increase the amount of information that Jobcentre Plus advisers can provide to local health practitioners and Sure Start children’s centres. Social security information can be shared with those parties with the consent of its customers.

[Mr Sheerman]

One hopes that the new Government will still support Sure Start children’s centres. Certainly, an inquiry of the former Children, Schools and Families Committee showed that the sharing of information was absolutely crucial. Does the hon. Lady agree that the sharing of information, knowing how our children are surviving and thriving and when they are in trouble, is vital to children’s future health and welfare?

[Maria Miller]

I thank the hon. Gentleman for his question. As he will be aware, the coalition Government have protected Sure Start from in-year cuts, and I am sure that he and the whole House will welcome that announcement. He has looked at this issue in detail, and in the most recent report of the CSF Committee, of which he was the Chairman, there was no clear evidence that data sharing between Jobcentre Plus and children’s centres was a problem. However, there can be such a problem between children’s centres and health professionals. The Government believe that early intervention is absolutely vital in the work that we are doing to alleviate poverty and that co-ordination and signposting between those organisations are important. That is one of the reasons why we have put Sure Start health visitors in Sure State children’s centres.

[Nicholas Soames (Mid Sussex) (Con)]

In agreeing with the hon. Gentleman about the importance of co-ordination, may I ask whether my hon. Friend agrees that most of the worst disasters that affect children that have become public are concerned with a lack of information shared between the authorities? Does she agree that it is extremely important that all those who are involved in these matters truly understand what each hand is doing?

[Maria Miller]

My hon. Friend is obviously talking about a great many different data sources. As I said, information-sharing difficulties between Jobcentre Plus and children’s centres is not a particular issue of concern, but I take his point and I am sure that our new Cabinet Committee on social justice may want to consider it to ensure that nothing is being missed.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Minister explain how sharing and co-ordinating between those agencies will be helped by the reduction in the working neighbourhoods fund, which joins lots of different Departments and local agencies? As a result of the Government’s recent announcement, £1.2 million has been taken away from that fund in Nottingham. That money pays for apprenticeships, welfare rights advice and helping to reduce teenage pregnancies. How will that reduction help such work?

[Maria Miller]

Undoubtedly, the hon. Gentleman will be very pleased about the coalition Government’s announcement of 50,000 additional apprenticeships, which will provide the sort of long-lasting job opportunities that his constituents want. Obviously, other decisions on budget taking are made locally, and it is for local authorities to make important decisions on how best to use their local resources.

[Mr David Amess (Southend West) (Con)]

2. What plans he has to reduce the number of people claiming out-of-work benefits.

[Mr Rob Wilson (Reading East) (Con)]

5. What recent discussions he has had with ministerial colleagues on reducing levels of unemployment.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

One of our top priorities is to reduce the number of people—nearly 5 million—on incapacity, lone parent or jobseeker’s benefits. We will reform the benefits system to make work pay and reassess the position of people on incapacity benefit, through a single, integrated package of support, to give people the personalised support that they need to find work.

[Mr Amess]

I congratulate my right hon. Friend on his appointment. He might be aware that this subject was raised regularly on the doorstep in Southend West, since when I have found out from the Department that 1.4 million people have been on out-of-work benefits for nine or more of the past 10 years. How does he intend to deal with that situation fairly but firmly?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The figures are somewhat worse than that—the UK has a higher proportion of children growing up in workless households than almost any other EU country. We have had a very high level of residual unemployment for far too long. The key to dealing with that is the integrated Work programme, which will look at ways of trying to get back into work some of those long-term unemployed—many of whom have been parked on incapacity benefit and forgotten about—and support those who have not been contacted. Something like 40% of unemployed people had not been contacted for over six years; no one had bothered even to speak to them. We will also try to reform the benefits system so that when someone can go to work they will straight away see that it is worth their while to do so, whereas at the moment work simply does not pay, or appears not to.

[Mr Wilson]

Unemployment has continued to rise in my constituency, and the impact is particularly being felt by young people. What further action will the Secretary of State take to help them after the failure of 13 years of Labour?

[Mr Duncan Smith]

The first thing I can say to my hon. Friend is that one of the key coalition drives is to stop the would-be jobs tax, the national insurance charge, that was to be imposed by the last Government when they were in power because that would have taken away a great many opportunities for young people. The other thing is to make sure that the targeted Work programme, which the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), will be speaking about in more detail later, helps the youth unemployed get back to work. We must remember that after all the money that was spent by the other Government, youth unemployment is now higher than it was when they came into office in 1997.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

Last week, the new Government announced that the jobcentre in Deptford, serving 2,500 of my constituents, is to be closed. Will the right hon. Gentleman meet me urgently to discuss how he plans to help the unemployed in my area, or is this to be the first example of how the coalition seeks to protect the poorest and most vulnerable from its savage cuts?

[Mr Duncan Smith]

I am very happy to meet the right hon. Lady at a moment of her convenience. I understand that the centre had reached the end of its lease, and we are trying to find a way of ensuring that there is support in the area. I am happy to meet her and deal with those specifics.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Secretary of State says that he wants more people off benefits and in work. He will know that that depends on their having jobs to go to. Can he tell the House exactly how many of the 205,000 jobs planned under the future jobs fund he is cutting as a result of his plans?

[Mr Duncan Smith]

The right hon. Lady will know that we are not cutting any jobs at all. We are saying that we will stop the part of the programme relating to jobs that were not contracted for. All the other jobs that are contracted for will go ahead. Originally it was estimated that that meant that 140,000 jobs would be found. In fact, we understand the number to be about a third fewer than that—about 100,000—although we will know when we get closer to the time.

I say to the right hon. Lady that the money that we save will go towards preventing the jobs tax—the national insurance tax—that her party was going to impose on those people when they took work, which would have meant fewer people being in work. We will also have the money to make sure that 50,000 new apprenticeships, which are sustainable jobs, come into existence under this Government.

[Yvette Cooper]

Can the Secretary of State confirm that the Office for Budget Responsibility, which today issued its forecasts based on the previous Labour Government’s tax and spending plans, in fact confirmed that unemployment would continue to fall in future years, including the plans for national insurance contributions? Can he also confirm that the Labour Government’s plans set out at the Budget were for 205,000 jobs under the future jobs fund this year and next, and his Department’s website says that only 111,000 jobs will be funded? Can he confirm that 205,000 take away 111,000 is 94,000, and that he will therefore be cutting nearly 100,000 job opportunities for young people and the long-term unemployed—cutting support for the jobless when they need it most?

[Mr Duncan Smith]

I know that the right hon. Lady feels personally wedded to this programme, but those figures are quite ludicrous. She poses notional figures of jobs that she might have created had the scheme worked against jobs that we believe are likely to be there, so a silly game is being played out.

Whether the right hon. Lady likes it or not, had she got into government—heaven help us—she would have had to cut back on various budgets, as her own Government at the time said they would. Where would she have made those savings? She cannot, now that she is in opposition, simply say no to everything. Her Government went on a spending spree like drunks on a Friday night, and we have all got the hangover now.

[Richard Fuller (Bedford) (Con)]

Would my right hon. Friend agree that the right way to get people back into work is to support our thriving small business and entrepreneurial sector? One of the key measures is to see that the small business sector has access to finance—something that, under the last Government, Labour Members failed to achieve.

[Mr Duncan Smith]

My hon. Friend is absolutely right. What is so often forgotten by Labour Members is the need to make sure that jobs are created by a vibrant small business sector. Of course, the first thing that would have damaged that sector would have been the rise in national insurance, which we have managed to stop as a result of our changes.

[Mr David Hanson (Delyn) (Lab)]

3. What steps he is taking to promote employment opportunities in Wales.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

Business and the economy are, as the right hon. Gentleman knows, devolved matters. However, Jobcentre Plus in Wales is notified of thousands of vacancies each month. Jobcentre Plus advisers ensure that jobseekers know of all sources of vacancies, and that is included in the review of jobseekers’ job search activity every two weeks. That focus on jobs will also be a key part of the support offered to people who are migrating from incapacity benefit to the employment and support allowance. Jobcentres in Wales also regularly hold jobs fairs to highlight employment and training opportunities.

[Mr Hanson]

Could the right hon. Gentleman tell the House how he thinks cutting £320 million from the future jobs fund will assist job creation in Wales, and will he give me a guarantee today that the almost 10,000 jobs that have been agreed under the future jobs fund, from Rhyl to Rhondda, will not be cut by his Government?

[Chris Grayling]

What the right hon. Gentleman needs to understand is that Wales and every other part of the United Kingdom need sustainable employment, and that is why we needed to stop the jobs tax that the last Government were planning to introduce. That is also why we need to provide incentives for small employers—those employing fewer than 10 people—to take on people by giving them a discount on their national insurance contributions. Those are measures that can and will make a difference.

[Harriett Baldwin (West Worcestershire) (Con)]

Many of my constituents have Welsh connections—[Interruption.] It is true. What would the Minister say to a constituent of mine who is physically very fit, but who has mental illness? How will we help people with mental illness back into work?

[Chris Grayling]

That is particularly relevant to the situation in Wales, where there are substantial numbers of people claiming incapacity benefit or employment and support allowance, as there are in other parts of the country, such as in my hon. Friend’s constituency. We need to ensure that we provide the best possible support, so that we give those people an opportunity to move into work. That is what we will do from later this year, when we begin work on migrating people from incapacity benefit to the employment and support allowance. I am confident that we can give many of those people an opportunity to get back into the workplace and make more of their lives.

[Several hon. Members]

rose—

[Mr Speaker]

Order. May I congratulate the hon. Member for West Worcestershire (Harriett Baldwin) on her ingenuity? I mean that genuinely. However, we will now focus specifically on people who are not associated with or linked to, but resident in, Wales.

[Hywel Williams (Arfon) (PC)]

Can the Minister assure me that the Government are doing their utmost to protect existing jobs in small companies, for example by encouraging Departments not to take peremptory action on, say, unpaid tax or regulation matters?

[Chris Grayling]

The hon. Gentleman is absolutely right: it is necessary for us to support employment in the private sector, particularly among small employers; that is why I made particular reference to our plans regarding national insurance contributions for small employers. I know, because we in the Department for Work and Pensions have already looked, that we have a good record on paying small employers, and I hope that my colleagues across Government will do everything that they can to support those small businesses, as they will provide the jobs of the future. It is not Government schemes that will create wealth and employment in future, but real business people, building real businesses.

[Philip Davies (Shipley) (Con)]

4. What plans he has for the future of the Child Maintenance and Enforcement Commission.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The whole issue of tackling child poverty and supporting families is the key objective of this Government. A significant component of that is that parents should take responsibility for their families, even if both parents do not live together. However, the Government have inherited a significant debt package of £3.8 billion, and some of that debt dates back to before the Child Support Agency was amalgamated into the Child Maintenance and Enforcement Commission. Furthermore, I understand that CMEC has not set a target for the recovery of the debt. I am meeting the chief executive of CMEC this week, and I intend to ask him to do a review on how arrears are collected, and I will insist that he sets a target for the collection of such arrears as soon as possible.

[Philip Davies]

I am concerned that the Child Support Agency and its successor body often do not pursue absent fathers who are paying nothing and file those under “Too difficult,” and instead target people who are already paying to try and screw more out of them. Will my right hon. Friend ensure that the Child Maintenance and Enforcement Commission goes back to what it was set up to do—to target absent parents who pay nothing, rather than trying to get more and more money out of the many people who are doing their best?

[Mr Duncan Smith]

I can guarantee to my hon. Friend that that is exactly what we will try to do. It is not the easiest set-up. There will be changes later in the year to the CSA, but I can promise him that we want it to make sure that those who owe that money pay it. The previous Government let them off the hook.

[Mary Creagh (Wakefield) (Lab)]

It is the Government’s stated intention to cut all quangos and non-departmental bodies by 20 per cent. How will the right hon. Gentleman better enforce the payments by absent parents when the budget for the commission is being cut?

[Mr Duncan Smith]

There are already plans for the organisation to make sure that it improves the quality of its work. It was set up to make sure that absent parents, for whom we all have to pay because they are not paying their way, ante up to their responsibilities, which is good both for their children and for the whole of society.

[Lisa Nandy (Wigan) (Lab)]

6. If he will bring forward proposals to ensure that all staff of his Department are paid at a rate of at least £7.60 per hour.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The figure of £7.60 per hour to which the hon. Lady refers was the London living wage until last week, and I can confirm that all directly employed DWP staff in London are paid £7.60 or above and, indeed, are paid more than the new London living wage of £7.85 announced by the Mayor of London on 9 June.

[Lisa Nandy]

I am sure the Minister is aware of the economic as well as the moral case for the living wage that was most recently advanced by the Mayor of London. In the light of that, will the hon. Gentleman confirm that as well as the directly employed staff, contracted-out staff in his Department, such as cleaners, will also be employed on the living wage because they do such important work for the people of this country?

[Steve Webb]

The hon. Lady is right to point to the position of contracted staff. She will be aware that long-term private finance initiative contracts were entered into by the Labour Government which involve paying people less than the living wage. We have inherited that practice. However, I understand that Telereal Trillium, with which we have our principal contract, including for cleaners, has an agreement with the relevant trade unions to pay higher rates on new tenders.

[Stephen Mosley (City of Chester) (Con)]

7. What steps he plans to take to reduce child poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Section 14 of the coalition document confirms the Government’s commitment to ending child poverty in the UK. We believe that the best way to tackle this issue is to address the root causes of poverty, because it is only by doing this that we can improve outcomes for children in the most effective way. Over the next 12 months we will put in place a robust, sustainable strategy to end child poverty.

[Stephen Mosley]

It is impossible to look at the situation of a child without looking at their family situation. To that end may I highlight the pioneering work that is being done by Save the Family in Chester and north Wales under the leadership of Edna Speed MBE? Has the Minister any plans to encourage the expansion of such pioneering family-based schemes across the country?

[Maria Miller]

I thank my hon. Friend for bringing the important work of Save the Family to the attention of the House. I am familiar with the project in north Wales, and my right hon. Friend the Secretary of State has visited it. Keeping families together is important, and I will do all I can to encourage colleagues who are considering child poverty across Government to consider the work being carried out by Save the Family. Family stability is vital and I am sure it will form part of the strategy that we work on to end child poverty.

[Malcolm Wicks (Croydon North) (Lab)]

One of the root causes of child poverty is teenage pregnancy. Before he assumed office, the Secretary of State—I congratulate the team on their new positions—did important work on the links between poverty and teenage pregnancy. What talks were held last week with the Secretary of State for Education before he announced cuts to local authority education and children’s budgets, which will, among other things, undermine the future of teenage pregnancy projects?

[Maria Miller]

I thank the right hon. Gentleman for his question. Teenage pregnancy is a critical part of the poverty strategy and one of the issues that will be considered in the cross-departmental Cabinet Committee on social justice which we will establish. It is important for the House to remember that, under the previous Government, not enough progress was made on that matter, but we will put that record right.

[Helen Goodman (Bishop Auckland) (Lab)]

Can the Minister confirm that the decision taken in recent days not to extend entitlement to free school meals to primary school children whose parents are on working tax credit will mean 50,000 more children living in poverty than otherwise would have been? Yes or no?

[Maria Miller]

We should be absolutely clear that the rules for determining eligibility for free school meals have not changed, and all pupils who currently qualify for free school meals will continue to be eligible. The issue was dear to the hon. Lady’s heart and something that she pushed forward when she was in government, and I should like to reassure her that there are pilots in place in Newham, Durham and Wolverhampton to see whether there is a robust case for extending free school meals. We feel that the extension was prematurely announced, without evidence from the pilots, so I ask her why, if she felt so strongly about the issue, she did not push it forward earlier in the 13 years of a Labour Government.

[Tracey Crouch (Chatham and Aylesford) (Con)]

8. What his policy is on the provision of support for people who are unable to work as a result of a disability.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

The Government recognise that some people will not be able to work, or prepare for work, because of a disability. Those people will receive unconditional support and be able to have help to find employment on a voluntary basis. Financial support for those who are unable to work will be through cash benefits, such as the disability living allowance and the employment and support allowance, replacing incapacity benefits.

[Tracey Crouch]

I thank the Minister for her reply. Royal British Legion Industries, based in my constituency, provides an important service to people with disabilities. Will the Minister assure the House that the Government will use the expertise of such organisations to help people with disabilities get back to work?

[Maria Miller]

I thank my hon. Friend for her question and also pay tribute to the Royal British Legion and its work, because it plays a vital role in supporting disabled people into work and helping those who are furthest from the workplace to acquire the skills that they need. The specialist knowledge of such organisations is absolutely vital and will be an important part of the Work programme that the employment Minister, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) has already announced, because those organisations have the on-the-ground knowledge of how best to support disabled people.

[Mrs Anne McGuire (Stirling) (Lab)]

As a former Minister for disabled people, I wish the Minister well in standing up for the rights of disabled people throughout government. Will she therefore tell me what plans there are for the access to work programme? Will the Government honour the previous Government’s commitment, or will access to work disappear amid the one, single Work programme?

[Maria Miller]

I thank the right hon. Lady for her kind comments and congratulate her on the work that she has done to support disabled people. It is absolutely vital that we recognise that a reform of work programmes in this country is long overdue. The Work programme will meet a great many people’s needs, but not absolutely everybody’s, so specialist programmes such as residential training colleges, Remploy’s work and others will continue in order to meet the needs of particular disabled people.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

In looking at the support for those with disability, will the Minister ensure that the work capability test is reviewed in order to see how it applies to cancer patients facing chemotherapy? At the moment, they seem to be assessed as fit for work when they are quite clearly going to be unfit and unable to work.

[Maria Miller]

I thank the hon. Gentleman for his question. That group will be exempt under the scheme, and it is important to note that the work capability assessment will be reviewed annually for the first five years of its operation.

[Ms Angela Eagle (Wallasey) (Lab)]

I should like to welcome all Ministers to their positions on the Government Front Bench. Does the Minister agree with me and her colleague the pensions Minister that it is important to ensure that those who cannot work for reasons of disability or age receive all the benefits to which they are entitled, and that the 13,000 home visits a week that the DWP local service currently makes to vulnerable households play a vital role in ensuring that that is the case? Does she agree also that, if the local service is cut in the spending review, the most vulnerable households will be the hardest hit?

[Maria Miller]

Looking after the most vulnerable groups in society is absolutely at the heart of the work that we do in the Department. I reassure the hon. Lady that when we are reviewing services, whether at a local or national level, we keep that very much in mind.

[Simon Kirby (Brighton, Kemptown) (Con)]

10. What his policy is on measures to encourage people into work in areas of long-term deprivation.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Many people in areas of long-term deprivation are also long-term benefit recipients. We will introduce the Work programme to give those benefit recipients access to tailored back-to-work support through an integrated system. Within that, we are actively considering how best to support those with complex barriers to work.

[Simon Kirby]

I thank the Minister for that answer. Does he agree that many of Labour’s top-down schemes, such as the new deal for communities in the areas of Moulsecoomb and Whitehawk in my constituency, have failed to deliver any real difference to people’s lives, despite having cost tens of millions of pounds? Does he also agree that this new Government’s empowerment of individuals and communities is a much more sensible way forward?

[Steve Webb]

Yes, the hon. Gentleman is right. We want to see an end to top-down, “Whitehall knows best” government. We want to see local communities and voluntary groups empowered and enabled to provide tailored solutions for individuals and local communities.

[Kerry McCarthy (Bristol East) (Lab)]

Labour in government had planned and funded 50,000 jobs for older people in areas of high unemployment and high deprivation under the future jobs fund. Will the Minister confirm how many of those jobs will be scrapped and what, if anything, will be put in their place?

[Steve Webb]

As the hon. Lady knows, jobs that are already contractually bound will go ahead. However, she falls foul of the old new Labour fallacy—that just because the Government temporarily fund a job, that makes it into a real, lasting job. I am afraid that life is not like that; the Government’s payment of a temporary subsidy does not make a permanent job. We will be investing in long-term, sustainable employment, which will benefit older people far more.

[Gordon Birtwistle (Burnley) (LD)]

My constituents in Burnley suffer more deprivation than most, with areas of high unemployment left to rot by the previous Government. Will the Minister ensure that the Department managing the apprenticeships scheme looks into areas such as Burnley to ensure that they are given a fair chance of providing apprentices for the future?

[Steve Webb]

My hon. Friend makes a powerful point. Part of the reason why he is here in this House, apart from his highly effective campaigning, is the record left by the Labour Government in Burnley and similar constituencies. The new apprenticeships will indeed go to areas such as my hon. Friend’s constituency, where they will provide training that leads to lasting jobs, which are what we want to be provided.

[Jon Trickett (Hemsworth) (Lab)]

11. What steps he plans to take to reduce levels of youth unemployment.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

Youth unemployment is unacceptably high. We will introduce the new single Work programme in the first half of 2011, which will offer young people targeted, personalised help. That will be delivered through the best of private and voluntary sector providers. We will ensure that young people continue to have access to employment support prior to the implementation of the Work programme.

[Jon Trickett]

I thank the Minister for that reply. The Tories are the party of mass unemployment; they had left thousands of young people in long-term unemployment in the mining areas and elsewhere in this country when they were turfed out of office in ’97. Will the Minister confirm last week’s authoritative report that said that the fiscal strategy that the coalition is adopting will lead to there being another half a million people—many of them young people—in the dole queues for at least the rest of this Parliament?

[Chris Grayling]

The hon. Gentleman ought to remember that the level of youth unemployment today is higher than it was in 1997, when the Labour party took office. He should also remember that year after year, despite all the last Government’s promises about apprenticeships, which could have provided long-term, sustainable opportunities for young people, the Labour Government consistently missed their targets and promises for apprenticeships. We will take no lessons from Labour about youth unemployment.

[Richard Graham (Gloucester) (Con)]

When the Minister is looking at the issues involved in providing more jobs for the young unemployed, will he consider the impact of the Pension Protection Fund, particularly on long-standing manufacturing companies, which may be inhibited from providing new apprenticeships by their future commitments to the PPF?

[Chris Grayling]

My hon. Friend makes an important point. The Minister of State, my hon. Friend the Member for Thornbury and Yate (Steve Webb), will be considering that. It is important to provide the right balance between protecting the pensions of those whose pension provision for old age may be at risk and ensuring that we do not drive businesses out of business as a result. We will be looking at this carefully and attempting to find the right balance.

[Mr Frank Field (Birkenhead) (Lab)]

Does the Minister accept that the future jobs fund offered real opportunities for the young people who were drowning in the prospects of employers’ refusal to give them work while at the same time it provided the Government with their only genuine test of whether somebody really wanted to work? Why, therefore, is it being cut when no other Government programme will achieve both those objectives?

[Chris Grayling]

The right hon. Gentleman knows that what his constituents and other people on Merseyside really need is sustainable, long-term opportunities. The future jobs fund will continue to offer tens of thousands of opportunities over the next few months, but what the young people of Merseyside really need is apprenticeships that can take them into proper long-term opportunities. That is what this Government will provide.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

12. How much funding he expects to allocate to programmes for the young unemployed in 2010-11.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We have allocated more than £600 million for programmes to support unemployed young people back to work. That includes the cost of specific employment support programmes targeted at young people and the support provided through the flexible new deal.

[Jim Sheridan]

I thank the Minister for that response. According to a recent survey by the Federation of Small Businesses, 95% of businesses are unaware of the wage contributions that are on offer to train apprentices. Indeed, 69% of apprentices work in workplaces where there are 30 or fewer employees. The same research has revealed that even more apprenticeships could be created if the system were simplified or modified.

[Chris Grayling]

I am all in favour of systems being as simple as possible. One of the things that I aim to ensure will happen when we introduce the single Work programme is that providers build links with local employers and explain to employers the support and opportunities that exist. We need to ensure that we maximise the employment opportunities that are out there for people without work, whether young or older.

[Miss Anne Begg (Aberdeen South) (Lab)]

The Secretary of State made great play of the idea that the best way to get people into work and off benefits is to make work pay. What will the coalition Government do to achieve that—cut benefits or increase in-work support?

[Chris Grayling]

First, I congratulate the hon. Lady on her election to the position of Chair of the Work and Pensions Committee. My colleagues and I look forward to meeting her and her Committee in the weeks ahead.

The most important thing that we can do is to deliver first-class back-to-work support to help some of the people who have been stranded on benefits for long periods and often do not have a clear sense of what they need to do to get back into the workplace. That will be a key focus for us in trying to ensure that those people get back into work. In addition, my right hon. Friend the Secretary of State is examining the benefits system and how we remove some of the disincentives within it that sometimes make it financially disadvantageous for people to get back into work, which cannot be right.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

13. What representations he has received on his plans for the future jobs fund; and if he will make a statement.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I have so far received virtually no direct representations on our plans for the future jobs fund.

[Tom Blenkinsop]

I thank the Minister for his response. The future jobs fund affirms the right to work, and it has done that for young people in Middlesbrough South and East Cleveland. Does he share the view of previous Tory Governments that there is a natural level of unemployment?

[Chris Grayling]

Our job is to get as many young people, indeed people of all ages, as possible back into government—[Interruption.] I mean back into employment. Well, our manifesto did say that we wanted everyone to be part of the task of trying to make things work. We need to get every young person we possibly can back into the workplace, and we need to get as many people as possible off benefits and into the workplace. That will be the purpose of the single Work programme, our apprenticeships plans and of the reductions that we are going to make in taxation on small business employers; and it is the reason we are not going ahead with the Labour party’s job tax, which would have damaged employment in the hon. Gentleman’s area and other parts of the country. Those differences of approach are what the country really needs.

[Duncan Hames (Chippenham) (LD)]

Is the Minister aware that many employees in future jobs fund placements, especially part-time workers on the minimum wage, took home less each month than their placement cost the fund? In future, will he ask for fairer partnerships with employers that provide better value for money for the taxpayer?

[Chris Grayling]

I can confirm that we will look for better value for money for the taxpayer and the maximum possible effectiveness in getting people into work; not work that lasts just six months, but work that gets them into sustainable, long-term careers that can make a difference to them—not the sort of short-term scheme that characterised the previous Government’s last few months.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Office for Budget Responsibility has found that unemployment would have fallen under Labour’s plans. The Chartered Institute of Personnel and Development survey in April also said that unemployment was close to its peak. However, the Minister will know that it has recently revised its forecast and, as a result of the change in policies by the new Conservative-Liberal Government, it predicts that public sector jobs will be cut by 750,000 and unemployment will increase to nearly 3 million. Does the Minister think that it is talking nonsense or does he agree that his proposals for cuts will hit jobs hard?

[Chris Grayling]

I am afraid that Labour Front Benchers remain in fantasy land about the current financial position. They left a huge debt overhang for the country that will do long-term, lasting damage to every single person in the country if it is not addressed. They themselves had prepared plans for big public spending cuts, but they are now pretending that they never planned those cuts. They should look at the books and in the mirror and ask themselves why the country is in the current financial mess. It is their fault.

[Chris Skidmore (Kingswood) (Con)]

14. What his policy is on the provision of support for people who are unable to work as a result of disability.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

15. What his policy is on the provision of support for people who are unable to work as a result of disability.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I refer my hon. Friends to the answer I gave my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) earlier.

[Chris Skidmore]

Many charities and voluntary organisations act as a mainstay for many people with long-term disabilities who are unable to work. Near my constituency, the superb Vassall centre and the excellent disability action group come to mind. What measures will my hon. Friend take to empower those organisations to have a greater say and play a greater role in supporting those with disabilities?

[Maria Miller]

I thank my hon. Friend for his question. He is right that the Vassall centre plays a pivotal role in Gloucestershire in bringing together many different organisations, which provide support for some of the disabled people most in need of it. As I said previously, the Work programme will offer such organisations the opportunity to bring local expertise and knowledge to supporting disabled people into employment or in other ways. I also hope that, through other specialist programmes, we can continue to harness that expertise.

[Nicola Blackwood]

As the Under-Secretary knows, many people with disabilities depend heavily on carers. During a visit in carers week to the Oxfordshire carers forum, it became abundantly obvious that, despite the drunken spending spree to which the Secretary of State referred, carers remain chronically under-supported. Will the Under-Secretary please comment on the Government’s plans to improve support for carers and to reduce the bureaucracy, which too often prevents them from accessing the help that is available?

[Maria Miller]

I am also delighted to support in carers week the work that carers do. I am particularly looking forward to visiting Barnet carers centre on Thursday as part of that. Obviously, carers receive benefits through carer’s allowance, and important support through Jobcentre Plus in partnership management. However, I reassure my hon. Friend that the Government are committed to widening the support available to family carers, and will establish an independent commission on funding long-term care this year.

[Kevin Brennan (Cardiff West) (Lab)]

Conservative Members are right to highlight the work of voluntary groups in supporting disabled people. Is the Under-Secretary also aware of organisations such as Pedal Power in my constituency, a voluntary group that works with disabled people, which recently relied heavily on the future jobs fund for support for its work? What estimate has she made of the impact of the decision to cut the future jobs fund on the very organisations that she thinks can help build a big society?

[Maria Miller]

If the hon. Gentleman had listened to some of the earlier exchanges, he would have known that we feel strongly that we need to have proper, long-term jobs in place. We will achieve that better through our apprenticeship announcements than through the future jobs fund. However, it is important that organisations such as Pedal Power—which, I am sure, supports disabled people in the hon. Gentleman’s constituency—get the support that they need. I am happy to talk to him about that if he has concerns.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

On the subject of carers week, will the Under-Secretary assure us that carer’s premium will be protected for those who are unable to find work or need support to stay in work as a result of looking after severely disabled relatives?

[Maria Miller]

Carers have a critical role to play in keeping people out of the formal state-run care system, and we will ensure that they get the support that they need in our coming reviews.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

16. What steps he plans to take to reduce the level of pensioner poverty.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Government want to see all pensioners have a decent and secure income in retirement. We will restore the earnings link for the basic state pension from April 2011, with a triple guarantee that pensions are raised by the highest of earnings, prices or 2.5%. We will also protect key benefits for older people.

[Annette Brooke]

I thank my hon. Friend for his answer. What action, if any, is he able to take on a problem he himself identified, namely, the cliff-edge situation of women who have completed 30 years employment and who have made the necessary national insurance contributions, but who were born one or two days too early to get the pension that they deserve?

[Steve Webb]

My hon. Friend raises an important point—in fact, it sounds vaguely familiar—and she is quite right that introducing changes in a cliff-edge manner, as the previous Government did, creates unfairnesses of the sort that she identifies. As she will know, when women are short of the necessary number of years, they can buy voluntary contributions, under a fairly restricted set of circumstances. That will allow some women to get closer to the full pension than they would otherwise have been able to get. However, she is absolutely right that the way in which the scheme was implemented by the previous Government creates an unfair cliff edge.

[Mr Kevan Jones (North Durham) (Lab)]

Many elderly people rely on services from local councils. Can the hon. Gentleman tell the House how the cuts imposed on Durham county council last week will affect, and reduce poverty for, pensioners in the county of Durham?

[Steve Webb]

The hon. Gentleman is quite right to point out that when public finances are tight, all sectors of society risk having services threatened in the way that he describes. One of the incoming Government’s concerns was the huge hole in the public finances, which a Labour Government would also have had to fill. It would be interesting to know which cuts he thinks should be made, because there has been a silence from the Labour party on that very subject.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Today in Britain, nearly one in five pensioners is living in poverty, and as I said earlier, more than 5 million people are on working-age benefits, and the country has one of the highest proportions of workless households in the European Union. Therefore, the case for radical welfare reform is clear. That is why this Government will establish a new Work programme and simplify our complex benefits system to provide greater support for the poorest.

At the same time, we are rising to the challenge of long-term demographic change in how we support an ageing society. It is more important than ever that we build strong foundations for the future of the basic state pension, which is why, for the first time, as the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) just said, this Government will introduce the triple guarantee for the basic state pension with immediate effect. That guarantee will restore the earnings link and ensure that any future uprating is set at the highest of earnings, prices or 2.5%. I am enormously proud that this coalition Government are doing that. Those are important first steps towards the reform of the whole system.

[Mr Timpson]

Last week, one of my constituents in Crewe told me how exasperated she had become after wading through the application form for her pension credit, because of the complexities within it and the never-ending series of phone calls that seemed to follow. With one in three pensioners who are entitled to claim pension credit still not doing so, in part owing to the major administrative barriers in their way, what does the Secretary of State propose to do to simplify the system, and to make it fairer and more transparent?

[Mr Duncan Smith]

First, I say to my hon. Friend that one of the most important steps that we will be taking towards helping those pensioners is re-linking the basic state pension to earnings. That will hugely improve take-up, because that money will go to everybody and people will not be required to claim for it. The other thing that my hon. Friend the Minister will be doing is reviewing the complexity and looking for ways in which we can simplify the process and make it easier, so that the take-up for those who need it—this point is critical—is better. I can assure my hon. Friend that we will do that.

[John Robertson (Glasgow North West) (Lab)]

T2. Did the right hon. Gentleman have many constituents, including people from young families who do not have a lot of money and who need the extra money to get by, coming up to him during his general election campaign to tell him that they were worried about working tax credits? What will he do to ensure that the working tax credit is maintained and that the ravages of the cuts are taken care of for the people who need that cover more than anybody else.

[Mr Duncan Smith]

The purpose of this Administration is not to penalise those in most need. We will do our level best to ensure that during these changes—and given the necessity of reducing the budget—we try to protect as many of those people as possible. Ultimately the best thing that we can do for them across the board is to simplify the benefit system so that the take-up is greater and ensure that going to work pays, with people retaining more of what they earn when they go to work than they do at the moment.

[Mr Rob Wilson (Reading East) (Con)]

T3. What action can the Government take to bring the ballooning public sector pension debt under control?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Our colleagues in the Treasury are establishing a commission to look at public sector pensions, and we have already had a meeting with our colleagues to try to ensure a fair deal both for the hard-working people who work in the public sector and for the taxpayers who are making a very large contribution to those pensions. It is important that the true cost is made transparent, which it clearly is not at present.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

T5. At a time when unemployment is forecast to increase to 3 million, this so-called coalition Government have decided to cut 100,000 jobs from the future jobs fund, but will not replace them until next summer. Is that just another example of unemployment being a price worth paying for this Government?

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am afraid that the hon. Gentleman has not been listening. There will be tens of thousands of new jobs created under the future jobs fund in the months ahead. However, we have changed the priorities, because we believe that long-term, sustainable employment is better supported by a programme of extra apprenticeships than by a short-term job creation measure of the kind envisaged by the previous Government.

[Richard Harrington (Watford) (Con)]

T4. Given the shocking number of young unemployed people in my constituency and in the country as a whole, I welcome the proposals for mentoring schemes, whereby young people spend time with the self-employed and other business people. Will those schemes be introduced quickly and efficiently, because they will be very important?

[Chris Grayling]

I agree with my hon. Friend. The use of mentoring, both to encourage young people into the workplace and to create a sense of belief in their ability to build their own businesses, will be central parts of the Work programme. We are working on the details as rapidly as we can, and I can give him an assurance that mentoring will be a central part of the way in which the Work programme works.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T9. The cuts to the future jobs fund are causing real concern in my constituency. From listening to Ministers this afternoon, I understand that the expectation is that these job losses will be replaced by a growing private sector. Can the Minister share with me the detailed analysis that the Government have undertaken that shows that these jobs will be created, when they will be created and that they will be created in the north-east?

[Mr Duncan Smith]

The cuts to the future jobs fund are not cuts. We have stuck to the contracted jobs already in existence, which will run until next year. We are talking about the notional jobs that might have been created but were not contracted for, so we are dealing with a game of vague figures. The best thing that we can do for the hon. Lady’s constituents is to ensure that the cost of employing people does not rise, which was the plan of the previous Government in raising national insurance. Most of all, the 50,000 apprenticeships that we will create will provide long-term jobs for all her constituents.

[David Tredinnick (Bosworth) (Con)]

T6. Will my hon. Friend be reviewing the rule on annuities? Many people with occupational pensions resent the fact that they have to invest 75% of their accumulated funds in that way and would prefer to put some in other places.

[Steve Webb]

The coalition Government are sympathetic to the idea of giving people greater choice over annuities. We already have a commitment to scrapping the rule that forces people to annuitise at 75. We also want to look at how people can achieve better value for money from the annuities that they buy, and possibly also have earlier access to accrued pension funds. We take the view that it is their money, not the Government’s money.

[Mr Jim Cunningham (Coventry South) (Lab)]

T10. Has the Minister had any discussions with the Treasury regarding the pay-out for Equitable Life, bearing in mind that when they were in opposition, that crowd over there on the Government Benches hounded us week in and week out about a pay-out? Now can they deliver?

[Steve Webb]

The hon. Gentleman will know that Sir John Chadwick will produce his report in July. I understand from discussions with the Treasury that a compensation package will be produced on the basis of that, and legislation to bring that forward was included in the Queen’s Speech.

[Andrew George (St Ives) (LD)]

T8. As Ministers are no doubt aware, the withdrawal rate of housing benefit and council tax benefit combined can be up to 85p in every pound earned, thereby contributing significantly to the poverty trap. Do the Government have any plans to review the withdrawal rate and the tapers?

[Steve Webb]

My hon. Friend puts his finger on a crucial point. We both believe that work needs to pay, but one of the crucial problems at the moment is that as people improve themselves, work harder, train and do overtime, too much of that money is clawed back through the benefit tapers and tax rates that he has described. My right hon. and hon. Friends will be bringing forward quite radical proposals for benefit reform that are designed to tackle precisely the point that he has raised.

[Natascha Engel (North East Derbyshire) (Lab)]

I know that this will surprise everyone, but I want to return to the future jobs fund and the answer that the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling) gave earlier about not having received any representations on it. Has he at least made the effort to consult, for example, some of the voluntary and charitable sector organisations that represent young people and support them into work on the effect that cutting the future jobs fund will have on their work? If so, what have they said to him?

[Chris Grayling]

Yes, we have indeed spoken to those organisations, which will continue to create thousands of new jobs under the future jobs fund during the remainder of this year. However, there is general agreement, particularly among those who have been working with us on the Work programme, that we need apprenticeships, lower employment costs and sustainable long-term jobs in the private sector, not in the public sector—too many of the future jobs fund jobs are in the public sector. We need to create sustainable, long-term employment opportunities for young people and older people on benefits in this country.

[Robert Halfon (Harlow) (Con)]

Is the Minister aware of early-day motion 159, which is about jobcentres and foodbanks? Is he also aware that charities in my constituency, such as the excellent Harlow foodbank, have been stopped by Jobcentre Plus from giving out food vouchers to the unemployed because of regulations introduced by the previous Government? Does he agree that that is an example of Labour bureaucracy hurting the poor most, and will he take steps to reverse this policy as soon as possible?

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I thank my hon. Friend for raising that issue. Foodbanks have an important role to play in our local communities. It is important that we ensure that people who might benefit from the services that they offer know that they are available, and we will certainly be reviewing whether it is possible to highlight the availability of local foodbanks through Jobcentre Plus.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Brief questions and brief answers are now of the essence.

[Liz Kendall (Leicester West) (Lab)]

Will the Minister say what help to get off benefits and into work will be available for young people between the future jobs fund ending, which he said would happen in a couple of months, and the Government’s new single Work programme, which he said would not be available until March 2011?

[Chris Grayling]

We will be maintaining all the existing programmes, and in particular the flexible new deal, right up until the start of the Work programme next year. The flexible new deal is by far the largest programme that the previous Government put in place to support young people and older people into employment. It is important to ensure that we maintain continuity of support right up to the point when the Work programme is ready to be launched.

[Sajid Javid (Bromsgrove) (Con)]

The Minister will know that spending on welfare doubled under the previous Administration, yet the number of those living in poverty increased. Does he agree that what the previous Administration succeeded in doing was to create the most expensive poverty in history?

[Maria Miller]

My hon. Friend is absolutely right. Record levels of spending on benefits have left us with 100,000 extra children living in poverty since 2004, and the gap between the richest and the poorest has grown wider than at any time since the 1960s. What we need to do is tackle the root causes of poverty to break that cycle of disadvantage, and not do what the previous Government did.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

What income guarantee will the Secretary of State give to the worried father who wrote to me last week who gave up his job to look after his disabled son and is now a carer?

[Mr Duncan Smith]

I would be happy to speak to the hon. Gentleman’s constituent with him, but I also guarantee to the hon. Gentleman that the role of carers in society will be one that we continue to support and value. The reality is that if we did not have that informal care in society, the state could never pick up the bill. We look to enhance and support that role, ensuring that carers are valued throughout what we do, and I should be happy to see the hon. Gentleman’s constituent, if he wishes.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The Secretary of State knows as well as anyone that what he calls notional jobs are nevertheless factored into the Government’s spending projections. Can he tell the House how long it will be before the proposed savings in the future jobs fund will be wiped out by the increased cost of keeping more young people on the dole?

[Mr Duncan Smith]

With respect to the hon. Gentleman, he is playing a game of notional figures—[Interruption.] I know what it is like in opposition, and I must tell Labour Members that they must start to get real about the fact that they were in government three months ago and it was they who went on the spending spree. They would also have had to find savings. We need to use the savings that we have found for this year, and ensure that we do not have the job tax. There will also be a much better chance for longer-term jobs through the apprenticeship scheme, involving some 50,000 people. That is real decision making.

[Clive Efford (Eltham) (Lab)]

Will the Secretary of State give a guarantee that every job that is found through any Government-backed scheme to move someone from benefits into work will be paid at or above the national minimum wage?

[Chris Grayling]

Self-evidently, if the providers who work for us under the Work programme are successful in getting someone into work, we will reward them on the basis that they provide post-employment mentoring and stay with the person to ensure that they stay in work—

[Clive Efford]

Yes or no?

[Chris Grayling]

Of course, by law, they will have to pay the national minimum wage. That is the requirement for any employer in this country; it is not going to change.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

One of the successes of the future jobs fund has been in the area of sports. I heard the Minister say earlier that he would stop future contracts, but full-time jobs in sport have been found at the end of the period, and I hope that he will look again at that decision.

[Chris Grayling]

Absolutely; I also expect sport to take advantage of some of the apprenticeship opportunities. There will be tens of thousands of further opportunities under the future jobs fund, as well as additional apprenticeships and further opportunities provided through the Work programme. We intend to do everything we can to ensure that, when this Government leave office, youth unemployment is lower than it is today—unlike the record of the Labour party in its 13 years in government.

Afghanistan

Monday 14th June 2010 Commons Chamber

15:31

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on Afghanistan. First, I am sure that the whole House will want to join with me in paying tribute to Private Jonathan Monk from 2nd Battalion the Princess of Wales’s Royal Regiment and Lance Corporal Andrew Breeze from 1st Battalion the Mercian Regiment, who have both died in Afghanistan. Our thoughts and prayers are with their families and friends. Their service and sacrifice for our country must never be forgotten.

It was my fifth visit to Afghanistan, but my first as Prime Minister. I held talks with President Karzai and visited our troops in Helmand. I want to set out for the House how this Government will approach our mission in Afghanistan, and how that mission is progressing, but first let me stress the importance of such updates. The whole nation is touched by the heroism of this generation of our armed forces, who are fighting to protect us in harsh conditions far from home, and I believe that the country, and this House, are entitled to the facts. That is why this statement will be the start of a pattern. There will be regular updates to the House, with quarterly statements by the Foreign Secretary or the Defence Secretary, and we will publish on a monthly basis much more information on the progress we are making. This will include updates on the security situation, on recruiting, training and retaining the Afghan security forces, on progress in appointing and supporting provincial and district governors, and on progress in development work, including health and education.

Our main focus, however, will be on the security situation. For example, in the six months to March 2010, the Afghan national army grew by almost 20 %, with more than 17,000 people joining the ranks, but the Afghan police are assessed to be ineffective or barely able to operate in six of the 13 key provinces in General McChrystal’s plan. Good news or bad, we want to take the country with us in what is this Government’s top foreign policy priority.

Let me address the first question that people are asking. Why are we in Afghanistan? I can answer in two words: national security. Our forces are in Afghanistan to prevent Afghan territory from again being used by al-Qaeda as a base from which to plan attacks on the UK or on our allies. Of course, the al-Qaeda training camps and the Taliban regime that protected them were removed from Afghanistan in the months after 9/11, and the presence of NATO forces prevents them from returning, but Afghanistan is not yet strong enough to look after its own security. That is why we are there, and with the help of the greater efforts of the Pakistanis to hunt down al-Qaeda in their own country, we are now placing al-Qaeda under pressure on both sides of the border. Eighteen months ago, the then Prime Minister told this House that some three quarters of the most serious terrorist plots against Britain had links to the border area. Today I am advised that the threat from al-Qaeda from Afghanistan and Pakistan has reduced, but I am also advised that if it were not for the current presence of UK and international coalition forces, al-Qaeda would return to Afghanistan and the threat to the UK would rise.

The next question is how long must we stay. The Afghan people do not want foreign forces on their soil any longer than necessary, and the British people are rightly impatient for progress. Our forces will not remain in Afghanistan a day longer than is necessary, and I want to bring them home the moment it is safe to do so. The key to success is training and equipping the Afghan security forces at every level to take on the task of securing their country, so that Afghans can chart their own way in the world without their country posing a threat to others, and our forces can come home, the job done, their heads held high.

That is why we back the strategy developed by General McChrystal, commander of the international security assistance force, and endorsed by President Obama and NATO. That strategy involves protecting the civilian population from the insurgents, supporting more effective government at every level, and building up the Afghan national security forces as rapidly as is feasible. We want to transfer security responsibility for districts and provinces to Afghan control as soon as they are ready, but that must be done on the basis of the facts on the ground, not a pre-announced timetable.

The current year is the vital year. We are six months into an 18-month military surge, and we must now redouble our efforts to drive progress. Central Helmand has, along with Kandahar, been the heartland of the Taliban. It is from there that they gave safe haven to the al-Qaeda network in Afghanistan. That is why the operation in central Helmand is crucial to the success of the whole mission. Four years ago, we went into Helmand with 3,000 troops. I do not think anyone now seriously argues that that was sufficient. Today, there are around 30,000 troops there, with 8,000 British working alongside 20,000 US Marines. In total, we have more than 10,000 troops in the country as a whole. With the arrival of reinforcements and the continued growth of the Afghan security forces, we are now evening out the ISAF presence in the main populated areas in Helmand.

That is an absolutely crucial point. In the past, we have simply not had enough soldiers per head of population for an effective counter-insurgency campaign. Today, although the rebalancing is still work in progress, the situation is much improved. The arrival of a US Marine expeditionary force, combined with additional contributions from other ISAF partners including the UK, has given a huge boost to the resources available to ISAF in Helmand. For example, the Marines have arrived with some 80 aircraft and helicopters of their own, which are now available to support all ISAF forces in Helmand.

It is clear that we have made real progress in central Helmand this year. A degree of normal life has returned to places such as Nad Ali, where the bazaar is open again and people are going about their daily business in an area that was until recently completely infested with insurgents, but the progress is not yet irreversible. Inevitably, there will be tough fighting as Afghan forces, with ISAF support, hold the ground we have taken and push the insurgents out of further towns and villages.

During my visit, I was able to announce a further £67 million to double the number of counter-improvised explosive device teams, to tackle the most serious threat facing our young men and women. So with the improvements made in the past year, many of the acute shortages that hampered us so severely in our initial deployment in Helmand have been dealt with, but I do not pretend that every equipment shortage has been resolved. We will need to adapt constantly and deal with problems as they arise.

The whole country is incredibly proud of our armed forces, and I believe we need to do more to recognise these remarkable men and women and place them at the front and centre of our society. That is why I announced a doubling of the operational allowance for service in Afghanistan, backdated to 6 May; and that is why I believe it is right that we renew and reaffirm our commitment to the military covenant, that crucial contract between our country and those who risk their lives to ensure our security.

I do not pretend that we can succeed, either in Helmand or in Afghanistan, by military means alone. Insurgencies usually end with political settlements, not military victories, and that is why I have always said that we need a political surge to accompany the military one. We need better to align our development spending with our overall strategy, and I have announced £200 million to be spent on training, strengthening the police services and government institutions; and, crucially, we need a political process to help bring the insurgency to an end.

As a first step, that means getting individual Taliban fighters to put down their weapons, renounce violence and reintegrate into Afghan society, and the successful peace jirga earlier this month should enable that process to move ahead more swiftly. However, it means more than that. For there to be long-term political stability, everyone in Afghanistan, including those in the south, must feel that the Government is theirs, that it is their country, and that they have a role to play. As I agreed with President Karzai, we must start working towards a wider reconciliation process, leading to a political settlement that works for all the peoples of Afghanistan.

We are seeing a good example of that in Kandahar where, importantly, the process getting under way is largely Afghan-led. Alongside military operations by Afghan security forces together with international forces, it includes, for example, the shura of several hundred local elders conducted yesterday by the local governor, which President Karzai attended, and a major drive by the Afghan Government, with our support, to improve public services and the rule of law. From now on, what is happening around Kandahar and in Helmand should reflect a deeper understanding of the influence of tribal structures in Afghanistan. In the past, we simply have not paid enough attention to that and to the unintended consequences of some of our policies. I want us, for example, to take a careful look at the contracting policy of ISAF, to ensure that the money going into the local economy from the huge contracts that are let has a positive impact and does not help fund local militias or, even worse, the insurgents.

This is the vital year. We have the forces needed on the ground and we have our very best people, not just those in the military, but those leading on the diplomatic and development front. I do not pretend that it will be easy and I must warn the House that we must be ready for further casualties over the summer months, as the so called “fighting season” resumes and as ISAF extends its activity. But I say to the House what I said to our young servicemen and women in the dust and heat of Helmand on Friday: they are fighting thousands of miles away to protect our national security here at home. Like their predecessors, they have the support and gratitude of the whole nation. When we have succeeded in enabling the Afghans to take control of their own security, our troops can begin to come home. Even after our troops have left Afghanistan, the relationship between Britain and Afghanistan must continue as a strong and close one. Likewise, we want to continue to build on our relationship with Pakistan. These long-term relationships are, quite simply, essential for our national security. I commend this statement to the House.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I join the Prime Minister in paying tribute to the two soldiers who have been killed, Private Jonathan Monk from 2nd Battalion The Princess of Wales’s Royal Regiment and Lance Corporal Andrew Breeze from 1st Battalion the Mercian Regiment. Our thoughts are with their families and on the grief of their loss.

I thank the Prime Minister for his statement. I welcome both his early visit to Afghanistan since coming into government and the increase in the operational allowance that he announced. All those serving in Afghanistan should know that they have the admiration and respect of the whole country and of Members from all parts of the House. Will he continue with Armed Forces day on 26 June?

May I restate Labour’s support for our mission in Afghanistan, which is, as the Prime Minister rightly said, first and foremost to protect our national security. As this was his first statement to the House on Afghanistan and the first occasion on which we have responded as the official Opposition, may I assure him that as he proceeds to take difficult decisions in the best interests of our mission in Afghanistan and of our troops, he will have our full support. In that spirit, I welcome the £67 million that he has announced to help tackle the IED threat. Will he inform the House in more detail as to what that will be spent on? We understand that there will be 13 extra Mastiff vehicles, and we welcome that. Will they be in addition to the £67 million? As there is also a need for well protected vehicles with greater manoeuvrability, will the Prime Minister confirm that the Government will proceed with a second batch of 200 light protected patrol vehicles?

On the strategy in Afghanistan, the Prime Minister has reaffirmed that, despite the challenges, progress has been made. Will he confirm that the Government are continuing the strategy that the UK has been pursuing and that it has not changed? If it has changed, will he tell us in what respects? It is common ground that our work in Afghanistan needs to bring together security, development and diplomatic efforts. Will the Prime Minister update the House on the discussions he has had with President Karzai? I assure him that the Government will have our support to take through a strategy that sees that the Afghans are strong enough to take responsibility for their own security and prosperity. I welcome the £200 million that he announced for building up the Afghan army, police and civil service. Will he reassure the House that that will not be at the expense of vital existing development programmes elsewhere in the world?

Will the Prime Minister update the House on discussions that he has had with US Defence Secretary Gates and on whether they have addressed the proposed withdrawal of Canadian forces in 2011? A stable Afghanistan requires a stable Pakistan. Will the Prime Minister update the House on the discussions he has had with President Zardari and Prime Minister Gilani of Pakistan?

On the families of our troops, will the Prime Minister follow through on the important work that the former Defence Secretary was doing, with my support, to back up the wives, partners and families of our armed forces?

On the strategic defence review, will the Prime Minister reassure the House that the front line will not be weakened? In opposition, the Prime Minister and his Defence Secretary argued for a bigger Army and for the expansion of the Army by three battalions. Will that go ahead?

Finally, will the Prime Minister explain to the House the reasons for the departure of Sir Jock Stirrup and Sir Bill Jeffrey? Will he confirm that they will both play a role in the strategic defence review and that they will remain until it is completed? May I ask him to join me in paying tribute to Sir Jock Stirrup and Sir Bill Jeffrey for their service to the nation?

[The Prime Minister]

I thank the right hon. and learned Lady for her response—both for what she said and the way in which she said it. I know that we will have our differences across these Dispatch Boxes, but on the issue of Afghanistan there is great unity on the Labour and coalition Benches—[Interruption.] Well done; well spotted. That is important, because our troops like to know that everyone in the House is behind what they are doing.

On the specific questions that she asked, Armed Forces day will go ahead as planned on 26 June. She asked about the £67 million spent on countering the IED threat and whether it is in addition to the patrol vehicles that are already on order. Yes; I can confirm that it is. She asked about the strategy generally and what has changed. What I would say—I note what the Foreign Secretary said in his speech on the Queen’s Speech—is that we are six months into the McChrystal-Obama strategy of the military and political surge and we want to see that strategy through, so there is continuity in that regard. We must be absolutely clear in our focus on the national security perspective of what we are doing. That is not to say that development work and the building of schools, hospitals and other things are not important—it is just to get our priorities straight. In the end, our route home and our route to a successful Afghanistan is to put security first. That needs to be very clear. On the question about development aid, the £200 million is additional to the existing work we are doing in Afghanistan.

I very much agree with what the right hon. and learned Lady said about backing the wives, partners and families of all those who serve in our armed forces. In recent years, we have put enormous pressure on those families and we need to do more to help them. I have RAF Brize Norton in my constituency and I know the very severe pressures that we put on people. In all the issues around military families—whether it is about the schools their children go to, the health centres they use or time for leave—we want to do more to help, and we are going to give real focus to that.

The right hon. and learned Lady asked about the strategic defence review and whether it would cover the size of the Army. Of course, it will cover all of the issues in defence. Finally, she quite rightly paid tribute to Sir Jock Stirrup and Bill Jeffrey, and I join her in paying tribute to them. They both have been, and are, extremely strong and dedicated public servants, and everyone in this country owes them that thank you. Sir Jock Stirrup, as the right hon. and learned Lady knows, actually extended his time as Chief of the Defence Staff before the election because he wanted to see continuity—he wanted to see that service continue—and I was very pleased that that happened. For some time he has had in mind standing down in the autumn, at the end of the strategic defence review—at the end of October—and that is indeed what he is going to do, and what Bill Jeffrey is going to do. That will give the new Government time to put in place a proper transition for a new Chief of the Defence Staff to take on the vital work that Sir Jock has done. Let me say again that he has done a superb job as Chief of the Defence Staff. I am working with him extremely well. He came with me on the trip to Afghanistan, and he deserves the gratitude of the House of Commons.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Does my right hon. Friend agree that there is a risk of conflicting messages? We are saying on the one hand to the Taliban that we will not cut and run and that we will stay for as long as is needed to do the job, but on the other we are saying to the Afghan Government that there is urgency for them to sort out their corruption and their governance. Does my right hon. Friend give priority to leaving as soon as possible or staying for as long as is necessary?

[The Prime Minister]

First, I congratulate my right hon. Friend on his successful election as Chairman of the Select Committee on Defence. I look forward to reading his reports over the course of this Parliament.

I do not think that there is a contradiction, because I think people in Afghanistan want to know that foreign troops will not be on their soil for an extended period, and it is right not to set an artificial deadline about when troops will leave but to do all the work we can to build up the Afghan security forces to give us the chance to leave, and to put pressure—yes, it is pressure sometimes—on the Afghan Government to do all they can to cut out corruption and put in place good governance. It is important that we get on with this work but, as I said, not to set artificial timetables that we then cannot meet.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Several hon. and right hon. Members are seeking to catch my eye. Colleagues will be conscious that there are a further two statements to follow, and two debates, so single, short supplementary questions and—I know—economical replies are the order of the day.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred very briefly to Pakistan and he did not take the opportunity to respond to the questions about Pakistan asked by my right hon. and learned Friend the Leader of the Opposition. Can he give us his assessment of Pakistan’s role, for good or ill, across the Durand line, in a political solution and regional stability involving Afghanistan?

[The Prime Minister]

The hon. Gentleman is absolutely right. The role of Pakistan in this is vital. What is encouraging is that in all the conversations I have had with President Karzai across the past five years I have never heard him as positive about his relationship with Pakistan as now. Clearly, a stable Pakistan and a stable Afghanistan are two sides of the same coin. The encouraging thing right now is that the Pakistan Government and the Pakistan military are pursuing al-Qaeda in South Waziristan and other parts of the tribal areas, and that is making a difference. But of course we have to convince both the Pakistan Government and the Afghanistan Government that we are there for the long term—not the long term with troops, but the long term with support, aid, diplomacy and development—so that they do not think that we will leave them in the lurch once again.

[Sir Malcolm Rifkind (Kensington) (Con)]

May I commend the Prime Minister for confirming that our only justification for being in Afghanistan is not corruption or the poppy trade but national security? On that basis, will he also confirm that the decision when we start to withdraw our troops should be based not simply on the Afghan army having increased in size or training, but when we are satisfied that it has reached the level of training and ability to ensure that al-Qaeda cannot return?

[The Prime Minister]

My right hon. and learned Friend is right. It should be a focus on national security and when we can safely leave the job of securing Afghanistan to Afghan forces. That is not about numbers; it is about capability and he is right to measure it in that way.

[Mr Denis MacShane (Rotherham) (Lab)]

On 26 May, during the Queen’s Speech debate, I said:

“It is time to assert the principle that war is too important a matter to be left to generals. We need to assert the authority of this House and the authority of a politically elected Government over the lack of strategy in Afghanistan.”—[Official Report, 26 May 2010; Vol. 510, c. 246.]

Therefore, I welcome the Prime Minister’s keen interest. We have had too much of this war dictated by the red tops, with their jingoism, and the red tabs, with the generals’ priorities before those of the nation. I wish the Prime Minister well in what is clearly a change of strategy, with a politically elected Government in charge.

[The Prime Minister]

I thank the right hon. Gentleman. I was once told that the first sign of madness is to read out one’s own speeches, but I agree very much with a lot of what he said. It is important that the military feel that they can give unvarnished, clear advice to Ministers, but it is also important that Ministers test, probe and challenge that advice. That is how policy should be developed, and that is how it should be done in future.

[Richard Ottaway (Croydon South) (Con)]

Given that one of the problems in Afghanistan in the past has been mission creep, may I thank the Prime Minister for the clarity of his statement? He pointed out that we are still in the United States military surge phase. Can he assure me that, although the US military are already beginning to talk about a future draw-down, we will keep in constant touch with them to ensure that we operate on the same timeline? Will he keep in touch with not only the US but our NATO allies on this point?

[The Prime Minister]

I congratulate my hon. Friend on his election as Chairman of the Foreign Affairs Committee, and I look forward to the work that it will do.

My hon. Friend is absolutely right: making sure that we work together with the Americans and our NATO allies is absolutely vital to success. One of the things that strikes me when I go to see what our troops are doing in Helmand is just how close that work is. Sometimes people wonder whether it is right that British troops in Sangin are under American command, and it is right to point out that all the American troops in Kandahar are under British command. Our forces work incredibly closely together, including in the hospitals, and it is a great sight to see.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Could the Prime Minister update the House on the progress made on opium and poppy production and say whether there is now a prison in Afghanistan that is secure enough to hold any of the opium traders should they be arrested?

[The Prime Minister]

I am grateful for that question. There has been progress, as the hon. Lady will know. The province with the worst record of opium production has tended to be Helmand, but production is significantly down this year. There is a question mark about how much of that is due to poppy blight, how much of it is due to the excellent wheat-seed substitution programme that the British Government have been supporting and how much of it is due to security efforts. It is important as part of the picture that, as we see a more secure Afghanistan, we see more farmers pursuing alternative livelihoods. But again, we need to get the order of priorities the right way around.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

May I welcome both the Prime Minister’s statement and his visit, join him in paying tribute to the soldiers who have lost their lives and to all those who serve, and assure him that his—our—Liberal Democrat colleagues stand four square behind him in the policy that he has announced? May I ask him a question about the implications for policy at home? Will he now review the work of our domestic Departments to ensure that returning troops have full support for their mental, emotional and physical needs, including their housing, after they have served in theatre in Afghanistan?

[The Prime Minister]

I am grateful for that question. We have said that we will examine every part of the military covenant and ensure that we fulfil it in all the ways that we should. Housing is clearly a key part of that, and the previous Government, to be fair, were putting money into forces housing, which we need to go on improving. Mental health is the area that needs the most attention. If we think of the combat stress that has been placed on those young men, now year after year, we should really recognise that this is something that needs to go through the rest of their lives, and we need to learn from countries, such as America, where much more is done to follow up mental health issues. My hon. Friend the Member for South West Wiltshire (Dr Murrison) is particularly looking at this area, working between the Ministry of Defence and the Department of Health.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Further to that question, may I ask the right hon. Gentleman whether he will meet a small delegation, together with me, sometime in the future to discuss this very issue? I serve on a panel of inquiry appointed by the Howard League for Penal Reform to consider this issue and why so many returnees end up in the criminal justice system. Will he spare some time to meet us sometime in the future?

[The Prime Minister]

I thank the hon. Gentleman for his question, and either I or the Defence Secretary would be happy to meet him and other colleagues. He makes a very good point: because the whole problem of mental health issues has not had enough attention, we are seeing former soldiers fall through the net and, as he says, too often end up either homeless on the streets or, on occasion, in the criminal justice system.

[Sir John Stanley (Tonbridge and Malling) (Con)]

Does my right hon. Friend agree that, if we are to achieve lasting security success in Afghanistan, it is imperative that we exert the maximum possible pressure on al-Qaeda and the Taliban on both sides of the border? Is it the Government’s policy to continue the programme of bilateral counter-terrorism co-operation between the British Government and the Pakistan Government initiated by the previous Government here?

[The Prime Minister]

Yes, it absolutely is our policy to continue that work. The vital role that will be played by Pakistan will encourage it to go on driving al-Qaeda out of the badlands of the tribally administered areas. That is taking place, partly because there is good security and military co-operation, and there is a sense among the Pakistan Government and military that both the British and the Americans are there for a long-term relationship, to help them with this vital work.

[Michael Dugher (Barnsley East) (Lab)]

Given that our forces are engaged in Pakistan, does the Prime Minister share my anger about how the departure of the Chief of the Defence Staff was announced—in an interview between the Defence Secretary and a national newspaper? Did not the CDS deserve rather better than that?

[The Prime Minister]

As I said, the Chief of the Defence Staff had for some time been intending to stand aside in the autumn after seeing through the strategic defence review, which is a vital piece of work. That is an appropriate time for him to do so. This is a good moment to pay tribute to the work that he has done, which has been genuinely good—I saw it myself in Afghanistan—and the very good leadership that he has given our armed forces.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

I join my right hon. Friend and the right hon. and learned Member for Camberwell and Peckham (Ms Harman) in their tributes to two more of our fallen heroes. As some of us in all parts of the House have been pointing out ad nauseam since 2006 that this was an undermanned and underequipped Army, how does my right hon. Friend think it came about that four successive Labour Defence Secretaries were so uninformed?

[The Prime Minister]

My hon. Friend takes a very strong view about this issue, and I have listened to him talk about it many times. He is right to say that we went into Helmand province with far too few soldiers and without a clear enough idea of how dangerous the insurgency could become. We also—I made this criticism in opposition—did not have sufficient helicopters and did not move fast enough on vehicles and other equipment programmes. We have to start from where we are and ask ourselves what it is right to do now, and it is right to give this new strategy set out by Stanley McChrystal and President Obama time to work by having a correct number of forces on the ground to deliver proper counter-insurgency and build up the Afghan army and police force so that we can bring those troops back home. The point in the end is, what will make our country safer? Our country will be safer if we can leave behind an Afghanistan that, although it may not be a perfect democracy or a brilliant society, has some level of stability so that it is not a haven for terrorism.

[Jeremy Corbyn (Islington North) (Lab)]

Next year the British and American troops will have been 10 years in Afghanistan. It has cost the lives of hundreds of coalition soldiers and thousands of Afghan people, and the war has spread into Pakistan and created instability in the region. Is the right hon. Gentleman utterly convinced that this strategy of long-term military engagement with Afghanistan is not the cause of future problems and that we should not be thinking of an alternative process of involvement and negotiation rather than constant military activity?

[The Prime Minister]

Let me try to find some common cause with the hon. Gentleman. I agree with him to this extent: we will not solve this problem by military means alone. There should be a political process, a process for the Taliban to lay down their arms and rejoin Afghan society and, yes, a process led by the Afghan Government of engaging with the Taliban. However, there have to be some red lines. There has to be an acceptance of the Afghan constitution, an acceptance that everything must be done by peaceful means and, above all, the severing of any link with al-Qaeda. So a political process, yes, but let us not pretend that that will come if we walk away militarily.

[Dr Julian Lewis (New Forest East) (Con)]

Does the Prime Minister accept that al-Qaeda, as an international terrorist organisation, if it is suppressed in Afghanistan and Pakistan will begin to operate from any one or more of half a dozen other potential harbouring states? Given that it is out of the question that we could ever try to tackle that problem in the extremely costly way that we have tackled Afghanistan, will he undertake to view with an open mind the sovereign base bridgehead solution, which I hope to have an opportunity to discuss with him presently?

[The Prime Minister]

I thank my hon. Friend for his question, and I know that he has considerable expertise in this area. He is right to say that there are other parts of the world where al-Qaeda is, regrettably, quite strongly established, including Yemen and Somalia, but it seems to me that that does not negate the need to do what is possible to deliver a basic level of security in Afghanistan, so that at least that country cannot once again become home to al-Qaeda. Doing that at the same time as working with the Pakistan Government can actually help to stabilise a region from which huge amounts of terrorism have come. In terms of the sovereign base idea, I am happy to look at it, and to discuss my hon. Friend’s ideas with him, but I think that a military surge that is part of a counter-insurgency must be given time to work.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

In accepting that security and a political solution are of the utmost importance, will the Prime Minister be mindful of the need to advance human rights in Afghanistan? What progress can he report? Will he confirm that there will be no return to the oppression, particularly of women, that was suffered in Afghanistan in the Taliban years?

[The Prime Minister]

I am grateful for the hon. Lady’s question. I think that some progress has been made. When I say, “Look, we’re not going to end up with a perfect democracy or a brilliant society,” it does not mean that those things do not matter; they do. It is just about ordering our priorities. For instance, at the recent peace jirga, something like 20% or more of the representatives were women. I noted at my press conference with President Karzai that whereas the entire British press were made up of young, white men, all the questions from the Afghan press were from women, which I thought was a sign in itself.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

The Prime Minister has rightly recognised how important the integrated nature of the military operation is, and how the coalition forces are together trying to achieve security for Afghanistan. Does he have a commitment from our coalition partners that they have understood the message that we can leave only once security is established, as the population in Afghanistan has to believe that we have the commitment to see the job through to the end?

[The Prime Minister]

The hon. Gentleman makes a very important point. He will know that the Canadians and the Dutch have made their own decision about timetables, but it is very important to do all that we can to encourage other NATO allies—I met representatives of the Danish and Estonian military while in Afghanistan—and to ensure that all other NATO partners remain committed to the task, particularly in this most vital year, when the number of troops has increased in the way that I have described, and when there is a real chance of delivering a proper counter-insurgency strategy that protects the people, pushes the Taliban out and delivers that basic level of stability that we want to see.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

The Prime Minister will be aware that the 1st Battalion the Mercian Regiment includes many of my constituents who were formally of the Cheshire Regiment, so I thank him for his statement. He rightly says that the military effort must be the highest priority in the campaign but, given his visits and the reports that he has received, may I ask him to reflect on the engineering resource on the ground? There is no doubt that the engineering resource helps massively with the military effort, but it also helps to rebuild communications, which can in turn help the governance of the country. Is he satisfied that it is at the right level?

[The Prime Minister]

The hon. Gentleman makes a good point. No, I do not think that we have made as much progress as we should have done on the engineering front. Let us take, for instance, the issue of the Kajaki dam: that should be delivering a lot more electricity to a lot more people in Afghanistan. Progress has not been anything like as fast as we would have hoped. That is the sort of tangible progress that people in Afghanistan want to see, to demonstrate that life is now better than it was under the Taliban. We have to deliver that as part of the message of security and stability that will enable us to leave.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I commend and support my right hon. Friend’s determination and commitment personally to take responsibility for what our armed forces are seeking to achieve in Afghanistan? Is he aware, however, that there has for a long time been a widespread perception that while we are fighting a war in Afghanistan, Whitehall has not been on the same wartime footing and has not been tackling problems with the urgency that those in our armed services would expect? What is he doing to put Whitehall on a war footing and, in his absence, will he appoint a Secretary of State for Afghanistan to drive things forward?

[The Prime Minister]

My hon. Friend takes a great interest in these matters. We have put Whitehall on much more of a war footing, not least by appointing a National Security Council and a national security adviser, who met on day one of the new Government. That is a difference, and it is driving the policy. That message has got through clearly to the Ministry of Defence. Obviously, there are sometimes time lags in getting equipment out to the front line, but we are doing everything we can to make sure that that happens and that the commitment is there.

[Richard Burden (Birmingham, Northfield) (Lab)]

The Prime Minister has focused most of his remarks on security issues—rightly and understandably so. Can he say a little more about the development angles of our strategy in Afghanistan, and in particular, what, if any, changes he sees in the overall development strategy, how he feels about the so-called whole Afghanistan strategy which looks beyond Helmand and Kandahar to other parts of Afghanistan, and how he feels about the use of instruments such as the Afghan reconstruction trust fund for the disbursement of assistance? Finally, will he revisit the International Development Committee’s report from nearly two and a half years ago, which still has relevant messages to give about development strategies in Afghanistan?

[Mr Speaker]

I heard four questions, but one answer will suffice.

[The Prime Minister]

I agree with what the hon. Member for Birmingham, Northfield (Richard Burden) says about a whole Afghanistan strategy. We must be careful not to be over-focused on Helmand province, although I make no excuse for that, as that is where troops are. In the end, the whole campaign and mission will be judged by progress in Helmand. With reference to how we are changing our strategy, it is to make sure that it is focused, particularly on the issues of security and helping to deliver that security. On too many occasions in the past five years, people working hard for DFID have not been able to get out into Afghanistan to deliver aid projects because there is not enough security, so we have to get that right first.

[Mr John Baron (Basildon and Billericay) (Con)]

One of the many problems with our involvement in Afghanistan is that there has in the past been confusion about the key objective, so I welcome my right hon. Friend’s statement today, although I remain to be convinced that it can be achieved. Given that there has to be a political solution as well as a military one, how worried is he by the recent resignations from President Karzai’s Government of the chief of intelligence and the Interior Minister? Will he support President Karzai in seeking the compromise that is needed?

[The Prime Minister]

I discussed with President Karzai the resignation of the two Ministers, to which my hon. Friend referred, and the prospects for political settlement and for reintegration. That, combined with the military surge, will be vital to securing the future of Afghanistan and enabling us to bring our troops back home. In the end, particularly in southern Afghanistan, people must feel that they are part of the Government, and that it represents them. That process of reintegration, with the red lines that have been laid down, is a vital part of making that country more secure.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I am grateful to the Prime Minister for his commitment not just to the House, but to Afghanistan. It has been clear that our forces over there were undermanned. Instead of fighting one five-year war, we have been fighting five one-year wars. The various bases along the Helmand valley where British troops are now taking down the flags should be handed over not to the Afghans, but to the Americans. This is a repeat of Basra. Will the Prime Minister, along with the Defence Secretary, commit himself to counter-insurgency? We have always been good at that, but now we have been leapfrogged by the Americans.

[The Prime Minister]

I am grateful for the question and I know that my hon. Friend has great experience of Afghanistan, including having travelled there a great deal. I do not agree with him, though, that there is somehow a repeat of Basra, as he put it. Under the counter-insurgency strategy we are making sure that we have the correct number of forces spread across Helmand and across Afghanistan to deliver counter-insurgency. In some cases, as he knows, that means moving forces from one place to another to make sure that they are thick enough across the whole ground. It is welcome that there are now 20,000 US marines in Helmand. That should enable us to deliver such security, so we should not be in any way worried or ashamed or anything like that if we move the disposition of our forces around Helmand with our US allies. That is part of delivering a successful outcome.

[Bob Russell (Colchester) (LD)]

I welcome the Prime Minister’s statement. This autumn, soldiers from 16 Air Assault Brigade, from Colchester garrison, will be deployed to Afghanistan for the third time. In the Prime Minister’s statement on equipment, he did not mention unmanned aerial vehicles. Bearing in mind that UAVs are a very welcome tool in identifying insurgents and those who lay improvised explosive devices, will he give a commitment that UAVs will be very much there and part of the equipment programme?

[The Prime Minister]

I can give the hon. Gentleman that reassurance. On previous trips to Afghanistan, I have had proper presentations on the work of UAVs, drones, Predators, Reapers and other such projects, and what they are able to do is incredibly impressive. A great deal of British investment is going into those technologies, too, and we will ensure that they can be deployed as quickly as possible.

[David Tredinnick (Bosworth) (Con)]

When I recently spoke to soldiers from the Grenadier Guards who had just returned from Afghanistan, they made the point that the Afghan national police equipment is incredibly poor but the police themselves are very good, so will my right hon. Friend the Prime Minister please address that as a key issue?

[The Prime Minister]

I am grateful to my hon. Friend for that question. The problem has been not just equipment but recruiting, training and retaining good police officers, and obviously we had that appalling incident at Nad Ali last year. This cause has come out among Members from all parts of the House: for too long not enough focus was given to the most important things in Afghanistan, of which training the police was absolutely key. The effort is now going in. I met American and British police trainers, and the police training college in Lashkar Gah is now turning out very good police officers, but for too long that particular issue was ignored.

[Andrew Selous (South West Bedfordshire) (Con)]

Does the Prime Minister believe that the mine clearance equipment available to our troops is now the best in the world?

[The Prime Minister]

Certainly I had a presentation out in Afghanistan on the equipment now being used and the training undertaken, and what our troops are able to do is incredibly impressive. The truth—I am sure that the former Defence Secretary will agree—is that we have to keep on investing and catching up with the latest technologies that the enemy use, because they are incredibly cunning at trying to find new ways of making those things even harder to find.

[Mr Speaker]

Order. I am grateful to all colleagues for their co-operation.

Office for Budget Responsibility

Monday 14th June 2010 Commons Chamber

16:17

[The Chancellor of the Exchequer (Mr George Osborne)]

With permission, Mr Speaker, I should like to make a statement on the Office for Budget Responsibility, which the Government created on coming into office.

This morning, for the first time in British history, we have opened up the Treasury books and allowed the publication of an independent and comprehensive assessment of the public finances. From now on, Governments will have to fix the budget to fit the figures, instead of fixing the figures to fit the budget. I should like to thank Sir Alan Budd, the members of the budget responsibility committee and all their staff for the impressive work that they have done in short order. A copy of their report has been placed in the Vote Office and in the Libraries.

There has been some interest in whether the OBR would publish all the relevant underlying assumptions and judgments driving the forecast. Today’s report does more than that: there are more than 70 pages of detailed material, much of which has never been published before. For the first time ever, the Government are publishing the assumptions that lie behind the estimates for average earnings, property prices, interest rates and financial sector profits, and, crucially, a five-year forecast for annually managed expenditure. That includes a forecast for the amount of debt interest that we as a country will pay over the coming years.

The creation of the OBR has already impressed the international community and been praised by the International Monetary Fund and the G20. We will now move to put the OBR on a statutory footing with legislation that was included in the Queen’s Speech. From now on, Members of Parliament sent to this House to scrutinise how the Government spend taxpayers’ money will have access to honest and independent figures.

Let me now turn to those figures and what the OBR has uncovered. First, there are the forecasts for growth in the economy. The OBR is forecasting that growth will reach 1.3% this year and 2.6% next year. In future years, the OBR’s forecast is for growth of around 2.8% in 2012 and 2013, and then 2.6% in 2014. Sadly for our country, the forecasts for growth are lower in every single year than the figures announced by the previous Chancellor at the time of the last Government’s Budget in March. He told us that growth would soar to 3.25% in 2011, and then to 3.5% in 2012. When those forecasts were given, neither the Bank of England nor 28 of the main 30 private institutions producing forecasts for the UK were offering such an optimistic central view of the economy; we can only speculate as to why such rosy forecasts for a trampoline recovery were produced only weeks ahead of a general election.

I turn to the OBR’s forecasts for the public finances. The latest outturn data show that public sector net borrowing for last year was £156 billion. The OBR is forecasting that it will be £155 billion this year. It is the highest budget deficit of any country in the European Union with the exception of Ireland. It is £10 billion less than the forecast given only a month before the end of the last fiscal year, but I can tell the House that, based on the OBR’s figures, that £10 billion advantage that we start with decreases to only £3 billion by the end of the Parliament.

The reason for that is that the cyclically adjusted current balance, commonly known as the structural deficit, is forecast to be higher in every single year than what this House was told in March. That is perhaps the most important figure in the report, because the structural deficit is the borrowing that remains even when growth in the economy returns. It is the structural deficit that is a key determinant of whether the public finances are sustainable. This year, the structural deficit is forecast to reach 5.2% of GDP—that is, £9 billion higher than we were told in March. Next year, the structural deficit will be £12 billion higher than we were told before the election.

The OBR’s forecast sees debt rising as a share of GDP throughout the Parliament—and the interest on that debt, which we as taxpayers have to pay, also grows every year. Let me be the first Chancellor in modern history to give Parliament those numbers for the coming years. The OBR forecast is that this is what Britain will have to pay for its debts: £42 billion of debt interest this year, rising to £46 billion next year, then £54 billion, then £60 billion and reaching £67 billion in debt interest payments by 2014-15. Over the course of this Parliament, more than a quarter of a trillion pounds will come from the pockets of taxpayers simply to service the debts left by the previous Government.

The figures produced by the OBR also give us a new insight into the spending plans that we inherited as a Government. They show that, given the OBR’s assumptions, the previous Government would have had to find £44 billion of spending cuts in departmental budgets to deliver their published plans. I can confirm that I have found no evidence at the Treasury for how even a single pound of that £44 billion was ever going to be achieved.

There are two other very important considerations that relate to these pre-Budget forecasts and understate the situation that we inherited. First, these are central forecasts with a fan chart around them to represent the great uncertainty that exists, rather than Treasury forecasts based on an arbitrary reduction in the trend level of output. As a result, they understate the increase in the structural deficit and the reduction in growth. Secondly, and crucially, these projections have been based on recent market interest rates, which are about a third of a percentage point lower in Britain than at the time of the general election. As is widely acknowledged, that in part reflects investors’ confidence that the new coalition Government will take action to deal with the deficit. As a result, as Sir Alan points out in his report:

“In present conditions the likely result is that these economic forecasts are biased upwards”.

That is absolutely crucial to understanding today’s figures, because if we followed the fiscal path set out by the previous Government, that would, again in Sir Alan’s words in the report,

“lead to higher interest rates and so lower economic activity”

than forecast today.

Let me conclude with this point. The independent report published today confirms that this coalition Government have inherited from their predecessor one of the largest budget deficits in the world, forecasts for growth lower than the country was told at the time of the election, a larger structural deficit than had been previously admitted, and a debt interest bill larger than the schools budget.

It is indeed worse than we thought. The public would not have known any of this if we had not set up the Office for Budget Responsibility. Next week, I will return to the House to explain what we will do about it. In the meantime, I commend this statement to the House.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I thank the Chancellor for his statement. My thanks would be more heartfelt had I not received it just 25 minutes ago. There was a time when statements were supposed to be in the hands of the Opposition an hour before the statement was made, and then 45 minutes. I do accept, before the Chancellor says it, that in my time there were occasions when he did not get as much notice as he wanted. All I would say, in the nicest possible way and in the spirit of consensus, is that if we could try to get these statements in the Opposition’s hands rather earlier, that would be very helpful.

Turning to the substance of the Chancellor’s statement, I welcome the measured approach taken by Sir Alan Budd, and his colleagues in the Office for Budget Responsibility, in presenting his report this morning. Higher borrowing by the Government, as the OBR acknowledges today, continues to support the economy. Indeed, without it, there was a grave risk that a recession could have tipped into a depression; that is why the expenditure was necessary in this country and in other countries across the world. However, as I have said repeatedly, borrowing needs to come down as the economic recovery is established. Has not the OBR forecast that borrowing will be £30 billion lower than I anticipated in my Budget, and does not that flatly contradict the Prime Minister who said last week that

“the overall scale of the problem is even worse than we thought”?

Does not the report say that borrowing is lower not just this year, for which the OBR forecasts borrowing at £8 billion lower than I did, but in each and every one of the next five years? Borrowing is down by more than £30 billion in total. Can the Chancellor confirm whether he and the Prime Minister knew what the OBR’s borrowing forecasts were prior to the Prime Minister making his speech last Monday? If he did not, he was just plain wrong; if he did, he owes us an apology. At the election, the Chancellor and the Prime Minister said that they had no need to raise VAT. Now that borrowing is in fact lower than they thought, is that still their policy?

Turning to growth, the OBR has confirmed my forecast for this year, but it has set out a lower growth forecast for future years—just 2.6% next year. This change is driven partly by what Sir Alan has today labelled “recent events”, particularly events in Europe, where growth is sluggish at best. Is it not the case that what is happening in Europe, our largest export market, will impact on growth here in the UK? Does not that reinforce the need to put in place measures to secure growth here and in other countries in Europe? Does not the Chancellor agree that the impact of action taken across Europe to reduce deficits runs the risk of depressing demand and setting back the recovery unless accompanied by measures to stimulate growth? Does he not accept that growth is essential to cut borrowing? Japan provides an example of what happens if one gets this wrong—recovery is choked off, growth becomes stagnant, and debt rises.

It was because the private sector was weak as the global crisis hit that the public sector stepped in to support our economy. Sir Alan Budd and his colleagues understand that point, because Sir Alan says in his report, at paragraph 3.20:

“Private sector demand contracted sharply in the recession, while government spending contributed positively to GDP growth.”

So much for the claim that our spending was irresponsible and unnecessary. In the same paragraph, he goes on to say:

“For this year”—

2010—

“it is government consumption and inventory accumulation that make the largest contribution to growth.”

In other words, without it there would not have been growth this year. The risk of taking large sums out of the economy is that the recovery will be derailed. Is it not also the case that confidence is being affected by the scaremongering that we see from the Prime Minister and the Chancellor? The Chancellor will have noticed the survey of business confidence this morning showing a reduction in business confidence. That shows that what he is saying is, unfortunately, having a very real impact on the economy.

The Chancellor asked us to focus on the structural deficit. However, he will have read Sir Alan’s very clear statement, at paragraph 4.40 of the report, that

“forecasts of cyclically-adjusted aggregates are subject to particular uncertainty.”

In other words, there is a great deal of uncertainty about what the structural deficit is. But if the Chancellor does take the estimate of structural borrowing from today’s forecasts as the barometer of success, he needs to be clear with people what that means. Will he confirm that it is still his policy to remove the entire structural deficit over this Parliament? If so, will he confirm that, on the numbers published today, he would need to find £118 billion by 2014-15? That is £118 billion of spending cuts, tax rises or both, which will affect millions of people and businesses in this country.

Since the Budget, there has been slightly faster growth at the beginning of this year. There is lower borrowing as tax receipts have come in higher than previously thought. Far from providing political cover for the Conservatives and Liberal Democrats for cuts and tax rises next week, does not the report remind us that growth is still fragile, the recovery is not yet secured and growth is essential, not only to cut borrowing but to secure jobs and a lasting recovery?

[Mr Osborne]

The report reminds us of the complete mess that the economy was in when there was a change of Government.

Let me deal with the right hon. Gentleman’s points. First, I apologise that he received the statement only 25 minutes before it was delivered. I was following the normal practice that had been established in the Chancellor’s private office. Despite having been on the wrong end of that for three years, I note his complaints about the very first statement, and I will look into that.

Let me answer directly the right hon. Gentleman’s question, towards the end of his remarks, about the fiscal mandate. It will be set in the Budget. There is no credible fiscal mandate in place in Britain because we have inherited from the previous Government a commitment, which most of the rest of world does not believe is a serious and credible effort to reduce the deficit. The fiscal rules never amounted to very much either when the crisis came, but we will put in place new fiscal architecture.

The right hon. Gentleman talks about borrowing and economic growth. I remind him that the whole point about the structural deficit is that it is not the part of the deficit that reduces as growth returns. According to the OBR report, it is increasing above the estimates that were given in the March Budget. That is striking given that the out-turn for borrowing last year was, indeed, lower than the Chancellor forecast just three or four weeks, as far as I can tell, before he received the out-turn numbers. He gave a figure in the Budget and out-turn numbers were lower. It is therefore all the more striking that the structural deficit—the crucial part of the numbers: the black hole in the public finances—is higher by a significant amount than he forecast. Of course, we are all concerned about the situation in the eurozone, but 28 out of 30 independent bodies that look at the British economy did not believe that the figures that he gave in the March Budget were accurate. Indeed, we pointed that out at the time. [Hon. Members: “You haven’t answered a single question.”] I did not think that the right hon. Gentleman asked many questions; I have answered both of them.

The right hon. Gentleman makes a point about spending cuts and so on. He pencilled in £44 billion of spending cuts. Until a single member of the Opposition provides us with a clue as to how they would even have begun to achieve those £44 billion of cuts, they will not be taken seriously. The leadership contenders are busily taking their party leftwards into the margins of British politics. They are not addressing the central issue about their fiscal plans, which were not credible. Where would the spending cuts have come from? We are prepared to answer that question. Until they do, they are not contenders for being taken seriously in British politics.

Let me remind the right hon. Gentleman of what one of his Ministers, Paul Myners, said. This was the man whom he appointed—or at least agreed to have appointed—to the Treasury, and the man who sat with him in all those meetings over the years. He said:

“There is nothing progressive about a Government who consistently spend more than they can raise in taxation, and certainly nothing progressive that endows generations to come with the liabilities incurred by the current generation.”—[Official Report, House of Lords, 8 June 2010; Vol. 719, c. 625.]

That is the truth about the Labour party’s position.

The right hon. Gentleman says, “Apologise”. He is the person who should apologise. More to the point, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), wherever he is, should come here and apologise for the complete economic mess in which he left the country.

[Margot James (Stourbridge) (Con)]

May I congratulate my right hon. Friend on this unprecedented increase in transparency and openness on economic forecasting? Is it not the case that the increase in the structural deficit as a percentage of gross domestic product means that a robust deficit reduction plan is needed now more than ever?

[Mr Osborne]

My hon. Friend is absolutely right, and that is also the conclusion of the G20, the European Union and most international observers of the UK situation.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

If the Chancellor accepts Sir Alan Budd’s estimate that around three quarters of the current deficit—about £120 billion—is structural, and if he intends to eradicate that entirely during this Parliament through public spending cuts and tax increases, where does he expect the growth to come from to prevent unemployment from increasing to 3 million and staying there for the next five years?

[Mr Osborne]

The fiscal mandate will be set out in the Budget. I am disappointed that the right hon. Gentleman was not elected as Chair of the Public Accounts Committee, but perhaps from his current position he will begin to propose cuts—as I said, cuts were even pencilled in to the previous Government’s plans—before concerning himself with our proposals.

[Mr Julian Brazier (Canterbury) (Con)]

While sharing my right hon. Friend’s dismay at the inheritance he has acquired—the picture is even worse than it once appeared—may I urge him to accelerate the plans that the Conservatives set out at election time to encourage lending by the banks, especially to small businesses, because the money supply figures are at an almost unprecedented low, and there is a real danger that we could see a further downturn?

[Mr Osborne]

My hon. Friend is absolutely right to be concerned about the lending figures out there in the economy, and I hope to have more to say on that in the Budget.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Chancellor for his statement and the early advance sight of it. That is different from what happened under the previous Government, when such statements tended to come in very late indeed.

There is no doubt that the OBR forecasts show that the previous growth forecasts were too high and the deficit forecast, which is now £155 billion, was also too high. Will the Chancellor reflect that that is not simply a green light to tax and cut more, but that it demonstrates the imperative for sustained and sustainable above-trend growth, which is the real solution to tackling the structural deficit?

[Mr Osborne]

I thank the hon. Gentleman for thanking me for the early sight of the statement—we are trying to improve on things in the Chancellor’s office.

My point to the hon. Gentleman is that the threat to the United Kingdom at the moment is, in part, our very large budget deficit. Indeed, the Governor of the Bank of England identified it as the single greatest economic challenge that we face. Whether we are Scots or English, and wherever we live in the UK, we must deal with that deficit. I would welcome engagement with the Scottish Government in moving forward and identifying sensible savings, so that we can reduce the budget deficit and give our country and future generations a bright future.

[Dr John Pugh (Southport) (LD)]

May I welcome you to your role, Mr Deputy Speaker?

According to the House of Commons Library, the Treasury has, in the past 10 years, been at least as good at accurately forecasting growth as independent forecasters. The background work on the new projections has actually been done by a secretariat provided by the Treasury, and according to Sir Alan, the changes are

“within the normal range of uncertainty”.

Therefore, in all honesty, ought we to regard the new independent forecast as a simple downgrade of Treasury forecasts, and avoid unnecessary point scoring on what is a matter for the whole nation?

[Mr Osborne]

I am always against unnecessary point scoring. I say this to my hon. Friend: I think the new process is a big departure in how Budgets are put together. It is worth reflecting for a moment on what I did in this statement. I have read out what would normally be the first part of the Budget. Everyone now knows the forecasts and the assumptions behind them. He says that the forecasts were produced with the help of Treasury people, but Sir Alan Budd is an enormously respected independent person, and I do not think his independence can be questioned. We now have a set of accurate national accounts. Indeed, when the OBR is on a statutory footing, I want it to do more work on the true state of the national accounts, with regard to private finance initiative liabilities and the like. The big difference is that I must now fit the Budget to the figures, rather than fit the figures to the Budget.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I welcome you to the Chair, Mr Deputy Speaker.

Page 11 of the OBR forecast has an illuminating table about the contribution that various elements of spending—in this case, Government investment—make to GDP growth. For 2011, it shows a potential minus 19% effect in one year. Will the Chancellor confirm that his Budget and the spending review will not worsen that contribution to GDP, and will the OBR report on an analysis of the Budget and the spending review in terms of those components shortly after they take place?

[Mr Osborne]

I will set out measures in the Budget, and the hon. Gentleman will have to wait for that. He highlights the point that I was making—that the forecast is based on the plans inherited from the previous Government. It identifies huge spending cuts, but they never told us where those cuts would fall. I am sure that he wants a future in the Labour party, so perhaps he can take a lead over some of the leadership contenders and tell us what those cuts would be.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Will my right hon. Friend support the work of the OBR in assessing offsheet balance liabilities, including such things as PFI and unfunded public sector pension liabilities? I hope that he will recognise that it is important that we put all the debts that Labour has generated over the years on the balance sheet once and for all so we know how we can pay for them.

[Mr Osborne]

My hon. Friend is right. On page 58 of the report, Sir Alan and the fellow members of his committee set out some of the liabilities that need to be factored into longer-term fiscal forecasts, which include an ageing population, unfunded public service pension liabilities and the PFI contracts. They point out that some £43 billion of PFI contracts are off the national balance sheet.

[Jack Dromey (Birmingham, Erdington) (Lab)]

In the real world of the real economy, last Friday I met a dozen world-class machine tool manufacturers at their annual exhibition in Birmingham. They were unanimous in their view that the Government were right to borrow to invest in the economy to boost it and their order books. Are they wrong?

[Mr Osborne]

If they are similar to the machine tool manufacturers I have met in Birmingham in recent months, they are also very concerned about the size of the budget deficit and that, unless we get a grip on it, there will be an ever higher spiral of tax rises and interest rate increases that would do enormous damage to them and to the people whom they employ.

[Nicky Morgan (Loughborough) (Con)]

I note that the former Chief Secretary who left that infamous note for his successors is in his place. Surely the establishment of the OBR heralds a transparency and openness that we have not seen before, and will mean that such a note could never be left again.

[Mr Osborne]

It would probably have to be published, if it were—[Interruption.] Well, just the contents.

As I noted from the remarks of the shadow Chancellor, it is interesting that we have not actually heard from the Labour party about whether it supports an independent OBR. It opposed that when in government—

[Mr Darling]

indicated dissent.

[Mr Osborne]

It was repeatedly opposed by Treasury Ministers when I proposed it. Indeed, one of the most vocal and eloquent opponents was the shadow Education Secretary—I know that the shadow Chancellor has not always got on with him—who put the arguments on why Labour was opposed. If the Labour party wants to change its mind, we are all ears.

[Clive Efford (Eltham) (Lab)]

What has the OBR had to say about predictions of levels of unemployment and how they differ from those predicted in the March Budget?

[Mr Osborne]

For the first time, the OBR has published five-year projections of unemployment and employment. The projection for the coming year, for example, is that employment will fall and unemployment will rise—based, of course, on the pre-Budget measures.

[Charlie Elphicke (Dover) (Con)]

In Dover and Deal, people tell me time and again that they want more jobs, more money and more economic growth, so it is a real shock to come to the House and see the table in today’s report showing that economic growth has been revised downwards, by between 0.5% and 1%. How can that have happened in the three short months since the Budget? Were the Budget numbers fiddled? What has been going on?

[Mr Osborne]

To be frank, my hon. Friend’s question is one that he needs to address to the shadow Chancellor when there is an opportunity.

[Rachel Reeves (Leeds West) (Lab)]

I welcome the establishment of the Office for Budget Responsibility and the increased transparency that it brings. However, the point that today’s document makes most clearly is that the economic recovery is still fragile. The Chancellor makes interesting points about the structural deficit, but does he agree that the structural deficit depends also on the level of economic growth? What are he and his Government doing to lift the economic growth rate, when there is so little about, given that the future jobs fund, the regional development agencies, and support for industry and universities are all being scrapped?

[Mr Osborne]

We are providing support to the economy, first, by providing a transparent account that commands international confidence, and secondly, by committing to a clear plan to reduce the budget deficit and taking in-year measures that have commanded international confidence. That has led to a reduction in market interest rates for this country and given enormous support to the economy.

The final point that I would make to the hon. Lady is this. Let us not forget the situation that we inherited: the largest budget deficit in the developed world; rising unemployment; industry that had been brought to its knees; business investment that had collapsed. That is the situation that we are trying to recover from.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Will the Chancellor consider asking the Office for Budget Responsibility to think about tax cuts to help economic growth, thereby bringing our budgetary system into a better situation?

[Mr Osborne]

Sir Alan will give evidence to the Treasury Committee when it is formed, but one of the things that the Office for Budget Responsibility will do is cost Budget measures, including the impact of tax and spending changes. That will revolutionise how Budgets are put together, as well as how the House can scrutinise them, because hon. Members will be able to see that the costings are independently verified, rather than being ones that the Chancellor has signed off.

[Fiona Mactaggart (Slough) (Lab)]

I, too, welcome the greater transparency that today’s report involves. It shows us that the recovery is genuinely fragile. When I spoke just last week to a company in my constituency in one of the sectors in which Britain leads the world—bio-pharmaceuticals—I was told that manufacturing investment had been moved to countries that were investing publicly in their companies, including from Britain, where it was not possible to secure such investments. How will the Chancellor’s Government ensure that such disinvestment, caused by a lack of public support, does not continue to create more unemployment and a weaker recovery for Britain?

[Mr Osborne]

First, let me thank the hon. Lady for welcoming the creation of the Office for Budget Responsibility—I should have thanked the hon. Member for Leeds West (Rachel Reeves) for that as well. The change is a genuinely revolutionary step forward in the making of Budgets that fits with a wider agenda of trying to bring more transparency to the way that the Government do their business. On the point about investment, the hon. Member for Slough (Fiona Mactaggart) is right to point out that there was a fairly dramatic fall in investment under the Government whom she supported, but I would say this: the sustainable answer to the problem is a strong private sector recovery, and that is what we all have to work towards.

[George Freeman (Mid Norfolk) (Con)]

Does my right hon. Friend agree that the real significance of today’s independent report is the revelation of the extent of the structural deficit, with debt interest alone forecast to rise to £67 billion, strangling growth and enterprise, and at the same time destroying new Labour’s core claim to be the party of economic competence?

[Mr Osborne]

My hon. Friend is right—[Interruption.] I see one of the leadership contenders barracking from the Opposition Benches. I do not know whether the right hon. Member for Doncaster North (Edward Miliband) wrote the speech for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in which he told the Labour party conference in 1996:

“Losing control of public spending doesn’t help the poor”.

That is one area in which I agree with the former Prime Minister.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does the right hon. Gentleman accept that a major contributor to the reduction in the growth forecasts for next year is the increasingly gloomy situation developing in Europe? Is he at all concerned about the competitive austerity that is breaking out across Europe? Is he also concerned that, if he goes ahead with the programme that he is outlining, we might face a double-dip recession as a consequence?

[Mr Osborne]

I suspect that everyone in the House is concerned about the situation in the eurozone, but let us be clear what has brought that about. It is a result of market concern about the sustainability of public finances in eurozone countries such as Greece. Those countries are having to take action to reassure markets and therefore keep their interest rates lower. I think that interest rates in Greece rose to more than 10% higher than those of other eurozone countries at one point. That is what happens to countries that do not get a grip on their public finances, and I want to ensure that no question mark is ever put against the name of the United Kingdom.

[Richard Harrington (Watford) (Con)]

The complacency of the former Chancellor of the Exchequer about the small reduction in the expected budget deficit is rather like my saying that I am losing weight because I missed breakfast. We want clear, credible plans to deal with the budget deficit, and we need to know what they are as soon as possible.

[Mr Osborne]

I suggest to my hon. Friend that he turns up here next Tuesday.

[Kelvin Hopkins (Luton North) (Lab)]

May I first welcome you to your new post, Mr Deputy Speaker? Will the Chancellor confirm that budgetary policy will remain the responsibility of the Government, who will be fully responsible to Parliament in this Chamber, and that it will not be dictated by the European Union or any of its institutions?

[Mr Osborne]

Before I answer the hon. Gentleman, I, too, should welcome you to the Chair, Mr Deputy Speaker. [Hon. Members: “Hear, hear!”] My several visits to Chorley during the general election seem only to have helped you to return to this place. It is good to see you here in the Chair.

In answer to the hon. Member for Luton North (Kelvin Hopkins), of course I want the elected British Government and the elected House of Commons to have complete control over the tax and spending decisions that affect our country. One way of doing that is to ensure that we never give rise to market concerns about our ability as a country to live within our means. That is the way to retain national sovereignty. We have seen what happens when other countries lose that sovereignty to the markets.

The hon. Gentleman asked specifically about the European Union, and I shall make two observations about that. First, the Budget this year and in all future years will of course be presented first to the House of Commons before being presented to anyone else. Secondly, I know that he will be interested in this and, before those in my party who are interested in these subjects get hold of this fact, I should let the House know that, under the deal negotiated by the right hon. Member for Kirkcaldy and Cowdenbeath and the other former Prime Minister, Tony Blair, the British contributions to the EU budget are set to rise from £3 billion in 2008 to £10.3 billion in 2014.

[Sajid Javid (Bromsgrove) (Con)]

My constituents, like millions of people up and down the country, are very concerned about the direction of mortgage interest rates. Does my right hon. Friend agree that unprecedented transparency in our national finances of this kind will increase our credibility in the global financial markets and help to keep interest rates lower for longer?

[Mr Osborne]

My hon. Friend is absolutely right, and it is worth reminding ourselves that the OBR June 2010 pre-Budget report is based not only on the previous Government’s tax and spending measures and decisions, but partly on the lower interest rates earned by the current Government in the decisions and announcements we have made over the previous month or so. That is why Sir Alan says in his forward that

“the fiscal path assumed”

by the previous Government

“would lead to higher interest rates and so lower economic activity ”.

[Mr Ivan Lewis (Bury South) (Lab)]

Are cuts this year a matter of a small-state ideology or in our economic interests?

[Mr Osborne]

They are, above all, in our economic interests because of the mess left to us by the previous Government.

[Claire Perry (Devizes) (Con)]

Has my right hon. Friend had any conversations about these measures with other international financial managers like himself, and if so, what has been the response?

[Mr Osborne]

I know that my hon. Friend takes a keen interest in these matters, so she will have seen the G20 communiqué signed in South Korea that says:

“Those countries with serious fiscal challenges need to accelerate the pace of consolidation. We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions.”

That is, of course, precisely what the OBR does.

[Mr George Mudie (Leeds East) (Lab)]

Has the Chancellor seriously come to this House and told us he does not have any concerns or see any danger of high unemployment or damage to the economy in taking a short-term approach to clearing the structural deficit?

[Mr Osborne]

We have demonstrated that the OBR, alongside some of the other things we have done, is a commitment to the long-term sustainability of the British public finances, and I remind the hon. Gentleman of the following words of the Governor of the Bank of England:

“The most important thing now is for the new Government to deal with the challenge of the fiscal deficit. It is the single most pressing problem facing the United Kingdom”.

[Penny Mordaunt (Portsmouth North) (Con)]

One of the consequences of the previous Chancellor playing fantasy forecasts with this country’s growth projections is that the men and women of my constituency—and, I am sure, of elsewhere—feel they have been treated with contempt and as mere collateral damage of an election campaign. It is vital that we restore these people’s trust and confidence in Treasury reporting; it is, after all, they who are going to put this country back on its feet again. What will this Treasury team do to support that?

[Mr Osborne]

First, I will tell the Prime Minister what I am up to, because another thing that emerged over the weekend was that the former Chancellor of the Exchequer hid the numbers not only from the rest of the country, but from his own Prime Minister.

[Chris Williamson (Derby North) (Lab)]

May I begin by congratulating you, Mr Deputy Speaker, on your elevation to your new role? Will the Chancellor explain why he is obsessed with pursuing economic policies that failed in the 1930s, failed in the 1980s and failed in the 1990s?

[Mr Osborne]

The most obvious set of failed economic policies is that pursued by the Labour party.

[Gavin Barwell (Croydon Central) (Con)]

If I heard my right hon. Friend correctly, the policies of the previous Administration will lead to us spending an incredible £67 billion on debt interest alone by the end of this Parliament. In the interests of transparency, may I encourage him to put that number in context for the wider electorate, so that we know the amount per household in relation to the amounts we spend on our NHS and school system?

[Mr Osborne]

That is an excellent idea. I will ensure that that information is circulated not only to Government Members, but to Opposition Members as well.

Gulf of Mexico Oil Spill

Monday 14th June 2010 Commons Chamber

16:58

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

I welcome you to your position, Mr Deputy Speaker. The House will wish to join me in expressing our deepest sympathy to those bereaved or injured in the explosion in the gulf of Mexico on 20 April, and to all the individuals and communities affected by spilling oil or fearing that they will be affected by it over the days and weeks to come. Our thoughts must be, first, with them.

On 20 April, an explosion and subsequent fire on board a drilling rig operated by Transocean under contract to BP in the gulf of Mexico tragically killed 11 workers. On 22 April, the rig sank. On the sea bed, 1,600 metres below, substantial quantities of oil were leaking into the ocean—the blow-out preventer, which should have sealed the leak, failed. The causes of the accident are now subject to a US presidential commission of inquiry, and to civil and criminal investigation.

There has never been such a large leak of oil so deep in the sea. Attempts by BP, under the direction of the US authorities, to seal the leak were not successful. The company then pursued a strategy of capturing as much oil as possible, and in recent days more than 15,000 barrels a day of oil have been recovered. However, it is also thought that the leak is worse than previously believed. The US Government’s estimate of the flow of the leak is now 35,000 to 40,000 barrels per day. BP hopes to be able to increase significantly the amount of oil that it is capturing, but a very large quantity of oil continues to be released into the sea. Moreover, the leak will not be fully staunched until August at the earliest, when the first relief well, which BP is already drilling, should enable the original well to be plugged.

An enormous operation is also taking place to address the environmental impact of oil that is already in the water. Working under Admiral Thad Allen of the US Coast Guard, more than 2,000 boats have been involved, skimming the water and using dispersant chemicals. Thousands of workers and volunteers onshore are removing oil and maintaining coastal defences. The House will wish to join me in paying tribute to those involved in that work.

We understand and sympathise with the US Government’s frustration that oil continues to leak at the rate that it does. In order for us to appreciate the scale of this environmental disaster, I should point out that each week a quantity of oil equivalent to the total spillage from the Exxon Valdez is escaping into the gulf of Mexico. The US Administration have said that BP is doing everything asked of it in the effort to combat the spill. We, of course, look to the company to continue in that, and we will do everything we can to help. The key priority must be stopping the environmental damage. In their telephone conversation at the weekend, President Obama reassured the Prime Minister that he has no interest in undermining BP’s value and that frustrations in America have nothing to do with national identity.

Hon. Members will remember that in 1988 the Piper Alpha rig in the North sea exploded, with 167 fatalities. Following that disaster, our regulatory regime was significantly tightened, and we split the functions of licensing and health and safety in the UK. The US has announced that, in future, separate organisations will deal with those functions in the US, and we hope that we have some experience to offer of building and operating such a system. Officials from my Department and from the Health and Safety Executive have been discussing that with their US counterparts.

It is my responsibility to make sure that the oil and gas industry maintains the highest possible standards in UK waters, and I have had an urgent review undertaken. It is clear that our safety and environmental regulatory regime is already among the most robust in the world, and the industry’s record in the North sea is strong. However, as exploration begins in deeper waters west of Shetland, we must be vigilant. Initial steps are already under way, including a doubling of the Department’s annual environmental inspections of drilling rigs. I will also review our new and existing procedures as soon as detailed analysis of the factors that caused the incident in the gulf of Mexico is available. That will build upon the work already begun by the newly-formed Oil Spill Prevention and Response Advisory Group. Given the importance of global deep-water production during our transition to a low-carbon economy, I will also ensure that lessons and practice are shared with relevant regulators and operating companies.

I shall now discuss the position of BP. It is hugely regrettable that the company’s technical efforts to stop the spill have, to date, been only partially successful, but I acknowledge the company for its strong public commitment to stand by its obligations, to halt the spill and to provide remedy and payment of all legitimate claims. As BP’s chairman has said, these are critical tasks for BP, and it must complete them in order to rebuild trust in the company as a long-term member of the business community in the United States, the United Kingdom and around the world.

BP remains a strong company. Although its share price has fallen sharply since April, it has the financial resources to put right the damage. It has exceptionally strong cash flow, and it will continue to be a major employer and a vital investor here and in the United States. In many ways, BP is effectively an Anglo-American company with 39% of its shares being owned in the US, against 40% in the UK.

There has been much speculation in the press about the impact on UK pension funds and about whether the company will pay a quarterly dividend. That is entirely a matter for BP’s directors, who will no doubt weigh all the factors and make a recommendation to their shareholders that is in their best interests, which of course include the best interests of many UK pension funds. Many citizens have real and legitimate worries about their pensions, but I would like to reassure the House not only that BP is financially sound, but that pension funds that hold BP shares generally hold a very diverse portfolio of assets and that their exposure to a single company, even a company as economically important as BP, is limited.

In concluding my statement, I wish again to express the Government’s profound sympathy to those in the US affected by this accident and its aftermath. The priority must be to address the environmental consequences of the spill, and our concentration is on practical measures that can help with that. The disaster is a stark reminder of the environmental dangers of oil and gas production in ever-more difficult areas. Coupled with the impact of high-carbon consumption, it highlights yet again the importance of improving the energy efficiency of our economy and the expansion of low-carbon technologies. We must and will learn the lessons of these terrible events. I commend the statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

May I start by thanking the Secretary of State for the advance notice of his statement and for keeping the House informed of developments regarding the gulf oil spill? Let me join him in expressing deep sorrow for the 11 people who died in the accident and deep sympathy to their families. As he said, it is a reminder of the dangers that come with life in the offshore oil industry. We saw that ourselves last year with the tragic helicopter accident in the North sea. We should never forget the people who have lost their lives in this accident.

May I join the Secretary of State in expressing deep concern about the environmental impacts of the oil spill, which he summarised in his statement? I believe it is in the interests of the environment as well as the employees, shareholders and pension fund investors of BP that there should be a clear and co-ordinated response from the Governments of Britain and the United States. In that context, I want to ask him five specific questions arising from his statement. First, on the private sector companies involved in this accident, does he agree that all the companies involved in the Deepwater Horizon project—Halliburton, Transocean, Cameron and BP—should be subject to investigation, and that finger-pointing at BP in particular is not helpful?

Secondly, on regulation, does the Secretary of State agree that any process of learning lessons needs to look not just at the actions of private companies, but at the regulator—the United States’ Minerals Management Service—and at the general level of regulatory standards in place in the US and around the world for deep-water drilling? Will he also comment on his specific understanding—I appreciate that things are at an early stage—of the level of regulation in the US compared with that in the UK?

Thirdly, in terms of the implications for Britain, I welcome what the Secretary of State said about the licensing of drilling in deeper waters in the UK, including west of Shetland. Does he agree that it is essential to look at any lessons learned before beginning that deeper-water drilling?

Fourthly, and very importantly for the long-term future, does the Secretary of State agree that the central lesson of Deepwater Horizon is that we cannot, as a world, simply dig deeper and deeper for oil, plundering the world’s natural resources? The opportunity should be seized on both sides of the Atlantic by the Prime Minister and the President, in a way that has not so far happened, to send a louder and clearer message about the need to make the transition to a post-oil economy. It will take decades, but the transition needs to start all around the world.

Fifthly, in the same context, does the Secretary of State agree that, after the tragedy of Deepwater, the best thing that could happen is a renewed push towards low carbon and clean energy around the world, with Europe moving to a 30% emissions reduction, America passing a climate and energy Bill and the securing of an international treaty either at Cancun or as soon as possible afterwards? Does he also agree that domestically we need to play our part? That means maintaining industrial policy support for the low-carbon transition. Looking ahead to his right hon. Friend the Chancellor of the Exchequer’s Budget next week, if we are to make the low-carbon transition ourselves, and send out a clear signal, it is important that the investments promised by the previous Government to Sheffield Forgemasters and Ford, and for offshore wind, go ahead as soon as possible.

The gulf oil spill is an environmental wake-up call for the world. Just as the banking crisis changed the rules of the game for financial services, so this disaster must change the rules of the game across the world for energy policy. That requires strong leadership—including being tough with our allies—in defending British interests, in pushing the United States for a Bill on climate change and in charting a course towards the low-carbon transition. If the Government provide that strong leadership for BP employees, pension fundholders and our environment, we will of course support them.

[Chris Huhne]

I am grateful to the right hon. Gentleman, not least for the manner in which he has approached this matter. There is not a lot of difference in our approaches. We have seen some examples of what can happen if people attempt to flam up the rhetoric rather than dealing with the issues in a measured way.

The right hon. Gentleman is clearly absolutely correct to say that BP was involved with other partners in Deepwater Horizon. BP’s interest is 65%. In addition, the subcontracted rig was from Transocean, which is a well known and respected United States company, and was using technology produced in the United States. I understand that the blow-out preventer was produced by Cameron International to American petroleum industry standards.

All that said, it is absolutely crucial to let the full investigation take its course. We simply do not know exactly what the events were on Deepwater Horizon, not least because, tragically, so many of the people who could have told us what happened are no longer alive. We need a proper process of investigation if we are to learn the lessons.

I have already said something about the difference in the regulatory regime between us and the United States. The most important feature is the decision we took after the Piper Alpha disaster to separate licensing and operational regulation from the health and safety side, but that is certainly not the only lesson that will be learned from this disaster. When we have a clearer understanding of exactly what went on, I am sure that both technical and regulatory responses will be required. In the interim, we have taken the step of improving inspections.

Precisely because we have already announced an increased number of inspections, I do not believe it would be appropriate to stop the drilling west of Shetland. Our regime has been shown to be robust, but we need to go on learning the lessons.

On the right hon. Gentleman’s final point, I very much agree that we need to accelerate the move towards a low-carbon economy. Whatever the risks involved with, for example, offshore wind, onshore wind, tidal stream or indeed a future generation of wave technology, they are not in the same order of magnitude as the sort of risks that we are clearly running by drilling in increasingly hostile environments around the world, as we attempt to find the last hydrocarbons. That message is important. This is an environmental wake-up call. Hydrocarbons—oil and gas—do and will play a crucial part in our transition. We know from our economic history that we cannot suddenly switch off steam power, for example, and move to electricity—these things take time—but it is certainly an important warning to us that there is no time to lose in trying to make that transition as quickly as possible.

[Malcolm Bruce (Gordon) (LD)]

I thank the Secretary of State for his statement and for the tone in which he answered the right hon. Member for Doncaster North (Edward Miliband), which will give reassurance that we are operating in two different environments. As someone who represents a constituency that hosts BP’s North sea operational headquarters and more oil and gas-related jobs than any other constituency in the UK, may I say that we need to recognise that these mistakes in a very difficult environment are the responsibility of the whole industry, which will have to solve them in partnership with the regulatory authorities? The 25 billion barrels of oil and gas still to be got out of the North sea need to be got out, but we must ensure that that is done in circumstances where health and safety, the environment and partnership technology all work together.

[Chris Huhne]

I am grateful to my right hon. Friend for the question. He is absolutely right. This industry is crucial for us, and it is in everyone’s interest, not least the people who work and invest in the industry, that the standards of environmental safety and health and safety should be as high as we can possibly make them. I can assure him that we intend to make that the case.

[Miss Anne Begg (Aberdeen South) (Lab)]

At one stage last week, I had great fear that we were talking ourselves into a second crisis that would have undermined BP and, indeed, the whole offshore oil and gas industry, but I am glad that things seem to have calmed down over the weekend. Partly to restore faith, BP and its partners must know what they need to do to stem the flow of oil and what their responsibility is with regard to the clean-up, and understand and be able to quantify just how much it will cost to make the reparations that are obviously needed for those on the shore whose livelihoods have been devastated.

[Chris Huhne]

The hon. Lady is absolutely right. I spoke yesterday to BP chief executive Tony Hayward, and I spoke this morning to another board member, Iain Conn. Until those conversations took place, I had not realised the extent of the co-operative effort across the industry in attempting to find a technical solution. Frankly, it is in the interests of all the oil and gas companies that operate in the gulf of Mexico and, indeed, more widely to ensure that they can reassure their publics and the people who are affected in Louisiana and the other coastal states that there are genuine technical solutions. That is one of the encouraging signs of what is now going on.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I reinforce the Secretary of State’s welcome recognition of the human tragedy involved in this disaster. This tragedy has a human face as well as an environmental one. Although the President was reassuring us that he did not intentionally want to affect BP’s finances, he may have unintentionally done so. If we can ensure effective co-operation across countries to make sure that the focus is on finding a solution to the problem, that would be most welcome. Specifically, for the north-east of Scotland, his reassurance on the safety regime that applies to the North sea is most welcome—in particular, that our blow-out preventers are subject to rigorous testing and inspection to ensure that such an incident could not happen here.

[Chris Huhne]

My hon. Friend is absolutely right to draw attention to that. In fact, both in our regime and in the United States regime, blow-out preventers are checked regularly. One of the mysteries appears to be the fact that the blow-out preventer was checked within two weeks of the disaster and still failed. Clearly, that is one of the things that the investigation must get to the bottom of. One of the things that we will need to learn about operating at such depths and pressures is whether yet further fail-safe mechanisms need to be built into the blow-out preventers, and we will certainly look at that. He is also absolutely right to draw attention to the human tragedy and, indeed, the importance of maintaining safety for all those who work in the industry.

[Mr Frank Doran (Aberdeen North) (Lab)]

I welcome the Secretary of State’s statement, particularly the extra resources for technical investigations, but it is not only the technology that is important. BP has identified that three of the seven causes of the spill that it is aware of so far were the result of people ignoring warning signs. That tends to happen when people are badly trained, inexperienced or afraid to challenge their superiors, and it is one of the key lessons that we learned from the Piper Alpha tragedy. Is the Secretary of State aware that over the past few years we have made huge progress in the North sea in involving workers? There are three trade union representatives on the new body that has been set up to examine the spill, which is extremely important. However, there is a major problem in the drilling industry, which has—how shall I put it?—an outdated attitude to employment relations. Those employers include Transocean, which is involved in this issue. Until the problem of worker involvement in the drilling industry in the North sea is sorted out, we will continue to have problems.

[Chris Huhne]

I thank the hon. Gentleman for his question. I am certainly happy to look at the issues that he raises. It is important to have trade union oversight of these matters in cases where the companies are unionised; it provides another perspective and a guarantee to other employees that safety will be given the attention that it deserves.

[Duncan Hames (Chippenham) (LD)]

As with Railtrack and the Hatfield rail tragedy, is not a critical lesson from the explosion on this rig that companies who outsource environmental and safety-critical processes fail to take their responsibilities seriously when it really counts—before disaster strikes? Railtrack lost its licence to operate. What discussion will my right hon. Friend’s Department have with businesses in the energy sector to prompt them to review their corporate governance and get a grip on their direct environmental responsibilities, instead of simply spouting the rhetoric of corporate social responsibility?

[Chris Huhne]

I thank my hon. Friend for that acute and well directed question. There is an issue about the extent of outsourcing, which has certainly gone on apace in the oil and gas industry; for example, in subcontracting to companies such as Transocean. That may be one of the lessons that comes out of the inquiry. However, there is another side to the issue: the oil majors can argue that the level of expertise of a company such as Transocean may be higher than their own, precisely because it is operating so many rigs and contracting to so many oil majors. That will clearly be an issue for the investigation. All the big oil companies will be much more aware of the potential reputational damage that can be inflicted by an environmental disaster of this kind. I think that they will take that on board, and I hope that it will provide an additional incentive to make sure that corporate governance, including its ethical dimension, is strengthened.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I welcome the Secretary of State’s response to my hon. Friend the Member for Aberdeen North (Mr Doran). I draw his attention to a helpful written answer from the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), on 7 June, in which he revealed that there are some 10 Transocean rigs registered and operating in UK waters. Two are registered in the Marshall Islands, two in Panama, three in Liberia and two in Vanuatu. Given the obvious public concern about where they are registered, has the Secretary of State considered ordering an immediate review of the safety of those rigs, and if not, why not?

[Chris Huhne]

I thank the hon. Gentleman for that question. That is precisely why, when we conducted the urgent review of our regime, we thought it appropriate to increase immediately the number of environmental inspectors who can go on to rigs and ensure that the rules and regulations that are set on safety, including environmental safety, are properly applied. That is exactly what we have done. Frankly, much of the world’s shipping is registered in what often seem to be exotic jurisdictions, but the key point surely has to be that anybody operating in UK waters, whatever the basis of the registration, should operate to UK standards and must be properly inspected, and we will not take any risks. That inspection is under way, and there is an increase in the pace of inspection as I speak.

[Mr Jim Cunningham (Coventry South) (Lab)]

I thank the Secretary of State for his statement. On a more positive note, has he, or a senior colleague of his, considered a visit to the area in question in the United States, to show a bit of good will, and to try to take the heat out of the situation between the United States and us?

[Chris Huhne]

I am grateful to the hon. Gentleman for his suggestion. I have to say that some of the reporting back that I have heard from the United States suggests that another British voice turning up on television screens might not, at this stage of the game, have quite the effect that he suggests. As he has probably seen in the press, BP’s efforts are now being directed by one of its American executive directors. We do not want any element of national identity to creep into the issue. BP is, as I have said, effectively an Anglo-American company. It was, after all, previously BP Amoco, and Amoco was an American oil company. It is important that any television viewer in the United States realises that BP will go on playing a very important part in the economy of the US, and the UK, for many years to come.

[Ian Paisley (North Antrim) (DUP)]

Congratulations to you, Mr Deputy Speaker.

I thank the Secretary of State for his statement and for bringing some calmness to the rather choppy waters of the last week. On the conversation that took place between the Prime Minister of this country and the President of the United States, was there any recognition, on the American side of the conversation, that deep-water drilling is partially a direct result of America’s insatiable demand for more and more oil, or that the commentary against BP was doing intolerable damage to a company here, and was grossly unfair? Was there recognition that, in the parlance of Northern Ireland, the Americans should wind their neck in and recognise that such comments are doing damage to our companies?

[Chris Huhne]

The hon. Gentleman has to understand what would happen in this country if there were an oil spill off the coast of Northern Ireland on the scale of that at Deepwater Horizon. He would be among the first to insist that we did everything that we could to stop it. It would be an absolutely enormous environmental disaster. Let me put the scale of the oil spill in some sort of perspective. I tried a comparison with Exxon Valdez, but we might think back to our experience with Piper Alpha. The situation was not exactly the same, because the problem was largely a gas well, but in Piper Alpha’s case, we were looking at 200 barrels of oil escaping a day. In the case of Deepwater Horizon, the latest estimate is 40,000 to 50,000 barrels a day. Given the sheer scale of the problem, we fellow politicians have to understand what our reaction would be if that were going on in our waters.

[Paul Blomfield (Sheffield Central) (Lab)]

May I press the Secretary of State for a fuller answer to the last question asked by my right hon. Friend the Member for Doncaster North (Edward Miliband) on investment in low-carbon technologies? Like my right hon. Friend, I welcome the Secretary of State’s statement of the importance of the expansion of low-carbon technologies, but that needs to be matched by practical action, particularly—in the context of Sheffield—by ending the uncertainty around the financial support for Sheffield Forgemasters. Does the Secretary of State support me in wishing to see a speedy end to that uncertainty and confirmation of that financial support?

[Chris Huhne]

I thank the hon. Gentleman for his question. When I was studying politics, philosophy and economics at Oxford somewhat before the hon. Gentleman, I was told that socialism involved the language of priorities. On the basis of the public expenditure commitments undertaken by the Government in the past six months, including in respect of Sheffield Forgemasters, I do not recognise a Government who were making choices about hard-earned taxpayers’ cash. As we have just heard from the Chancellor of the Exchequer, the Treasury had pencilled in £44 billion worth of cuts without finding a single one. It is inevitable that, having inherited the legacy that we have and the scale of the Budget deficit, this Government have to review our priorities and identify crucial projects to go ahead with and those that are less important. That is a process that we continue to undertake.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Given that we are at or very near peak oil annual capacity, that conventional oil will increasingly be available only from very deep sites that are extremely risky such as the gulf of Mexico, and that unconventional oil such as Canadian tar sands involves unacceptable economic and climate change costs, what plans does the Secretary of State have to move the process forward, as I am sure he wants to do, to diminish oil consumption drastically before there is another horrendous catastrophe or the price of oil spikes uncontrollably?

[Chris Huhne]

I thank the right hon. Gentleman, who has a long and honourable record of interest in these issues. We share many instincts in our approach to them. We will present a series of proposals over the next year, which will attempt to accelerate the process of moving to a low-carbon economy. For my Department, the centrepiece of the Queen’s Speech is the energy saving Bill, which will attempt to put forward a comprehensive solution for retro-fitting in our existing housing stock. As the right hon. Gentleman knows, saving energy is by far the most low-cost means of closing the gap as regards our energy use and energy production. We also intend to accelerate the production of low-carbon sources of energy, including renewables, on which we will introduce measures. This is a time of transition, and nothing can be done overnight. We are talking about enormous investments that cannot suddenly be switched off; others cannot be suddenly switched on. We need a clear route map to a low-carbon economy which reduces our carbon emissions by the amount called for by the Climate Change Act 2008—80%—and we intend to make sure that we have a credible route for getting there.

Point of Order

Monday 14th June 2010 Commons Chamber

17:32

[Mr Wayne David (Caerphilly) (Lab)]

On a point of order, Mr Deputy Speaker. Yesterday various ministerial statements were made to the media about the early departure of the Chief of the Defence Staff. Many of us believe that it would have been far better for a statement to be made to the House first. May I ask you to use your good offices to make representations to the Government to see whether that would have been more appropriate?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

The hon. Gentleman has raised the point, and rightly so. The Speaker was not notified of such a request. I dare say it will now have been taken on board.

UK Policy on the Middle East

Monday 14th June 2010 Commons Chamber

17:33

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)]

I beg to move,

That this House has considered the matter of UK policy on the middle east.

May I say, Mr Deputy Speaker, as a north-west chum of years past, that it is a pleasure to see you in the Chair.

As the Minister responsible for the middle east, it is an enormous privilege for me to open this general debate. It is a pleasure also to welcome the shadow spokesman, the hon. Member for Bury South (Mr Lewis). We, too, go back a long way to our time together in Bury, and we have always enjoyed the warmest of relationships, as I am sure we will again. I have already had the benefit of his advice, as he recently held my post, and I look forward to his contribution.

Let me say a little about housekeeping for the debate. Those of us who have been in the House for some time know that in short debates the risk is that Front Benchers occupy a great deal of the time. I will do my best to confine scripted remarks to about 15 minutes. I will take a handful of interventions, but try to conclude within 20 minutes or so in order to give maximum time for Back-Bench contributions. That will mean a relatively short winding-up speech, with some written replies to colleagues. It is a short debate and, in deference to the Speaker’s request, we want to try to ensure that Front Benchers are not too heavily involved. I hope the House will appreciate that. If I am not able to go into everything in as much as detail as Members would like, and if they want to pursue the subject of Gaza, for example, I commend to them the debate on that issue tomorrow in Westminster Hall. I also intend to meet regularly, on formal and informal bases, colleagues who have an interest in the middle east, as I know many do. With that bit of housekeeping out the way, I shall move on.

The middle east is a topic of great concern to many hon. Members and of great importance to the security, economic and political interests of the United Kingdom. However, the middle east is more; it is an area rich in culture, heritage, history, faith and religion, in which Members have a wonderful opportunity to engage. The world sometimes spends rather too much time on the region’s conflicts and concerns, instead of on the great joys, history and cultural gifts that it has given. The Government intend to ensure that we are conscious of the opportunities and great heritage that the middle east brings to the world, as well as spending time dealing with the inevitable human problems that have been centred on the area for so long.

The Foreign Secretary recently said:

“It is one of the strengths of this country that a strong thread of bipartisanship runs through large areas of foreign policy.”—[Official Report, 26 May 2010; Vol. 510, c. 174.]

That is particularly true of the middle east, and quite rightly, given its international importance. That is why this Government will pursue active partnerships with the people and countries of the middle east to achieve security, prosperity and peace for Britain and for the peoples of the region.

Let me spell out in simple terms, but in no particular order, the Government’s aims and objectives for the middle east. We will work to resolve the Arab-Israeli conflict. The only long-term solution to the conflict is a secure Israel living alongside a sovereign and viable Palestinian state, with Jerusalem the future capital of both states, and with a fair settlement for refugees. We will continue to press for progress, working with the United States and through the European Union. We will also continue working with our international partners to secure changes that help lift Gaza’s closure. Let the House be in no doubt: we wish to engage with as much energy as we can in the middle east peace process, because we recognise its huge importance to so many other issues that focus on the region and affect the world.

[Several hon. Members]

rose—

[Alistair Burt]

The first voice that I heard was that of my hon. Friend the Member for Basildon and Billericay (Mr Baron).

[Mr John Baron (Basildon and Billericay) (Con)]

In congratulating my hon. Friend on his appointment, I refer him to the proverb, “To every man with a hammer, the problem always seems a nail.” Will he do what he can, and get his Department on board, to try to impress on the Israelis the fact that Hamas is more than just a terrorist organisation? It is an idea—a frustration—borne out of many disillusioned and disfranchised Palestinians, and the best way of defeating an idea is not by using force but by coming up with a better idea, such as an equitable, two-state solution.

[Alistair Burt]

My hon. Friend makes a point that almost immediately illustrates the complexity of the area. Whatever Hamas might be as an expression of a movement, it also represents a repressive, authoritarian force which has had a grip on Gaza for too long and held Gilad Shalit unfairly as a hostage for too long. In illustrating that point, I note the clear sense that there must be some movement in the middle east peace process, involving all parties and, inevitably, the slow steps towards progress which invite compromise. Of that, we wish to see more in the future. The Government’s position on dealing with Hamas remains the same as the previous Government’s, requiring as it does an adherence to Quartet principles before it can move. I do not see any change in that position.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

rose—

[Jo Swinson (East Dunbartonshire) (LD)]

rose—

[Alistair Burt]

I shall give way, first, to the hon. Member for Islington South and Finsbury (Emily Thornberry).

[Emily Thornberry]

Does the hon. Gentleman believe that the proposed Israeli inquiry into the terrible events of 31 May will be “credible, rigorous and impartial”? What discussions have the Government had with the Americans on that issue?

[Alistair Burt]

I thank the hon. Lady for her inquiry. We have had a lot of conversations, both with the Americans and the Israeli Government. We are keen proponents of the United Nations Security Council resolution, which was adopted quickly and called for exactly what the hon. Lady asked about—an independent and impartial inquiry. The international element is necessary to ensure credibility. At present, we believe that there is no reason why the inquiry announced by Israel today, with the external component that includes Lord Trimble, should not meet the requirements of the world to provide the answers necessary to the inquiry. That is an important standard, to which we will hold.

[Richard Burden (Birmingham, Northfield) (Lab)]

rose—

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

rose—

[Jo Swinson]

rose—

[Alistair Burt]

I shall take only one more intervention at this stage, then I shall make progress; otherwise, the remarks that I made at the beginning will be completely otiose. I give way to my hon. Friend the Member for East Dunbartonshire (Jo Swinson).

[Jo Swinson]

I thank the Minister for giving way and welcome what he has said about support for a two-state solution and involving our international partners. No matter what we do as the UK, it is vital that the US should also be involved in trying to unlock the peace process, which seems to have ground to a halt. Can the Minister tell us whether that was one of the issues discussed by the Prime Minister and President Obama on the telephone and whether there will be a renewal in US interest in trying to kick-start the peace process?

[Alistair Burt]

We very much welcome the kick-start that the proximity talks pointed to a few months ago. President Obama made it clear that a revitalisation of the peace process was one of his key objectives. The recent tragic incident in Gaza has highlighted once again the importance of getting things moving—not only in that area, but in respect of the peace process as a whole. My hon. Friend can be assured that the Prime Minister and the President think as one on that issue.

I shall make some progress. We will work with all our friends and partners across the region to ensure that they are free from terrorism and instability which is a direct threat to their security. We will take a broader approach to our relations with north Africa and the Gulf, supporting civil society and business links and aiming to be the partner of choice for commercial and investment links. We currently export £15 billion-worth of goods and services to the region annually, offering the best of British expertise, innovation and creativity to support the massive programmes of development under way.

We will remain engaged in Iraq. Iraq is a pivotal state in the middle east. A stable, prosperous, well governed and politically moderate Iraq is important for Iraqis, the wider region and the UK’s strategic interests. All in this House are proud of the role that the United Kingdom armed forces have played to help bring about the progress seen so far in Iraq, and we are committed to ensuring that their efforts are built on.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Will the Minister give way?

[Alistair Burt]

I ask my hon. Friend to give me a moment.

In the long term, all those partnerships will flourish if we can overcome the social and economic hurdles that the region faces. In the face of the complex challenges, our shared aim for middle eastern and UK interests alike must be good governance by stable states with growing social, economic and political participation. The Government will champion that approach while upholding our belief in human rights.

There are also important opportunities to work more closely with partners in the region on shared interests. We are well placed to work in partnership with the countries of the middle east in a way that benefits their people and ours. For example, the countries of the middle east will continue to be essential suppliers of the world’s energy needs. There is similarly mutual benefit in the flows of other trade and investments between Britain and the region. This Government will work closely to support and extend those links, facilitating trade missions and signing investment and promotion protection agreements. However, we will also work with the countries of north Africa to reduce the damage done to individuals and economies by illegal immigration, both here and there. By working with our partners against the threat from radical extremism, we are all stronger and more effective.

Now I want to cover a small series of significant issues, including Iraq.

[Mr Ellwood]

rose—

[Alistair Burt]

I ask my hon. Friend to wait a moment.

By working with the key countries in the middle east and the international bodies based there we can together make more of an impact on conflicts and other challenges both within that region and beyond. Work to resolve the Arab-Israeli conflict is a foreign policy priority for this Government. As I said earlier, the only long-term solution to the conflict is a secure Israel living alongside a sovereign and viable Palestinian state. We will continue to press for progress, working with the US and through the EU, while supporting Prime Minister Fayyad’s work to build the institutions of a future Palestinian state.

The tragic events off the coast of Gaza last month were very serious and captured the world’s attention—the House has already discussed the issue during a statement and will discuss it tomorrow in Westminster Hall—but they should not be viewed in isolation. They arise from the unacceptable and unsustainable situation in Gaza, which is a cause of public concern here in the UK and around the world. It has long been the view of the British Government, including the previous Government, that the restrictions on Gaza should be lifted. It is a tragedy that that has not happened, and we hope soon to see progress to change the situation.

We call on the Government of Israel to freeze all settlement activity. As the Foreign Secretary has said, the settlements are illegal and an obstacle to peace. It is also essential that there is unfettered access to meet the humanitarian needs of the people of Gaza in order to enable the reconstruction of homes and livelihoods and to permit trade to take place. At the same time, the rocket attacks from Gaza must cease, and Hamas must release Gilad Shalit, who is now entering his fourth year in captivity.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the Minister to his job. There is nothing in his speech so far that I would disagree with. In 2009, 96 humanitarian aid workers were gunned down in different conflict zones. Moreover, the death of the nine Turkish gentlemen is unacceptable. However, why does the United Nations not demand inquiries in every other country where humanitarian aid workers are slaughtered?

[Alistair Burt]

The right hon. Gentleman might reasonably submit that that is a question for the UN. In this particular case, though, I think that we responded entirely properly, in terms of the international concerns, by putting the primary responsibility on Israel to conduct its inquiry, as we are aware that it has in the past on issues such as Lebanon, and ensuring the international dimension for the security and the confidence of all. The important point is not to linger too much on the type of the inquiry but to consider more what it is about and how to move the process on so as to ease the situation in Gaza.

[Richard Burden]

Will the hon. Gentleman give way?

[Alistair Burt]

No, I will not. I am conscious that there is one more intervention to come. If I am to stick to what I said earlier and give Back Benchers time, I am afraid that that means a restriction on interventions.

The proximity talks that are under way are now more important than ever. The Government will make it an urgent priority to give British diplomatic support to those efforts, as well as supporting the efforts of the Quartet and inspiring the European Union. The UK is a committed friend of Israel, and a friend to the region. We believe that, in this particular context, the approach that I have outlined is the best that a real friend can provide, for Israelis and Palestinians alike.

Let me turn to Iran. There is grave concern among the international community about Iran’s failure to address concerns about its nuclear programme and the role that it plays in creating instability in the middle east.

[Jeremy Corbyn (Islington North) (Lab)]

rose—

[Alistair Burt]

I will proceed, if I may.

We remain resolved to address these concerns through a twin-track process of preventing a nuclear-weapons-capable Iran while reaching out with an offer for constructive engagement. We cannot allow Iran to act with impunity. I welcome the action that the UN Security Council took last week. The new resolution is an important statement of international resolve to prevent Iranian nuclear proliferation. It intensifies peaceful and legitimate international pressure on Iran to change course and restore the trust in its intentions that is so badly lacking. However, it is a twin-track approach. The resolution also makes it clear that the E3 plus 3 remain ready to meet Iran at any time for substantive negotiations on the nuclear issue.

In addition, I should like to condemn the human rights situation in Iran, which is appalling. Amnesty International reports that more than 5,000 people were arrested following the June 2009 protests, and hundreds remain in detention. The courage shown by the protesters on Iran’s streets over those months clearly demonstrates the strength of the desire for democracy, human rights and freedoms among the Iranian people. The Iranian Government have responded to that desire for democracy with violence, brutality and oppression. This weekend, the opposition were again refused permission to organise demonstrations on the anniversary of the elections. This House will not forget those ordinary Iranians who stood up for their rights last year. We will continue to work with our international partners to shine a light on Iran’s deteriorating human rights record and hold the Iranian Government to account. On Thursday last week, I met members of the Baha’i faith ahead of the trial of seven of their leadership last Saturday. Iran’s flagrant disregard of even its own laws on due process and respect for human rights should not be accepted by the international community, which should highlight and scrutinise that at every opportunity.

[Jeremy Corbyn]

I thank the Under-Secretary for giving way and compliment him on his new position. I endorse his comments about the need for human rights in Iran, but may I take him back to his work at the non-proliferation treaty review conference, which rightly condemned the potential development of any nuclear weapons in the region, but, for the first time, mentioned the existence of Israel’s nuclear weapons? Where exactly will the process go now to achieve the aim of a nuclear-free middle east, which must involve Israel’s possession of nuclear weapons?

[Alistair Burt]

This country has consistently asked Israel to join the non-proliferation treaty as a non-weapons-holding state. Israel was mentioned in the non-proliferation treaty review conference in the context of the desire to move the resolution on a middle east free of nuclear weapons and, indeed, weapons of mass destruction. The resolution looked forward to a conference in 2012 on the subject. The conference was a success in reaching the agreement that it did. It is good to have moved the process on a little further, but much is to be done before the conference is held. We all support a middle east that is secure for all its countries, and an understanding of its weaponry is clearly a key part of that.

[Mr Baron]

Will my hon. Friend give way?

[Alistair Burt]

No, my hon. Friend intervened earlier. I repeat that I am pressed for time, and I need to get my hon. Friend the Member for Bournemouth East (Mr Ellwood) in before finishing.

Let me mention Yemen briefly. We are continuing to work with other middle east nations such as Egypt and Jordan actively to promote increased stability in Yemen, because we know that al-Qaeda looks to exploit instability where it can. In Yemen, that instability is caused by wider social and economic problems. We welcome the fact that the United Arab Emirates and Jordan are co-chairing the two working groups of the Friends of Yemen. For our part, we will continue our direct, bilateral assistance to the Government of Yemen, which aims to reduce poverty and build the capacity and capability of the Yemeni state.

We will also remain engaged in Iraq. In many respects, Iraq is a nation changed for the better. There have been significant improvements in security, the economy and politics. Iraqis now have control over their own destiny and have embraced democracy, voting in their millions in March’s national election. Now that the election result has been ratified, Iraq’s leaders must work together to form an inclusive and effective Government.

I am sure that the House is proud of the extraordinary role that the United Kingdom’s armed forces have played in making Iraq a better place. We are right to commit to building on their legacy by supporting the Iraqi Government and all the people of Iraq as they face the challenges of maintaining security and strengthening their new democracy. We will also work to deepen our close bilateral relationship to our mutual benefit.

[Mr Ellwood]

I welcome you to the Chair, Mr. Deputy Speaker. It seems to fit you perfectly and I do not know why it has taken so long for you to get to that position, but it is great to see you there.

There seems to be a duality of approach to Iraq, with the Kurdistan area moving at a different speed from the rest of Iraq. As my hon. Friend knows, Kurdistan has advanced much quicker than the rest of Iraq because it was not so involved in the wars. There are no direct flights from the UK to Erbil in Kurdistan—or, indeed, to Baghdad. If any businesses operate in the north in Kurdistan, they are prevented, because of internal politics, from getting involved in business opportunities in Baghdad. I urge my hon. Friend to visit that area and try to resolve the problem that one either supports Kurdistan or greater Iraq.

[Alistair Burt]

My travel itinerary is already starting to look interesting, but I appreciate any new opportunities that come my way and any new suggestions from colleagues. I have noted my hon. Friend’s with specific purpose, so I am grateful to him for raising it. He has been particularly involved and interested in those areas for many years and I know that I shall value his advice in due course.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Will the Under-Secretary give way?

[Alistair Burt]

No, because I am now pushing the time limit that I set myself. To be fair to other hon. Members and to stick to what I said, I will wrap up.

It has necessarily been a whistlestop tour because of the constraints of time. I am sure that we will return to the subjects often. One of the Government’s first foreign policy priorities will be to give new momentum to our relationship with the Gulf. We also want to build broader relationships with Europe’s close neighbours in north Africa. We can do that by elevating our personal links, pursuing a deeper and more nuanced partnership with Islam and continuing our dialogue on commercial, cultural and education links—and, I would go so far as to say, parliamentary links. There is much to be gained from relationships between legislators in different countries. By doing all that, the UK will be able to provide constructive partnership on issues that are core to our national interest.

The Government have already made it clear that, in our pursuit of an enlightened national interest, we intend to be a force for good in the world to seek the best for our citizens and society, not only because it is good for the people but because it is the right thing to do. In pursuit of that policy, we will uphold our belief in human rights, championing democracy and the rule of law, and working tirelessly for peace. Nowhere will that be more important than in the middle east. I look forward to colleagues’ support and assistance in taking on that particular role.

17:55

[Mr Ivan Lewis (Bury South) (Lab)]

I welcome you to your new role, Mr. Deputy Speaker. I congratulate the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), on his appointment. As he said, we have known each other for more than 20 years—I know that I do not look old enough. We are both proud sons of Bury, the birthplace of Robert Peel, the home of the internationally acclaimed authentic Bury black pudding and a town that is immeasurably strengthened by its religious and cultural diversity.

The Under-Secretary is still remembered with great affection by his former constituents, irrespective of their political affiliations. However, it comes as little surprise that he was not given the Europe brief. His opposition to the views of the hon. Member for Stone (Mr Cash) is matched in intensity only by that of my right hon. Friend the Member for Rotherham (Mr MacShane). As the Under-Secretary survived a prolonged—some would say indecent—period as Minister with responsibility for the Child Support Agency in the 1990s, the Prime Minister clearly took the view that responsibility for the middle east would be a cakewalk in comparison. More seriously, I know that the Under-Secretary will carry out his responsibilities with commitment, integrity and sensitivity.

I also wanted to welcome the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North West Norfolk (Mr Bellingham), to his post. Now that he has returned to his place, I can do that.

I want to take the opportunity to place on record my appreciation of Foreign and Commonwealth Office officials, especially those in my former private office, for their dedication and professionalism. Being Minister of State at the Foreign and Commonwealth Office was a tremendous privilege and an awesome responsibility. Their support was crucial in enabling me to do my job effectively, and I owe them a great debt of gratitude.

I welcome the opportunity presented by this timely debate. The middle east ignites strong passion in hon. Members of all parties and in communities up and down the country. In my contribution, I want to reflect on those passions and deal with the issues that must be addressed urgently.

The middle east peace process, Iran’s nuclear threat, the new Iraq and a fragile Yemen are all pieces in a jigsaw that will determine whether a positive future can ever dwarf the tragedies and conflicts of the past. As my right hon. Friend the shadow Foreign Secretary often says:

“The most important word in politics is ‘Future’.”

Solutions will be found only through better leadership in the region, supported by co-ordinated and effective international action. However, for several reasons the middle east is also crucial to Britain’s national interest. They include security and stability, energy supply, the attachments of many of our diaspora communities and historic links, which give us special responsibilities.

The central challenge remains the relationship between Israel, the Palestinians and the Arab world. I want to set my response to that challenge in the context of a question that I was asked several times in my ministerial capacity during interviews on al-Jazeera: how could I, as a Jew, undertake my role as British Minister for the middle east independently and objectively? Putting aside the appropriateness or otherwise of the question, my answer was and is straightforward. I am proud to be a friend and supporter of Israel, as well as someone who believes passionately in the right of the Palestinians to dignity, freedom and statehood. Too often in the House and outside, people are required to make a choice, and it does not and should not have to be like that. I sometimes wonder whether there would be more light and less heat if friends of Israel and friends of Palestine came together to form friends of peace in the middle east. In that way, people would be forced to confront their prejudices and certainties and be challenged to build mutual respect, rather than replicate the division and bitterness that have characterised the region for far too long.

The Labour party—in government and opposition—has long championed a two-state solution: a viable, contiguous Palestinian state alongside a secure Israel. Such a solution will be possible only if we demonstrate a sensitivity to and understanding of the fears and insecurities of ordinary Palestinians and Israelis. I have witnessed for myself the anger and injustice felt by Palestinians on the west bank as their daily lives are interrupted by Israeli checkpoints and a security barrier that, in places, physically divides communities and therefore families. Occupation dehumanises both the occupied and the occupier. I also know families who have been traumatised by the impact of losing a loved one at the hands of suicide bombers who have wreaked carnage in towns and cities in Israel. I visited Sderot, where children live in fear of the next rocket attack from Gaza. Terrorism is no more legitimate in Tel Aviv and Haifa than it is in London and New York.

Palestinians yearn for freedom and statehood, Israelis for the certainty and guarantee of security. The political issues to be resolved are well known and frequently debated in this Chamber, but I want to spell them out clearly, with less ambiguity than in the past. What would a fair and just settlement actually mean? First, it would mean borders that ensured that the two states—Israel and Palestine—each had a volume and quality of land consistent with 1967. That would require land swaps, the principle of which has been accepted in previous negotiations.

Secondly, it would mean not a divided but a shared Jerusalem that can be the capital of both Israel and Palestine. The conventional wisdom is that in that scenario, the holy sites would have to come under some sort of international jurisdiction, but I disagree. An authentic, meaningful peace would mean that those sites should be the shared responsibility of the two states.

Thirdly, a settlement would mean justice for Palestinian refugees. They should have the right to return to a new, sovereign Palestinian state, and fair compensation should be paid to those who had homes and land within the borders of Israel.

Fourthly, as offered by the Arab League, a settlement would mean normalised relations between the Arab world and Israel. That cannot mean simply an exchange of ambassadors; it must also mean a commitment to end all support, financial and otherwise, for the military and terrorist activities of Hamas and Hezbollah, as well as a commitment to end the promotion of anti-Semitic and anti-Israeli propaganda via state-controlled media and education systems. An agreement to begin work on a framework for a middle east economic zone would be the strongest signal that the conflict is really over and that the focus has shifted to building a better future.

Fifthly, the settlement must be agreed as a full and final resolution of all contentious outstanding issues. Resolving those five issues in a comprehensive and just settlement would address positively the hopes and fears of the mainstream majority of both Palestinians and Israelis. It is true that the detail must be negotiated and agreed by the parties, but we should no longer be cautious when it comes to spelling out the parameters of such a settlement.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

How optimistic is my hon. Friend that the Fayyad plan to build a Palestinian state within two years will be successful?

[Mr Lewis]

I shall come to that, but I believe that this country and the international community should give that plan every support. Prime Minister Fayyad, and indeed President Abbas, have done a remarkable job in the west bank on security and economic development, so we should give as much support as we can to the Fayyad plan.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I pay tribute to the hon. Gentleman for the work he did as a Minister and for his clear statements this afternoon. Does he agree that it is vital that all parties understand that we need a secure middle east not just for Muslims and Jews, but for Christians and for people of other faiths and none across the region, and that the growing pressure for conflict prevention and resolution in the Parliaments and Assemblies of the middle east is one way forward? If we engage people on the ground on conflict prevention, we could do as much good as getting the world’s superpowers to try to solve the problem from afar.

[Mr Lewis]

I agree entirely with the hon. Gentleman. One lesson we should have learned from a long history of conflicts all over the world is that preventive work, both at a political and a people level, is far more effective than intervening when things go wrong.

[Richard Ottaway (Croydon South) (Con)]

Does the hon. Gentleman accept that he would not achieve his fifth point unless he got a resolution on his first four points? There can be no overall settlement unless the aspirations on both sides of the argument can be met at the same time.

[Mr Lewis]

The hon. Gentleman has a perfectly common-sense perspective. As all hon. Members know, although setting out the parameters is important, in a negotiation of such complexity, when the stakes are so high and when public opinion on both sides matters, there must be the necessary compromise. If non-negotiable matters are not resolved, no lasting and just settlement will be accepted by the people on both sides.

[Jeremy Corbyn]

Does my hon. Friend agree that a good step forward would be if Israel released the substantial number of Palestinian parliamentarians who are still held in prison, several years after the election? Otherwise, the message is that democracy does not work, and it is like saying to the Palestinians, “Your leaders get arrested and taken away, and therefore you have no representation.” The anger at that in Gaza and the west bank is very serious indeed.

[Mr Lewis]

We need to take each case on its merit, and look at whether any of those individuals committed criminal offences. If not, those people should of course be released immediately, as a confidence-building measure towards progress in the peace process.

My right hon. Friend the shadow Foreign Secretary has welcomed the current proximity talks. As Foreign Secretary, he played a prominent role in supporting the efforts of President Obama, Secretary Clinton and George Mitchell to kick-start meaningful negotiations. However, the Opposition want to see direct negotiations begin without further delay. The success of such negotiations will be more likely if strong US leadership is supported by an enhanced role for the Quartet and a core group of Arab League states to provide political support to President Abbas.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Does my hon. Friend agree that Hamas, with its view that eliminating the state of Israel is a religious imperative, is a real obstacle to peace?

[Mr Lewis]

I agree with my hon. Friend in the sense that as long as that remains Hamas’s position, it is inconceivable that it will be drawn into any credible peace process. The criteria that the Quartet has laid down—recognition of Israel, a denunciation of violence and a respect for previous agreements—are clear. Of course, there is engagement with Hamas through, for example, the Arab League and Egypt, so there is an opportunity for countries and institutions to have discussions with it. However, the international community is clear about the criteria that need to apply for Hamas to join the political process.

As I said, we want to see direct negotiations begin as a matter of urgency. It is important that no preconditions should be imposed by either side in advance. However, it is also true that confidence-building measures would help to create a level of trust that, frankly, is currently in very short supply. I want to identify what those measures should be—they are not preconditions but ways to create the right environment for the rebuilding of some relationship of trust and mutual respect. As my right hon. Friend the shadow Foreign Secretary has consistently made clear, Israel should freeze all settlement expansion. Not only are settlements illegal but their expansion changes the facts on the ground, jeopardising the prospect of a contiguous Palestinian state as well as provoking anger and mistrust. We should galvanise international support for Prime Minister Fayyad’s 2-year economic plan towards Palestinian statehood. I am proud that in government we pledged £210 million in aid, and I hope that over the three-year period that commitment will be maintained by the new Government.

The blockade of Gaza must end so that all necessary humanitarian and reconstruction assistance can get through. However, in line with resolution 1860, this will happen only is there is tangible action to prevent the trafficking of weapons and weapons parts into Gaza. To that end, we welcome Tony Blair’s efforts to secure progress, which—as I am sure all hon. Members accept—is now urgent. We want to see the Quartet and the Arab League working with all parties to come up with a credible plan that meets these two objectives within weeks, not months. Rocket attacks on Israel must stop. Gilad Shalit should be released by Hamas without precondition. His capture and continued detention are unacceptable.

With regard to recent events off the coast of Gaza, all sides have rightly condemned the tragic loss of life. We welcome today’s inquiry announced by Israel and the involvement of David Trimble and Ken Watkin. However, we will be watching closely to ensure that the tests of independence and transparency that we have set are met in the way in which the inquiry is conducted.

The message that we should send from the House today is that the clock is ticking and time is running out for peace and stability in the middle east. A lack of political progress will not sustain an uneasy calm, but will lead to a resumption of violence and the strengthening of those whose purpose and interest are served by perpetual conflict. It is true that political leaders should be wary of getting too far ahead of their electorate, but it is equally true that history teaches us that great leaders are willing to deliver difficult messages to their own people.

The time has come for Prime Minister Netanyahu and President Abbas to prove their critics wrong. Prime Minister Netanyahu needs to show that he truly understands and believes that there is no viable alternative to a just two-state solution and President Abbas needs to show the strength and credibility to deliver the Palestinian state which is long overdue.

Two states for two peoples will not bring to an end to al-Qaeda’s fundamentalist terrorism or bring the Iranian regime from the margins to the mainstream. Al-Qaeda’s support for the Palestinians is a tactic, not the pursuit of a just cause. But two states would undermine their selective narrative about the west’s foreign policy goals, weaken their recruitment tools and strengthen the voice and hand of the mainstream majority in the Muslim world who deplore both violence and the politicisation of faith.

On Iran, we on this side of the House strongly support the new package of sanctions agreed by the United Nations Security Council last week. We reiterate our hope that Iran will chose the path of dialogue and diplomacy. Iran is a proud country which would have an important and influential role if it chose to rejoin the mainstream of the international community, but the regime must understand that the world will not stand by as it develops a nuclear weapons programme in clear contravention of its non-proliferation treaty obligations. That is not only because of the direct threat to Israel and the Arab states, but because a nuclear Iran would almost certainly trigger a new nuclear arms race, with some Arab states feeling an obligation to develop their own nuclear programme. That would be catastrophic at a time when the recent NPT review conference sought to take some tentative steps towards a world free of nuclear weapons.

As the Minister said, the people of Iran are courageous, as they demonstrated through their peaceful post-election protests. They should know that Britain seeks to be a friend of Iran and wants to resolve our differences though negotiation. Equally, the regime should know that, with our international partners, we will remain unwavering in our determination to prevent it from developing nuclear weapons and in our revulsion at its President’s holocaust denial.

Irrespective of different views on the war in Iraq, we should always remember the brave British servicemen and women who risked and in some cases sacrificed their lives freeing Iraq from the tyranny of Saddam Hussein. Just before Christmas last year, I was privileged to visit Iraq and see for myself the excellent work being done by our Royal Navy in training the Iraqi navy to protect its coastal waters. Significant progress has been made in Iraq but the new Iraqi Government must seek maximum consensus to consolidate security, improve the effectiveness of Government and push forward with economic and social reform. They should seek to improve human rights, including for minorities, women and trade unionists. Britain has a duty to play a positive role in the development of a new Iraq, and it is important that the British Government work with the Iraqis to identify how we can add the most value and make the most difference on a sustainable basis.

[Dr William McCrea (South Antrim) (DUP)]

The hon. Gentleman said that the world would not stand by and let Iran develop nuclear weapons. What would the world actually do? Would it pass a resolution of condemnation or what?

[Mr Lewis]

I do not think that it is responsible to enter into a running commentary on the situation in Iran. We moved from an historic offer of dialogue from President Obama, which received no positive response, to toughening our economic sanctions—ensuring that those sanctions are targeted at the regime. We must hope that the Iranian regime understands that there is significant international consensus and concern about the concept of Iran developing nuclear weapons. It is important that there is a unity of message and purpose throughout the international community so that Iran does not see any weakening or division in our determination to ensure that it does not breach its responsibilities under the NPT. We should remember that Iran is a signatory to that treaty but has continually failed to live up to its obligations.

Finally, on Yemen, it is important that the international community learns the lesson of Afghanistan. We must ensure that the commitments made at the London meeting in January are delivered. The President of Yemen should be expected to lead a programme of change that addresses security and political, economic and social reform, including authentic internal political reconciliation. However, that will be successful only if the aid promised primarily by Gulf states is delivered and spent effectively alongside a fast-tracked IMF programme that supports economic reform.

As I found on my visit earlier this year, Yemen feels a new sense of friendship and warmth towards Britain. I hope that the Minister, when he visits, will focus on how we can use our innovative joined-up approach—combining the best of the Department for International Development, the Ministry of Defence and the Foreign and Commonwealth Office—to achieve tangible results.

As my right hon. Friend the Member for Leicester East (Keith Vaz) often rightly states, Yemen is not a failed state, but it is most definitely a fragile state and we must do everything that we can to tackle the poverty and social disorder that are the breeding ground for al-Qaeda. Effective action now will prevent the far more serious interventions that would be necessary in the future if the Government of Yemen were to fail.

I do not have time in this debate to do justice to all the challenges that face the middle east, which include the implications of a newly assertive Turkey, the serious threat to stability posed by a re-armed Hezbollah in contravention of UN resolutions, or our approach to engagement with Syria which, although very important, has not yet led to any serious move by Syria to take a step—let alone make the leap—from the margins to the mainstream of the international community.

Sceptical friends in the region often say, “But you must understand: this is the middle east,” as they raise their eyebrows at talk of yet another peace initiative. My response is simple. In my lifetime, I have seen the Berlin wall fall and the Soviet Union crumble; Nelson Mandela released from prison and elected President of a democratic South Africa; peace come to Northern Ireland, with Ian Paisley and Martin McGuinness serving in the same Government; an African-American elected President of the United States—events that are now facts of history, but which would once have been viewed as the naive dreams of romantic idealists.

The middle east needs a combination of realism and idealism. Most of all, it needs great leaders with the courage and vision to make the hard choices and take the difficult decisions. There will never be a shared narrative about the past, but there can be a shared determination to build a better future. I hope that the new Government will ensure that Britain remains at the heart of supporting a peaceful and just future for all the people of the middle east.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is an important debate, and a large number of right hon. and hon. Members have put their names down to speak. Mr Speaker has therefore imposed an eight-minute limit on Back-Bench speeches, although if colleagues take less than eight minutes, we can probably get further down the list.

18:21

[Sir Malcolm Rifkind (Kensington) (Con)]

I congratulate you on your appointment, Mr Deputy Speaker. I also commend my hon. Friend the Minister and the shadow Minister for what were two powerful and profound speeches on an important matter.

The subject of the debate is the middle east. One might therefore expect it to be concentrated on the views of the Arab world, as well as on those of Israel, yet one of the great ironies is that the three most important countries involved in the region—in the sense of being engaged in proactive action at this moment—are Israel, Iran and Turkey, none of which is an Arab state. Part of the difficulty that we face has been the inability, for various reasons, of most of the Arab world to take the kind of proactive role that might have been expected.

In the time available, I want to concentrate on Iran. I want to ask a number of questions, but I want also to offer possible answers to some of them, including to the point raised by the hon. Member for South Antrim (Dr McCrea) in an intervention a few moments ago. The first question is: are we right to single out Iran for its almost-certain nuclear arms programme? Often we are told, “Well, there are other nuclear weapons states. Why should Iran be singled out in this way?” I believe that the answer to my question is that we are right to do so, and we are right for two reasons. Compared with the existing nuclear weapons states, Iran—or, more particularly, its President—has gone out of the way to be bellicose in his language, to be threatening to at least one other country in the region and to have aspirations for the aggrandisement of his country, with a willingness to use weapons for that purpose.

However, linked to that is the undoubted fact that, unlike in the case of previous nuclear weapons developments, undesirable though they might have been, if Iran acquires nuclear weapons, it is painfully obvious not that it will use them directly, but that a consequence will be a destabilisation of the region and the almost near certainty of countries such as Saudi Arabia, Egypt and Turkey feeling it necessary to go in the same direction. Therefore, the middle east as a whole would become a region with a significant number of nuclear weapons states, with all the awful consequences that that could imply.

That is the first question. The second question is, therefore: is current policy working? Manifestly it is not. We all know that it was meant to be based on carrot and stick. What better carrot could there have been than President Obama’s offer of a grand dialogue with Iran and the normalisation of relations? Instead, that was thrown in his face. There were not even failed negotiations; the negotiations never began, because Iran rejected that possibility. We know also that sanctions—important though they are, and much as we welcome the latest decision by the United Nations Security Council—will not by themselves achieve a change of heart in Tehran.

I therefore come to the third question: is it possible that a policy of diplomacy and pressure could work? Is there a scenario in which it might work? The answer, I believe, is yes, if two conditions are satisfied. First, Russia and China are crucial, because although they supported the resolution last week, we know that their support is grudging. We also know that they have consistently taken on board their short-term considerations—in particular, their trade relationships with Iran and other aspects of their foreign policy—rather than standing four-square with the rest of the Security Council. Russia in particular, as a neighbour of the middle east and Iran, and with a large Muslim minority in its own territory, has as much to be concerned about by a nuclear-armed Iran as any country in the west, as does China, because of its particular position. Russia and China, therefore, if they look to their self-interest, ought to be able to share the position of the United Kingdom, the United States and others on the need for a total uniformity of view on the question of pressing Iran.

However, it is not just Russia and China; it is also the Arab states that I mentioned earlier. Anyone who goes to any of the countries of the region—and I have been to most of them—will find that, in private, people will say that they are as horrified as we are at the possibility of a nuclear-armed Iran. But try getting them to put their heads above the parapet—try getting them to support publicly what the United States and the Security Council are trying to do—and all sorts of reasons are given as to why it is too difficult, why it would be unpopular in their countries and why it all depends on what Israel does, along with various other excuses.

That would not worry me but for the consequence of that resistance to coming out and sharing people’s real views, which is that Ahmadinejad is able to say to the world, “This isn’t the international community versus Iran; this is simply the United States and its closest allies.” What we need is not a coalition of the willing, but a coalition of the relevant. We need those countries of the region to join the west—and, I hope, Russia and China—to take a common position on the issue. That is what happened in the first Gulf war, when Kuwait was being liberated. Syria, Turkey and Saudi Arabia publicly supported—with troops, as well as through diplomacy—what the United States-led coalition was doing. Pressure could work, therefore, but until that change takes place, it is less likely to do so.

The main point that I want to concentrate on in the time left is if the methods that I have described do not work—I refer now to the intervention of a few minutes ago—what then do we do? Do we simply say, “Well, that’s too bad. There’s nothing we can do”? There is the question of the military option. People have rightly pointed out that the downside is a pretty dreadful downside. If military action is taken by either the United States or Israel, it will almost certainly lead to Iran enabling Hamas or Hezbollah to become even more proactive and attack Israel, as well as fomenting mischief in Iraq, with the price of oil going sky high and the straits of Hormuz perhaps being closed.

All that is true, and I cannot say that it would not be likely to happen. However—and this is an important “however”—all those things would be relatively short-term events, and I stress “relatively”. They would last a few days or a few weeks, or perhaps two or three months. An Iran with a nuclear weapon, however, would be around for years to come—for ever. Therefore, it is not good enough simply to say, “There is a downside. Therefore, the military option cannot be considered at any stage.” We have to come to a judgment on the balance of advantage. Is the balance of advantage to accept major problems if military action was taken, if—and this is an important “if”—it would remove the nuclear threat from Iran?

However, everything that I have said on this issue depends on whether the military option is a real option. Would it actually deliver? That is the fundamental question that Britain, America, Israel and the wider international community have to consider. I do not have time to go into the detail, but I make the point that the objective must be to come to an honest judgment. If diplomacy fails, if sanctions do not work and if there is no peaceful alternative, then we will have to come to an honest view on whether the military option—whether by the United States or Israel—would destroy Iran’s nuclear capacity or, even if it did not, so degrade it as to make Iran unable to have nuclear weapons for a good few years to come.

I conclude by simply saying this. In this rather imperfect world in which we live, it is not good enough to ask, “What is the perfect solution to this dilemma?” The real question that we have to ask—or at least that Governments have to ask—is what is the least bad option? If the military advice was that we could either remove Iran’s nuclear capacity or degrade it for a long period, Iran must realise that, at some stage, that might be what happens. It would not be an ideal solution, but it might still be better than the alternatives.

18:29

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Although we are discussing a grave subject, may I say what a pleasure it is to speak in the House with you sitting in the Chair, Mr Deputy Speaker?

The Labour Foreign Secretary, Ernest Bevin, once dismissed an opponent’s speech as consisting of “clitch after clitch after clitch”. I do not believe that there is any future in debating this subject by relying on clichés. If any other country had behaved as Israel is behaving towards the Palestinians in the occupied territories, international action would have been taken long ago. The international community is, as the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) pointed out, rightly concerned about Iran. Yes, Iran’s regime is detestable and it is important to do all we can to prevent it from acquiring nuclear weapons, but it does not have them at present and it has never invaded another country. Israel does possess nuclear weapons; it is said to have 200 warheads. It has refused to sign the non-proliferation treaty and it recently refused to attend President Obama’s conference on nuclear weapons divestment. Israel has invaded Lebanon three times. It facilitated the Sabra and Shatila massacres. It also conducted Operation Cast Lead, the Gaza blockade and the attack on the Gaza flotilla.

Let us also dispose of the distractions that impede action. It makes no difference whether the inquiry into the attack on the flotilla is conducted internally by Israel or internationally. Even an international inquiry would not change Israeli policy. The Goldstone inquiry into Operation Cast Lead had no influence at all, and Goldstone was vilified as a Jewish anti-Semite and a self-hating Jew. We have heard mention this afternoon of the dreadful situation involving Gilad Shalit, the young man who was taken into captivity four years ago this week. I feel great sorrow for his family, but he was a soldier on military duty. About 15 members of the Palestine National Council are being held without charge by the Israelis, and about 300 children are being held in prisons by the Israeli Government. It is a distraction to propose, as Tony Blair and Baroness Ashton have done, to change the terms of the Israeli blockade of Gaza. Neither of them has challenged the principle of the blockade, yet it is that principle that contravenes the Geneva convention.

[Mrs Ellman]

Will my right hon. Friend give way?

[Sir Gerald Kaufman]

If my hon. Friend will allow me, I will give way if I have time before I finish.

Israel ignores international opinion on the illegal wall that has turned towns such as Kalkilya and Bethlehem into prisons, and on the illegal checkpoints. It knows that, whatever it does, no action will follow. It has the most extremist Government it has ever had, under the most extremist Prime Minister it has ever had, and a Foreign Minister who is an avowed racist. Israel is allowed literally to get away with murder. Only punitive international action will make even the tiniest difference. That means an arms ban, and the kind of sanctions that were imposed by the senior President Bush on Yitzhak Shamir to force him to participate in international talks in Madrid.

This is a situation in which one country is holding 1.5 million people in an internal prison and 4 million other Palestinians in a form of detention, but let us be clear about this: no action will be taken against Israel. President Obama will take no action, partly because he has mid-term elections in five months’ time, and partly because the odious pressure group, AIPAC—the American Israel Public Affairs Committee—can destroy any United States politician who makes the slightest criticism of Israel. When a Republican Congressman suggested that a tiny sliver of the billions of dollars that the United States gives to Israel should be transferred to alleviate a certain amount of poverty in Africa, AIPAC labelled him an anti-Semite. That is what American politicians, including Obama, have to put up with. We could take action, however. The European Union could take action over trade agreements, for example. Let us be clear that we cannot appeal to the conscience and good will of a country that has not demonstrated that it has either quality.

The situation is now unsustainable. The more the Israelis repress, suppress and oppress the Palestinians, the more precarious the future of their state will be. I saw, as did other hon. Members when we went to Iraq this year, that the Israelis are breeding children who hate them because of their hunger and their lack of schooling, and because of the way in which they are being treated. The Israelis seem to believe that treating the people of Gaza like that is a way of weaning them away from Hamas, but it only makes them support Hamas even more. Nobody is excusing Hamas; it has done dreadful things, as I pointed out to its representatives when I was in Gaza earlier this year. The fact is, however, that the Israelis are creating a generation of children who will grow up hungry and hating them.

This Israel does not want a two-state solution, but the only alternative is a one-state solution, and the existential fact is that, before long, there will be more Palestinians than Israeli Jews. It took the Jews 2,000 years to get their homeland in what is now Israel. After 60 years in that homeland, they now risk throwing it all away.

18:36

[Stephen Williams (Bristol West) (LD)]

May I begin by saying that it is nice to see you in your new place, Mr Deputy Speaker?

The Minister and his Labour shadow made wide-ranging speeches about the nature of the various problems in the middle east. I want to confine my remarks to the situation in Palestine, and particularly in Gaza, as did the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman). That is not just because of the events that we all witnessed on our TV screens a couple of weekends ago, and which were discussed by colleagues at a Liberal International meeting in Berlin this weekend. My speech has also been informed by my visit to Gaza in March as part of a cross-party delegation led by my noble Friend, Lord David Steel. The hon. Members for Hammersmith (Mr Slaughter) and for Westminster North (Ms Buck) were also part of the delegation. For me, that visit to Gaza was one of those life-transforming experiences that crystallised the issues in my head and made me see them more clearly than I had done before.

In Gaza, 1.5 million people are being held under siege conditions. First, they are blockaded on land. We saw the wall and, more pertinently, we had to be careful not to get too close to it because of the snipers who patrol it. The people are also blockaded by air, as well as by sea, the tragic result of which we saw a couple of weekends ago. To set this in the context of my own constituency, that is the equivalent of the whole of greater Bristol, Bath and all of Wiltshire being blockaded off from the rest of the United Kingdom and denied access to the most basic goods. This is a humanitarian violation on a quite staggering scale.

There are limited crossing points along the well-policed border. The Rafah crossing from Egypt, which we had to use, is only for foot passengers. No goods are allowed to pass through it. All the crossing points through which goods may be transmitted are controlled by the Israeli army. As we saw, only a limited variety of items are allowed to be transferred across, and the list, which seems quite arbitrary, changes from week to week. When we were there in early March, only 70 items were allowed across the border. If we go into our local corner shop—never mind the supermarket—we can see the thousands of products, including hundreds of different kinds of biscuits and confectionery alone, that are available to us. Imagine being limited to only 70 items in total out of the full range of goods and services that we, as 21st-century citizens, expect to have access to. However, only 70 items were allowed into Gaza in that particular week. This is not just the denial of humanitarian aid; it is the denial, and complete obstruction and destruction, of a fully functioning market economy.

Desperately needed reconstruction materials are not allowed to be transferred across the border either, and in Gaza we saw, of course, the bombed-out schools, the bombed university and hospital, and the housing shortages. It is absurd and outrageous that cement and other construction materials are not allowed across the border.

All of that leads to those 1.5 million people effectively being utterly dependent on a shadow, black-market economy supplied with goods through tunnels dug through the sand from Egypt and controlled by local criminals and Hamas. People with sufficient money and wherewithal can access those goods, whereas the rest are dependent on local patronage or the United Nations Relief and Works Agency.

What we saw in Gaza is effectively a parallel society. Ironically, people who can prove their status as a descendant of a 1948 refugee are in a slightly better position than those who have lived in the Gaza strip for generations, because they might get access to UNRWA food parcels. We saw that at a food distribution centre, where families came from all over the Gaza strip and took away their very limited supplies of cooking oil and other cooking materials by donkey cart. It was a mediaeval scene, and what is happening in Gaza is mediaeval, too: mediaeval siege tactics are being used that would have been appropriate at the time of Richard the Lionheart or Saladin but are completely outrageous and unacceptable in the second decade of the 21st century.

My remarks so far have provided an outline of the problem as I saw it for myself just a few months ago, but what can we do about it? The UK Government should use our membership of the European Union to be more active in putting pressure on the state of Israel, and also on Egypt. The objective should be to lift the siege, and not only for humanitarian aid; indeed, I am a little worried about the frequent references to humanitarian aid. The full range of goods and services that we take for granted in our society should be allowed in. That is needed in Gaza to allow people to rebuild a fully functioning market economy.

The EU is in a good position to apply leverage on the state of Israel through our trade agreements with it. The EU can also potentially play an important role in enabling access to goods and services for Gaza. While travelling into Westminster on the train today, I was intrigued by an article in The Times by the EU’s foreign affairs High Representative, Cathy Ashton, whom I believe is at this very moment chairing a meeting of all EU Foreign Ministers. The article said that the EU could perhaps be the agency that facilitates and polices the transfer of goods and services into the Gaza strip, and that instead of Israel banning all goods and services, we should have a list that prohibits only those few of them that would be prejudicial to Israel’s security, and that the presumption should be that all other goods should be allowed in.

[Dr Julian Lewis (New Forest East) (Con)]

I thank the hon. Gentleman for giving way, and may I also say what a pleasure it is to see an alumnus of Dynevor grammar school, Swansea, occupying the Speaker’s Chair today?

Why does the hon. Gentleman think that Israel is imposing such an extreme blockade if the solution is, in fact, as simple as he sets out?

[Stephen Williams]

I am certainly not going to deny that part of what is taking place is self-inflicted. Obviously, the rocket attacks on villages in the south of Israel are outrageous, and we made it clear in the meetings we had with various political representatives in Gaza that there had been wrong on both sides, but the state of Israel has an army at its disposal, whereas the inhabitants of Gaza are 1.5 million people who are at the mercy of a superpower on their doorstep, and those superpowers, whether Israel or Egypt—or the states that, perhaps, control and influence their foreign policy from much further afield—are, effectively, playing with the destinies of men, women and children, as the right hon. Member for Manchester, Gorton mentioned. That is not the way to build peace and understanding for the future, and I think we have a right to expect rather more from the democratic state of Israel than it has shown so far. That leads me to my final point.

[Robert Halfon (Harlow) (Con)]

Will the hon. Gentleman give way?

[Stephen Williams]

I have fewer than 40 seconds left, so I am not going to give way again.

My final point is about political engagement. One of the touching scenes we saw while in Gaza city was at an UNRWA school, where children were conducting a mock election. That shows hope for the future, but I do not think there can be any hope for the future if we do not talk to the people whom their parents have elected. We must have engagement with all the political representatives of Gaza and the west bank. We must lift the siege. We must have constructive engagement, and from that point we might have a chance of building lasting peace into the future.

18:46

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I also welcome you, Mr Deputy Speaker, to your new position and wish you the best of luck.

The hon. Member for Bristol West (Stephen Williams) spoke with great passion about the situation in Gaza and, based on my experience of visiting there, I completely concur with his analysis. I, too, will concentrate on the situation in Israel and the occupied territories.

Just over a week ago in the town of Ayr, I joined other local people in seeking signatures to a petition about the attack on the flotilla taking aid to Gaza and the resulting loss of life. I was joined by local people from Amnesty International and various other groups, including Sheena Boyle, who is involved in a Scottish charity, Children of Amal. She spends half her year in Nablus, where she provides therapeutic support and training to children who have been traumatised by violence. She also trains psychologists and social workers to provide group therapy through music as an art.

I was taken aback by what I witnessed in Ayr. The people who had volunteered have a long-standing commitment to seeking peace in the middle east, but I do not think those who were lining up to support the petition follow events in the middle east particularly closely. I was struck by the level of anger at what had happened.

All Members must take note that there is widespread concern in our constituencies about the entire situation and the continuing disproportionate actions of the Israeli Government. All too often, the Israeli Government act in an affronted and defensive manner when their actions are questioned and there are calls for independent reports. My right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) referred to the Goldstone report and the fact that the Israelis’ response was to blame the messenger.

As my hon. Friend the Member for Bury South (Mr Lewis) said, we should welcome an inquiry and input from independent people, including the Houses of Parliament. I understand that Turkey is not happy with the set-up and what is being proposed, and as it is the country that has been most affected by the action, we have to take note of that. In particular, we must make sure that there is transparency in the inquiry.

Over the years, there have been many false dawns interspersed with violence from both sides, although not in equal measure. My hon. Friend was very optimistic, based on his experience of various different situations in his lifetime where peace has been achieved. I am not so optimistic, as I am aware from trying to put myself in the shoes of the Palestinians—and, indeed, the Israeli people—that it is very hard to see any likelihood of progress.

We have heard plenty of words, but they have been interspersed with violence. There have been conferences, accords, mutual recognitions, declarations of principles, assassinations, memorandums, elections, permanent status negotiations, unilateral withdrawals, intifadas, reports, ceasefires, peace initiatives, curfews, a so-called “security barrier” that separates families from their livelihoods and nomadic people from their land, rocket attacks, road maps, air strikes, incursions, prisoner exchanges—we have seen all that and more since 1991. We have heard many words, but we have seen many negative consequences and very little positive impact. UN resolutions have been ineffective and Israel has not been held accountable to international standards of conduct and law.

In the previous Parliament, the Select Committee on Foreign Affairs visited Gaza following Operation Cast Lead, whose impact was a humanitarian and counter-productive disaster. We could see the resentment being fed by that operation and we could see that it was shoring up the position of Hamas. This Government and the previous one are against holding talks with Hamas, because to do so would apparently make it seem more legitimate. However, we must consider the suffering of the people in Gaza, who live in one big prison, subjected to collective punishment and deprived, as the hon. Member for Bristol West said, of everyday necessities and the means to rebuild their infrastructure and economy. That has made people turn to Hamas in the face of an ongoing failure to find a peaceful solution.

The Committee also visited Sderot and a local college, which are often subjected to rocket attacks. The people there, too, want peace, because they are in the same spiral of despair and distrust as the Palestinian people. The longer the blockade continues, the lower expectations become. Recently, it seems that the US even reached the stage of outlining its own plan, with a view to imposing it on both sides—such is the frustration at the ongoing situation, which does not appear to have a real solution.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Will the hon. Lady visit Egypt in order to understand from the Egyptians why they have not fully opened the Rafah crossing? Does she understand why they have been conspicuous in their absence from the chorus of disapproval for the flotilla? Does it not have something to do with the fact that they are very much aware of the danger of having Hamas right on their border?

[Sandra Osborne]

I do not underestimate the danger of Hamas, but the reality is that Hamas is part of the equation, whether we like it or not. Hamas was elected by the people of Palestine and will not go away simply because we ignore it. Some of the actions, far from advancing the cause of the Palestinian Authority, actually undermine it.

I would welcome news today of a breakthrough in the easing of the blockade, whereby fewer goods will be restricted, and commercial goods and civilians will be allowed entry and exit. Like my hon. Friend the Member for Bury South, I would also welcome the involvement of the European Union, because that would encourage greater transparency and would leave no excuse for the smuggling of goods through the illegal tunnels. However, that is not a substitute for the lifting of the blockade. It will not achieve a two-state solution. We have heard plenty of words, but turning them into action is what will bring credibility to the Palestinian Authority.

The previous UK Government played their part in the Quartet and some benefits are being reaped from that involvement. I get the impression from the Minister that the new Government will follow a similar policy, and we hope that they will do so with similar determination. The main thing is to ensure that the US does not lose impetus in promoting a peaceful solution, as has happened so often in the past. A two-state solution in the middle east involving the occupied territories and Israel is long overdue, because what is happening in the meantime is a disgrace to humanity.

18:54

[Mr James Arbuthnot (North East Hampshire) (Con)]

It is a pleasure to see you in the Chair, Mr Deputy Speaker. I declare my interest: I am interested in Israel, I am the parliamentary chairman of the Conservative Friends of Israel and proud to be so. Everyone in this House should have an interest in Israel, because it is a country that embodies the values that we should stand for. It was created in the 1940s, partly as a reaction to the way in which the Jews were treated during the holocaust. Israel was created by the international community and it became a bastion of the rule of law, democracy, free speech, business enterprise and family values. If that is not what this country also stands for, I am disappointed.

Israel is a country that makes mistakes. Its political system of proportional representation taken to a ludicrous degree is a mistake. Because of its political system, it finds it very difficult to change. In my view, the continued existence of the settlements is another of those mistakes—when President Peres was here a year or so ago, he suggested that most Israelis share that view. Again, however, because of the political system that is, unfortunately, extremely hard to change. But what is definitely not a mistake, and what we ought to applaud, is Israel’s determination to stand up for its continued right to exist in peace and security.

When that peace is destroyed by Hamas kidnapping Gilad Shalit and continuing to hold him prisoner for years, nobody should expect Israel just to accept it. When that peace is destroyed by rocketing from Gaza, nobody should expect Israel to say, “Yes, flotillas can be allowed to import whatever they like into Gaza, including perhaps explosives and rockets.” On one ship, the Karine A, which was not involved in this convoy, the Israelis found tons of weapons for Hamas. Were they simply to assume that this particular flotilla contained no such weapons to be used by Hamas against both Israel and the population of Gaza, whom Hamas treats so cruelly? Surely not. So obviously the flotilla was going to be stopped and boarded.

The fact that five out of the six ships were boarded without incident establishes, to my mind, that those who carried out the operation were well trained and well disciplined, and did not invite trouble. The trouble came from the sixth boarding operation. It seems strange to me, for the following reason, that the Israelis were apparently unprepared for a reaction to that boarding. The hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) talked about aid, but this flotilla was not about aid for Gaza. Had it been about that, the Israeli and Egyptian offers to allow the aid through at the land crossings would have been accepted, but they were refused, both before the flotilla sailed and after it had docked in Ashdod. The purpose of the flotilla was simply to create publicity. Therefore, as Israel should have predicted, the flotilla would have been a waste of time and resource unless there was a violent incident that would create that publicity. Given that the flotilla was designed to be provocative and to end in violence, we should not blame Israel for the violence against which it failed to guard itself; the blame lies with those who went on to the flotilla expressly seeking martyrdom.

[Jeremy Corbyn]

Does the right hon. Gentleman acknowledge that the incident took place in international waters, that most of the ships were boarded and that most of the people who were taken were held, handcuffed and illegally taken into Israel from international waters? Surely he should acknowledge that Israel is guilty of a breach of maritime law, never mind humanitarian attitudes.

[Mr Arbuthnot]

No; as a lawyer, I have, in my time, done international law, and I do not consider that any of this was illegal. If one is trying to prevent people from going into a blockaded area, the only place where one can board the ships is in international waters. I do not accept the point that the hon. Gentleman makes, although I accept that he strongly believes it.

It is against that background that Israel somehow manages to lose the propaganda battle, and I find that completely baffling. What I do not understand—I hope that someone in this debate can enlighten me—is why Israel is so good at fighting wars, but is absolutely atrocious at managing its public relations. Why does Israel—a country the size of Cornwall that was created out of nothing and that is surrounded by oil-rich countries, at least one of which would like to see it wiped off the face of the map—always allow itself to be portrayed as the aggressor? What is it about the right to exist in peace that is so difficult to get across?

I should like to finish by quoting from an excellent article, last week, by Charles Moore. He asked:

“What has gone wrong? Experts tell me that there is no proper co-ordination, that no one person is in charge of shaping and communicating Israel’s message to the world, and that no one is sacked…Somewhere down the years, Israel allowed itself to forget that its greatest weapon is the story it can tell about itself…What it wants is a clear, calm, repeated case. It is a case—aimed more at public opinion than at foreign ministries—about freedom, democracy, a Western way of life and the need for the whole of the free world to fight terrorism.”

19:02

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I, too, congratulate you on your very well deserved position, Mr Deputy Speaker.

The death of nine people on the Mavi Marmara on 31 May has brought widespread outrage. It is the latest incident to highlight the tragic conflict between Jewish and Palestinian nationalism, which will be resolved only by a negotiated, comprehensive peace settlement that establishes two states—Israel and Palestine—living side by side in peace and security. I am very pleased that inquiries into the incident have now been set up. We will have to await the results of those inquiries to get the full picture, but this afternoon I want to refer to some of the facts that are already known—indeed, they are clearly evident.

The blockade of Gaza came about because Gaza has been run by the Islamist Hamas after Israel dismantled its settlements, ended the occupation of Gaza and withdrew 8,000 settlers and its soldiers. Instead of that being followed by an attempt to build a peaceful society, it was followed by Hamas overthrowing Fatah and establishing a regime set on eliminating Israel. Hamas’s ideology is very clear—it is set out in its charter and by the continuing statements of its leaders. Hamas sees it as a religious duty to destroy the state of Israel and it promotes the death cult. It says:

“The Day of Judgement will not come about until Muslims fight the Jews (killing the Jews)”.

That is in article 7 of its charter. It also invokes the protocols of the elders of Zion—the false allegations that there is a Jewish conspiracy to run the world.

Hamas’s position is not just to do with ideology and rhetoric; it is to do with action as well. It has fired about 11,000 rockets and missiles—directed at Israeli civilians—and now it is receiving weapons from Iran that Israelis fear could reach Tel Aviv. It was only last November that a shipment of more than 500 tonnes of Iranian weapons coming to Gaza was intercepted off the coast of Cyprus. So Israel has every reason to be concerned about the Hamas regime continuing to attack Israeli civilians and working continually with Iran, its backer, which is dedicated to the absolute destruction and annihilation of the state of Israel and its people. Israel has every reason to be concerned about that.

There is also every reason to be concerned about what is happening to civilians and citizens in Gaza, many of whom are not involved with Hamas. That can and has to be addressed in the long term by a proper peace agreement, but in the short term it could and should be addressed by the European Union, Egypt and the Palestinian Authority taking their part in ensuring that goods that do and should come into Gaza do not include weapons of destruction. That responsibility had been taken up in the past, but has now ceased to be exercised. It should be resumed, and I hope that today’s announcement will facilitate the easing of that blockade and will allow the needs of the people of Gaza to be met without threatening the citizens of Israel.

I want to ask several questions about the incident with the flotilla to Gaza. Six vessels set out to take humanitarian aid to Gaza, from five of which aid was landed at Ashdod as the Israelis requested. Most unfortunately, Hamas then refused to allow that aid to be taken into Gaza. The incident and the regrettable deaths happened on the sixth vessel, so what was different about it? Who was on it? Were the peace activists who most certainly were on the other vessels infiltrated by others with sinister motives? What was the role of the IHH—the Turkish-Islamic organisation that is linked, through the Union of Good, to Hamas and jihadists and even to al-Qaeda—which was involved in promoting the flotilla? When the Israelis asked that No. 6 vessel dock in Ashdod to unload its humanitarian load, a reply came back, which was recorded, “Go back to Auschwitz.” What was going on on that specific vessel?

The Turkish press have been making a number of interesting reports in the past few days, including interviews with the families of some of the people in the flotilla who died. Those families have spoken about their partners wanting to be martyrs. We saw Hamas flags draped over the coffins of the dead and we have seen videos of the Israeli paratroopers on those ships being attacked with metal pipes and knives and being dragged downstairs in attempts to lynch them. Reuters has issued an apology for clipping from photographs scenes showing weapons being held by activists on that ship. Were they all peace activists? I have no doubt that most of the people who set out for Gaza genuinely want peace, but there was something else going on on that No. 6 vessel—something that we need to know a lot more about.

[Simon Hughes]

Will the hon. Lady give way?

[Mrs Ellman]

I am sorry, but there is very little time left.

Ismail Haniya, the leader of Hamas in Gaza, said on 4 June that the

“Zionist project on our land is reaching its final stage. The incident marks the beginning of the delegitimisation of the Zionist project in our country.”

Clearly, there is something more to this than the giving of humanitarian aid. I hope that those inquiries will show just exactly what that is.

There is something to be hopeful for in the middle east, and that is the resumed negotiations, although they are only indirect, with Fatah in a genuine attempt to find a two-state solution to this very tragic conflict. I hope the work of Senator Mitchell and his team is successful. The only solution to the conflict is mutual recognition by two peoples, justifiably seeking to retain or achieve national statehood and living in peace. The ideology of Hamas, followed by its actions to deny Jewish statehood, is absolutely unacceptable and is the obstacle to peace.

19:10

[Sir John Stanley (Tonbridge and Malling) (Con)]

Mr Deputy Speaker, I share the pleasure of the House at seeing you in the Chair, loss though you will be to the UK branch of the Commonwealth Parliamentary Association.

In the few minutes available to me, I shall devote my remarks to policy on the blockade. I start by making it unequivocally clear that I consider that Israel has a totally indisputable right to self-defence as a sovereign national state. Last year, I was able to visit Sderot with the Foreign Affairs Committee. One is left in absolutely no doubt whatever about the intolerable state in which those living in that community and others near the Gaza border are placed by the Hamas rocket attacks.

The reality is that in Sderot the warning time between the siren sounding and the rocket exploding is between 15 and 17 seconds, which means that there has to be a shelter within a few metres of where people are living. Shelters have even had to be dug underneath bus stops so that people queuing for the bus can go to them quickly. We were told by the Israelis there that, since the rocket attacks started in 2001, more than 800 Israelis had been wounded and 15 had lost their lives. That is 15 too many, but it is fair to point out that the number of those who lost their lives during the last Israeli incursion into Gaza was approximately 1,400—overwhelmingly non-combatants, including hundreds of women and children.

I shall focus on the critical issue of getting building supplies into Gaza to rebuild the area. One needs to go to Gaza to see at first hand the scale of the destruction that has taken place. We saw huge numbers of homes that had been shattered. We saw the hospital in Gaza City that had been burnt out with incendiary phosphorus Israeli tank shells. We went to a large industrial estate spreading over many acres where not just an isolated factory or warehouse had been destroyed, but every building had been razed to the ground and flattened—a scorched earth policy. I am at a loss to know why the Israelis believe that depriving hundreds, if not thousands, of Palestinians of viable employment and driving them into the hands of Hamas can be in Israel’s interest, but that was the policy that was followed.

The policy is justified on the grounds of security, but that argument simply does not hold water, for the simple reason that Hamas has all the building materials it wants. Hamas controls the tunnels through which come all the cement and steel reinforcing rods it wants. Hamas can build bunkers to its heart’s content, so the security grounds do not hold up. However, a huge rebuilding programme is needed for the civilian population of Gaza.

This morning, on the “Today” programme, I heard what was said by the former Prime Minister, Tony Blair. If we are to reach a position where the Israelis agree that a limited amount of building supplies linked to UN projects can go into Gaza, it will certainly be a step in the right direction, but that does not go far enough. Among the 1.5 million population of Gaza, large numbers of people need building supplies, but they are not part of a UN project. People want to rebuild their homes. People need to rebuild their farm buildings, their businesses, factories or warehouses, to create a viable economy. I point out to my hon. Friend the Under-Secretary that, if the proposal is to allow in building supplies only for UN projects, I hope the Government will say that we should go wider than that. There is no security risk in increasing the amount of building supplies going into Gaza to private individuals and private companies, provided that all those supplies are subject to the right of search by the Israelis.

I fully accept that the Israelis have every right to ensure that no weapons go into Gaza. We insisted on the same right in Northern Ireland. We did our utmost, with varying degrees of success, to prevent the IRA from getting weapons by sea from countries such as Libya. The Israelis have every right to interdict weapons and explosives, but I hope the Government will take a robust attitude and make every possible case for allowing the free flow of building supplies to Gaza. Hamas has all the building supplies it wants. There is no security case for stopping building supplies, which are critical in allowing the people of Gaza to rebuild their lives and their businesses.

19:17

[Richard Burden (Birmingham, Northfield) (Lab)]

I add my welcome to you, Mr Deputy Speaker, to your new position. Just as the right hon. Member for North East Hampshire (Mr Arbuthnot) declared his interest as chair of the Conservative Friends of Israel, I declare my chairmanship of the all-party Britain-Palestine group. In that capacity I offer my thanks to the 133 Members from all parties who have signed the early-day motion on the Gaza flotilla, which underlines the widespread concern across the UK about what happened on 31 May.

Today, we have heard that Israel has set up what has been described as an internal inquiry into that incident. I hope that Members will forgive me for being a little sceptical, because Israel’s record on inquiries has not been a good one; we have only to ask the British mother Jocelyn Hurndall about the hoops she had to jump through to get to the truth about the shooting of her son Tom by an Israeli sniper in Gaza in 2003.

Israeli Prime Minister, Binyamin Netanyahu, said that his inquiry meets the standards of

“prompt, impartial, credible and transparent investigation.”

We shall see whether that is the case. There are worries about the evidence to which the inquiry will have access. It is described as an internal inquiry, but the incident was not internal. The interception of the Gaza flotilla took place in international waters, so why is there not an international inquiry? The approach of the Government of Israel to Gaza, and to Israel’s occupation of the west bank, appears to be that the international community can advise—even the Palestinians can advise—about what should happen, but Israel decides what happens, not only within its borders but beyond them. If we are to have peace, that mindset has to change.

Will the Government confirm whether they still support the concept of an international inquiry? The Under-Secretary referred to an international dimension of the Israeli inquiry, but the Secretary-General of the United Nations described it as an inquiry to international standards, which is not necessarily the same thing. I would say to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) and the right hon. Member for North East Hampshire (Mr Arbuthnot) that, to get to the bottom of what happened on the Gaza flotilla, why can we not have an inquiry to international standards, run by the international community? What is the problem with that if we are to get to the truth?

Today, we have also heard that the middle east envoy, Tony Blair, expects a significant easing of the Gaza blockade in the coming period. In particular, he has predicted a change in Israeli policy from allowing into Gaza only items that are on a list of permitted items to letting in items if they are not on a list of prohibited items. As we know, Israel has prohibited things such as cement and steel—things that are vital to the reconstruction of schools, hospitals and homes. I refer hon. Members to the two reports of the all-party Palestine group that are based on eyewitness reports in 2009 and 2010 about the importance of such things going through.

It will be a step forward if Israel allows those materials to enter for UN projects, but it is not just UN projects that are important, even though their work is absolutely vital. Israel has said, for example, that medicines have no problems getting into Gaza. Well, actually, they do have some problems, but most medicines slowly and intermittently will get through eventually. They are not the same as medical equipment. We know from those two all-party group reports—when I was there, I witnessed this—that tubes needed for diagnostic equipment could not get in because they were seen as goods that could be used for terrorism. The last all-party group visit found the same experience with X-ray equipment.

Let us assume that those things get through. People can get food and medical treatment in a prison, but that does not alter the fact that it is still a prison. That is the issue, because the blockade is a collective punishment of the people of Gaza. Not only is it unlawful, but it condemns the people of Gaza to living in a prison. It is not enough for the people of Gaza to get by on more food parcels. It is not just an international humanitarian charity case. The people of Gaza need to be able to travel. They need to be able to rebuild a functioning economy.

It is interesting that the United Nations Office of the Co-ordination of Humanitarian Assistance reported just last week that more items were going into Gaza by category but that imports had declined by 26% compared with the week before, and there is still a ban on exports from the territory. That is not only wrong, but it undermines the cause of peace. As many hon. Members have already said, it is also madness: goods can get into Gaza through the tunnels illegally, but most of the people of Gaza cannot afford them, because poverty has risen exponentially. The United Nations Relief and Works Agency estimates that the number of people in abject poverty has tripled since 2007.

It is not Hamas that is saying these things. John Ging, the UNRWA co-ordinator, is saying them. I pay tribute to him, because he is one of those who are trying to give the children of Gaza some glimpse of a normal childhood by running summer camps. He has received threats from extremist groups for doing so, and they have also set fire to equipment. As a friend of Palestine, I say very clearly that those threats and attacks must stop, but that does not alter the fact that, for that to happen and for trust to be rebuilt, the blockade of Gaza must not be eased; it must be ended.

In the minute that I have left, I want to say one other thing. There has been a lot of focus on Gaza today—rightly so; it is understandable in the circumstances—but let us not forget the west bank. Although there has been a partial easing of checkpoints and movement restrictions, it is still under occupation. Since the start of this year, there has been an escalation of attacks by settlers on Palestinians—up to 132. Land confiscations continue. Demolitions of homes continue. There has been a particularly pernicious systematic eviction of Palestinians who live in East Jerusalem from their homes—often virtually in sight of the United Kingdom consulate general.

If we are to bring such things to an end, we must do more than talk. It is time to say what action can begin to be effective. The European Union has an association agreement with Israel that carries not only rights but responsibilities. It carries the right to trade preferences and various other preferences, but it carries the responsibility of Israel abiding by standards of international humanitarian law. Israel is simply not abiding by those standards. The terms of the EU-Israel association agreement are not being carried out. Therefore, until Israel changes its attitude, that agreement needs to be suspended.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. In calling the next Member, I remind colleagues that the convention of the maiden speech applies.

19:25

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

Thank you very much, Mr Deputy Speaker. I am, of course, grateful to you for the opportunity that you give me, terrifying as it is, to make my first contribution to a debate in the House. I confess to hesitating before doing so in a debate that touches so many people so seriously and that is of such a serious nature.

I am naturally sensible of the very great privilege that I enjoy in addressing the House on this occasion—and, no doubt, for the last time—without interruption. Members on both sides of the House will recall their own maiden speeches, and many of them have been kind enough to give their advice about what I should say, whether or not it has been asked for. The principal injunction of course has throughout been to be short. Well, as those who are in the Chamber will observe, that is an injunction with which it will not be difficult for me to comply. Indeed, the entire purpose of my having delayed my speech for this long was to try to avoid the incongruous spectre of appearing in the Chamber at the same time as my new neighbour, my hon. Friend the Member for Grantham and Stamford (Nick Boles), but I see that I have singularly failed to achieve that.

As I rise to address the House, I am conscious of a number of advantages that I enjoy. First and foremost among them is, of course, that I have the honour and privilege to follow in this place a very distinguished parliamentarian indeed. Mr Douglas Hogg, as he was known in the House, was, as Members on both sides of the House will know, respected and beloved throughout his constituency of Sleaford and North Hykeham and before that of Grantham. He was generous with his time for those who sent him here to represent their interests, thoughtful in his contributions to the business of the House and unstinting in his support for the rights of this place against any interference from the Executive—something that he addressed in his own maiden speech. All that will be sorely missed. They are big shoes to fill, as Members on both sides of the House have made very clear.

That brings me perhaps to the second advantage that I enjoy as I make my maiden speech—namely, that the electors of Sleaford and North Hykeham, who chose me as a candidate at an open primary even before they had the opportunity to put their crosses in the boxes in May, were evidently satisfied with the make and model that they had returned to the House for the past 30 years, for they have chosen as their new MP another silk—another dinosaur—and another Member with a wife cleverer and more successful than he is. As Douglas himself has put it,

“the old banger must have been pretty sound for them to have chosen the same make and model again.”

I caution, though, and certainly add at this juncture that the unoriginal question that has occurred to wags on both sides of the House receives the answer no. I leave that as a puzzle perhaps for my successors, but given that I represent Sleaford and North Hykeham and follow Mr Hogg, many Members will know what question has arisen in their minds.

Before I come to the matter on the Order Paper, let me say that there is, finally, this advantage that I also enjoy: I have the very considerable honour to represent one of the most beautiful constituencies in the country, with some of the very best people one could hope for. From my village of Thorpe on the Hill in the north to Barrowby in the south, Long Bennington in the west to Metheringham in the east, hon. Members on both sides would do well to pay us a visit. It is a great shame that my hon. Friend the Member for Watford (Richard Harrington) is no longer in his place. He would particularly enjoy some of the real ale and some of the best pub food in the country, but I shall look forward to welcoming him and as many others as possible to the constituency.

The House can expect contributions from me perhaps on the middle east, and I hope to speak in future debates at somewhat greater length than I have time to do today. I hope also to speak about special educational needs. As many in the House will know, I was the chairman of governors at one of the last remaining signed bilingual schools for deaf children in this country. Close to my heart are issues about the education of deaf and autistic children and those who are less able.

I come to the matter that is on the Order Paper, conscious of the fact that I have heard contributions of great weight, not merely from Front Benchers but from Back Benchers, and that many Members on both sides of the House know a great deal more about this than I do. As is evident from those contributions, Members on both sides of the House well know the physical suffering that the continued blockade of Gaza is causing to a civilian population already laid low by the effective destruction of its infrastructure. Members obviously recognise the unsustainable policies that have been pursued in the past by the Government of Israel, of which I count myself a considerable friend, but which have, whether we like it or not, had the effect of entrenching a de facto Government with a vested financial interest in the maintenance of the tunnel economy that has been created by the blockade.

My right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) spoke about building materials. There is no shortage of building materials available to Hamas. The leaders of Hamas, should they wish to, construct villas, as they do, and have no problem getting cement through the tunnels. It is even possible to get a 4x4 through them. The argument that the blockade is based on the security of Israel is, I am afraid, fallacious, and I join other Members in saying that it should quickly be abandoned. Israel should concentrate on its strengths and on the values that it offers and demonstrates to the world.

Members on all sides have also been appalled, as have I, by the inability of the Palestinian Government, of whatever colour, to offer security to Israel. There is only one way forward—the two-state solution. Change has to come to Gaza and to the entirety of Israel and the Palestinian territories established under the Oslo accords. Change is something that we all talked about during the election, but this is a change that is desired by the vast majority of the civilian population throughout the middle east, and indeed in Palestine and in Israel, and is supported by the Government here as well as by our allies, as resolution 1860 demonstrates. It is that resolution with which Israel would do well to comply, as long as, of course, its security is guaranteed, and for that reason I hope that in this Parliament we will have the opportunity of seeing some form of lasting peace—the lasting peace that has for so long evaded previous Administrations in this House and indeed across the world.

19:32

[Mr Andy Slaughter (Hammersmith) (Lab)]

I, too, congratulate you, Mr. Deputy Speaker, and welcome you to the Chair. Before making my brief remarks, I mention, by way of declaration and pending the publication of the register, that my constituency party has received donations from individuals and organisations supporting the rights of Palestinians, and I made several visits to Palestine, Gaza and the west bank in the last Parliament.

I wish that there were more time to debate this issue today. There is a debate in Westminster Hall tomorrow, secured by my hon. Friend the Member for Westminster North (Ms Buck), which may give more opportunity to address the issue of Gaza. We have heard very powerful speeches about that from my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) and the hon. Member for Bristol West (Stephen Williams) which will help me to confine my remarks. I wish that I had more time to deal with some other issues. I would like to comment on Yemen, Syria and Iraq, but the time simply does not allow that, save for one point, which is topical and relevant to my constituents.

In opening the debate the Minister mentioned in an impassioned way the contribution that this country had made to security in Iraq. I do not in any way denigrate the efforts that have been made by our forces there, but Iraq remains very insecure. The UN High Commissioner for Refugees has commented on the forcible removal of people from this country to central and southern Iraq in conditions that put their safety at risk, and I ask the Government to look at that matter. A longer, all-day debate on the issue in the Chamber would be helpful in order to test the Government’s emerging policies on the middle east. I am lucky enough to have in my new constituency the Iraqi Association UK, which I know is particularly concerned about deportations that continue from this and other European countries.

My hon. Friend the Member for Bury South (Mr Lewis) said that he wished there could be more of a meeting of minds between interests representing the Palestinian and Israeli sides. I echo that. It does occur, but perhaps not frequently enough. I am afraid that in the debate today we have seen people taking entrenched positions again, and I will try not to do that in my remarks. I have noticed an unprecedented co-operation between the groups representing the interests of Palestinians and in the three main parties, which now meet on a relatively regular basis. That is to be welcomed, but I think it is a response to the appalling situation that the attack on the Gaza flotilla has brought to light.

Following my several trips to Gaza, I would highlight three points that have come home to me and, I think, other hon. Members who have also made that journey in the last two to three years. First, there is a desire for justice. Yes, there is a desire for cement and security, but there is an overwhelming desire for justice among the Palestinian people. They believe that they are not getting that and that the balance of force is set very much against them, whether in the region or in the world. The hope given by the Goldstone report has so far been dashed, and now the prospect of an independent inquiry into the attack on the Gaza flotilla appears also to have receded.

Why is an independent inquiry important? The Prime Minister of Israel, in announcing the inquiry, said that it is to investigate

“whether Israel’s Gaza blockade and the flotilla’s interception conformed with international law”.

With respect to the right hon. Member for North East Hampshire (Mr Arbuthnot), he may need to brush up on his international law a little if he is going to practise again, because every opinion that I have read from respected international lawyers is very clear that there is no right to attack a ship bearing the flag of another country in the high seas to enforce a blockade, even were it a legal blockade. On that and many other grounds, this is an action of little more than piracy, and it will not much trouble the inquiry, if it is an impartial inquiry, to investigate that.

The other reason for the inquiry, according to Mr Netanyahu, is to

“investigate the actions taken by the convoy’s organisers and participants.”

In other words the victims—those who were killed and the many who were injured—are to be put on trial. Thanks to the way the Israeli media typically manipulate publicity—we have heard some examples repeated verbatim in the House tonight—there is very little chance of the inquiry being impartial and of the world being presented with what actually happened.

I took the opportunity to attend press conferences held by British citizens from the flotilla immediately on their return from Istanbul, where they were flown from Tel Aviv, and to hear their first-hand accounts. I may be able to say a little more about that in the debate tomorrow. Suffice it to say that it gives a totally different picture from most of what has been reported even in the British media and certainly in the international media about what happened during that unprecedented attack, in the middle of the night, in international waters, by armed troops, in a way that was deliberately provocative and ended with the entirely predictable result that many people were killed.

[Simon Hughes]

I hope that the hon. Gentleman agrees that although we understand the careful wording of what our Government said today, people such as his constituents and mine, who have come back with their stories, having been on the flotilla, particularly if they are of Palestinian origin, as the person whom I saw was, would be reassured only by an independent inquiry, rather than a partial one. We cannot expect people to trust an inquiry carried out by one of the parties to the event. It has to have international credibility.

[Mr Slaughter]

I am grateful for that intervention. Those who heard the response of the Israeli Prime Minister’s official spokesman, both during the Gaza invasion and more recently, will realise the deep cynicism that underlies most of what Israel says and does to justify what has happened.

We have heard a lot said about Hamas today, and I have again heard the same points trotted out. I do not in any way defend what Hamas has done or said in the past, but let us look at the inequality in arms, and at the violence done and the deaths caused in the region over the past few years. There have been 1,400 people killed—mainly civilians, including many children—in the invasion, and nine people on the flotilla were killed. Just this year, six Palestinians have been killed, and 18 injured, on the west bank; 31 were killed and 116 injured in Gaza. Of course we must condemn rocket attacks, and the now relatively isolated attacks on Israeli civilians and on the Israeli military, but the question of proportionality must enter into the matter. My hon. Friend the Member for Birmingham, Northfield (Richard Burden) and my right hon. Friend the Member for Manchester, Gorton mentioned the lockdown on the west bank and the repression that, every day, in a thousand ways, crushes the spirit of the Palestinian people there.

I end by putting a further question to those on the Government Benches: does an end to the blockade mean an end to the blockade? In The Guardian last Thursday, the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), was quoted as saying that that was not necessarily the case, and that we could not expect an end to the blockade immediately. I believe that we need an end to the blockade, and I would like to hear the Government say today that that is what they intend. I echo what was said by the right hon. Member for Tonbridge and Malling (Sir John Stanley): there should be entry of supplies not only for UN purposes, but for general purposes so that the population of Gaza, who simply wish to live ordinary lives, can succeed and thrive—to trade, to eat, and to behave in a way that we in this country would think normal. The blockade is a form of collective punishment, not a way of controlling terrorism. It would be helpful to hear the Government say that in terms today.

19:41

[Bob Blackman (Harrow East) (Con)]

Many congratulations to you, Mr. Deputy Speaker, on your elevation to your current position, some 30 years after we first met in a Committee Room elsewhere in this noble House.

The first, fundamental duty of any Government is to safeguard their citizens and borders, and to look after their people at home and abroad. As we come up to the 70th anniversary of the battle of Britain, we may ask, who would have denied our nation the right and duty to safeguard ourselves against the Nazis? Who would condemn Britain’s historical roles, both in the middle east and blockading the African coast to enforce the abolition of slavery back in the 19th century?

Many of our noted justifications for invading sovereign countries have been based on safeguarding our safety and security. Our reason for invading Iraq was that weapons of mass destruction could be implemented on our sovereign soil within 45 minutes. We are still searching for those weapons of mass destruction, but that was the reason that we were given. Our justification for occupying Afghanistan is, of course, to prevent al-Qaeda and other forces from setting up camps, planting bombs and damaging British sovereign territory. We must say to the Government of the day that as we win that fight, we must ensure that al-Qaeda and other such dark forces do not set themselves up in other countries, such as Yemen. We must remember that that is a big danger that we face.

Israel has fought a number of wars over the years since it was set up in 1948. Its recent experience of rockets and bombings, including suicide bombings, has been traumatic for all residents. The people of Israel have witnessed frequent suicide bombings, and suffered as a result of them. When the Israeli Government set up the wall, the incidence of suicide bombings dramatically reduced. If one were an Israeli citizen, one would say that the Israeli Government had done a wondrous thing. However, if one were a Palestinian, one would say, “You have done terrible things to us.”

Equally, what is Israel’s justification of the blockade? It is quite clear that since the blockade was implemented, the incidence of bombings and rockets coming into Israel has reduced, although such incidents have not ceased. The reality is that given the state of war between Israel and Hamas, Israel has the absolute right to enforce the position that rockets, bombs, missiles and ammunition must not enter Palestine or any area that can then attack the state of Israel.

We are challenged on the position of humanitarian aid, yet the state of Israel allows some 15,000 tonnes per week of humanitarian aid to enter Gaza. However, there is the role of Hamas: it holds up the aid. It uses it as an incentive to control the people of Palestine, and as a means of repression. Until it ceases its repression, the people of Palestine will not see the benefit of having a properly, democratically elected Government who truly represent them.

As has been said in many speeches today, Hamas says in its founding statement that it wants to destroy the state of Israel and wipe it off the face of the planet. It is very difficult to negotiate with people whose fundamental aim is to destroy one’s Government and one’s very being.

We must challenge the position taken on the flotilla and ask what its purpose was. Was it to deliver humanitarian aid? Absolutely; most of the people on those ships wanted to make sure that the citizens of Palestine and Gaza received humanitarian aid. However, behind it was IHH, an organisation with fundamental links to Hamas and al-Qaeda. The reality is that it sponsors terrorism, and it wanted to breach the blockade so that subsequently, once the blockade was removed, guns, rockets and other ammunition could be brought in, so that bombs could rain once again on Israel. It is understandable that the Israeli defence forces sought to prevent that from happening. On five of the six ships, they did so in a perfectly reasonable way, and people went about their business properly.

Let us look at what happened on 31 May, particularly on the Mavi Marmara. Many of the individuals concerned appeared to wish to be martyrs to the great cause. They attacked Israeli soldiers—remember, Israeli soldiers were injured during the boarding, and the reality is that they were attacked with weapons. There are two sides to the issue. Is it any surprise that Israel is concerned about inquiries? The Goldstone inquiry was almost certainly perceived in Israel as being biased against that state. When the inquiry came before the United Nations, the Labour Government’s representative refused even to vote on the issue.

[Mr David Ward (Bradford East) (LD)]

My understanding is that the Goldstone inquiry was independent, and that it was rejected by Israel because it did not like the findings.

[Bob Blackman]

The state of Israel rejected the inquiry as being biased and unfair. The reality is that the British Government refused even to vote on the issue; they did not vote for or against it. They did not even abstain. They just refused to vote. It is perceived as being not a fair and reasonable inquiry. On that basis, the state of Israel will most certainly say, “If we are to have another such inquiry, that can hardly be perceived to be fair or reasonable.” That is one reason why there is a difficulty with the whole approach.

There is, of course, a way forward on the situation. First, Hamas and Hezbollah must renounce violence, stop bombing Israel and recognise Israel’s right to exist. Israel must then lift the blockade, allow humanitarian aid in and ensure that a two-state solution can prosper and grow in an atmosphere of negotiation, peace and tranquillity. That will be hard on both sides, but that is what is required in the region to ensure that we move forward to two independent states able to exist side by side. Until all the nations that surround the state of Israel can accept Israel’s right to exist, and Iran retreats from its stated position of trying to destroy the state of Israel, potentially with nuclear weapons, the situation in the middle east will remain fragile.

19:50

[Emma Reynolds (Wolverhampton North East) (Lab)]

Thank you for calling me to speak, Mr. Deputy Speaker. I congratulate you on your new position.

Like many colleagues on both sides of the House, I shall concentrate my remarks on the situation in Israel. I visited Israel and the west bank last year and met politicians from both sides. The best and most hopeful meetings were those with politicians with moderate views, who were willing to make compromises and could see the conflict from the perspective of the other side. In that vein, I welcome the comments of my hon. Friend the Member for Bury South (Mr Lewis), who said that there is no contradiction between being a friend of Israel and a friend of the Palestinians, supporting a viable two-state solution.

During my visit, I was struck by the range and depth of those agreements, and I ask the Government how they will strengthen the voices of those moderates. Recent events filled me with great pessimism. The horrific incident on the Mavi Marmara sent a shock wave around the world, with widespread condemnation of the deaths of the nine civilians. The inquiry into the incident—I believe there should be an inquiry—must be judged by the international community as comprehensive, impartial and independent. Anything that falls short of those criteria will not be credible. I do not want to prejudge the conclusions of the inquiry, but questions about the conduct of soldiers aboard the ship must be complemented by searching questions about the planning of the military operation.

There must also be a wider understanding by the Israeli Government and the Israeli defence forces that they cannot use the justification of self-defence for any action that they choose to take. They must understand that there are severe doubts about the proportionality of their response in this case and others, and that the blockade of Gaza, in the wise words of my right hon. Friend the shadow Foreign Secretary, is self-defeating—a policy that has long been discredited and continues to push power into the hands of Hamas.

The people of Gaza are, in effect, faced with collective punishment, which in turn produces bitterness and resentment and pushes them further into the arms of Hamas, thereby frustrating the efforts of the more moderate voices that I mentioned. Allowing Hamas to control supplies of many of the goods that are smuggled illegally has strengthened its hand, not weakened it. The basic human rights of the people of Gaza have been denied for too long. The economy of Gaza is in ruins, with an unemployment rate of nearly 40%. Any hope of sustaining economic growth through exports is strangled at birth by the blockade. Not being able to export from Gaza has given more power and control to Hamas.

The restrictions and the poverty that they engender leave the people of Gaza without hope and drive them into the waiting arms of Hamas, whose only counsel is a path of confrontation and an endless cycle of violence and revenge. I welcome the work that the middle east envoy, Tony Blair, is doing to ensure that supplies will, we hope, go into Gaza, that the security concerns of the Israelis are respected and that weapons are not allowed into Gaza.

The proactive stance of the Obama Administration and their insistence that the Israeli Government should halt settlement construction is welcome. For too long the Bush Administration inflamed rather than helped the situation. Israel needs critical, not uncritical, friends. I urge the Government to do everything they can to strengthen the voices of moderation on both sides of this tragic conflict. Despite all that has happened, there are such voices, and our Government should put pressure on the Israeli Government, through the Quartet or bilaterally, to extend the freeze on settlement building beyond September.

The talks going on are, unfortunately, indirect talks. If the confidence-building measures of which my hon. Friend the Member for Bury South spoke are adopted, I hope they will lead to direct talks between the Israelis and the Palestinians.

[Ian Paisley (North Antrim) (DUP)]

Does the hon. Lady recognise that equally the Government should apply pressure to Hamas to ensure that the force that it uses is not successful, that the repressive approach that it takes is counter-productive, and that the authoritative way in which it goes forward is self-defeating?

[Emma Reynolds]

I could not agree more with my hon. Friend. I regret the fact that there have not been elections in Gaza, as there should have been, last year. They were also put off this year. The lack of democracy in Gaza reinforces the position of Hamas. We in the international community should do all we can to fight against the increase of its power.

Only if the indirect talks become direct talks will there be a chance of a lasting and viable two-state solution in the middle east. I look forward to all that the Government can do. We on the Opposition Benches will help them, where we agree with them, to bring that about.

19:57

[Nick Boles (Grantham and Stamford) (Con)]

Thank you, Mr Deputy Speaker. May I, too, welcome you to the Chair? You look very fine in it.

I welcome my hon. Friend the Minister to his post, which I know he will undertake as well as he has undertaken every other post in which I have worked with him in the past. I congratulate my neighbour, my hon. Friend the Member for Sleaford and North Hykeham (Stephen Phillips), on his excellent maiden speech. The whole House knows that the finest things come in small packages.

In this first debate of the new Parliament on the middle east, and the first debate in which I have had a chance to take part, I did not want to get lost in the thicket of the detail of the current negotiation and the rights and wrongs of every issue. I wanted to take a little time to step back and tell the House why, ultimately, I count myself a friend of Israel, first and foremost, in the middle east. That is because I think of some fundamental truths.

In my maiden speech last week, I talked of the achievements of the Labour Government in establishing full equality for all people in the United Kingdom. Let us look at the middle east and ask ourselves, where in the middle east is it best to be a woman, or where in the middle east is it best to be gay? In Egypt, personal status laws discriminate harshly against women on marriage, custody of children and inheritance. In Jordan, a country which I consider to be a positive force and one where the current ruler is trying to take it forward, more than 20 women per annum, according to Amnesty International, are killed for breaking social taboos. Israel had a female Prime Minister before any party in Britain had even thought of it, and it nearly had another one last year—I rather wish it had—in Tzipi Livni.

Think about a gay person in the middle east. In Syria, it is not so bad—three years in prison. In Iran, a gay person would get the death penalty. In Israel, a gay person can rise to be a general in the armed forces, and just last Friday 100,000 people marched in Tel Aviv to celebrate the equality of gay people in Israel.

So then I ask myself, where in the middle east is it best to criticise the Government in public? In Syria, it is simply not possible, because the state controls every single aspect of the media. Reporters Without Borders calls Iran,

“the Middle East’s biggest prison for journalists”,

but it ranks Israel higher than the United States as a place for press freedom—44th in the world and first in the middle east.

Finally, I ask myself, where is it best in the middle east to belong to a religious or ethnic minority? In Syria, Kurds and Jews are not allowed to take any part at all in political life. In Iran, one cannot even go to university without passing an exam on Islamic ideology, and one cannot get a senior post in any organisation unless one belongs to the majority Shi’a group. In Israel, Israeli Arabs have always had all rights—the same as Israeli Jews—except for one: they do not have to serve in the armed forces, because the state of Israel recognises that it would be unfair to set them against their Arab brothers. However, they can vote and be elected, and many have been. There is even an Arab-Israeli serving on the supreme court in Israel.

So let us be clear: for all its errors and excesses, which I and the whole House see, Israel is an oasis in a desert—an oasis of freedom, democracy and human rights in the middle east. We therefore have to ask ourselves, why does Israel do those things that shock, pain and worry us all? Why does it feel driven to inflict on the people of Gaza what we all recognise, whether in law or not, as seemingly like collective punishment? The answer is very simple: it is not just faced but encircled by an enemy that wishes to destroy it.

So before the House pulls on its breeches and starts saddling up the high horse, let us remind ourselves of how we—this place, this ancient democracy, this ancient birthplace of freedom—reacted when we faced an existential threat. We interned or deported long-time residents of German and Italian origin and refugees from Nazi Germany—to our everlasting shame. However, we did it, and with the approval of this House. The Americans did the same with Japanese Americans and German Americans, so we should be very careful before we start lecturing a nation that was built by the survivors of a genocide, which took less than five years to kill more than the current population of Jews in Israel.

Rather than lecturing and sitting on that high horse, we should ask ourselves, what practical things can we do instead of the huffing, the puffing and the futile outrage? I, too, welcome the role of Tony Blair in the middle east and in Palestine at the moment, so, first, we should do everything that we can to support the Palestinian Authority in the west bank and, in particular, Prime Minister Fayyad, so that Palestinian people can see an alternative to Hamas which delivers security, jobs and a normal life. That is all that they want. Secondly, we must do everything we can to encourage Turkey to remain aligned with Europe and the west, and not to feel that we do not want it in the European Union or as part of the western alliance. Turkey is key to us and to Israel, and we must ensure that Turkey knows it.

Finally, we must confront Iran. I am very glad that the Government played such a pivotal role in achieving the sanctions that the UN agreed last week. The middle east is a terrible area of the world, with so many problems, but in ending I share the optimism that some Members have expressed. Yes, the situation seems full of despair, but let us look at the progress that has been made. There is a peace treaty with Egypt, and I should point out that Israel has never attacked a nation with which it has a full peace treaty. There is a peace treaty also with Jordan, and across the Israeli political system it is commonly accepted that a two-state solution with an independent state for Palestinians is the right solution. I feel that progress is being made, and further progress can be made if we quit the lectures and just get down to supporting our friends and helping them to come to an agreement.

20:05

[Yasmin Qureshi (Bolton South East) (Lab)]

I was going to say something very different when I started listening to the debate, but after hearing the hon. Member for Grantham and Stamford (Nick Boles) talk about different countries’ rules, regulations and societies, I must say that that is no basis for invading, for killing or for destroying other people. One cannot say, “I’m a friend of Israel because it is a democracy.” We can be friends with Israel; I have no problem with the state of Israel. I welcome what my hon. Friend the Member for Bury South (Mr Lewis) said about the way to deal with the situation in the middle east. He said that the Palestinian people should receive land in proportion to their population. There should be an end to illegal settlements, and we should end the war, which has created so much misery for the Palestinian people.

We have to go back in history. In the 19th century, only 5% of the population in Palestine were Jewish; 95% were Muslims and Christians. In 1931, 18% of the people in Palestine were Jewish, resulting from the persecution of the Jewish people in Europe. Between 1947 and 1948, 78% of Palestinians were expelled from their homeland, and now Jewish people hold 75% of the land, whereas the Palestinians, who are larger in number, have only 25%. That is the dispute under discussion; that is the issue that the House must not forget. People have been expelled from their homes and blockaded, but some Members say, “We can’t see why people are being critical of the Israelis and why people feel that they should fight for the rights of the Palestinians.” I agree that there should be two states, but they should be created on the basis of equality—on the basis that 20% of the population own 75% of the land. When does that become fair? When is that right? Until we put those wrongs right, we will never have peace in Palestine.

I am surprised that people seem to have forgotten the history. Jewish people were massacred and genocide was committed against them, but it was carried out by western democratic countries—Germany, Austria and Poland; nobody in the middle east carried out genocide against the Jewish people. If the Palestinians are given their proper rights, I do not think that the state of Israel will have any problem with any of its neighbours. It would certainly finish Hamas, because Hamas exists only because such inequities exist. If we gave the Palestinian people their rightful homeland, if we gave them a proper share of the land and if we gave them security, Hamas would disappear just like that.

20:08

[Alistair Burt]

It is a pleasure to welcome you to your seat, Madam Deputy Speaker, on this, my first opportunity to do so. I thank all Members for participating in the debate. Time necessitates that I cannot deal with each submission. Suffice it to say that tomorrow in Westminster Hall there is a debate on Gaza, which will provide me with a longer opportunity to put forward the Government’s position and to respond to a few other issues.

Before I make some general remarks, I thank my hon. Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for his contribution, which we all much enjoyed. He takes on a seat that Douglas Hogg held with that combination of mischief and brilliance of which he was such a unique exponent. Douglas will be sadly missed, but the gap is clearly going to be very ably filled, indeed. My hon. Friend spoke about a difficult subject with a lightness and self-deprecation that clearly masks a keen intellect. We sensed that when he touched on the seriousness of the issue. I am sure that we all enjoyed his contribution. We will certainly hear from him again, and we will welcome that.

On the debate itself, the hon. Member for Bury South (Mr Lewis) began with some thoughtful and reflective comments that illustrate why as a Minister he was so well regarded in both the House and his private office, which I have been fortunate enough to inherit. Freedom has allowed an even richer seam of belief and rhetoric to emerge. His sensitivity, through his faith, to those on all sides of the conflict caught up in incidents of death and misery, reflected the concerns of so many of us who agonise over the steps needed to achieve the realisation of a peace the architecture of which is seemingly so well known to so many people and has been for so long.

The later contributions of many colleagues on both sides of the House illustrated the complexities of the politics of the region and how easily the confidence-building measures of one run the risk of being a threat to another. It was inevitable that the House would concentrate on Gaza. With due deference to balance in many contributions, a number of colleagues examined the events of the other week from a deeply held conviction on one or other side of the divide.

I shall deal with some of the issues in more detail tomorrow, but I welcome the contributions made by my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley), the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), my hon. Friends the Members for Sleaford and North Hykeham, for Grantham and Stamford (Nick Boles) and for Harrow East (Bob Blackman) and the hon. Members for Bristol West (Stephen Williams), for Ayr, Carrick and Cumnock (Sandra Osborne), for Birmingham, Northfield (Richard Burden), for Hammersmith (Mr Slaughter), for Wolverhampton North East (Emma Reynolds), for Bolton North East (Mr Crausby) and for Liverpool, Riverside (Mrs Ellman).

The remarks made by my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) were more about Iran than anything else, but in general the debate concentrated on Gaza. Hon. Members anxious about Gaza and angry at the activities and actions of Israel demonstrate why the Government urge a credible inquiry and change in Gaza to relieve the humanitarian situation while recognising Israel’s need for security. We need to create the environment so necessary for a viable, non-dependent economy and a people with reason to hope.

[Jeremy Corbyn]

Will the Minister give way?

[Alistair Burt]

No.

Friends of Israel, in the House and beyond, will no doubt reflect on the words of my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), a long-standing friend and colleague. As much from experience and deep conviction as from his unquestioned support for the state of Israel, he posed a series of questions that will make uncomfortable but necessary reading in Israel.

At the beginning of the debate, I said that the middle east was a realm of culture, diverse history, faith and heritage. Despite that, we concentrated on places and circumstances that illustrate the other side of the middle east and show that history can be a burden as well as a blessing. If I have anything to offer in this context, it will be my determination to work with the House and the expertise of so many Members who care about this issue, to reflect the House’s passions and above all to champion its eternal determination to bring hope into the most difficult of situations.

The hon. Member for Bury South was not wrong to list the series of events that he and I have experienced and witnessed throughout our time in this House, a number of which have been personally shared by colleagues here. They range from standing amid the tear gas in apartheid South Africa in the ruins of Crossroads to opening ballot boxes in a free East Germany and cheering home President Obama—not so much for his party, but for what he represented in respect of change for the world and his country. How the House longs to add the middle east to that list.

The way will be long, tough, tortuous and unromantic. The House can and will play its part in offering balance and sharp inquiry—and, I hope, encouragement—to the many partners who will be playing key roles in securing the peace and stability that we long for in the middle east. We will return to these issues many times. I trust that in darker times to come, the light of hope, which the best of history can provide, will remain unextinguished by events, no matter how frail that flame may be from time to time.

Question put and agreed to.

Resolved,

That this House has considered the matter of UK policy on the middle east.

Emerging Economies

Monday 14th June 2010 Commons Chamber

20:15

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

I beg to move,

That this House has considered the matter of emerging economies.

I am delighted to have this first opportunity to speak from the Government Benches, and even more delighted to serve for the first time under your chairmanship, Madam Deputy Speaker. I trust that the high-preference vote that I gave you in the ballot will mean that you will look favourably on me if I go astray.

[Madam Deputy Speaker (Dawn Primarolo)]

The hon. Gentleman joins a long line of Members who have said exactly the same; I will, of course, be even-handed with everyone.

[Mr Browne]

I did not doubt that for one moment.

I welcome this opportunity to debate the new Government’s policy on the emerging economies. Strengthening the UK’s relations with the fastest-growing areas of the world economy is one of the key foreign policy objectives of the coalition programme for the next five years. That was explicitly stated by my right hon. Friend the Foreign Secretary when he opened the foreign affairs debate on the Queen’s Speech and observed that

“we live in a world where economic might is shifting to the emerging economies”—[Official Report, 26 May 2010; Vol. 510, c. 174.]

In the House, we all recognise the ongoing importance of Europe and north America to our foreign policy goals, but we must also be clear about where new opportunities increasingly lie. That means elevating our links with the emerging economies and expanding powers in other parts of the world as part of a distinctive British foreign policy. That is why, only a few days after the Government were formed, the Foreign Secretary and I were meeting counterparts from Mexico, Chile and several other emerging powers at the EU-Latin America-Caribbean summit in Madrid. The following week I also held talks with Foreign Ministers from Vietnam and Singapore, among others, at the EU-south-east Asia summit, which was also held in Madrid. I give an undertaking that I will be making our relations with emerging economies my biggest priority, with visits to several key partners, in the coming months.

Why is the issue so important? We live in a time of fundamental change, both economic and political. The last decade of the previous century saw a shift from the bipolar, cold war world that we had all become familiar with. The first decade of this century has seen another shift, just as dramatic, from a G8 world to a G20 world. Global economic decisions were once made by a grouping of European and north American nations in conjunction with Japan, but today such decisions are increasingly taking place within the G20—not only a much bigger group, but one that represents a much broader range of countries from every continent of the world. The UK strongly supports the G20, which reflects the economic realities of the 21st century and recognises the rise in the strength of powers such as China, India and Brazil. The next meeting of the G20, in Toronto a few days from now, will be an important opportunity to take this work forward.

It is impossible to get through one of these discussions without a barrage of fascinating statistics that people can take home, and I have a few to run past colleagues on both sides of the House. It is important to remind ourselves of how dramatic the change that we have lived through in recent years has been. In the past decade, China’s economic growth has averaged 9.9% a year, while the UK’s has averaged just 1.7% over the same period. India’s growth over the same period has averaged 7%. In 1980, China’s proportion of world GDP was just 2.6%; by last year, that had risen to 8.5%. According to some predictions, China’s economy may well equal that of the US as early as 2027, and by 2050 the Indian economy may well be bigger than the five largest European economies added together.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

My hon. Friend talks about the statistics for China. It is important to realise how much of that growth is needed just for its economy to stand still. If growth falls below about 8%, then unemployment starts to rise. When we look at the Chinese economy from outside, we have to understand what a challenge it faces.

[Mr Browne]

My hon. Friend makes a very good point. Huge levels of growth, by European standards, are necessary to take the Chinese economy forward and to realise the aspirations of an enormous population, hundreds of millions of whom still live in absolute, as well as relative, poverty.

It is easy to characterise these debates as being about China, India, Brazil and other countries with large populations, but there are also regions, particularly in Asia, that are developing at a fast rate. The Association of Southeast Asian Nations countries—the south-east Asian bloc—have, between them, a larger population than that of the European Union. Over the past decade, they have had an annual growth rate of 5.7%— not as high that of as China, but still very high by European standards, albeit having started from a much lower base. If we think of groups of countries that are increasingly willing and enthusiastic about the prospect of working together as single blocs in that way, their relevance will be obviously apparent to everyone in this House.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

My hon. Friend mentions China and the huge steps forward that it has taken in its growing economy. Its gross domestic product now stands at about 9.5% or 9.6%—growth that compares quite favourably with ours. Is it therefore right that we continue to provide that country with Department for International Development funds to the tune of—I may stand corrected—about £30 million a year?

[Mr Browne]

An interesting evolution in the power balance in the world is taking place, with these huge emerging countries. Although China’s GDP is slightly greater than ours, it is worth reminding ourselves that their population is 25 times higher, so their GDP per capita is very much smaller than ours. Hundreds of millions of people in China have yet to benefit from the huge advances that that country has made over the past decade or two. At the moment, we have this slightly strange situation whereby many of the emerging economies are the new powerhouses and yet still have millions of people living in absolute poverty. I think that there will be an evolutionary period in which they are apparently two slightly contradictory things simultaneously: they will require aid and assistance while becoming increasingly significant economic and political players. Over time, that balance needs to be reflected in the contributions that we make in aid.

[Mr Iain Wright (Hartlepool) (Lab)]

I welcome the hon. Gentleman to his post; I think that he will make a very fine Minister.

Developing the argument somewhat, in the next 20 years or so we will see growth in the middle classes across the emerging economies the like of which we have never seen before, with huge untapped potential that British companies can access in selling goods and services to them. What steps will the Government take to ensure that British companies can access those future market opportunities?

[Mr Browne]

I am grateful to the hon. Gentleman not only for his flattering comments but for his intervention. I will deal with that point as I proceed through my speech.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

What attitude does the hon. Gentleman take to emerging economies in what the European Union calls its near abroad? It seems to be keen to devote a portion of its aid—to which, of course, we donate royally—to those countries, whereas Britain’s philosophy, through DFID, has been that our aid should go to countries that are impoverished.

[Mr Browne]

I do not want this debate to be just about aid, because the emerging economies are important in many different ways, not only as recipients of our largesse. Let me proceed with some of the points I was going to make, not least those relevant to the comments of the hon. Member for Hartlepool (Mr Wright). If I do not cover them to the satisfaction of the hon. Member for South West Wiltshire (Dr Murrison) and others, perhaps we can return to them later.

There has been a truly transformational shift in economic and political power. That is a change that will have enormous consequences for Britain and about which we cannot be complacent. Although it is a challenge that may, in some ways, pose difficulties for us, it is also a great opportunity. It is worth saying—this is relevant to the point about aid—that about half a billion more people have been taken out of poverty as a result of these changes taking place around the globe: a figure that could not possibly ever have been achieved through international aid and generous donations from our country. It is a phenomenon that has transformed the life chances and opportunities of millions of people who previously lived in a state of destitution.

The World Bank has estimated that the global middle class is likely to grow from 430 million people in 1999 to more than 1 billion people in 2030, and most of that growth will be in the emerging market countries. That increase in middle class consumers is equal to the total population of the European Union, in the course of just three decades. If we are to see Britain’s economy growing strongly again, which must happen if we are to tackle the UK’s deficit and raise the prosperity of our own citizens, we must tap into these vast new markets.

We have huge economic advantages in this country. Britain is home to many of the leading global companies in the energy, retail, financial and communications spheres. We are an outward-looking and open country ranked by The Economist as the best place in Europe to do business. London is a global city and Britain is increasingly a global hub. Ours is a multicultural nation with connections across the world. We will use those connections to build and intensify our commercial, cultural and educational links. The English language is the most widely spoken in the world. It is the common language not only of international business but of science, academic research and the digital world. There are today more English language students in China than there are people in the United Kingdom, and English is the common tongue for business in India. This can only be good news for British businesses wanting to tap into these giant markets.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Following the intervention by the hon. Member for Hartlepool (Mr Wright), will the Minister join me in paying tribute to people from these countries—not only those from India, who have historically been very proactive, but those from the Chinese public and private sector, and from Brazil and elsewhere—who are working hard in this country to ensure that we understand not only the opportunities for them, but the opportunities for us in their countries, in a way that they were not even beginning to do 10 years ago?

[Mr Browne]

I strongly agree with my hon. Friend. It is notable that, in many international companies and other organisations in which the management and the work force are drawn from right around the world, talent has become a global phenomenon. Many talented Chinese, Indian, Brazilian and other people work in London and throughout the United Kingdom and contribute to companies with British leadership and to the prosperity of our country.

[Mr Ellwood]

My hon. Friend mentions the importance of the movement of people with regard to China. Does he know that France and Germany attract around 500,000 visitors every year? I am afraid that we compare badly, attracting only 100,000. That is because it is far simpler for the Chinese to apply for the Schengen visa, which gives them much greater access to Europe. They are deterred from coming here because of the complexities and the distance that they must travel to get a visa. Would my hon. Friend consider Schengen plus, which would allow a bolt-on to the Schengen visa system to allow Chinese visitors to come to the UK?

[Mr Browne]

That is a matter that I may wish to bring to the attention of Home Office colleagues. I am sure that they will take my hon. Friend’s wider point seriously, and I want to deal with it in the remainder of my speech. It relates to the importance of not just Government-to-Government or even business-to-business relations, but of engaging on a person-to-person basis with many countries.

The economic shifts that we are witnessing are no less significant politically. I have already said that after the second world war we had a political settlement, which was essentially the cold war settlement based on Europe and north America. That is emphatically no longer the case. Of course, we must be careful about getting ahead of ourselves. The United States is still the dominant power in the world and likely to remain so for a considerable time. Gross domestic product per capita in the EU is still vastly higher than in China or India. However, the direction of travel is obvious.

Britain can and should be confident in our ability to succeed in the new order. We remain a respected global player. We are at the core of international decision making: we are a major player in the EU, the Commonwealth, the United Nations and NATO. We have a network of diplomatic and other missions that reaches into every corner of the globe, while maintaining the ability to exercise hard power when necessary.

Along with Britain's economic and political assets, our so-called soft power can also play an important role in ensuring that we retain our influence and prosperity in future. We are globally influential in subjects ranging from architecture to science and popular culture. We have global sporting connections, including the world’s most followed football league. The UK will be at the centre of world sport when the Olympics come to London in 2012 and the Commonwealth games to Glasgow in 2014. We have a unique asset in the BBC World Service, while the British Council connects millions across the globe to Britain’s culture and education.

The changing world order should not be seen just in terms of a GDP league table. As important, if we are to win the debate on important matters such as climate change and human rights, is our ability to lead on ideas. Just as we must lead in that competition of ideas, we must likewise provide leadership in the debate on fundamental values.

I have spoken in meetings with Foreign Ministers from around the world about not only our economic interests but the balance between the role of the state and the individual, and argued that economic growth was not the only measure of human well-being, but that civil rights were central, too.

[Mr Iain Wright]

rose—

[Mr Browne]

I will take the hon. Gentleman’s intervention, but I may be less generous afterwards.

[Mr Wright]

I thank the Minister for giving way; he is being most generous. Before he moves from economic power to soft power, let me say that resource constraints are an inherent risk in the movement eastwards of the world’s economy. I am concerned that the 21st-century equivalent of the scramble for Africa, in which emerging economies lock in trade deals with African nations to get commodities such as iron ore and oil, will compromise our ability to compete as a nation. What steps will the British Government take to ensure that British companies have access to hard-pressed resources and commodities in future?

[Mr Browne]

The hon. Gentleman makes another excellent point, about how we ensure that there is a global architecture of decision making and responsibility, which means that resource allocation and other political decisions are made in a framework of law and consensus. That is our foreign policy objective and why our foreign policy has to evolve to match reality. We cannot sit, King Canute-like, and try to cling on to the G8 and European-north American-centric architecture. We need a decision-making framework, which reflects the change in the status of different countries and allows us to make decisions in concert with them as we proceed with economic growth and political decision making in the decades ahead.

Much of the analysis that I have shared with the House is widely accepted if under-appreciated by some in our national discussion. We must now ask how we respond to that and what the consequences are for our policy making. Let me suggest three overlapping subjects as a framework for our debate in the next hour and a half or so. First and perhaps most important, we must make the case—and win the argument—for keeping global markets open to foreign trade and investment. A resurgence of protectionism in any of the markets about which I have spoken would be a far greater risk to the UK economy than the rise of those markets. We must also have a dynamic, outward-looking economy—this point was made by my hon. Friend the Member for Bermondsey and Old Southward (Simon Hughes)—that is not burdened by unsustainable levels of Government debt.

Secondly, we will significantly increase our cross-Whitehall effort to engage not only with the obvious, big emerging economies, but with the medium-sized emerging economies. We must also build on our solid co-operation with Japan, which remains the second-largest economy in the world. All of that will mean working with business to reap the opportunities in countries and regions whose cultures and languages may be less familiar to many of us, and getting the official dialogue right, including through more structured relationships at Government level with many such countries.

Thirdly, we must continue to invest in our political as well as our economic effort. The rise of emerging economies will make the world a more prosperous place, but it will also make it more complicated. A more multilateral world will require us to engage on key security issues with a wider cast of global actors, which will put an even higher premium on ensuring that we are all bound by the same international rules-based system. Upholding that will be the key task of our diplomacy in its widest sense in the years ahead.

That places a heavy burden of responsibility on the Foreign and Commonwealth Office. One FCO priority will therefore be to look at how we can best use our diplomatic network and shape our resources to ensure that we have the capability to make the most of the new world that is being brought about by the emerging economies. We are already being innovative in our representation overseas. I do not claim that such innovation started magically a month ago—it has been undertaken for a period of time—but I hope that we will accelerate it and give it extra momentum. We are using regional networks of experts and so-called laptop diplomats, among other innovative measures. In a difficult resource climate, we must ensure that our language training, including in Mandarin, Spanish and Arabic, is focused where we need it most. We will look at how to resource stronger UK engagement with the Governments, peoples and societies of emerging economies in the forthcoming spending round.

If we are to retain our influence in the new global, economic and political world, we will need to change and adapt. Our diplomatic effort will be focused where it is needed and adapted to the new realities, but our efforts must go beyond discussions between diplomats in capital cities. We must inspire business and community leaders throughout Britain to build relationships with their counterparts in the emerging powers. That task is not only for the FCO and the Government: I am emphatic in my view that that task is for our country as a whole and all the people who live in it. Everybody in our country needs to step back for a moment and ask themselves, “Are we able to think and act globally in a way that reflects the new realities of the world? Are we seeking better to understand and engage with the emerging global players? How does the UK media cover the rest of the world? How does our educational curriculum meet our global needs? How well can our major businesses reach out beyond our borders to the markets of the future?” The Government should and will provide leadership, but our national outlook needs to adjust to the rapidly changing global landscape.

[Dr Murrison]

That is all very well, but what do the Government plan to do to combine Government offices abroad? In particular, does the Minister agree that it makes absolutely no sense to have Department for International Development offices and FCO offices in the same capital? Surely to goodness if we are to have the joint working to which he refers, we need co-location.

[Mr Browne]

My hon. Friend makes an excellent point that echoes one made by my right hon. Friend the Foreign Secretary and others. How can we best concentrate our resource in countries and avoid duplicating Government functions or Departments in the same location? There is a wider point: although it is important for the FCO to give intellectual leadership and momentum to our policy making overseas, our policy is not simply about relationships between the FCO and other Foreign Ministries. Rather, it is about Britain as a whole visiting China, India or Brazil, which includes the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and right across the board. We should not see emerging markets policy as a bolt-on, extra function of the Government that is divorced from our other deliberations in the House. Rather, it is a key function of the Government. It is led by the FCO, but it involves many Departments.

[Malcolm Bruce (Gordon) (LD)]

To take up the point that my hon. Friend has just made, in some countries our engagement is a development relationship, but we have both a high commissioner and a head of DFID. Are the Government prepared to consider whether those roles could usefully be combined? In some cases high commissioners or ambassadors have told me that they are only there to wave the flag because the only people that the host nation wants to talk to are those from DFID. Would it not be sensible to combine the two?

[Mr Browne]

I am grateful for my right hon. Friend’s expertise as the Chairman of the Select Committee. It is important that when we engage with countries, especially those that are substantial recipients of British aid, we have a joined-up approach in which the aid is not divorced from the wider discussions that we have with them. I do not mean that the aid should come with strings attached, but it is bizarre—when resources are stretched—for us to have competing Government offices in one capital, potentially with competing agendas, when there is scope for the money to be spent more efficiently and effectively.

It is possible to overstate the existing scale of the change. Britain’s GDP per capita remains high, our absolute prosperity—rather than our relative prosperity—remains high, and our economic, political and cultural leadership in the world remains very strong. But as a country and even as a continent—not just as a Government or Parliament—we cannot afford to be complacent. The world is changing rapidly. We need to engage constructively and energetically in that process of change so that we can shape it to ensure that Britain benefits as much as the new emerging economies from the opportunities that their rise undoubtedly offers. This task will be central to our future prosperity in the decades to come. We are already embarking on turning that goal into action.

20:42

[Chris Bryant (Rhondda) (Lab)]

Thank you, Madam Deputy Speaker. It is a great delight to see you in the Chair. I shall not reveal how I voted, but I did nominate you. This is the dawn of a new parliamentary era. [Hon. Members: “Oh!”] I apologise to the House for the quality of that remark.

I also welcome the Minister to his new responsibilities. He will be backed by a fine team of people, some of whom used to work to me. The quality of the advice provided in the Foreign Office is second to none, not only in relation to other Departments in this country but in relation to other foreign departments in other countries. I hope that the Minister lives up to them.

I have been looking at the Minister’s campaign website, which includes an interesting list of endorsements. Indeed, they have something of a theme. There is one from Janet, who lives in Taunton. She says:

“Jeremy is clearly the best candidate. He will be supported by former Conservative voters.”

Jez, also from Taunton, says:

“I’m afraid the idea of Mark Formosa”,

who sounds more like a plant than an animal—I mean, candidate—

“as an MP terrifies me! He is worryingly extreme.”

And Lavinia, from Wiveliscombe, says:

“Why is Mark Formosa so negative and nasty? I’m a natural Tory but I’m not supporting him!”

It is clear that throughout the election campaign the Minister had his eye on a Conservative-Liberal Democrat coalition. It was seated in his mind. It is little wonder that, with him in his new job, the Tory Back Benches have as many noses out of joint as the England rugby team—

[Mr Browne]

And the Welsh team.

[Chris Bryant]

No, we tend to specialise in ears.

The Minister is the first Liberal in the Foreign Office for some 60 years, so I did a little research into previous Liberal Ministers there. Captain Neil Primrose, who was one of the last four, lasted less than five months—

[Madam Deputy Speaker]

Order. The hon. Gentleman’s points are very interesting, but he needs to ensure that he stays in order and relates his remarks to the subject of emerging economies.

[Chris Bryant]

Captain Neil Primrose, who took a strong interest in emerging economies at the time, and particularly Turkey, which we shall come to, unfortunately lasted only five months in government, because the Government collapsed, and his daughter ended up marrying a Tory. Cecil Harmsworth, who also took a strong interest in emerging economies, is someone whose family gave us the Daily Mail—we often forget that it was the Liberals who did that. The Marquis of Reading had to resign for insider dealing after just three months in the job, while John Simon ended up virtually a Tory, so I look forward to observing the Minister’s career.

There can be little doubt that the shape of the world’s economy is changing, as the Minister said, and it is changing at a pace that few would have anticipated just a decade ago. Over the past 10 years, the BRIC countries, as they are often referred to—Brazil, Russia, India and China—have alone contributed more than a third of world GDP growth, growing from one sixth of the world economy to almost a quarter. There is also a growing confidence in many of those countries about their economic and cultural future, and they want a far greater impact on the world stage. Indeed, they are often impatient with progress at the United Nations and elsewhere. Thus, in April, Brazil saw its lowest unemployment figures since 2001, and it confidently expects growth to reach 6% this year, and this from a country that in 2002 had to secure an IMF loan—the largest IMF loan ever at the time—of $30.4 billion. India’s growth rate is expected to be 8.6%, while China has been averaging at 10% not just for the 10 years to which the Minister referred, but for the past 30 years.

Nothing, however, is certain—we only have to look at a little bit of history to see that. In 1913, Argentina was the 10th largest economy in the world and enjoyed significant advantages over many others: great natural resources, a well educated population and strong international ties to the United States of America, Spain, Italy and the United Kingdom. Today, however, Argentina languishes. Why? In part, I believe, because of the self-inflicted political turbulence that it has experienced; in part, because of—[Interruption.] I do not think that it was socialism—if anything, it was national socialism, which was rather closer to Tory philosophy in those days. In part, the reason was that Argentina failed to deal with inequality, but it was also—and primarily—an economic nationalism that created unnecessary barriers to trade. I would say to Argentina today that economic nationalism will do it no favours at all in the years to come either.

[Sajid Javid (Bromsgrove) (Con)]

Does the hon. Gentleman agree that one of the reasons why Argentina had all those problems was that when it defaulted on its debt a few years ago, it had both the largest budget deficit and the largest debt per capita on its continent? Does he see any parallels between that situation and the one that his Government left behind after 13 years of power?

[Chris Bryant]

Nice try, but we will come a little later to the problems that I see with the Conservative-Lib Dem Government’s approach to growth and why I think this debate points to some of the problems that we will see over the coming years. But no, I think that the problems in Argentina stretch back across 100 years. The Argentines failed to take advantage of their many strengths and they played their politics extremely badly. My fear is that they are doing exactly the same thing today.

The task for all those countries is to ensure their growth, while the task for us is to ensure that we match their performance pound for pound, real for real. It is worth bearing in mind how significant those economies are to the UK. To all intents and purposes, we are Russia’s banker, while we are Brazil’s seventh trading partner in terms of exports and India’s fourth. The emerging economies have become increasingly dependent on each other in recent years; thus China has now overtaken the USA as Brazil’s major partner. Our position in relation to the emerging economies should be to seek to do three things: first, build UK growth; secondly, fight bilaterally and on an international level for free and fair trade, rather than protectionist measures, which is something to which the Minister referred; and thirdly, constantly underline the importance of the rule of law and human rights.

Let me start with growth. I simply do not believe that it is possible for the UK to achieve a greater share of the markets, or a stronger role in the world, without a strategy for UK economic growth. The Foreign Secretary can huff and puff as much as he wants, but if the Chancellor is focusing only on cutting the deficit—whether through cutting expenditure or increasing taxes—and has no strategy for growth, we will have nothing to sell abroad, we shall lose out economically, and the Foreign Secretary will simply be left to manage the decline of our reputation abroad.

[Gordon Birtwistle (Burnley) (LD)]

rose—

[Malcolm Bruce]

rose—

[Chris Bryant]

I shall give way first to the newer Member, then to the old lag.

[Gordon Birtwistle]

Does the hon. Gentleman agree that, over the past 13 years—and probably even over the past 25—the products that we sell abroad have diminished because of Government policy? We now have very little to sell, apart from in the financial markets, because most of our manufacturing has moved to the emerging economies.

[Chris Bryant]

Strictly speaking, that is not statistically right. Yes, when Burberry tried to close its factory in my constituency, I fought hard to ensure that the business would not be taken to India or China. I do not think that most people would want to buy a high-quality Burberry product that purported to be British if it had not been made in the UK. Unfortunately, we lost that battle. However, we export a lot more than just financial services. For example, a lot of our exports relate to extractive mineral industries, which I shall come to in a moment—[Interruption.] I sense that Hartlepool is springing to its feet.

[Mr Iain Wright (Hartlepool) (Lab)]

I welcome my hon. Friend to the Opposition Benches, and I hope that he will apologise for the appalling nature of the gags. May I first take up the point made by the hon. Member for Burnley (Gordon Birtwistle)? I disagree with him, because the UK is still the sixth largest manufacturing nation on earth. We have moved along the value chain, in that we now provide high value-added manufacturing, such as that produced in Hartlepool by Heerema and by JDR Cable Systems. May I also press my hon. Friend on a point that he was starting to make? A UK growth strategy is sadly lacking in the new Government. The prospects for growth in relation to supporting and nurturing higher education and to higher value-added manufacturing are lacking. What does he think the Government could do to remedy that?

[Chris Bryant]

I am a bit distressed that my hon. Friend has just welcomed me to the Opposition Benches, but there it is. We came into the House at roughly the same time, and I will take that matter up with him later. He also made a good point about a growth strategy, which I will come to in a moment. First, I will give way to the slightly older Member.

[Malcolm Bruce]

Just refer to me as the old lag. On a detailed point, the Crombie overcoat company in my constituency went out of business—or at least contracted its business—because it had a major contract with the KGB, not because it had been successful in the free market. The point that the hon. Gentleman is making about a growth strategy is all very well—yes, we should have one—but can he divorce that from spending even more Government money and getting ourselves further into debt? Can he explain how we can have a growth strategy that does not involve spending more taxpayers’ money that we cannot afford?

[Chris Bryant]

I was about to do precisely that, so I am grateful to the old lag—

[Mr Ivan Lewis]

The honourable old lag.

[Chris Bryant]

Sorry—the honourable old lag. He is probably extremely right honourable, learned and gallant as well, for all I know.

We need to focus on three elements of a growth strategy in relation to the emerging economies. First, we need active investment in the industries of the future. We have only to take a cursory look at our exports to many of those countries to see that a large part of our engagement relates to old, extremely well established industries, notwithstanding the significant advances that have taken place in some others. For example, it is a simple fact that petrocarbons form the backbone of our world trade with many of the emerging economies. In India, pearls and rough diamonds are key exports, and, in many places, extractive industries dominate our balance of trade. In recent years, we have added telecoms to the list, as well as the pharmaceutical and IT industries, but the UK’s future has to spread further, especially into the low-carbon, green industries. I do not believe that that will happen without some degree of Government investment, however, and if we are too slow, others will gain first player advantage.

I presume that a Minister will be winding up the debate?

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

indicated assent.

[Chris Bryant]

I am grateful for that. The Minister who does so may not be able to answer all my questions, but I hope that he will write to me about any that he cannot.

What support will the Government give to British industry to compete in these green markets? The budget for UK Trade & Investment in 2008-09 was £316 million, with which it assisted 21,800 businesses that recorded an additional £3.6 billion of profit, which is equivalent to a £16 benefit for every £1 spent by UKTI. Will that budget rise or fall next year, and by how much?

[Mr Ellwood]

May I also welcome the hon. Gentleman to the Opposition Benches, and may I welcome, too, the many Labour Back Benchers who are present for this debate?

[Malcolm Bruce]

All one of them.

[Mr Ellwood]

Absolutely right.

The hon. Gentleman talks about the importance of green technology, but I am reminded of a fantastic company on the Isle of Wight—not far from my Bournemouth constituency—that made blades for wind turbines. For some reason, they could not be used in the UK, but they were manufactured to be used in the United States. That company closed down because it did not receive the support it needed from the previous Government. Does he now regret that decision?

[Chris Bryant]

Yes, of course I do—and I am looking forward to welcoming the hon. Gentleman to the Opposition Benches as well. Whether he will have to transfer his allegiance or we will have to change the Government in order to achieve that is another matter, but he makes a very fair point. I would, however, gently say to him that of course I accept that there will have to be cuts in the coming months and years, but I also believe that we must prioritise those industries where we can make the most dramatic difference and where we can maximise our chances of succeeding in the emerging economies.

The second thing we need to do is to learn some lessons about modern foreign languages. The Minister of State was rather complacent about the facts that India now uses English as its business language and many people in China learn English, rather than French as in the past. Unless we have a cadre of young people, and not only those working in the Foreign Office—[Interruption.] I think “cadre” is now a sufficiently anglicised word to be allowed in a debate and not to be out of order. Unless we have a sufficient number of people who speak modern foreign languages, and not just the useless modern foreign languages such as French, but the—[Interruption.] I have said that to the French; I think they realise there are problems.

[Dr Murrison]

Is the hon. Gentleman aware that not only has he just insulted the French, but he has also insulted a large swathe of the Maghreb, which has not been mentioned at all in the debate so far? That is a bit of a pity, in particular because one of our major trading partners in north Africa is, of course, Morocco, where the diplomatic language is French.

[Chris Bryant]

Yes, but I think that one of the things that has changed over the past 30 or 40 years is that whereas French used to be the most useful language because it was, for the most part, the diplomatic language around the world, that is certainly no longer the case. The most useful languages to speak at present are Mandarin, and Spanish and Portuguese because of Latin America, and we need to focus on Arabic as well.

My biggest concern is that the effortless British superiority with which we stride around the economic world means that all too often we are the only country that presents business people in other countries who do not speak even the rudiments of a foreign language. That is a big problem. [Interruption.] The Minister of State refers to the Deputy Prime Minister, and it is a delight that he speaks so many foreign languages, but I just gently say that it is important that the Government focus on this.

We did not get it right, and ever fewer people in the UK are learning foreign languages. My experience in the Foreign Office was that the number of people who spoke foreign languages has diminished, and the number who can confidently speak them is pretty low.

[Mr Jeremy Browne]

I am grateful to the hon. Gentleman for giving way as I wish to find a point of consensus with him. It is important not only that the Foreign Office trains to a high standard a sufficient number of diplomats who can engage with the emerging economies in the language spoken in each of those countries, but that we appreciate the wider challenge to our country, which I posed, of the educational curriculum and how well suited we are, not only within the Foreign Office or the Government, but as a nation, to deal with the emerging changes in the world.

[Chris Bryant]

Well, indeed.

The third thing that we need to do to enhance UK growth relates to students from emerging economies. In all, some 48,000 overseas students study in the UK and they are vital to the UK’s universities, as they bring in fees, ideas and an international perspective. Ever since Wong Fun graduated as a doctor from Edinburgh in 1855 there has been a large number of Chinese students in the UK. Their number has grown significantly in recent years, with nearly 5,000 starting new courses in 2008, along with 1,581 students from India.

The Conservatives were direct about this issue during the general election campaign, saying that

“our student visa system has become the biggest weakness in our border controls.”

They said that they would

“insist foreign students…pay a bond in order to study in this country, to be repaid after the student has left the country at the end of their studies”

and

“ensure foreign students can prove that they have the financial means to support themselves in the UK”.

By contrast, I note that the coalition agreement simply says that the Government will introduce new measures

“to minimise abuse of the immigration system, for example via student routes”.

I hope that the Minister will be able to tell us precisely what the Government’s intentions are. Will a bond be payable? Does he expect that this will cut or increase the number of students coming to the UK from emerging economies? Has the Foreign Office been consulted on this process? In particular, what plans does he have for the Chevening scholarships? The Chevening website already says that this year’s places cannot yet be confirmed, which means that people who have been offered places do not know whether they will be coming. When will the review be completed? How many students will be studying this year and for the next three years, and from which countries will they come?

[Mr Ellwood]

The point about visas is important. Bournemouth has a number of English language schools, which attract people from places such as China. The Labour Government introduced new guidelines so that people had to have a certain standard of English before they could even come to this country, thus defeating the purpose of their coming here to learn English in the first place.

[Chris Bryant]

I am only asking what the Government’s policy is—that is the job of the Opposition. The Labour Government did some things to ensure that significant loopholes that were being used to circumvent the proper immigration process were tackled. In particular, we decided to restrict the number of places available in northern India because there had been a sudden spike in the number of applications. Of course one has to be rational about this. I just want to know what conciliation has taken place between the Conservative and Liberal Democrat positions on this issue since the election.

In each of the countries that we are talking about there remain significant barriers to free and fair trade. In some instances we need to be sensitive to the political and cultural realities of those nations. For example, Mexico’s constitution forbids the ownership of that which lies under the earth by anyone other than Mexico. I hope that the Minister will press the Mexican Government for further reform of the energy law, so that British companies can help Mexico to realise its resources—I hope that he will write to me on that point. Likewise, we need to restart the Doha round with an enhanced offer from the European Union on the common agricultural policy, especially now that the EU-Latin America banana war is over.

In that regard, an additional issue needs to be tackled: the casual approach in several countries towards intellectual property. Every report on intellectual property has suggested that those countries that most carefully delineate and protect the fruits of human intelligence are those that stand the best chance of prosperity. That becomes a virtuous circle, because people invest in ideas, commercialise them and then reinvest the profits in education and research. I hope that the Government will use the international institutions to push through a stronger global understanding of intellectual property issues—particularly in relation to China—be it in respect of the work of a musician or a playwright, an engineer or a scientist.

One other barrier to free and fair trade is corruption. Many of these emerging economies still languish a long way down the list of openness and transparency, with South Africa 55th, Turkey 61st, Brazil 75th, China 79th, India 84th, Mexico 89th and Russia a shocking 146th on Transparency International’s corruption perceptions index, which I think is much respected by all.

As I have said, we need to use bilateral and multilateral levers to try to change all that. The most important of those is the European Union. For too long, Europe has allowed itself to be run ragged by the likes of Russia, China and India. If European countries are to flourish economically, we have to realise that we need greater unity based on self-discipline in our approach to those growing economies. Likewise, we need a common approach to Turkey—a country that is all too often left off the list of emerging economies, despite already being the 16th-largest economy in the world, and on the up. It must be in the UK’s interest for the Bosphorus tiger eventually to join the European Union.

On human rights and the rule of law, it is always tempting for a British company or Government to sideline human rights abuses when trying to secure an important new contract. However, that is always a mistake, as tacit acceptance of the status quo in terms of unscrupulous business practices all too often rebounds on the careless investor. In many of the countries that we are talking about, the human rights record is truly appalling. Russia, for example, is, economically, virtually a monogorod, or a town built on a single industry—petrocarbons. As the petrocarbons industry involves massive investment projects with potentially high returns and equally high risks, the Russian Government take a very direct interest in every aspect of it, but anxiety about excessive state intervention, about state appropriation of private assets and about corruption at the highest level has made it difficult for British companies to make the long-term investment needed to keep pipes running. When one adds to that the scandalous oppression of the media, the murder of journalists, the imprisonment of dissidents and the regular use of torture by the police and in prisons, it is a pretty heavy indictment of the Russian leadership. I am delighted that President Medvedev has made some excellent comments about tackling corruption, but so far that is just rhetoric, and very similar rhetoric to that used by Mr Putin when he was President.

I could make similar comments about China, which executes more people than the whole of the rest of the world and where there is the ongoing disgrace that is the treatment of the people of Tibet. In Brazil and Mexico, notwithstanding the efforts of Presidents Lula and Calderon, drug-related violence is endemic, especially in Mexico, torture is commonplace, and the rights of indigenous people are not fully recognised. In India, too, there have been unprovoked attacks on minorities—in Orissa state against Christians, and in Assam and Andhra Pradesh against Muslims. In that context, I ask the Minister which human rights projects in each of the emerging economies he proposes to continue and which he will cut. Will the project on the rights of children in the legal system in Brazil survive? Will the training of judges aimed at reducing the use of the death penalty in China survive? Will the civil society project in Chechnya continue? Or will all the human rights work in India, Russia, China and Brazil that is sponsored by the Foreign and Commonwealth Office be cut?

There is a tendency for Foreign Office Ministers—I confess that I did this myself—to declare whenever they arrive anywhere that they want to improve relations with that country. After all, it is only polite, and that is normally the aim of the visit. I am sure that we all want to improve trade with the emerging economies, but that requires a consistent approach to free and fair trade, a determination to assist British businesses abroad and a commitment to the British values of the rule of law and human rights. Above all, it requires a strategy for UK growth, but through all the hype, spin and glorious guff that we have heard from the new Government, the one thing we have not yet had is any sign of a strategy for growth.

21:08

[Laura Sandys (South Thanet) (Con)]

Thank you, Madam Deputy Speaker, for allowing me to contribute to this debate and to make my maiden speech.

I have worked in many parts of the world, including in many emerging economies, and I have seen the growing asymmetry in how business is done in parts of the world that are growing at a faster rate than ours and with whom we will need to do business if we are to maintain our global economic position. That is a real challenge for us all and I will be keen to contribute to further debates on the need for stronger relationships between the United Kingdom and those emerging economies, particularly those in the area of central Asia that I think is not well understood and with which our relationships are not as deep as they should be. However, my priority in the House, for as long as the people of South Thanet so choose, is to serve them and to ensure that the House and this Government support their needs and address their concerns.

I pay tribute to my predecessor, Dr Ladyman. He was an exceptionally committed Member of Parliament for South Thanet for 13 years, and held two distinguished posts in Transport and Health. On a personal note, he was extremely courteous and generous throughout our four-year campaigning trail together. I wish him great good luck in his new job as chief executive of a retirement home company. I know that in that role he will show the same commitment with which he served the people of South Thanet.

I live in and represent one of the best-kept secrets in the country—a series of towns and villages that demonstrate what is best about this country. I know how beautiful, how surprising and how unique each of the towns is that I represent, but over the last four years it has been particularly rewarding to see the number of supporters who came to South Thanet—some of them are here tonight—and who gasped with excitement when they saw the beauty of Ramsgate harbour, who saw that Broadstairs is one of the most perfect seaside towns, and who were staggered by Sandwich, which is considered nationally the most perfect medieval town. Even in Cliftonville, the poorest ward in the south-east, people recognised its architecture and its potential.

South Thanet has a particular relationship with the House. I live about a quarter of a mile from where Pugin built a church and his house. Ramsgate has many of the same architectural icons as the House, so there is a part of this place in South Thanet and a part of South Thanet here.

It is not just the place itself. The people of east Kent and South Thanet have attitude. We are independent. We have stood up against many wars and we have been on the front line against many invasions. I was privileged to be at the 70th anniversary of the Dunkirk little ships. Many people from my area, whether fishermen or small boat owners, went in their boats to save 300,000 of our soldiers who were on the beaches of Dunkirk. I am proud to represent such courageous and independent people in the House.

We have come into government at one of the most difficult times for many generations and what we achieve in the next five years will define our future for the next generation. I am sure that none of us on the Government Benches are under the illusion that we will not have to do things that will make us unpopular. What we must be judged on is whether we are being fair and whether we are rewarding those who take responsibility.

It is on fairness and responsibility that I want to contribute to the debate. This week is the start of carers week. In South Thanet, we have one of the largest numbers of carers in the country. Coastal towns have a high percentage of carers. Young, old, frail, healthy—carers are selfless family members whose lives become dominated by the responsibilities they voluntarily take on. Being a carer is not subject to any working time directive; carers are full-time, on call 24 hours. Their lives are dominated by the needs of others. When helping those with chronic illnesses, they often forfeit their own life, and certainly their livelihood. Having watched my mother look after my father for five years before he died, I have seen at first hand the toll that can be taken on the carer.

We need to ensure that we put carers at the heart of our review of care for the elderly. It is crucial that we look at the role they play. In many ways, they will be one of the front lines in public services in the future. I urge the Government to ensure that we support those who support their loved ones. We need to look again at providing respite for carers. We need to review the cut-off of carer’s allowance when people reach pensionable age—just when they need it most—and we need to place the carer’s role at the heart of our review of care for the elderly.

When we leave the House—not for many years, we hope—we might all need carers, or we might all need to care for others. I would prefer that to be done by a loving relative—someone who will be there for me in my time of need—and I am certain that many other Members would, too. As the Prime Minister says, we need to reward those who take responsibility, and never can that be better said than about 6 million carers who give up their lives and selflessly give their time to their loved ones.

21:15

[Alok Sharma (Reading West) (Con)]

Thank you, Madam Deputy Speaker, for the opportunity to make my maiden speech. I start by congratulating my hon. Friends the Members for Sleaford and North Hykeham (Stephen Phillips) and for South Thanet (Laura Sandys) on their excellent and moving maiden speeches.

My constituency of Reading West was created in 1983 and was served from then until 1997 by a Conservative Member, Sir Anthony Durant, who previously represented the Reading North seat between 1974 and 1983. Sir Anthony was an excellent constituency MP, who served the people of Reading with great distinction. In recent months, Sir Anthony has not been in the best of health, and I am sure that hon. Members on both sides of the House will join me in wishing him a speedy recovery. [Hon. Members: “Hear, hear.”]

My immediate predecessor was the Labour Member, Martin Salter, who represented Reading West for 13 years. No one who knows him could ever describe Martin as a shy and retiring individual. He always had and continues to have firm opinions on every political subject. Indeed, during his time as an MP, he sometimes held two opposing firm opinions on the same subject, both delivered with great conviction. A constituent of mine once compared Martin Salter to Marmite by saying, “You either loved him, or you wished that you had never opened the jar to let him out.” Despite our many political rows and differences during the four years that I was a candidate and he was the Member of Parliament, I grew to rather like Martin, but then I must also confess to liking Marmite.

Martin Salter announced last year that he would not be seeking re-election because he wanted to

“move on and do something else with my life while I’ve still got some energy left.”

Martin Salter certainly brought energy to his work on behalf of the people of Reading during his 25 years of public service—first, as a local councillor and then as the Member of Parliament for Reading West. Like Sir Anthony before him, he was a champion of local causes, a dedicated constituency MP, and he stood up for all the people of Reading West. I very much hope to continue in that fine tradition and serve each and every one my constituents to the best of my abilities.

I turn now to my wonderful constituency of Reading West, which stretches from the villages of Theale, Tidmarsh and Pangbourne in the west, to the more urban areas of Coley and Whitley towards the east. I grew up and went to school in Reading, and for me Reading is, quite simply, home. It is a confident and vibrant town full of aspirational and hard-working people. As a settlement, Reading was founded in the 8th century and was listed in the Domesday Book as a growing population centre—much as it is today. Reading abbey was built by Henry I in 1121, where he is also buried.

Although Reading has a long and honourable history, it is now very much a modern place. Originally famous for producing beer, biscuits and bulbs, Reading is now a high-tech and service industry hub and is home to many locally grown businesses, as well as international companies, such as Microsoft, Oracle and Cisco.

Reading also offers culture, with the internationally renowned Reading music festival being held every August. Hon. Members with a liking for contemporary music should know that a few tickets are still available for this year’s festival. The very fine Madejski football stadium is located in my constituency, and I am sure that, before too long, we will see Reading football club return to its rightful place in the premiership.

In their maiden speeches many Members have mentioned great historical figures who are connected with their constituency, but, as I said, Reading is a modern place, so I would like to mention just two of the recent renowned sons and daughters of our great town. Kate Winslet was born and grew up in Reading. Her parents are constituents of mine. We are very proud of Miss Winslet’s Oscar-winning achievements. Locally, Miss Winslet’s mother is also a winner. Last year she was awarded first prize in a local pub’s pickled onion-making competition. Who says Reading cannot match Hollywood’s glamour?

The comedian and actor Mr Ricky Gervais grew up in Whitley, not far from where my parents lived when they first moved to Reading. I do not know Mr Gervais personally, but it is entirely possible that we loitered in the same shopping precinct when we were youngsters. Of course, one of us has now gone on to great things—and the other has become a Member of Parliament.

I am very pleased to be making my maiden speech during this debate on emerging economies, one of the largest of which is India. I know a little of the country. My family hails from India originally; I have advised European companies on doing business there; and some months ago I visited India on a research project and interviewed a range of corporate leaders, civil servants and opinion formers to hear their views on India’s development and economic ambitions. What is absolutely clear is that over the past decade the relationship between emerging economies such as India and China on the one hand, and the industrialised nations in the west on the other, has developed from one of the emerging economies being junior partners to a relationship of equals, with real potential for the likes of China and India to emerge as first among economic equals.

The emerging economies present challenges for us. We have seen some British jobs offshored to low-cost locations. With increasing globalisation and cost pressures on corporates, a certain level of offshoring is here to stay, whether we like it or not. But emerging economies also present a huge opportunity for British companies and jobs in this country. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), talked about statistics. Let me give the House a few on India. We have heard about annual growth rates of 7 to 9%. There is a middle class of around 400 million people and growing. Well over 60% of the population is aged below 35. India is looking to make significant investments in its infrastructure, in pharmaceuticals and health care, IT, green technologies, and food and agriculture, to name just a few sectors ripe for investment and growth. We in Britain have leading companies with significant expertise and know-how in many of these and other sectors.

In Reading, I have met home-grown technology companies that are exporting value-added products across the world. As a Government, we should be doing everything we can to help and encourage our companies to take advantage of the growth markets in the emerging economies. That will in turn help to create value-added and long-term jobs in the United Kingdom.

I was very pleased that the Gracious Speech made mention of developing an enhanced partnership with India. Because of our shared history and the mutual good will and affection between Britain and India, we already have a special relationship on an emotional level. We now need to make sure that we translate that good will and understanding into a special relationship based on trade and commerce to our mutual benefit. If we can do that in a timely manner, it will be to the advantage of British companies and will help safeguard and create jobs in our country which will be vital as we aim to grow and expand the British economy.

21:23

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Thank you, Madam Deputy Speaker, for letting me catch your eye, and welcome to the Chair. I also welcome Ministers to the Dispatch Box and congratulate the hon. Member for Rhondda (Chris Bryant) on his position on the Opposition Front Bench.

I have a huge personal interest in the emerging economies, and it is a great joy to be able to speak here tonight. Many years ago, I ran an educational charity giving away new medical textbooks throughout eastern Europe during and after the communist period, and it has been a particular delight to hear the expertise displayed by my hon. Friends the Members for South Thanet (Laura Sandys) and for Reading West (Alok Sharma) in their excellent maiden speeches.

I was in eastern Europe at a time when civil society was the subject of constant political oppression. Economic activity was shackled by commissars and petty regulation, and industry was funded by an open chequebook from Government. The result was colossal debt and economic stagnation. How very different from the situation that faces the UK today.

I know that every Member of this House will join me in saying that it is the greatest honour of all to be chosen to sit in this august Chamber; to have a share, however small, in the supreme sovereign authority in this country; and to walk in these hallowed halls and corridors, as so many extraordinary men and women have done before us. First impressions are not always so favourable; one thinks of Mark Twain, who said—I hope that the House will forgive my accent—“When I first came to Memphis, I found men drinking and gambling, and open prostitution in the streets. It was no place for a Presbyterian—and I did not long remain one.” As for me, I enter this House as I hope I will remain—filled with a sense of due reverence and due responsibility.

I feel doubly privileged, in that I stand here as one of two tribunes for the people of Herefordshire. Truly, Herefordshire is a glorious county, known throughout the world for the quality of its cider, its beef and its soldiers. Such is its beauty that it has been only slightly disfigured by a recent association with the noble Lord Mandelson, who has added “of Foy in the county of Herefordshire” to an already rather extensive title. I alert the Member for Hartlepool (Mr Wright) to that unfortunate precedent. Alas, we still look in vain for the tidal wave of public subsidy that usually accompanies Lord Mandelson wherever he goes.

My constituency stretches from the Black mountains in the west to the Forest of Dean. It encompasses the aptly named Golden valley; the gorgeous Monnow and Wye valleys; and Hereford itself, with its magnificent cathedral and Mappa Mundi. It has apple orchards, lovely churchyards, fine, rolling arable land, wildlife and pasture, stretching all the way down to Ross-on-Wye and the spectacular rock of Symonds Yat.

I am not, in fact, the first Norman to be returned to Parliament from Herefordshire; that honour goes to its very earliest representatives, Rogerus le Rus and Ricardus le Brut, who were summoned to meet at Westminster on 15 July 1290, in the reign of Edward I, barely 200 years after the Norman conquest—the first Norman conquest, that is. At the time, Herefordshire was regarded as the farthest outpost of western civilisation—a status which, some Herefordians would argue, it retains to this day.

South Herefordshire has always been well served by its MPs, and I would like to pay particular tribute to my predecessor Paul Keetch, a Herefordian born and bred, who built up a reputation over 13 years as a fine constituency MP. Hereford city reputedly has the largest container of alcoholic beverage in the world—I should say, outside the Palace of Westminster—at Bulmers, and Paul has worked very hard over many years to protect and support the cider industry, most recently against the ill-advised depredations of the cider duty. I should also like to pay tribute to Sir Colin Shepherd before him, whom many hon. Members will recall for his 23 years of dedicated service to this House. He and his wife, Lady Lou, have been tireless in their support of the county and of its newest MP.

But Herefordshire is not, or not yet, a garden of Eden. On the contrary, it has many social and economic problems that demand vigorous public action. Like other rural areas, it has not been at the top of the Government’s agenda in recent years, to say the least. On the contrary, our schools are the third worst-funded in the UK. Local wages are very low. Farmers struggle with the many inadequacies of the Department for Environment, Food and Rural Affairs. Young people lack decent leisure facilities. The very idea of a functional broadband connection, or even of a decent mobile telephone signal, has yet to be entertained in many parts of my county, and Hereford, a lovely medieval city that received its royal charter in 1189, is being strangled by traffic. Those, and greater support for higher education in the county, will be among my personal priorities as the new MP.

However, we are not sent to this House only to represent our constituents; we are also sent here to play a role in the wider governance of this country. The new Government have made a superb early start in opening up sources of data about spending across the public sector. But what matters is not merely what we think about, but how we think about it. Our task is to remedy not just a colossal failure of governance over the past 13 years, but a colossal failure of thought. Politicians are generally nervous about talking about abstract ideas. In the words of the late great Ernie Bevin—here I will not attempt an accent—“Open up that there Pandora’s Box, and who knows what Trojan ’orses won’t jump out of it.” But of course to dismiss ideas is itself to be ruled by an idea. Ideas are always in charge. So it is important—nay, vital—to choose the right ones.

Now, the idea of revolution is never dear to a conservative, but even Edmund Burke would agree that we need a revolution in how we think about economics in Government. Over the past two decades the British Government have become steeped in a 1970s textbook caricature—a view in which markets are always efficient, prices reflect perfect information, and institutions are nowhere to be found. One would be tempted to call such a view neo-liberal, were we not in a time of coalition government.

Worse than that, the deep assumption remains that human beings are purely economic, rather than social, animals. This dismal gospel regards the human world as static, not dynamic—as a world of fixed social engineering, not one of creation, discovery and competition. In policy terms, this textbook economics takes power away from local people. It encourages centralisation and top-down meddling. It pushes us towards an inefficient, inhumane and factory-style view of public services. It is absurdly risk averse. In its apparent inevitability, it stifles public debate about other, more thoughtful approaches. Above all, it actively undermines the ideas of public service, public vocation and public duty—ideas which, I know, lie close to the heart of every Member of this House.

Now is the moment to re-examine these assumptions. Politics is not a subset of economics, and economics is not a subset of the financial sector. GDP growth is important—goodness knows that is true now—but so are flexibility, resilience and, above all, entrepreneurship in our economy. We need a new economics in our Government, not the desiccated economic atomism of the old textbooks, and we need to see people for what they really are, as bundles of human capability, creative, dynamic and fizzing with imagination and potential.

If we do this, and only if we do this, we can revive our economy on a huge billow of human energy, one that is barely conceivable within our current conventional economic models, and we can help to restore the trust and the mutual respect that our society so badly requires. It was that great—and rather conservative—economist, John Maynard Keynes, who once warned politicians not to be the slaves of some defunct economist. So let us all cry freedom and move on.

21:32

[John Howell (Henley) (Con)]

Let me start by thanking all the hon. Members who made maiden speeches tonight. I suspect that when I came into the House after a by-election colleagues breathed a sigh of relief at the fact that they had only one maiden speech to concentrate on. Tonight we have had three, but they have been three excellent speeches. I particularly welcome a fellow central and east European cold warrior to the Conservative Benches, particularly in the context of this debate.

It is nice, too, to return to a subject that I left professionally almost a decade ago, when I was the author of the Ernst and Young emerging markets reports. It was a monthly attempt to score key markets for attractiveness, principally from the point of view of foreign direct investment. The big emerging markets of the day were in eastern Europe, which seem still to be the big emerging markets of today, as if nothing had happened. Many are still on the list, despite being members of the European Union. Then, as now, the big enigma was the role of Russia.

In the intervening decade there seems to have been in the field a long march of taxonomists, who have sought to subdivide emerging markets almost ad infinitum. The Financial Times divides them into advanced and secondary emerging markets, based on national income. Morgan Stanley divides them into developed, emerging and what it calls frontier markets. There is a core group of markets on which everyone agrees, with a few others, such as Saudi Arabia, around the edges.

I am not sure that such taxonomy is of any use. What we are still dealing with are industrialising countries with large growth and large potential, accompanied by equally large risk and insecurity. Most of that taxonomy, anyway, is capital markets-driven, but a very different picture often emerges if one looks at those economies not as capital markets, but as markets for foreign direct investment or for export. Indeed, when for a brief while I presented business programmes for BBC World Service television, I visited more emerging countries’ stock exchanges than I care to remember. Undoubtedly the smallest but one of the most enthusiastic was that in Mongolia, but we should remember that the Mongolian stock exchange is not there to generate capital for its companies; it is there as a social device for the equitable distribution of newly privatised assets, most of those by means of mass or voucher privatisation, which the UK has sponsored. Inevitably, those are high-risk procedures, but experienced capital-market players can largely cope with such risks.

A good question is how we define the difference between emerging economies and emerging markets. We are talking about the attractiveness of such economies in business terms, with their export-led focus, use of agents, joint ventures and, indeed, direct investments. In my time as a partner at Ernst and Young, I helped many small and medium-sized enterprises into emerging markets, but we have to be realistic, because one of the biggest constraints on them is the amount of time involved in entering such markets.

Sadly, the majority of SMEs that came to me for advice came when they were on their last legs in the UK—their markets having disappeared for one reason or another—and they wanted an emerging market and an emerging economy as a means of getting them out of their problems. I am not saying that that cannot be done; it can. The company that I set up with a business partner did so, but it meant that one of us was always on the road, particularly as our first major project was to produce what I can only describe as a pop video of Manmohan Singh, to be shown at an international conference. It was incredibly difficult, because the essential humility of the man meant that his character did not fit into the pop video class. The business meant having to be away for quite a long time and, in a business with two principals, one can imagine the difficulties that arose.

We need to take a balanced view of individual countries, and to make an assessment that some will need more help than others and more encouragement from Government if they are to export. There is a lot of talk about the emerging economies that are in fashion today and out of fashion tomorrow, but not all of that is based on the objective, analytical criteria of companies such as Morgan Stanley; much of it is based on gut feeling.

We spoke earlier about one barrier being the difficulty of language, but one that is frequently overlooked is the difficulty of culture. I remember how, at an INSEAD seminar, the most distinguished cultural scientist on the matter, Fons Trompenaars, put forward his view on cultures and how that can help people assess them and do business. His view is based on a number of individual dilemmas that he put to about 15,000 people throughout the world.

The most famous is known as the dilemma of the car and the pedestrian. Essentially, we are in a car driven by a friend who exceeds the speed limit and knocks down a pedestrian. On the question of the driver’s expectation that we will lie for him, the worst place in the world, according to Fons Trompenaars, is Canada, where 96% of people would shop their friends to the police. Emerging markets, however, are some of the best places to have friends: in South Korea, 26% would shop their friends; in Russia, 42% would; and in China, the figure is 48%.

Those responses should not be taken literally, but they are indicative of how much obligations to the state outweigh obligations to individuals. [Interruption.] The Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne) laughs, but Britons figure at 90% on that scale, so the UK is not too good for friendship. Interestingly, however, those questioned in the UK asked how seriously the pedestrian was hurt. If they were more seriously hurt, there was more of an obligation to the state than to the individual. One has only to cross the channel to obtain completely the opposite result, where the more the pedestrian is hurt, the more the driver obtains our assistance in lying, because their punishment would be more severe. That may seem academic, but I recommend the work of Fons Trompenaars to hon. Members; it provides a useful, pragmatic framework for considering emerging markets. For example, it draws out the frequency with which developed countries depend on legal agreements and big contracts.

[Gordon Birtwistle]

My concern, which the hon. Gentleman may well be able to answer, is about the fact that the emerging markets have now taken away our heavy industry—shipbuilding, steel and things of that nature. How do you see this country fighting back against the emerging markets, with jobs of the future? I accept that we have advanced engineering in aerospace and other such sectors, but many residents of the country do not have the skills to be involved in that type of industry. How do you see the UK fighting back against the emerging markets in respect of less skilled jobs?

[Mr Speaker]

Order. I gently point out to the hon. Gentleman that I do not see anything, although I think that the hon. Member for Henley (John Howell) will.

[John Howell]

I thank the hon. Gentleman for his comments. Clearly, British industry still has a big role to play in emerging markets, but we need to be realistic about in which markets it can play that role, what assistance is needed and what size companies can play in which markets.

The dilemma that I was discussing draws out the frequency with which developed countries depend on legal agreements, big contracts and lawyers, and how relationships tend to get ignored. Emerging markets, however, depend more on the relationships that are built up; the handshake comes first, rather than the contract—hence the amount of time required to develop business in them. That is important not only for foreign direct investment or the export trade but for capital markets and understanding the role of supervisory regimes—the structure of those market institutions and how the regimes are approached. The point is also a crucial piece of understanding about how such countries will perform in international forums. One thinks immediately of the expectation of honouring OECD template agreements, which are the lowest common denominator but often do not fit within the cultures of the countries that we are talking about.

I respectfully suggest to Ministers that the issue also appears in diplomacy. When I was leading a delegation of British business to a G7 meeting, I remember being able, because I had the benefit of such an understanding of cultures, to get the Hungarians and French on side with us Brits to overturn an American proposal for Russia to simplify bureaucracy by introducing a new ministry. The proposal was quickly defeated; the Hungarians got on board and the French commented that they had never previously recognised that a Brit could understand la psychologie.

That provides a link to another issue as well. Part of the reason why some emerging markets never fully emerge is their lack of understanding of the fact that economics and politics cannot be separated. It is difficult to find an emerging economy that is not also an emerging or problematic political system. Russia is the principal example of that—bedevilled by an incomplete set of reforms that left politics behind economics.

The know-how fund was one of the institutions set up by the previous Conservative Government, who appreciated that market economics needed to go hand in hand with democracy. Their well placed £100 million or so laid the ground for much of eastern Europe to come into the European Union. The know-how fund was aimed not at Governments but at providing assistance to NGOs to build capacity on the ground. That is still a good approach. Sadly, however, the know-how fund was not allowed to finish its work in Russia.

The shadow Minister, the hon. Member for Rhondda (Chris Bryant), took the biscuit when he complained about the position in which Russia was left, given that it was his Government who abandoned the know-how fund, turning it over to the European Union as part of a multilateral package. They also abandoned the east European trade council and the British Association for Central and Eastern Europe. In a debate in 2008, the hon. Member for Birmingham, Edgbaston (Ms Stuart) pointed out that since 1991 BACEE, a small organisation with a minuscule grant in aid from the Foreign Office, had had more than 5,000 politicians, civil servants, judges, journalists and business people from countries of central and eastern Europe participating in its programmes as alumni. That is the way to build up understanding of the politics in emerging market countries.

Unfortunately, when the know-how fund was delivered to the European Union, chaos resulted, with companies turning up in countries to be told that the same contract had been let twice. We also had the ridiculous situation of trying to bring into emerging markets in central and eastern Europe an Italian system of accounting, a French system of law, and an English system of stock exchange. It is no wonder that some of these emerging markets failed to emerge fully during the course of their transition.

Over the years, the role of UK Trade & Investment in this field has swung between a focus on geography and a focus on sectors. During that time, I have had a role in swinging it towards sectors, but I appreciate that it swings back again. An emphasis on sectors is fine provided that one recognises that some markets require more hand-holding than others. I praise UKTI for its services, which have been excellent.

As regards the transition in future, we will need to see markets as separate countries. The acronym, BRIC—Brazil, Russia, India and China—makes no sense in terms of relationships, just as a massive grouping. The transition should be acknowledged both in business and in aid. As regards aid, we must recognise that while there is a move away from providing aid to countries such as India, China and Russia, which I welcome, there is a difference between providing aid and technical assistance. Even after one has moved beyond the trade part, there is still a need to recognise that many of those countries still do not have fully developed local democratic institutions, civil society groups, media or, indeed, enterprise that is fully reflective of a market economy and democracy. I urge Ministers to look carefully at that to ensure that we do not throw the baby out with the bathwater but continue the process, looking back at the mistake that was made in relation to Russia, where, if we had continued our focus, we could have done a lot more to ensure that there was the continuity needed to bring that economy fully out of its emerging status to play its full role in the world.

21:48

[Kwasi Kwarteng (Spelthorne) (Con)]

I have been privileged to hear maiden speeches by my hon. Friends the Member for South Thanet (Laura Sandys) and for Hereford and South Herefordshire (Jesse Norman), who illustrated very well the nature of the threats that we face. My hon. Friend the Member for South Thanet talked about carers, and about the particular character and fortitude of the people of her constituency.

The House could have a no more important debate than this, and it is disappointing to see it so poorly attended by Labour Members. The nature of this country’s relationship with the wider world and how we can hold our own position in it, not only in terms of economics and culture, is the fundamental issue that will determine the next 10 or 20 years—a long time in which I hope that many Members present will sit in this House, obviously provided that their constituencies return them. It was revealing to hear the shadow Minister speaking on the subject. He said that Argentina was the 10th richest country in the world in 1913, but seemed to suggest that it had then fallen back because of its politics. He failed to analyse the political position and consider what sort of political regime operated in Argentina. He will remember that Juan Perón ruled for a long time after the second world war and was perhaps that country’s most disastrous ruler. He openly espoused a socialist programme. There was vast confiscation of wealth and manipulation of the unions. As my hon. Friend the Member for Bromsgrove (Sajid Javid) pointed out, Argentina defaulted in 1999 because of its huge debt. Yet the hon. Member for Rhondda (Chris Bryant) elided all those facts.

[Chris Bryant]

Juan Domingo Perón was more of a syndicalist, closer to Mussolini than to the socialism of the Labour party.

[Kwasi Kwarteng]

May I retort that Mussolini was originally a socialist? He was a left-wing journalist. It is no accident that those people had many shared ideas. However, whether Perón was a socialist or a syndicalist is neither here nor there.

The hon. Member for Rhondda alluded to our problem as a country. He suggested that we had problems with education. He rightly mentioned that many people in this country are not learning foreign languages. Indeed, the number has declined since 2001. However, who was in government at the time when, as he pointed out, the figures were declining?

We must also confront a decline in educational standards. It is an open secret that we have had grade inflation. In China or other parts of the world, the education systems are highly competitive and rigorous. If we are seriously to compete with the emerging nations, we must sort out our education system and return some rigour to the process.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Does the hon. Gentleman accept that the number of pupils passing GCSEs and A-levels reached a record high under the previous Labour Government?

[Kwasi Kwarteng]

That is the whole point—that happened because of grade inflation. The results reached a high every year for 13 years. One must conclude that either students are getting much cleverer or exams are getting easier. You take your choice. [Interruption.]

[Mr Ellwood]

I feel an intervention coming on.

[Kwasi Kwarteng]

I am happy to take them.

[Mr Iain Wright]

The hon. Gentleman is right about ensuring that more people take foreign languages such as Mandarin and Spanish. However, does he not think it is counter-productive to end the fourth phase of the diploma programme, particularly for languages, which would encourage enthusiasm for modern languages in emerging markets?

[Kwasi Kwarteng]

I was making a broad point about 13 years of Labour failure, which is central to the debate. If we are serious about competing with China and India, we must have much more rigour and a little more discipline and focus in our education system. Those are obvious facts, but Labour Members seem to ignore them completely.

[Chris Bryant]

Answer the question!

[Kwasi Kwarteng]

With respect, I am talking about the emerging economies, and the point about education is central to the debate. If the country is to improve and compete with other countries, we need much more rigour and discipline. That was palpably lacking in the Labour Government’s actions in the past 13 years.

We must approach the problem much more broadly. Britain was so successful in the past because we had a thriving economy. The industrial revolution powered Britain’s ascent to world dominance in many ways. Leaving a country economically crippled is the worst thing that we can do to our standing abroad. We must tackle our domestic economic situation before we can even begin to try to compete with emerging economies. I just wanted to put those broad points on the record, and to say that Labour failure has once again damaged—

[Mr Speaker]

Order. We are grateful to the hon. Gentleman. With the leave of the House, I call the Minister, Mr Henry Bellingham.

21:55

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham)]

I thank all hon. Members for their contributions to this excellent, albeit very short, debate. As the Foreign Office Minister responsible not only for Africa but for relations with business, I am keen to meet as many parliamentarians as possible who have an interest in emerging markets, and the debate has revealed a lot expertise.

We have heard a number of superb maiden speeches, and I turn first of all to my hon. Friend the Member for South Thanet (Laura Sandys), who made a charming, eloquent and very personal speech. She comes from a line of distinguished parliamentarians. Her father, to whom she referred in her moving remarks on carers, would have been incredibly proud of her this evening. I wish her well for the future and I am sure she will go a very long way indeed.

My hon. Friend the Member for Reading West (Alok Sharma) gave us another splendid tour de force. He spoke with passion about his constituency and made a number of good points about emerging markets, saying that we should treat them as equals and not be afraid of offshoring. He talked about the great opportunities that such markets present to us, and I agree with him 100%. The business world’s loss is the House’s gain, and I wish him well for the future.

My hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) produced one of the best Mark Twain quotes I have ever heard. One of the great treats of listening to maiden speeches is that one learns a lot about our beautiful and interesting kingdom. He spoke with a great deal of passion about his constituency, but his speech was also erudite and intellectual. He spoke of flexibility, resilience and entrepreneurship, which need to be applied to our drive to create and generate export-led growth. I congratulate him on his excellent speech.

The Foreign Secretary made it clear that he will pursue a dynamic foreign policy that will be ingenious and energetic. As my hon. Friend the Minister—my coalition partner—made clear, the Foreign Secretary’s plan is to intensify bilateral relations, particularly with many of the emerging economies. With our economy in crisis, we are facing a mammoth challenge to reduce the deficit. I congratulate the former Minister, the hon. Member for Rhondda (Chris Bryant), on his work at the Foreign Office—he obviously relied heavily this evening on the expert knowledge he gained in his time there—but it is complete nonsense to say that the Government have no strategy for growth. My hon. Friend the Minister talked about an export-led growth strategy. Furthermore, not tackling the deficit would be the biggest barrier of all to growth, because that would drive inflation and interest rates. I can tell the hon. Gentleman that he was talking total and complete nonsense. If we do not improve our economy and reduce the deficit, our standing in the world will be diminished, as my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) pointed out so eloquently, and we will not be able to improve those bilateral relations or drive that export-led growth.

UK Trade & Investment operates in 17 key, high-growth markets. Of course, the Foreign Office must consider efficiencies in all its operations, but the Foreign Secretary has made it clear that our national interest and our international role in the world will not be undermined or put at risk in any way. The Foreign Office places a lot of emphasis on low-carbon, green technologies. Its low-carbon, high-growth strategic programme fund—£17 million in total—will not, as I understand it, come under any financial pressure.

We treasure students who come to this country from around the world and rely on them to a very great extent when it comes to building our influence in the world. Obviously, we will look at a number of aspects of the budget, but Chevening scholarships, which the former Minister mentioned, are currently frozen as part of the Government’s review of all programme spending. We expect to make decisions in July, but of course there is uncertainty. The coalition Government have taken over an appalling economic crisis. It is a little rich for the shadow Minister to complain about various matters that were entirely the fault of the Government of whom he was a member.

The hon. Gentleman also raised the issue of human rights, among others. If I have not answered his questions, I will write to him. This has been an important debate—

22:00

Motion lapsed (Standing Order No. 9(3)).

Business without Debate

Monday 14th June 2010 Commons Chamber

Business of the House

Motion made,

That, at the sitting on Tuesday 15 June, the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Sir George Young relating to Backbench Business Committee, Election of Backbench Business Committee, Backbench Business (Amendment of Standing Orders), Westminster Hall (Amendment of Standing Orders), Topical Debates (Amendments of Standing Orders), Pay for Chairs of Select Committees, Backbench Business Committee (Review), September Sittings, Business of the House (Private Members’ Bills), Deferred Divisions (Timing), Select Committees (Membership), Select Committees (Machinery of Government Change) and Sittings of the House not later than 9.30 pm; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings may continue after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(James Duddridge.)

[Hon. Members]

Object.

Water Bills (South-West)

Monday 14th June 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(James Duddridge.)

22:00

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I am grateful for the opportunity to be the first to raise this issue in the new Parliament on behalf of water bill payers in Plymouth and the wider south-west. The problem we face is simple: water rates in the south-west are 25% higher than the UK average, placing an unfair burden on the budgets of my constituents and all residents across the south-west of England. This is an issue that dates back to the botched privatisation of water utility companies in the late 1980s, and it is to the shame of all parties that the problem remains unresolved after so many years, despite the constant efforts of right hon. and hon. Members from the south-west to keep the matter high on the agenda of the Minister’s Department.

I am pleased to welcome the new Minister, and I am pleased to see so many Members from other parties in their places tonight, including the hon. Member for St Ives (Andrew George), who is the new joint chair of the all-party water group, and the hon. Member for Newton Abbot (Anne Marie Morris), who is carrying on the active interest in water pricing shown by her predecessor. I hope that by the end of this debate we will have been able to put on record some of the options for consideration, including a levy proposal.

It would be remiss of me not to place on record the thanks due for the unstinting efforts and enthusiasm of my former colleague, Linda Gilroy, who not only chaired a very active all-party water group, but individually campaigned for many years on behalf of water bill payers.

[Mr Adrian Sanders (Torbay) (LD)]

I congratulate the hon. Lady on securing the debate. She is right to pay tribute to Linda Gilroy, but other former colleagues from Devon and Cornwall played their part, including the former Members for Truro, for Falmouth and Camborne and for Teignbridge. I may have forgotten others, but they all stood up for the south-west on this issue.

[Alison Seabeck]

The hon. Gentleman is right and the valuable contributions of those former Members will be missed.

Linda Gilroy was instrumental in organising the many meetings and briefings that we had with Ministers and others, and with the all-party group she produced a very thorough paper on the pressures felt by customers and water companies—and not just South West Water—which in turn fed into Anna Walker’s considerations in her review. In 1989, the privatised utilities were given responsibility not only for the provision of water and the disposal of waste but also for the maintenance of the coastline. The Minister will be well aware that in the south-west we are blessed with some of the most beautiful coastline in the country. Our beaches, bays and coves are famed, and rightly so, but they are an expensive luxury and one that is enjoyed not only by the people of the south-west, but by people from across the country and around the world. They are a common good and to the benefit of the whole public.

South West Water deserves credit for the work it has done to clean up the beaches. It has invested more than £1.5 billion through its clean sweep programme, which has modernised sewage treatment all around the peninsula, removing almost 250 crude outfalls and transforming the bathing waters of the region.

Those improvements are not paid for by the whole public. When the water utilities were privatised, the public in each area became responsible for paying for the maintenance of the coastline in their region. For the people of the west midlands, that was not a problem because they do not have a coastline, but in the south-west we have 30% of England’s coast, and the burden of cost is placed on just 3% of the population. The Prime Minister himself acknowledged the problem when he said, while holidaying in the region:

“I understand the unfairness that people feel in the South West that they are paying a lot of money so that there are clean beaches for people like me from Oxfordshire to come and play on.”

Indeed, the number of tourists to the region continues to grow, with the latest figures showing 21 million visits, the vast majority of which are by people coming from outside the south-west.

The water industry faces many challenges in the years ahead, and none of the solutions comes without a cost. It will have to deal with pollution concerns; better manage surface water and flooding; continue to try to provide an affordable supply of water; reduce greenhouse gas emissions; and adapt the service to make it more resilient to climate change.

[Andrew George (St Ives) (LD)]

I pay tribute to the hon. Lady for what she is saying, all of which I endorse. When she refers to cleaning up the coastline, she is talking about a national asset being paid for by local water rate payers—a point that the Anna Walker review made clear. That is clearly not the case with national galleries or national museums, which are paid for by all taxpayers. We should all reflect on that.

[Alison Seabeck]

Yes, indeed, and I shall return to that point.

It is welcome that all water companies are now expected to produce water resources plans for the Environment Agency and strategic direction statements for Ofwat, both of which are useful indicators to assist in the long-term planning for the sector, but also help in assessing the likely impact of such works on bill payers.

[Anne Marie Morris (Newton Abbot) (Con)]

I very much support this debate. I would like to reinforce the point that although many people feel that we in the south-west live in a land of plenty—a land of flowing milk and honey—there are areas of great deprivation. For many people in our constituencies, the cost of living is high compared with the national income, and they are therefore hit particularly hard.

[Alison Seabeck]

The hon. Lady is absolutely right, and I concur with that view. Again, however, I will deal with that issue in more depth a little later.

Bills in the south-west are 25% higher than the national average, which over the course of a year equates to £100 more, while for unmetered customers the figure is considerably higher, at almost £300. For people on low or fixed incomes, that can mean a substantial amount of their income. Indeed, for those on the lowest incomes, water bills can take 10% of their incomes. For elderly individuals living alone on a basic pension—we in the south-west have a larger-than-average older demographic— or for lone parents with young children or single people in rented accommodation, water bills present a struggle.

The Minister will know that the area covered by South West Water is large and diverse, ranging from Cornwall in the far west through to Devon, and taking in parts of Dorset and Somerset. We also have some of the poorest areas of the country. Cornwall is the only area of the country to be in receipt of EU convergence funding—previously known as objective 1 funding—and poverty remains an issue, despite big moves in the right direction over the past 13 years. The Consumer Council for Water has actively campaigned to try to influence price levels in the south-west, and has carried out further, detailed research to try to discover what the bill payers themselves feel should be done to remedy the problem.

The bill payers whom I have spoken to—I am sure that other hon. Members have had similar conversations—feel that it is unfair and indefensible to expect some of the nation’s least well-off families to shoulder the burden of the cost of a system that requires them to pay for the upkeep of beaches that are largely used by wealthier holidaymakers from outside the region who do not pay for the coastline in the south-west. A solution to that long-standing injustice must be found. Many of my constituents have already lost patience with the process. A recent letter from one elderly constituent from St Budeaux expressed utter exasperation at the lack of transparency in how the costs are apportioned.

In acknowledgement of the problem, the previous Government set up the Walker review to examine the case surrounding water charges. Anna Walker was asked, among other things, to examine the current system of charging households for water and sewerage, and to assess both the effectiveness and fairness of the current and alternative methods of charging, and the link to affordability. Anna Walker delivered her extremely thorough report last year, having toured the country and visited the south-west and Plymouth on more than one occasion. The report acknowledged for the first time what most of us knew: that the long-standing high charges in the south-west were a direct result of the privatisation in 1989.

Anna Walker also suggested that the options for tackling the root causes should include a specific one-off adjustment, estimated at around £650 million, to pay off South West Water’s debt, or annual transfers either from the Government—I suspect that this is unlikely in the current economic climate—or from other water customers around England and Wales. That would not be popular either, because Thames Water customers are financing the Thames tideway project around the city, and water shortage issues have a significant future cost in a number of other areas.

A further alternative would be to rely on a package of proposals targeting specific groups of South West Water customers, perhaps through a series of measures such as the use of a seasonal tariff charged for additional summer use. That would pick up second-home users, but also businesses. It could help some residents to achieve a saving of between £40 and £50, but it is not a popular option. It is seen as a tourist tax, and would require compulsory metering, which would also have a cost. I know that the hon. Member for St Ives (Andrew George) is concerned about second-home owners and their potential for benefiting significantly from having meters. He sees that as unfair. Indeed, in a debate on 2 June 2008, he said that metering was

“a way of rewarding people who should be paying more”.—[Official Report, 2 June 2008; Vol. 476, c. 619.]

Another option would be the wider use of affordability measures, and South West Water has been quite proactive in trying to identify and assist vulnerable customers in that regard. Such measures could be more widely applied and could deliver around £80 per annum for low-income households. That would have to be linked to water efficiency, however. It is essential to encourage that, not only for economic reasons but because water is becoming an increasingly scarce resource at certain times and in certain areas.

As a result of this debate, I have received some useful briefings from people on related matters, especially on the re-use of rain water and on building regulations. I suspect that there is a whole new debate to be had on those matters, but I want to put on record my gratitude to the businesses and organisations that have e-mailed me. This flags up just how useful these debates in an often rather empty Chamber can be—it is actually quite full tonight, so thank you to everyone who has stayed.

Low-income customers with medical conditions could benefit significantly if changes to the current WaterSure scheme, as recommended in the review, were adopted. That would result in it being capped, either at a national average or on a regional basis, whichever is the lower, and would have a redistributive effect within the region, but that in turn would mean that other South West Water customers would pay more, which would probably not have broad support. This is not a straightforward issue, which is partly why I am back here tonight, five years after I secured my first debate on the subject.

A national levy is another idea that has been put forward. That would have the effect of supporting South West Water bill payers now, but they could well find themselves having to pay for similar schemes in the future, such as additional reservoirs in the Thames Water area or elsewhere in the south of England, for example. The Consumer Council for Water’s research suggests that water bill payers would consider that option, and we local MPs certainly need to explore it with our constituents. I appreciate that many of the options would have consequences for bill payers elsewhere, but we must resolve to produce a fairer system that does not penalise low-income families merely for living on a peninsula surrounded by the sea.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate the hon. Lady on securing a debate on this topic so early in this Parliament. Does she share my concern that the modelling work to support the policy implementation of any of the options in the Walker review is not happening fast enough, and that we need to go further and faster towards reaching a solution to a problem that has bedevilled my constituency and many others for many years?

[Alison Seabeck]

I agree, and I hope that the Minister listened to the hon. Gentleman’s genuine concern. His comment is well timed, as I was about to say that the current Government have, in the work carried out by Anna Walker and by their own officials, a basis for going forward without further delay. The previous Government had already asked Ofwat to consider the Walker report, but no Government can compel the regulator to act. Before the election, MPs asked Ofwat to consider how the Walker review could be implemented. Ofwat was clearly willing to do that work, and its position has not changed. Serendipitously, Ofwat asked for a meeting with south-west MPs today. That has usefully coincided with this debate, and, I am sure, helped to inform those hon. Members present of Ofwat’s position and of its thoughts on the subject of affordability.

Action on water charges, particularly on behalf of vulnerable customers, is long overdue. The public have seen improvements to the quality of the water around our coasts, and this has without doubt benefited other businesses, including those linked to the tourism industry, but it has come at a huge cost and left many people struggling to pay their bills. In this difficult economic climate, people are worried about such pressure on their income. Will the Minister therefore confirm that he will meet Ofwat urgently, to ask it to continue with its assessment of Walker and to give it a timetable for bringing forward its advice to the Government? South West Water bill payers will not be pleased to hear tonight that that has been pushed further back into the long grass. I hope that the Minister can be positive, especially as we were tantalisingly close to getting an announcement prior to the last election.

Does the Minister intend to publish a water White Paper and take forward both the Cave and Walker proposals? If so, when will that be and is it likely to look at the future of Ofwat and its role? Will the Minister also confirm that work is continuing to ensure the widest possible data sharing, so that people receive the help and entitlements they are due? That work was in train between a range of Departments and other organisations prior to the general election.

Will the Minister also acknowledge that there is an ongoing need for all the bodies involved in environmental improvements in water supply and removal both to inform customers on work planned and to ask their views? On affordability, may I make the following plea, which came out of today’s meeting with Ofwat? The Minister must not rely solely on the Government office for the south-west figures, which include Wessex Water and skew the figures slightly. If we drill down and look at Devon and Cornwall separately, we will see that the situation there is much more serious. I hope that the Minister will press his officials to look at the minutiae.

Finally, will the Minister confirm whether he accepts the Walker review principle that it was right for environmental improvements to be funded regionally except where there is an exceptional expenditure, as was the case in the south-west? If he does, does he not feel duty bound to right the historic wrong that the south-west has suffered?

22:16

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck) on securing this debate on an issue about which she has shown a clear commitment during her time in the House. The hon. Member for Torbay (Mr Sanders) made the point that it has also been a very important issue for a great many former and current Members on both sides of the House. I know that the all-party group on water is well attended and is very passionate on this issue, and I certainly intend to address as many of the points the hon. Lady raised as possible in the few minutes available for my response.

The hon. Lady asked about White Papers. The new Government are very eager to introduce a White Paper on water, but we are determined to get it right. Our priority is to introduce a White Paper on the natural environment, which will involve a lot of issues that affect water—water will be fundamental to that White Paper—and then to introduce a White Paper on water, which will address many of the issues raised in the Cave and Walker reports. I can therefore assure the hon. Lady that this issue is a priority for the Government.

As I have said, I am aware that the hon. Lady and several other Members on both sides of the House have campaigned tirelessly on this issue for many years. I also understand that it is an issue that arises frequently in Adjournment debates, so I suppose I should not be too surprised that my first Adjournment debate as a new Department for Environment, Food and Rural Affairs Minister is on this topic.

I would like to say at the outset that the Government recognise that water affordability is a problem for some households, particularly in the south-west. We recognised that in our coalition statement, which pledged:

“We will examine the conclusions of the Cave and Walker Reviews and reform the water industry to ensure more efficient use of water and”—

crucially—

“the protection of poorer households.”

I also want to acknowledge that there is an important distinction between water affordability for low-income households and the more general sense of unfairness felt by households in the south-west at having to pay the highest bills in the country.

[Alison Seabeck]

I wish to reinforce the point that we have both unaffordability for households and a huge sense of a lack of fairness; both apply to the south-west.

[Richard Benyon]

I absolutely accept what the hon. Lady says. This year, the average bill for households in the region is almost £490, which is about £150 higher than the national average bill and—to refer to a particular point that she made—about £80 higher than Wessex Water bills, which is the next highest bill area. Affordability is very important. Although we often examine the average water prices across the country, we must also recognise that certain areas contain pockets of poverty where people may pay less in water bills, but utility bills may have a marked effect on their quality of life because they account for a high percentage of people’s net income.

Clearly, bills vary between water companies. That reflects the cost of providing water and sewerage services in an environmentally sustainable way. Ofwat, as the independent economic regulator of the water industry, ensures that bills are no higher than they need to be. The reasons for the relatively high bills—my use of “relative” is, of course, a relative use of the word—in the south-west were looked at by Anna Walker in her independent review of charging for household water and sewerage services. As has been said, she published her final report and recommendations last December, and I should like to take this opportunity to put on the record this Government’s recognition of the thorough and collaborative way in which she undertook her review.

As the hon. Lady said, the Walker report found that at the time of water privatisation, in 1989, South West Water had the lowest regulated asset base per property of any water and sewerage company. Since then, the company has invested about £2 billion, much of which has been spent on sewerage infrastructure and on improving sewerage services. That has brought sewerage standards in the area up to the same level as those elsewhere in England and Wales, and the cost has been met by local customers.

The cost per household has also been compounded by the relatively low number of households in the south-west, together with the relatively high proportion who live in rural areas. Those factors make it comparatively expensive to provide these households with water and sewerage services. Anna Walker recommended that Ofwat should advise the Government on options that could tackle the issue of high water bills in the south-west. The hon. Lady and those who attended a meeting with Ofwat representatives today will know that Ofwat is already working on that.

Some of the options suggested by Anna Walker could benefit all households in the region. In particular, a one-off or other financial adjustment funded by the Government, or an annual adjustment of bills financed by the Government or water customers nationally, could bring average household bills down by about £50 a year. Another option suggested by Anna Walker that would benefit all households in the south-west is a seasonal tariff, which would have the advantage of pricing water in a way that reflects the additional costs that tourists place on the water and sewerage system when they visit the region.

[Anne Marie Morris]

The Minister makes a good point, but when we examine the issue of affordability I want us to ensure that the WaterSure provision does help those who are particularly in need. I have looked at the detail of this and it is clear that it is not simply a matter of someone’s health need, the amount of money they have and the benefits that they are on. The way in which the system works means that it does not help those who really need that support, and I want the Government to consider that when we examine affordability.

[Richard Benyon]

As my hon. Friend did in her earlier intervention, she points out the important and urgent need to represent the needs of the most deprived and poorest households in the south-west. I shall discuss WaterSure in a moment and I am conscious of the amount of time available to me, but I must say that she rightly points out that when we address the urgent needs of the poorer families in the south-west we may have to examine the WaterSure provision.

Anna Walker estimated that, if water charges in the summer were four times higher than they are for the rest of the year, the average bill for all households in the region would be reduced by £60 a year. The other options identified in the review focused on providing additional support for vulnerable or low-income households, both in the south-west and elsewhere. My hon. Friend will be interested to learn that that includes a proposal to revise the national WaterSure tariff and to discount the bills of all low-income households or of low-income households with children.

Let me add that the Flood and Water Management Act 2010 enables water companies to offer social tariffs to households that struggle with their bills. However—this will be of concern to hon. Members from the south-west—the cross-subsidy under WaterSure or under social tariffs would have to be met by other customers in each company’s operating area.

As Anna Walker’s report made clear, the options are complex and, contrary to what I believed before I came to this side of the House, there certainly are no easy answers.

[Stephen Gilbert]

We have heard a lot tonight about the options, but Members in the south-west are keen to know when the Government might present an option that we can decide on for addressing the problem. Can the Minister help me with a time frame?

[Richard Benyon]

Certainly; the hon. Gentleman raised this earlier, and I am loth to give him a specific date, but I assure him and all Members of the House that I do not intend to be standing at the Dispatch Box in Adjournment debates in the dim and distant future because I have been unable to give a resolution, as best I can, to this matter. It is clear that I will not be able to satisfy every Member of the House or every one of the hon. Gentleman’s constituents, but I will do my best and the Government will do their best to get a speedy resolution to this.

I see the issue very much in two parts. First—this is the point I was making to my hon. Friend the Member for Newton Abbot (Anne Marie Morris)—there is an urgency. People are coming to hon. Members’ surgeries in real difficulties and there is work to be done to address their concerns. As we take Walker through the legislative process, following those options, I hope that we will be able to find other solutions on a more medium-term basis. I can only assure hon. Members on both sides of the House that I will meet them to try to resolve these matters and that I will keep them informed as best I can.

I understand that hon. Members who received the briefing from Ofwat earlier today will have heard about the merits and otherwise of the options that have been put forward. There is a fundamental question about who should pay for any new affordability measures. The options are the Government, which means the taxpayer, as the hon. Member for Plymouth, Moor View has said, and which brings difficulties at this time, or water customers, either at company-specific level or nationally. The hon. Lady will appreciate the need to reduce Government spending to tackle the budget deficit, and she will also be aware of the very strong resistance identified in the Walker review to any suggestion that water customers nationally should subsidise special measures for those in the south-west. The Government will need to take those factors into account when deciding which of the Walker recommendations to take forward.

[Alison Seabeck]

Could not the concern that customers nationally might not want to subsidise the south-west be offset by the fairness argument, in that south-west customers might well find themselves subsidising other areas of the country in future?

[Richard Benyon]

The hon. Lady points to a difficulty. She has mentioned the Thames tideway. What we decide to do now to help the south-west might legitimately be raised by customers in other areas in relation to concerns about a multi-billion pound project to improve the national asset that is the capital city. That is a difficult conundrum that I have to face, but I see her point.

Let me take this opportunity to remind the House of the support that is available for low-income households both in the south-west and elsewhere in England and Wales. Under the national WaterSure tariff, the bills of qualifying households are capped at the average bill for their company’s operating area. To qualify for WaterSure, households must be metered, in receipt of means-tested benefits and either have three or more dependent children aged under 19 and living at home—I have five children, so it is possible—or have someone in the household with a medical condition that necessitates a high, essential use of water.

WaterSure ensures that vulnerable and low-income households do not have to cut back on essential use of water because of worries about the potential size of their bills. Anna Walker made several recommendations about changing WaterSure and providing greater support for low-income households, which we will consider as part of our wider examination of the Walker review. In conclusion, I assure the hon. Lady and all hon. Members from the south-west that I will carefully examine the Walker recommendations, including those on water affordability, and Ofwat’s advice on the options for addressing high water bills in the south-west.

Question put and agreed to.

22:30

House adjourned.

Petitions

Monday 14th June 2010 Petitions

Monday 14 June 2010

Power Station (Blythe Park)

Monday 14th June 2010 Petitions

The Petition of residents of Creswell and the surrounding areas in Staffordshire regarding the Blythe Park gas-fired power station proposal,

Declares that the Petitioners recognise that the gas-fired power station is completely out of character with the area; the pollution created will be deposited across in and around an area of outstanding beauty; this site has historic and ongoing issues with toxic waste, and any major development will unsettle this waste leading to serious health concerns for the local community; the infrastructure leading to the site is wholly inadequate; the development will have disastrous consequences for local wildlife; following development, the community and surrounding areas will be blighted by significant noise and light pollution; the proposed site for the development is a known flood plain; Staffordshire County Council and Staffordshire Moorlands District Council have already made it officially clear that they completely object to these proposals; and the power source is non-sustainable, costly and not environmentally friendly.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Energy and Climate Change to launch a public inquiry into the proposed Blythe Bridge power station proposal and take further steps to prevent this project from going any further.

And the Petitioners remain, etc.—[Presented by Mr William Cash, Official Report, 23 March 2010; Vol. 508, c. 218.]

[P000773]

Observations from the Secretary of State for Energy and Climate Change:

Where an application is made under section 36 of the Electricity Act 1989 for consent to construct an electricity generating station with a capacity greater than 50 megawatts, a public inquiry must be held if an objection is made by a relevant planning authority. In the case of the Blythe Park application, the relevant planning authority, Staffordshire Moorlands District Council, has objected and therefore a public inquiry must now be held before any decision on the application is made.

The Department of Energy and Climate Change is making the necessary arrangements for the public inquiry and these will be publicised and objectors notified once they are finalised.

Written Ministerial Statements

Monday 14th June 2010 Written Statements

Monday 14 June 2010

Office for Budget Responsibility (Pre-Budget Forecast)

Monday 14th June 2010 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

The interim Office for Budget Responsibility has published its pre-Budget forecasts for the economy and the public finances.

Copies of the publication are available in the Vote Office and have been deposited in the Libraries of both Houses.

Operational Allowance

Monday 14th June 2010 Written Statements

[The Secretary of State for Defence (Dr Liam Fox)]

My right hon. Friend the Prime Minister has announced recently during his visit to Afghanistan the doubling of the operational allowance which we pay to our armed forces engaged in the most demanding areas of conflict. In doing so, we are fulfilling a key commitment to our armed forces in our Programme for Government.

The tax-free operational allowance will increase from £14.51 per day to £29.02 with effect from 6 May 2010. This will mean a typical six-month tour payment increasing from £2,640 to £5,281. Payment is in the form of a single lump sum paid on completion of operational service.

Nuclear Non-Proliferation Treaty (NPT) Review Conference

Monday 14th June 2010 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

The House may welcome a report on the outcome of the review conference of the nuclear non-proliferation treaty (NPT) held in New York from 3 to 28 May and Government action and policy in this regard.

It is the view of the Government that we are facing the risk of a new age of nuclear insecurity. In recent years, the NPT has come under unprecedented pressure from a combination of factors: the nuclear ambitions of Iran and North Korea; the risks of terrorist groups acquiring nuclear materials; the expected global renaissance in civil nuclear energy potentially leading to the dissemination of sensitive technology; and a fraying of the international consensus that has underpinned the treaty due to a perception that the nuclear weapon states have not done enough to meet their nuclear disarmament commitments under the NPT.

But all states benefit substantially from the NPT, in terms of both enhanced security and co-operation on civil nuclear energy. It is too important to be allowed to be undermined.

As I said in the Foreign Affairs debate on 26 May 2010, Official Report, column 181:

“stemming an uncontrolled spread of nuclear know-how and equipment, deterring any country that might be tempted to try to acquire nuclear weapons from doing so and keeping nuclear material out of the hands of terrorists must be a top foreign policy priority of any British Government.... In opposition, my party promised decisive UK leadership in this effort if elected, and the coalition agreement pledged an immediate and strong UK role at the conference.'

I am delighted therefore that the conference successfully reached agreement to revitalise the treaty as the cornerstone of global efforts to prevent the spread of nuclear weapons, to promote the safe and secure use of civil nuclear energy and to pursue the goal of a world without nuclear weapons.

I warmly congratulate the president of the conference, Ambassador Cabactulan of the Philippines, and all the states parties to the NPT for successfully putting aside the failures of the past to make this review conference a success.

The UK pushed hard for this success. During the Foreign Affairs debate in this House on 26 May, as an immediate contribution further to assist in building the climate of trust between nuclear and non-nuclear weapons states, I announced the ceiling figure for the UK’s overall nuclear warhead stockpile (225) and that the Government will re-examine the UK’s nuclear declaratory policy as part of the strategic defence and security review. The Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt) attended the review conference on the same day to repeat these announcements there as well as to meet other delegations to help promote a positive outcome.



The negotiations were not easy and the outcome necessarily represents compromise between the states parties. But it also marks, after the failure to secure agreement at the previous review conference in 2005, the first time in 10 years that the international community has been able to come together to agree on the collective efforts that will be required. President Obama’s leadership, with the conclusion of the New START agreement, the US nuclear posture review and the Washington nuclear security summit in April provided critical political impetus.

The UK’s Objectives

We wanted the conference to agree on a balanced outcome with specific forward action plans to strengthen implementation of the treaty’s non-proliferation and disarmament provisions and to support civil nuclear energy without increasing proliferation risks. We also wanted the conference to decide how to implement the resolution, adopted at the 1995 review and extension conference, on a zone free of weapons of mass destruction in the middle east, particularly as agreement on this was critical to achieving consensus on the other elements.

Achieving consensus among 189 states parties on such a substantive agenda was deliberately ambitious and we recognised that it would be challenging. The conference none the less succeeded in reaching agreement, for the first time in the NPT’s history, on a detailed and balanced set of actions to revitalise the treaty, establishing benchmarks for future progress.

That sends a strong signal both of united commitment among the overwhelming majority of states which abide by their responsibilities under the treaty, and of warning to Iran, North Korea and any other state or terrorist group which might be tempted to try to acquire nuclear weapons. It affirms that the world is ready to stand united against this threat and to rebuild the trust and partnership necessary as well as ensuring access to the peaceful applications of nuclear technology to all those countries desiring it in accordance with the NPT. It is proof that multilateral diplomacy can bear fruit, even in this sensitive area.

Non-Proliferation

We need to strengthen the regime of checks and controls to ensure that nuclear technology can be shared while reducing to a minimum the risk that technology and material could be used to provide a weapons capability to countries that do not now possess one.

It is highly encouraging that, for the first time in an NPT document, the conference recognised that comprehensive safeguards agreements and the additional protocol are essential for the IAEA to carry out its international safeguards responsibilities and that they represent the enhanced standard for verification of the NPT. All parties are encouraged to conclude and bring into force additional protocols.

The conference underscored the importance of the IAEA exercising fully its mandate and authority to verify states’ nuclear activities and supported strengthening the IAEA and assuring that it has sufficient resources. It called for strengthened export controls and urged states parties to improve their standards to combat illicit trafficking in nuclear materials and become parties to the international convention for the suppression of acts of nuclear terrorism.

But enhancing the IAEA’s ability to detect safeguard violations is not enough. Potential violators must know that if they are caught, they will pay a high price. Given that the conference worked by consensus, it was regrettably not possible for the actions of Iran—the only country at the conference which had been found by the IAEA board of governors to be currently in non-compliance with its nuclear safeguards obligations—to be directly criticised in the concluding documents. The conference none the less emphasised the importance of addressing questions over compliance with the treaty and the role of the UN Security Council to take appropriate measures in cases of violations reported to it.

On 9 June, the UN Security Council imposed further sanctions on Iran for its ongoing violations of previous resolutions and its failure to co-operate with the IAEA over its nuclear programme. We will be working with our partners to introduce further EU measures against Iran in the coming months.

The situation in North Korea, which did not attend the conference as it claims to have withdrawn from the treaty, was identified as constituting a threat to the peace and security of north-east Asia and the entire international community, and posing a critical challenge to the global non-proliferation regime. North Korea was urged to fulfil its commitments under all relevant non-proliferation and disarmament obligations.

For the first time in any NPT final document, the conference recognised that withdrawing parties are responsible for violations committed prior to withdrawal, and that consultations and actions by nuclear suppliers are needed to discourage abuse of the treaty’s withdrawal provision.

The non-parties to the treaty, India, Israel and Pakistan, were urged to accede to it as non-nuclear-weapon states and to place all their nuclear facilities promptly under comprehensive agency safeguards without conditions.

Nuclear Disarmament

The long-term vision of a world without nuclear weapons was reflected in an action plan which demonstrates to the international community that the five nuclear weapon states are taking their disarmament obligations seriously, and which sets out measures which will help us all—nuclear and non-nuclear weapon states alike—to make real progress in the coming years. The conference recognised the achievement of the US-Russia New START agreement, and steps taken by other nuclear weapon states, and reflected the shared interest in achieving deeper reductions of all types of nuclear weapons and reducing their role.

My announcements on 26 May demonstrated the UK’s resolve to make further nuclear disarmament steps possible: by building trust, by setting high standards for others to follow, and by ensuring that our nuclear declaratory policy is fully appropriate to the political and security circumstances of 2010 and beyond. We circulated papers at the conference detailing the UK’s strong disarmament record and on our joint research with Norway into the complex science of verifying warhead dismantlement, demonstrating the substantial action that we are taking.

The nuclear weapons states agreed to consider collectively further steps on transparency, negative security assurances and nuclear weapons-free zones. The conference encouraged the early entry into force of the comprehensive nuclear test ban treaty and the start of negotiations, without further delay, of a fissile material cut-off treaty.

Civil Nuclear Energy and Nuclear Security

Oil prices and climate change will make nuclear energy attractive to many, just as growing populations and economies in the developing world will make it increasingly necessary. There is already increased demand for the construction of new nuclear facilities worldwide.

Proliferation control needs to keep pace with this fast-changing reality. Nuclear energy will only fulfil its full potential if it is developed within a culture of openness, transparency and confidence. In this regard, the conference recognised the importance of continuing discussions to secure the introduction of multilateral approaches to the nuclear fuel cycle. It also called for greater efforts to enhance the effectiveness and efficiency of the IAEA’s technical co-operation programme, which contributes to development in some of the poorest regions of the world.

The conference acknowledged the successful Washington nuclear security summit in April, in which the UK played a leading role, and encouraged carrying forward its recommendations, including recognition of the IAEA’s role in promoting nuclear security co-operation and best practices, and the need to minimise the use of highly enriched uranium in the civilian sector.

The Middle East

The outcome on the middle east represented a major step forward, with agreement to hold a regional conference in 2012 to discuss issues relevant to a middle east zone free of weapons of mass destruction and their delivery systems. Responsibility for the regional conference is shared between the UN Secretary-General and the NPT depositary states (Russia, the UK and the US).

The UK has long supported such a zone as an achievable goal—we co-sponsored the resolution on the middle east at the 1995 review conference—while recognising that its realisation lies in progress towards a comprehensive peace in the middle east and in ensuring that other states in the region, including Iran and Syria, are fully implementing and upholding the existing international agreements.

The agreement on the middle east involved difficult compromise from all parties involved. The singling out of Israel in the final document, and without any reference to Iran, will make progress more difficult: Israel was not a formal party to the discussion and has already made clear its difficulty with the decision. Building confidence among all the parties in the region and giving them full ownership of the conference will be essential for success. The UK will play a full and active role.

Conclusion

This review conference was an important milestone in our long-term vision for a world without nuclear weapons. Now we have a map to help us move forward. We will now work, with our international partners, to capitalise on these achievements and to translate these commitments into concrete action in the years ahead.

Rail Value For Money Study

Monday 14th June 2010 Written Statements

[The Secretary of State for Transport (Mr Philip Hammond)]

I welcome the publication of the scoping study report from Sir Roy McNulty’s review of value for money on the railway. While I recognise that this report represents a very early stage in the work of Sir Roy and his team, I believe that the report represents an important step in identifying the factors that drive up the cost of the UK railway.

Given the scale of the fiscal deficit the UK is facing, it is vital that public spending be subject to scrutiny to ensure that it represents value for money. We must adjust to a world in which our aspirations for a successful railway have to be met from within a much tighter public spending envelope. As the scoping study highlights, there is evidence that the cost of the UK railway is relatively high, both in historic terms, and by comparison with other European railways.

The next stage will be to look at options for ensuring public investment in the railways is delivered as efficiently and effectively as possible. I have therefore asked Sir Roy to accelerate key elements of his work so that his preliminary findings can inform the decisions on public spending that will have to be taken in the autumn.

I would call upon all stakeholders in the rail industry to offer Sir Roy and his team their fullest co-operation. By driving efficiencies on the railway, we can ensure that passengers and freight users get the railway they need at a price which Government and taxpayers can afford.

Copies of the report have been placed in the Libraries of both Houses and are available on the Department’s website (www.dft.gov.uk).

House of Lords

Monday 14th June 2010 Lords Chamber

Monday, 14 June 2010.

14:30

Prayers—read by the Lord Bishop of Leicester.

Several noble Lords took the oath or affirmed.

Death of a Member: Baroness Delacourt-Smith of Alteryn

Monday 14th June 2010 Lords Chamber

Announcement

14:37

[The Lord Speaker (Baroness Hayman)]

My Lords, I regret that I have to inform the House of the death of Baroness Delacourt-Smith of Alteryn on 8 June. On behalf of the House, I extend our condolences to the noble Baroness’s family and friends.

Elections: Fraudulent Registration

Monday 14th June 2010 Lords Chamber

Question

14:38

Asked By

[Lord Naseby]

To ask Her Majesty’s Government what action they will take to prevent fraudulent multiple registration by individuals to vote in elections and to ensure that electors who turn out to vote can do so.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, the Government are committed to tackling electoral fraud by speeding up the introduction of individual electoral registration. This will improve the accuracy of the register and ensure that only those entitled to vote get on to the electoral register. We are also considering the Electoral Commission’s report on the queues at polling stations on 6 May and the Government will take any appropriate steps necessary to prevent a repeat.

[Lord Naseby]

My Lords, I thank my noble friend for that succinct Answer. Is he aware that on 23 February I asked a supplementary to a Question for Oral Answer about how many recommendations from the Electoral Commission the then Government had implemented? I received a holding response that afternoon and later a letter was placed in the Library which indicated that there were a great many outstanding items. In the light of the last election when over 1,000 queued up and then could not vote, and there were serious problems with the register itself, as indicated by the Commonwealth monitoring group, is it not time to look at the role and powers of the Electoral Commission so that we have full and fair elections and can trust in the results?

[Lord McNally]

My Lords, I share the aspirations of my noble friend, but it is fair to put the case into perspective. There were problems at 27 polling stations out of 40,000. That was a bad piece of public relations and terrible pictures went around the world, but in fact represented a very small percentage of the actual turnout.

On the powers of the Electoral Commission, I think it is true to say that it has few teeth; whether it should be given more teeth or its powers transferred elsewhere is a matter for discussion and examination after we have its report on the recent general election.

[Lord Bach]

My Lords, all sides agree that individual registration is the way forward. However, does the Minister agree that the danger is that if we move too quickly, it is a near certainty that many of our fellow citizens will drop off the register, thus adding to the 3.5 million people whom the Electoral Commission estimates are currently unregistered? Does not the Northern Ireland experience, where 10 per cent of the population immediately fell off the register following a sudden switch to individual registration, show us how careful we must be?

[Lord McNally]

My Lords, it is quite clear that the noble Lord, Lord Bach, is holding on to his old briefs. Yes, that is exactly why the implementation of the new form of registration has been taken at a measured pace. The experience in Northern Ireland was of a very large drop. However, again, we have got to get into perspective the fact that 91 or 92 per cent of people are on the electoral register. We are trying to balance the need for a clean and credible register against the points of caution the noble Lord has pointed out.

[Lord Rennard]

My Lords, does the Minister accept that it is now time to consider changing polling day from a Thursday to avoid the kind of problems we had in the recent general election, with large queues of voters unable to vote in the middle of the evening? By switching voting to the weekend we would avoid disruption to schools and enable more people to participate in our elections.

[Lord McNally]

My Lords, I have a great deal of sympathy with my noble friend’s argument for weekend voting. However, he may well be aware that the consultation on this matter did not show a great deal of support for the idea. We may come back to this issue, but the problems on 6 May, the day of voting, lay elsewhere.

[Lord Strabolgi]

My Lords, given the long queues to which the Minister referred, particularly in the evening, which prevented so many people getting to a polling station in time to vote, will the Government consider making polling day a bank holiday so that voting can be spread throughout the day? This would be of help to people who have to work in the daytime and cannot get to the polling station until the evening, sometimes after travelling long distances.

[Lord McNally]

My Lords, my noble friend Lord Shutt, who has experience of Yorkshire habits, said that in his part of the world the voters would all go to Blackpool if they were given a bank holiday, so the idea has some attractions.

[Lord Campbell-Savours]

My Lords, can the Minister assure the House that, during the period the coalition is in government, local authorities will have ring-fenced budgets for electoral registration offices and that the budgets will not be cut?

[Lord McNally]

Such questions are always extremely difficult to answer because we never know what is going on at No. 11 Downing Street, as the noble Lord knows well. One of the commitments of successive Governments has always been that they supply sufficient budget to enable our democracy to function properly. I cannot imagine that we will move from that situation.

[Lord Elton]

My Lords, the noble Lord, Lord Bach, mentioned 10 per cent of the population dropping off the register in Northern Ireland. How many of those 10 per cent should not have been there in the first place?

[Lord McNally]

I am not sure. We all know all the jokes about Northern Ireland voting. This Government take fraudulent voting very seriously. Wherever in the country there is fraud, we will prosecute with the firmest intention of getting convictions.

[Lord Brooke of Alverthorpe]

Is it not a cause for concern, and no cause for complacency, if we have only 91 per cent of the eligible population registered? What steps will the Government take to ensure that the figure does not fall below 91 per cent? If possible, will they take steps to try to increase it?

[Lord McNally]

It is not a reason for complacency, and there is none. People are encouraged to register. Interestingly enough, the figure for registration in Australia, where there is compulsory voting, is 95 per cent, so we are not far off. Ours is a voluntary system of registration. We should continue to promote in our society the social contract that registration and voting involve. We should not chase voters by making it ever easier to vote without putting some challenge to the rest of the population and making it clear that there is a responsibility. If you have the honour, the pleasure and the freedoms of living in democracy, you participate by voting.

Health: Isle of Man

Monday 14th June 2010 Lords Chamber

Question

14:47

Asked By

[Lord Smith of Clifton]

To ask Her Majesty’s Government when they will decide whether to continue or cancel their reciprocal healthcare agreement with the Isle of Man.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the current reciprocal healthcare agreement between the United Kingdom and the Isle of Man is due to end on 30 September 2010. My right honourable friend the Secretary of State will consider this matter, in consultation with other relevant parties, in good time to reach a decision by September.

[Lord Smith of Clifton]

My Lords, I thank the Minister for that reply. At the British-Irish Parliamentary Assembly plenary last March, it was unanimously resolved that the Government should continue with the reciprocal healthcare agreement. It would be very ageist if that agreement were rescinded, because people such as me—I declare an interest—could not get the personal health insurance that would be needed to go to the Crown Dependencies. Is this not a form of discrimination which is totally unacceptable?

[Earl Howe]

My Lords, it might be helpful if I were to clarify the current position. If the noble Lord were to go the Isle of Man, the agreement in place at the moment would enable him to receive emergency healthcare there—that is, healthcare that is immediately necessary—free of charge should he need it. The only reason for requiring travel insurance in addition would be to cover the cost of, let us say, an air ambulance back to the mainland or any extra costs that were non-medical arising out of the emergency. In that sense, the Isle of Man is no different as a travel destination than, let us say, the United States.

[Lord Alderdice]

My Lords, the previous Government rightly trumpeted one of the important advances of the Good Friday agreement: the establishment of the British-Irish Council, bringing together government representatives and Ministers from England, Scotland, Wales, Northern Ireland, the Republic of Ireland, the Channel Islands and the Isle of Man. Did the previous Administration raise this question at the British-Irish Council, which would seem the appropriate place to explore it? If they did, what was the response?

[Earl Howe]

My Lords, I am afraid that I cannot help my noble friend as I have not had access to the papers relating to the previous Administration. However, I can tell him that very cordial discussions and negotiations are proceeding at the moment, and the devolved Administrations will be consulted.

[Lord Dubs]

My Lords, the Minister in an earlier answer referred to the United States as being a parallel, but does he not agree that what we are after is that British tourists who go on holiday to the Isle of Man feel that they are covered at least as well as if they had gone on holiday to France? Does he agree that that is not the case and, unless insurance arrangements change, our people will suffer, as will Isle of Man people? Surely the right thing to do is to keep these reciprocal arrangements going.

[Earl Howe]

My Lords, if a UK resident were to travel to the Isle of Man, as I have said, and were to fall ill and need emergency care, they would receive that care free of charge. That is what the agreement currently covers. It was extended by the previous Government in March and will last until the end of September. We are using that window of opportunity to negotiate with the Isle of Man Government and, as I have said, these discussions at official level are proceeding very cordially.

[Baroness Gardner of Parkes]

My Lords, following the question from the noble Lord, Lord Dubs, about reciprocal arrangements in Europe, as I understand it we have to have a card, which we present if asked to do so, if we go for treatment in Europe. What is the position here? Are people coming from mainland Europe asked to present an equivalent card here? We hear so much about NHS tourism that it rather concerns me.

[Earl Howe]

My Lords, the rules are quite complicated. In the case of EEA countries, including the European Union, the UK has an obligation under EU law to pay what it is liable for in healthcare costs. Therefore, visitors from EEA member states are provided with NHS healthcare when visiting the UK and, indeed, vice versa. However, under the same regulations, the UK is entitled to claim the cost of treatment provided to citizens from EEA member states whom it has treated. Similarly, other member states can charge the UK for the cost of treating our citizens.

Health: Government Spending

Monday 14th June 2010 Lords Chamber

Question

14:52

Asked By

[Baroness Thornton]

To ask Her Majesty’s Government which health agencies and arm’s-length bodies will be affected by cuts in government spending.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the Government are committed to reducing bureaucracy and improving efficiency. By streamlining and simplifying the infrastructure, we can ensure that clinicians focus on what really matters: delivering the best possible health outcomes for patients. All non-front-line organisations will be expected to operate efficiently and contribute to the Government’s commitment to reduce central administration spending by one third. That is why we are reviewing how best to organise the national infrastructure. The review will report in due course.

[Baroness Thornton]

I thank the Minister for that Answer. Notwithstanding the Government’s proposed intention to create the biggest quango of all in the NHS board, what can the Human Tissue Authority and the Human Fertilisation and Embryology Authority expect from the bonfire of the quangos? Will it be a third of their work, for example? I choose those two because the Minister and many noble Lords in this House were closely involved in considering the legislation that led to the creation of those two important bodies.

[Earl Howe]

My Lords, the focus of the exercise that is going on at the moment is, on the one hand, to look at value for money and, on the other, to look at how best we can deliver quality. Therefore, the review will consider which functions should be carried out at a national or arm’s-length level, which could be stopped with no detriment to the delivery of front-line services and which could be undertaken elsewhere in the system or, indeed, left to the market. So there is no target as regards getting rid of a certain number of bodies. The point of view from which we come is that of functions.

[The Earl of Onslow]

My Lords, can my noble friend help me? He implied that savings were to be made, which is excellent. If we are going to make savings in the National Health Service budget, why is the rest of the budget ring-fenced? If you can save £20 here, why not cut the budget by £15 and keep £5 for something else? Why undertake to spend all the savings rather than make them contribute to help after the ghastly state of affairs that was left to the Government?

[Earl Howe]

My Lords, the simple answer is that we have a duty to ensure that every pound that we spend is spent efficiently, wisely and with value for money at the end of it. As my noble friend will know, the cost of healthcare in this country has traditionally risen at a faster rate than inflation, so even if we are advantaged in the sense of being a protected department, we still have to find savings in order to continue to ensure that we can deliver quality care at an acceptable price.

[Baroness Greengross]

My Lords, I declare an interest as a member of the Equality and Human Rights Commission. Can the Minister assure the House that public authorities will be able to meet their mandatory equality duties, including carrying out equality impact assessments for all relevant policies and decisions, in spite of the difficult financial constraints?

[Earl Howe]

My Lords, I can reassure the noble Baroness that the imperative to ensure that quality and equality are considered is uppermost in our minds as we proceed with this exercise, and indeed as we go forward into what will be a very difficult financial year next year.

[Lord Faulkner of Worcester]

My Lords, given the huge success of the tobacco-control legislation passed in the previous Parliament, which has already produced so many benefits including, as we have seen from recent statistics, a dramatic reduction in the number of heart-attack victims admitted to hospital, will the Minister give an assurance that the excellent smoking-cessation programmes run by his department will be exempted from any programme of cuts?

[Earl Howe]

My Lords, smoking cessation is extremely important as a public health measure. I am sure the noble Lord will know that the coalition Government have set great store by their public health agenda. I cannot imagine that smoking cessation is going to disappear off the radar.

[Lord Alderdice]

My Lords, in respect of a number of agencies within the health and social care field, it is clear to practitioners that some of them have been inadequate in their regulatory and monitoring function and others have gold-plated way over the top in a quite counterproductive way. In his search for which agencies could be brought together and their experience shared or which could be changed in other ways, what are the principles that the Minister intends to use to produce a better and more appropriate regulatory monitoring framework within health and social care?

[Earl Howe]

My Lords, there are several principles. A reduction in the number of arm’s-length bodies is only one of the possible outcomes. As I have said, we are not looking necessarily for a large-scale reduction in numbers, but we want to see both efficiency and the delivery of quality. With those two ends in view, the bodies that we end up with have to make sense in terms of what matters in our wider system reform, which is, as I have said, to deliver quality.

[Lord Warner]

My Lords, the Minister has said that he will be looking at functions in the review of bodies and that he will be looking to save one-third of running costs. In carrying out this review, will PCTs be examined carefully in terms of divesting themselves of their provider-arm functions so that they can concentrate on their commissioning functions?

[Earl Howe]

My Lords, strictly speaking, primary care trusts are not considered to be arm’s-length bodies, but the coalition agreement, which I am sure the noble Lord has read from cover to cover, indicates the new role and the functions envisaged for PCTs. Further details of our plans will be announced very soon.

[The Countess of Mar]

My Lords, will the Minister be prepared to consider joining together animal and human medicines and health? With global warming, with so many of our illnesses now zoonoses—in other words, caused by animals—and with so many antibiotics and other drugs used in common, would it not be a good idea?

[Earl Howe]

My Lords, I am grateful to the noble Countess, particularly given her wealth of knowledge and experience in this area, for putting forward that suggestion, which I shall certainly take back with me.

[Lord Rea]

My Lords, if the Food Standards Agency is to be wound down, which would be regrettable since it would mean the loss of an important, independent voice, will its science-based public health work on nutrition continue to be funded at least at the present level, if not augmented, which it needs to be?

[Earl Howe]

My Lords, the Government fully recognise the important role that the Food Standards Agency plays in food standards, nutrition and food safety. Public health is a priority, and I reassure the noble Lord that the function that the FSA currently fulfils—to advise the Government and the public on nutrition—is one that we believe is equally important.

[Lord Skelmersdale]

My Lords, can the Minister give us the assurance that it is functions that matter at the expense of individual bodies, which may of course overlap?

[Earl Howe]

My Lords, I am grateful to my noble friend. He is right to suggest that we should look not at each body individually but perhaps at several across the piece to see whether there is scope for rationalisation in a way that does not detract from the quality of service.

[Lord Harris of Haringey]

My Lords, the noble Earl has frequently argued in this House in favour of there being arm’s-length bodies to protect the patient’s interest in the NHS. Will extra resources be found to enable this aspiration of his—and I am sure, of the coalition’s—to be fully funded?

[Earl Howe]

My Lords, the budgetary implications of our plans are being worked through at the moment but we are clear that we need to have a more powerful patient voice within the system than at present. I believe that that goes hand-in-hand with our agenda for patient choice, greater quality standards and more information being made available to patients to enable them to make choices.

House of Lords: Post-legislative Scrutiny

Monday 14th June 2010 Lords Chamber

Question

15:02

Asked By

[Baroness Hamwee]

To ask the Leader of the House whether he will support discussions between all sides of the House of Lords in establishing a formal structure for post-legislative scrutiny by the House.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I am happy to participate in discussions on post-legislative scrutiny in this House. It is of course open to committees in both Houses to conduct post-legislative scrutiny of Acts of Parliament, either as part of a broader inquiry or on the basis of a specific post-legislative memorandum published by the Government. Noble Lords will no doubt have views on how this process has been working.

[Baroness Hamwee]

My Lords, I am grateful for that positive Answer. Does the Leader of the House agree that pre-legislative and post-legislative scrutiny are part of the same exercise, in that each informs the other in moving forward to improve legislation? Does he also agree that it is work to which this House could make a very particular and good contribution?

[Lord Strathclyde]

My Lords, I agree with everything that my noble friend has said about pre-legislative and post-legislative scrutiny. I have always been a supporter of post-legislative scrutiny, but I have discovered in recent days that there is a gap between desiring the idea and making it a reality. There are substantial issues involved in the practicalities of making post-legislative scrutiny work. I am delighted that there is a system of post-legislative memoranda being published by the Government, as a result of decisions taken by our predecessors some years ago. It remains to be seen how that works over the next few months.

[Lord Filkin]

Does the Leader of the House agree that it would be beneficial if this House at least initiated discussions with another place about whether a joint committee was beneficial, but that if it decided, for whatever reason, not to proceed with a joint committee we ourselves should start action on this, as we have been talking about it for 20 years now?

[Lord Strathclyde]

My Lords, there is no reason why any noble Lord should not make the case for post-legislative scrutiny on an Act of Parliament and put that forward to the Liaison Committee for discussion of whether an ad hoc committee should be set up.

[Baroness O'Cathain]

My Lords, would it not be better following this discussion to make it imperative that every bit of legislation that we pass is subject to post-legislative scrutiny? That would mean that people could not slide out from under but would be held to account. One of the awful allegations levelled against us is that we are not held to account, but this is one way in which we could be. Indeed, we could show the other place how to do it.

[Lord Strathclyde]

My Lords, that is the nub of a decision that was taken in March 2008 by the Leader of the House of Commons, committing the then Government to enable post-legislative scrutiny for all Acts of Parliament passed during and after the calendar year of 2005. Since then, six or seven of these memoranda have been published, although many are left in the pipeline. We wait to see what attitude the Select Committees in another place or, indeed, in your Lordships’ House will take to these memoranda.

[Lord Howarth of Newport]

My Lords, is it not particularly important that there should be post-legislative scrutiny in Parliament following this Session, for which the Government have promised—or threatened—a prodigious quantity of legislation, most of which, in the nature of the situation, will be pretty hastily cooked up in Whitehall and which Parliament will have only cursory opportunity to examine properly because of the scale of demands?

[Lord Strathclyde]

That is really rich coming from the noble Lord, Lord Howarth. He supported a Government who, over the past 13 years, gave rise to an outpouring of legislation quite unlike anything that we have ever seen in our history. Constitutional changes were dreamt up on the back of an envelope and introduced to Parliament with minimal thought and discussion and with no pre-announcement.

[Viscount Montgomery of Alamein]

My Lords—

[Lord Phillips of Sudbury]

My Lords, is the Minister aware—

[Noble Lords]

Order! Wrong Bench!

[Lord Phillips of Sudbury]

My Lords, I apologise to the right reverend Prelate for polluting his bit of the Bench. [Laughter.]

Is the Leader of the House aware of what I think is a military tradition, whereby the top brass who devise strategy are supposed to live with its consequences in practice? Would it not be a good idea if we learnt something from the military and stopped the mad ministerial merry-go-round, whereby Ministers, who are progenitors of legislation in this place, rarely if ever have to face the music?

[Lord Strathclyde]

My Lords, I am sure that I speak for all my colleagues in saying that we are very much in favour of stopping the ministerial merry-go-round in this House.

[Baroness Royall of Blaisdon]

My Lords, pre-legislative scrutiny and post-legislative scrutiny were two of the issues that were raised in the excellent debate introduced by the noble Lord, Lord Norton of Louth, in February of this year. At the end of that debate, the noble Lord, Lord Strathclyde, said that early in the next Parliament a Leader’s Group should be established to look at various procedural issues. Will he tell us when such a group might be established?

[Lord Strathclyde]

My Lords, it is certainly my intention to have discussions with the noble Baroness the Leader of the Opposition and with the Convenor of the Cross Benches as to how we should progress this and whether, before doing so, we should perhaps have a more general debate on the working practices of the House.

[Viscount Montgomery of Alamein]

My Lords, would the noble Lord be prepared to consider introducing sunset clauses to all legislation as a means of reducing the volume of legislation from recent levels? If not, what about introducing the repeal of legislation to reduce some of the legislation that we have had?

[Lord Strathclyde]

My Lords, it is certainly our intention shortly to bring before Parliament a Bill that will repeal some of the highly authoritarian legislation that was passed under the previous Government. As far as sunset clauses are concerned, in many instances they are extremely desirable.

[The Lord Bishop of Leicester]

My Lords—

[Noble Lords]

Order!

Examiners of Petitions for Private Bills

Monday 14th June 2010 Lords Chamber

Motion

15:09

Moved By

[The Chairman of Committees]

That, in accordance with Private Business Standing Order 69 (Appointment of Examiners of Petitions for Private Bills), Mr Allan Deverell Roberts and Mr Peter David Davis be appointed Examiners of Petitions for Private Bills.

[The Chairman of Committees (Lord Brabazon of Tara)]

My Lords, this Motion would increase the number of Examiners of Petitions for Private Bills from two to four. It follows the decision of the House on 8 June to refer the Local Government Bill to the Examiners. If appointed, Mr Roberts, who is one of my counsel, and Mr Davis, who is one of the counsel in the House of Commons, will examine the Bill, together with Mr Simon Patrick, the Clerk of Bills in the House of Commons, who is already an Examiner.

Motion agreed.

Arrangement of Business

Monday 14th June 2010 Lords Chamber

Announcement

15:09

[Baroness Anelay of St Johns]

My Lords, at a convenient point after 3.30 pm, my noble friend Lord Strathclyde will repeat a Statement on Afghanistan. The debate on the Olympics will resume and then, at a convenient point after 5 pm, my noble friend Lord Sassoon will repeat a Statement on the Office for Budget Responsibility, followed immediately by my noble friend Lord Marland repeating a Statement on the implications of the Gulf of Mexico oil spill for the UK.

Olympic Games and Paralympic Games 2012

Monday 14th June 2010 Lords Chamber

Motion to Take Note

15:10

Moved

[Lord Shutt of Greetland]

By

To move that this House takes note of preparations for the 2012 Olympic Games and Paralympic Games.

[Lord Shutt of Greetland]

My Lords, I am grateful to the noble Lord, Lord Moynihan, for securing this debate. This is a terrific opportunity for the House to take note of the excellent progress that is being made by all parties in delivering the 2012 Olympic Games and Paralympic Games. The Games are on track to be a nationwide sporting and cultural celebration unrivalled in a generation. I can assure the House that the Government will continue to work to ensure that we deliver a safe and successful Games in 2012.

In reviewing the list of speakers for today’s debate, I am aware that several noble Lords who are thoroughly involved personally in the planning for and after 2012 are speaking, as are others with tremendous sporting interest and insight. I and the whole House look forward to the maiden speech of the noble Baroness, Lady Grey-Thompson, whose own Olympic achievements and involvement give her special expertise to take part in the debate today. I am aware that the noble Lord, Lord Mawson, who has real concerns about the legacy for east London, is unable to be present today, but many look forward to joining him on a visit to the Olympic Park tomorrow, and to seeing how the landscape of this part of east London has been dramatically transformed.

I will focus my opening remarks on the progress made since the House last debated this subject in January of this year, addressing the Government’s plans for delivering a substantial sporting legacy from the 2012 Games. In coming to this subject with fresh eyes, I am amazed by the complexity and detailed dovetailing needed. In very simple terms, there are three strands. First, there is the work of the Olympic Delivery Authority—the ODA—in preparing the facilities for a successful Olympics. Secondly, there is the work of the London Organising Committee of the Olympic and Paralympic Games—LOCOG—which is responsible for the operation of the Games themselves. I regret that the noble Lord, Lord Coe, is unable to be present today but I have received a briefing from him. Thirdly, there is the legacy of 2012, both in terms of interest and involvement in sport and tourism, and the physical legacy, particularly in east London, and the work of the Olympic Park Legacy Company. Beyond the three strands, there is the import and involvement of the British Olympic Association, the International Olympic Committee, myriad sporting bodies and, not least, the Cultural Olympiad, taking the 2012 experience beyond sport.

On ODA progress, the construction of the Olympic Park and venues continues to be on time and on budget. More than 54 per cent of the Olympic Delivery Authority’s programme is now complete. I pay tribute to the way that the ODA, led by its chair, John Armitt, and chief executive, David Higgins, have managed this extremely complex project. The Olympic stadium, now at its full height with all 14 lighting towers recently installed, can be seen from across east London. Work on the stadium is expected to be completed by spring 2011. The Aquatics Centre, the iconic venue and gateway to the Olympic Park, is also structurally complete and is on course to be fully completed on time in June 2011. Construction of the Olympic Village is proceeding on schedule, with three of the 11 residential plots structurally complete. Work on the roads, bridges and utility networks between the sites is well under way and work on the new education campus, the Chobham Academy, is also under way. The majority of these homes will be structurally finished by summer 2010, with construction complete by the end of 2011.

Not only is the ODA delivering this work on time, on budget, and to a high quality, it is doing so while setting new standards for sustainable construction, ensuring that the Games will be a catalyst for genuine behavioural change in the construction industry. The ODA has supported a range of measures in place to ensure that local people are well placed to benefit from employment and training opportunities on the park, helping more people to gain lasting employment or a more highly skilled job.

In a difficult economic environment, the ODA has managed its resources extremely well. It has realised more than £600 million worth of savings throughout the programme, £130 million in the last quarter alone. When this Government came into office, they indicated that one of their first tasks was to secure £6 billion worth of savings to help reduce the budget deficit. The Government are committed to delivering a successful Games in 2012, but the preparations for the 2012 Games cannot be immune to the need to reduce the budget deficit. Therefore, we have asked the ODA to find £27 million worth of savings from its budget for 2010-11. The Government will be working with the ODA to deliver these savings, but we are clear that any savings should not detract from the quality of the facilities that the ODA is constructing. I am confident that the ODA can deliver these savings, which represent less than 2 per cent of its £1.7 billion budget for 2010-11. Further details of where these savings will be found will be published by the Department for Culture, Media and Sport in its quarterly economic report on London 2012 in July.

The Olympic Delivery Authority has put in place the building blocks for the regeneration of east London, including world-class sporting venues for both elite and community use; major utilities, transport and environmental improvements and a stunning new parkland; and the Olympic Village, which will be converted into nearly 3,000 new homes in legacy. The Olympic Park Legacy Company is also in place to oversee the future development of the area, which will see up to 12,000 additional homes and thousands of job opportunities being created on the park site. All this activity is inspiring a raft of new private developments and accelerating the delivery of existing schemes in the surrounding areas. For example, the £1.45 billion Westfield retail development at Stratford City, when it opens next year, will be the largest urban shopping centre in Europe, offering thousands of employment opportunities for local residents.

The regeneration of east London cannot be achieved by government alone. This has to be a partnership between local communities and councils, central and regional government, local businesses and the voluntary sector. I welcome the work of the east London host boroughs in leading the delivery of social and economic regeneration for local communities in and around the Olympic Park.

Ensuring the safety and security of the Games will be one of the biggest security challenges that the UK has ever faced. None the less, normal life will go on alongside regular summer events such as the Notting Hill Carnival and Her Majesty the Queen’s diamond jubilee celebrations. Our aim is for everyone to enjoy the 2012 summer of celebration safely and securely without security measures adversely affecting their experience. We are confident that this is a challenge that the police and security services are well placed to meet.

While the UK has an excellent track record of successfully hosting major events safely and securely, the coalition Government will be reviewing Olympic safety and security plans. This will make certain that delivery is on target and that the work done to date is sufficient. I want to make it absolutely clear that the safety of the Games is of paramount importance, and we are committed to ensuring that everyone can enjoy the celebrations peacefully.

Security is just one of many issues where the Government need to work closely with the organising committee of the noble Lord, Lord Coe, to enable it to deliver a stunning Games in 2012. That committee continues to make good progress in ensuring that the London 2012 Games will be everyone’s Games. The committee has already launched the ticketing sign-up programme, which aims to increase interest prior to tickets going on sale in spring 2011. The Olympic and Paralympic mascots, Wenlock and Mandeville, representing the heritage of the Olympic and Paralympic movements, have been launched. We are also looking forward to the launch of LOCOG’s volunteering recruitment programme during the summer. The Government will ensure that they meet all the commitments given to the International Olympic Committee during the bid, and we will continue to work closely with and support the organising committee in any way that we can.

What is key for the Government is delivering not just the physical regeneration programme in east London and a truly great Games in 2012, but ensuring that there is a distinctive, lasting and visible sports legacy from the London 2012 Games. As set out recently by the Minister for Sport and the Olympics, there are five aspects to this Government’s plans to deliver on this aim. The first stage of creating a truly distinctive sports legacy is the commitment to encourage more young people to take part in sport. Taking part in sport is a positive thing for young people, and competitive sport can build self-esteem, teamwork and respect among them. It helps them to develop their potential, whether in terms of sporting or academic success or their personal and social well-being.

While the previous Government made efforts in this area, there is much further to go. Only one out of five children participates regularly in competition between schools; and fewer than one in three participates regularly in competition within their schools. We want to use the Games to revive competitive sport in all schools. We will launch a new national Olympic-style school competition in which all schools will be invited to participate. It will not be a single competition but a package of events and activities across the country, culminating with the first national event in the summer of 2012. We have said that this will be financed with up to £10 million per annum through lottery funds. We are working with Sport England and the Youth Sport Trust—I pay tribute to the noble Baroness, Lady Campbell, for her vision and achievements in improving the quality of sport for young people—to develop our plans for this competition.

Secondly, we will meet the Conservative manifesto commitment to return the share of National Lottery funding of the arts, heritage and sports to its original level of 20 per cent. We are moving ahead with this and have already begun the consultation process. We expect to lay the order before Parliament after the Summer Recess. We believe that each year this will secure in the region of a further £50 million in lottery funding for sport.

Thirdly, we are aiming fully to develop a truly world-leading organisational structure for sport in the UK, and believe that we can do this by bringing UK Sport, Sport England and the Youth Sport Trust together under one roof. Given the current economic environment, it is more important than ever for our sports organisations to demonstrate that they can do work and together as effectively and efficiently as possible. However, we are committed to listening to sports bodies in agreeing the best way to approach this and will bring forward proposals for consultation in due course.

Fourthly, we want to make it easier to bid for major events. We are looking to bring forward, at the appropriate time, a specific major sports events Bill to help to make the UK a natural home for international governing bodies’ major events.

Finally, we are under no illusions that achieving a step change in adult participation in sport is easy. However, the Government have asked Sport England to lead a programme of activity and investment to deliver a legacy from the 2012 Games of lasting mass participation in sport. We will announce further details of these plans in the coming months.

We remain committed to delivering a wide legacy from the 2012 Games—the regeneration of east London, as I have already mentioned, and also the creation of a lasting legacy of cultural participation and community action, as well as making a real difference to the life chances of disabled people in this country.

The Government have a once-in-a-lifetime opportunity to deliver an outstanding Olympic and Paralympic Games, alongside a strong and lasting legacy. Working closely with all our stakeholders, it is our intention to make that happen. I look forward to hearing noble Lords’ contributions to this debate.

15:25

[Baroness Ford]

My Lords, it is a real pleasure to take part in the debate today. Before I begin, I convey to the House apologies from the noble Lord, Lord Mawson, who would normally be here to participate but has been held up on business in the north of England. Noble Lords know what a great champion he is for the legacy and regeneration of east London, and I am sure that he will continue to be every bit as diligent over the next two years and thereafter.

The Government inherit the preparations for the 2012 Olympic and Paralympic Games in excellent shape. I have no doubt that the Minister will find many challenges in his new post but I suspect that none will be so satisfying or so enjoyable as the 2012 brief. I wish him well in continuing the successful work done to date.

I am looking forward to hearing from my noble friend Lady Morgan, who, I am sure, will tell us about the great work being done by the Olympic Delivery Authority on constructing the venues and facilities for 2012. I had the pleasure of taking visitors around the Olympic Park, which is absolutely amazing. It is difficult to convey in words without going there what an immense achievement and complex project it has been. I urge any noble Lords who have not recently been on a visit to the park to do so. It is a marvellous tribute to British construction and project management expertise.

I am disappointed that the noble Lord, Lord Coe, is not in his place today, but I know from my frequent discussions with him about the great progress being made to stage a spectacular and very British Games. He and his team deserve enormous credit for achieving such a positive level of sponsorship in trying economic circumstances. They have done an absolutely fantastic job there.

I very much look forward to hearing the maiden speech of the noble Baroness, Lady Grey-Thompson, and the speech of the noble Baroness, Lady Campbell, about the preparations of our elite athletes. However, I do not want to let the moment pass without also paying tribute to my right honourable friend Tessa Jowell MP, whose vision, skill and tenacity have held this amazingly complex project together and handed to the new Government a very strong legacy, as well as an immense challenge for incoming Ministers. These are very big shoes to fill.

Of course, one of the great aspects of this project is its non-partisan nature. The new Olympics Minister, Hugh Robertson, was fully engaged, very knowledgeable and thoughtful in opposition and, for my part, hugely supportive of the legacy of the Olympic and Paralympic Games. I am sure that he will be a great champion in his new role.

My primary interest in the Games is in the legacy that endures in the Olympic Park and surrounding area. Uniquely among host cities, a dedicated company was set up to focus entirely on securing the strongest possible legacy from the Games. The Olympic Park Legacy Company, which I am privileged to chair, was set up almost 15 months ago, and I think that we have made a really good start.

We have completed the master plan that will guide the sustainable development of this park for the next 25 years. This is not a short-term project. In time, more than 10,000 new homes will be built in the park and the surrounding areas, as well as the marvellous legacy of beautiful open space to which the Minister referred, fantastic waterways and world-class sporting venues. It is important to us that we create a high-quality neighbourhood which provides much-needed family housing in this part of east London.

We will also create a super visitor attraction, helped by the sporting and leisure facilities on offer in the park and enhanced by the iconic ArcelorMittal Orbit. That magnificent structure—I know that there are different views about it, but I think that it is magnificent—was commissioned by the Mayor of London and will be a major addition to the London skyline and a magnet for visitors to the area in the years to come. I think that it will underline the park as a must-see, must-return destination for people who have been inspired by the Games and who want to return again and again to use the great facilities on offer there. Also in that mix, we will attract commercial activity to the park that complements and sustains the residential, sporting and leisure offer there.

What specifically do we have to show for 15 months’ preparation? We have a great working relationship with the five excellent Olympic host boroughs, which are doing tremendous work in preparing for the Games. I was so glad that the Minister mentioned that, because we should never forget that it will be the host boroughs that will inherit the legacy and live with the decisions that are taken. Working very closely with them, we have a new master plan with a sharpened focus on sustainability, on family housing, as I mentioned, and, of course, a sporting legacy.

Secondly, the process to create a final use for the Olympic stadium is also well under way. I am confident that we will soon be able to announce a commercially viable, sustainable use for this beautiful stadium that guarantees a top-class, long-term home for UK athletics. Thirdly, the process to determine operators for the remaining park venues is also well under way, and we have had tremendous interest in them. We have no intention of waiting until the Games are over, as other countries have done, to determine the use of those venues. Their future will be absolutely secure well in advance of the Games.

Fourthly, we have created a new approach with Olympic sponsors. I think that it is absolutely right and proper that in this, the first Games to be won explicitly on legacy, the sponsors widen their approach to ask not just how they support the Games but how they invest in and support the legacy. I am delighted to report to noble Lords that they have responded incredibly positively to that. Last month, we announced our first investment in the park. The excellent Field Studies Council, well known to many noble Lords, will work with us to create a residential centre in the park, the first ever urban field studies centre. I could not be more pleased that our first investment will be educationally led and will benefit young people locally in east London but also students from the rest of the United Kingdom. I hope that noble Lords will see that we are making tangible progress.

However, an important part of making all that work has been the need for the legacy company to have freehold control of the land in the park, unencumbered by debt. A deal to do that was struck earlier this year by the Mayor of London and the previous Government. That deal is now being re-examined as part of the overall Treasury review, despite the fact that the deal was fiscally neutral, so I ask the Minister to underline the importance of the deal for a successful legacy and press colleagues for an early endorsement of it.

Preparations for the Olympic and Paralympic Games are well advanced, although many, many challenges still lie ahead. The same is entirely true of legacy. However, everywhere I go, there is tremendous good will and a real passion for the legacy of the Games to be every bit as successful as the Games themselves. Working with the Mayor of London and the five host boroughs, I know that the legacy will be something of which we can all be immensely proud.

Afghanistan

Monday 14th June 2010 Lords Chamber

Statement

15:34

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, with permission, I would like to repeat a Statement that is being made in another place by the Prime Minister. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on Afghanistan. First, I am sure the whole House will want to join with me in paying tribute to Private Jonathan Monk from 2nd Battalion The Princess of Wales’s Royal Regiment, and Lance -Corporal Andrew Breeze from 1st Battalion The Mercian Regiment, who have died in Afghanistan. Our thoughts and prayers are with their families and friends. Their service and sacrifice for our country must never be forgotten.

This was my fifth visit to Afghanistan, but my first as Prime Minister. I held talks with President Karzai and visited our troops in Helmand. I want to set out for the House how this Government will approach our mission in Afghanistan and how that mission is progressing. But, first, let me stress the importance of such updates. The whole nation is touched by the heroism of this generation of our Armed Forces who are fighting to protect us in harsh conditions far from home. And I believe that the country, and this House, is entitled to the facts. That is why this Statement will be the start of a pattern. There will be regular updates to the House, with quarterly statements by the Foreign or Defence Secretary and we will on a monthly basis publish much more information on the progress we are making. This will include updates on the security situation, recruiting, training and retaining the Afghan security forces; on progress in appointing and supporting provincial and district governors; and on progress in terms of development work, including health and education.

Our main focus will be on the security situation. For example, in the six months to March 2010 the Afghan National Army grew by almost 20 per cent with over 17,000 joining the ranks. But, at present, the Afghan police are assessed to be ineffective or barely able to operate in six of the 13 key provinces in General McChrystal’s plan. Good news or bad, we want to take the country with us in what is this Government’s top foreign policy priority.

Let me address the first question people are asking: why are we in Afghanistan? I can answer in two words: national security. Our forces are in Afghanistan to prevent Afghan territory from again being used by al-Qaeda as a base from which to plan attacks on the UK and our allies. Of course the al-Qaeda training camps and the Taliban regime that protected them were removed from Afghanistan in the months after 9/11. But the presence of NATO forces prevents them from returning.

Afghanistan is, however, not yet strong enough to look after its own security. That is why we are there. Together, with the greater efforts of the Pakistanis to hunt down al-Qaeda in its own country, al-Qaeda is now under pressure on both sides of the border. Eighteen months ago, the then Prime Minister told this House that some three-quarters of the most serious terrorist plots against Britain had links to the border area. Today, I am advised that the threat from al-Qaeda from Afghanistan and Pakistan has reduced. But I am also advised that if it were not for the current presence of UK and international coalition forces, al-Qaeda would return to Afghanistan and the threat to the UK would rise.

The next question is: how long must we stay? The Afghan people do not want foreign forces on their soil any longer than necessary and the British people are rightly impatient for progress. Our forces will not remain in Afghanistan a day longer than is necessary and I want to bring them home the moment it is safe to do so. The key to success is training and equipping the Afghan security forces at every level to take on the task of securing their country, so that Afghans can chart their own way in the world without their country posing a threat to others and our forces can come home—the job done and their heads held high.

That is why we back the strategy developed by the ISAF Commander General McChrystal and endorsed by President Obama and NATO. That strategy involves protecting the civilian population from the insurgents, supporting more effective government at every level and building up the Afghan National Security Forces as rapidly as feasible. We want to transfer security responsibility for districts and provinces to Afghan control as soon as they are ready, but this should be based on the facts on the ground, not on pre-announced timetables.

The current year is the vital one. We are six months into an 18-month military surge and we must now redouble our efforts to drive progress. Central Helmand, along with Kandahar, has been the heartland of the Taliban. It is from here that they gave safe haven to the al-Qaeda network in Afghanistan. That is why the operation in central Helmand is crucial to the success of the whole mission.

Four years ago we went into Helmand with 3,000 troops. I do not think anyone now seriously argues that was sufficient. Today there are around 30,000 there; 8,000 British working alongside 20,000 US Marines. In total, we have more than 10,000 troops in the country as a whole. With the arrival of reinforcements and the continued growth of the Afghan security forces, we are now evening out the ISAF presence in the main populated areas in Helmand. This is a crucial point.

In the past, we have simply not had enough soldiers per population for an effective counter-insurgency campaign. Today, although the rebalancing is still work-in-progress, the situation is much improved.  The arrival of a US Marine expeditionary force, combined with additional contributions from other ISAF partners, including the UK, has given a huge boost to the resources available to ISAF in Helmand. For example, the Marines have arrived with some 80 aircraft and helicopters of their own, which are now available to support all ISAF forces in Helmand and it is clear that we have made real progress in central Helmand this year.

A degree of normal life has returned to places like Nad Ali, where the bazaar is open again and people are going about their daily business in an area that was, until recently, infested with insurgents. But the progress is not yet irreversible. Inevitably, there will be tough fighting as Afghan forces, with ISAF in support, hold the ground that we have taken and push the insurgents out of further towns and villages. But I can also assure the House that this Government will do everything in their power to make sure that we give our forces the protection and the state-of-the-art counter-IED capabilities that they need.

During my visit, I was able to announce a further £67 million to double the number of counter-IED teams to tackle the most serious threat facing our young men and women. So, with the improvements made in the past year, many of the acute shortages, which hampered us so severely in our initial deployment in Helmand, have been dealt with. But I do not pretend that every equipment shortage has been resolved. We will need to adapt constantly and to deal with problems as they arise.

I regard it as my most important duty as Prime Minister to make sure our forces have what they need to do what we ask of them, and that they are properly cared for and respected for the extraordinary work that they do. The whole country is incredibly proud of them and I believe we need to do more to recognise the remarkable men and women of our Armed Forces and to place them at the front and centre of our society.  That is why I announced a doubling of the operational allowance for service in Afghanistan, back dated to 6 May and that is why I believe it is right that we renew and reaffirm our commitment to the military covenant, that crucial contract between our country and those who risk their lives to ensure our security.

However, I do not pretend that we can succeed, either in Helmand or in Afghanistan as a whole, by military means alone. Insurgencies usually end with political settlements—not military victories—and that is why I have always said that we need a political surge to accompany the military one. We need better to align our development spending with our overall strategy and I have announced £200 million to be spent on vocational training, strengthening the police services and government institutions. And we need a political process to bring the insurgency to an end.

As a first step, this means getting individual Taliban fighters to put down their weapons, to renounce violence and to reintegrate into Afghan society. The successful peace Jirgah earlier this month should enable that process to move ahead swiftly. But it means more than that. For long-term political stability, everyone in Afghanistan, including those in the south, must feel that it is their government, their country and that they have a role to play. As I agreed with President Karzai, we must start working towards a wider reconciliation process, leading to a political settlement that works for all the peoples of Afghanistan.

We are seeing a good example of the dual approach of a political surge combined with a military surge to deliver greater security in the second city of Kandahar. Importantly, the process getting under way in Kandahar is largely Afghan-led. Alongside military operations by Afghan security forces together with international forces, it included, for example, a Shura of several hundred local elders conducted yesterday by the local governor, which President Karzai attended. And it includes a major drive by the Afghan Government, with our support, to improve public services and the rule of law.

We want to create a situation where the people of Kandahar look to their Government, not the Taliban or militia groups, to deliver security, justice and a better quality of life. From now on, what is happening around Kandahar and in Helmand will reflect a deeper understanding of the influence of the tribal structures in Afghanistan. In the past, we have simply not paid enough attention to this, and to the unintended consequences of some of our policies. I want, for example, for us to take a careful look at the contracting policy of ISAF to ensure that the money going into the local economy from the huge logistical contracts has a positive impact and does not help fund local militias or, even worse, the insurgents.

As I have stressed, this is the vital year for our mission in Afghanistan. We have the forces needed on the ground; we have our very best people, not just military, but leading on the diplomatic and development front as well. I do not pretend it will be easy. As the last few weeks have shown, I must warn the House that we must be ready for further casualties over the summer months as the so-called fighting season resumes and ISAF extends its activity. But I say to the House what I said to our young service men and women in the dust and heat of Helmand on Friday: they are fighting thousands of miles away to protect our national security here at home. There is no national interest more vital than that. Like their predecessors, they have the support and the gratitude of the whole nation.

When we have succeeded in enabling the Afghans to take control of their own security, our troops can begin to come home. But even after our troops have left Afghanistan, the relationship between Britain and Afghanistan must continue as a strong and close one. Likewise, we want to continue to build on our relationship with Pakistan. These long-term relationships, quite simply, are essential for our national security.

I commend this Statement to the House”.

15:46

[Baroness Royall of Blaisdon]

My Lords, I join the Leader of the House, who has spoken on behalf of the Prime Minister, in paying tribute to the two soldiers who have been killed: Private Jonathan Monk of 2nd Battalion The Princess of Wales’s Royal Regiment and Lance-Corporal Andrew Breeze of 1st Battalion The Mercian Regiment. Our thoughts are with their families and their grief at their loss.

I thank the Leader of the House for repeating the Statement today and for giving me advance notice of it. It is certainly welcome that the Prime Minister and other Ministers have visited Afghanistan so early on in the formation of the Government. I thank him for that and I welcome the decision to increase the operational allowance for our troops in the field. I also welcome the support that he and the Government have shown for our troops. All those who are serving in Afghanistan should know that they have the admiration and respect of all sides of this House and the other place, and indeed of the whole country. I welcome, too, the Government’s continuing commitment to Armed Forces Day on 26 June and make clear our continuing commitment to it.

On the question of our troops’ families, will the coalition Government continue the important work we in government were doing to support the wives, partners and families of all our Armed Forces? It is common ground that our work in Afghanistan needs to bring together security, development and diplomatic efforts. Will the Leader of the House update the House on the discussions the Prime Minister had with President Karzai? I assure him that the Government will have our support to take through a strategy that sees the Afghans strong enough to take responsibility for their own security and prosperity. We on this side of the House welcome the £200 million that the coalition Government have announced for building up the Afghan army, police and civil service. Can he reassure the House that this will not be at the expense of existing programmes? Can he also update noble Lords on discussions the Prime Minister has had with the US Secretary of Defense Robert Gates and whether they addressed the proposed withdrawal of Canadian forces in 2011?

A stable Afghanistan requires a stable Pakistan. Will the Leader update the House on what discussions the Prime Minister has had with President Zardari and Prime Minister Gilani of Pakistan?

I turn now to the Strategic Defence Review. Will the Leader reassure the House that the front line will not be affected? Will the Prime Minister arrange for a Statement to be made to both Houses to explain how he is taking forward this work? Perhaps he would wish to include this in the next quarterly statement.

Will the Prime Minister agree to the commitment we gave to have an annual reception in Downing Street for the families? Has he met the formidable women who lead the Army Families Federation, the Naval Families Federation and the Royal Air Force Families Federation? Will the Prime Minister and all Ministers who are going to a base in theatre find time to meet wives and partners separately?

Can the Leader of the House reaffirm that, despite the challenges we face in Afghanistan, progress has been made? Can he confirm that the Government are continuing the strategy which the United Kingdom has pursued, with our partners in the international coalition, and that it has not changed? If it has changed, can he tell us in what respects? I am sure that all noble and gallant Lords will be as vigilant in respect of the strategy under this Government as they were under the previous Government.

Returning briefly to the issue of spending, in opposition the now Prime Minister and his Defence Secretary argued for a bigger Army and for its expansion by three battalions. Are the Government going ahead with that?

The Strategic Defence Review gives rise to the statements made over the weekend by the Secretary of State for Defence on the future of the Chief of the Defence Staff and the Permanent Secretary of the Ministry of Defence—statements to the media, of course, not to Parliament. Will the Leader of the House join me in paying tribute to Sir Jock Stirrup and Sir Bill Jeffrey for their public service to the nation? Will he explain to this House the reasons for their departures? Will he confirm that they will both play a role in the implementation of the Strategic Defence Review and remain until it is completed?

I restate our support for the mission in Afghanistan, which is, as the Prime Minister has rightly said, first and foremost to protect our national security. As this is the noble Lord’s first Statement to this House on Afghanistan on behalf of the Prime Minister—and, therefore, the first occasion on which we have responded as the Official Opposition—I assure him that, as the Government proceed to take difficult decisions in the best interests of our mission in Afghanistan and of our troops, they will have our full support.

15:51

[Lord Strathclyde]

My Lords, I thank the Leader of the Opposition for what she has said and for the questions she has posed. There were quite a few and I do not pretend for one moment that I shall be able to answer all of them right now. She is only too aware of the difficulties in replying on behalf of the Prime Minister, who speaks in another place, while being asked questions here. However, I shall do my very best.

I also thank the noble Baroness for the broad statement of support for what the new Government are doing. In many instances we are following the footsteps of our predecessors. As a generality, it is important to our forces abroad that they feel there is combined and united political support. I do not take that, of course, as stopping the noble Baroness from asking her incisive questions; I would be amazed if she did not continue to do so.

On the question of continuing the strategy, it has not changed fundamentally; we have very much the same interests in mind. However, there are different priorities, particularly in trying to press forward more political change. We are trying to promote a political surge at the same time as a military surge in order to win the military war and the people-and-minds war on the ground, and to encourage the Taliban to understand that the time for laying down its weapons has now come.

The noble Baroness will have seen in the newspapers this morning and over the weekend that the Permanent Secretary of the Ministry of Defence is due to retire. That was envisaged a while ago and there is nothing extraordinary in it. It is true that Sir Jock Stirrup is leaving early. However, I am informed that he will play a full role in the Strategic Defence Review and that that role will be important and significant in it coming to its conclusions.

The noble Baroness asked whether we would continue to support the families. I can confirm that we shall do so. That is why we have also announced that we should look again at how the R&R rules work in terms of travel time for soldiers returning to this country, as well as looking at the review of the military covenant, putting at the heart of that covenant the welfare of our military.

I cannot confirm that my right honourable friend the Prime Minister has met the formidable women of the Army, Navy and Royal Air Force families federations, but I am sure that their interests are very much uppermost in his mind and those of the Secretary of State for Defence and his ministerial team.

The increase in funding of £200 million that we have announced is substantial. I can confirm that it is new money; it is not at the expense of existing programmes. Of course, I cannot say that in the future there may not be some reordering of it, but it is new money, to be spent during the next few years on trying, as I have explained, to unfold the strategic objective of helping the restoration of a civil society within the nation of Afghanistan.

As the noble Baroness correctly noted, the relationship with Pakistan is vital. It is extremely well understood. The sacrifice that the armed forces of Pakistan have made these past few years is equally recognised and understood, as are the close links that exist between this country and Pakistan. I am glad to say that, in general, the relationship between us and Pakistan is extremely good, and the amount of money which is spent by various agencies from the United Kingdom to Pakistan will be continued.

I am unable to tell the noble Baroness when the Strategic Defence Review will report. We are in the very early days of working out exactly how it will take place, but as soon as I have more information on it, I shall let her know.

15:56

[Baroness D'Souza]

My Lords, I thank the Leader for repeating this constructive Statement. I add on behalf of the Cross Benches to the tributes already paid to those who have died in the line of duty.

It has been persuasively argued by long-term Afghan experts that the war against the Taliban is unwinnable for many reasons, some of which have been listed by the noble Lord. One of them is that the training camps supplying fresh batches of suicide killers for export are now based largely in the tribal areas of Pakistan, which are on the whole outside the reach of the Pakistan authorities. The link between the Taliban and al-Qaeda in Afghanistan is almost negligible now. Nor is the Taliban centrally involved in exporting terrorism; it is concerned much more with domestic control. It would seem that the justification for the surge looks increasingly thin. Does the Minister therefore agree that a different, perhaps more limited, strategy is called for? I suggest, for example, as have others, that a strategy which focuses on protecting the main cities, together with maintaining a highly trained, mobile force to take out any remaining training camps, is possible, desirable and therefore to be recommended.

[Lord Strathclyde]

My Lords, the noble Baroness, Lady D’Souza, the Convenor of the Cross-Benchers, makes some important and valid points, but it is the view of the Government that the key area for us to spend time and money on is the reintegration and reconciliation process of dealing with Taliban leaders. The noble Baroness rightly said that it is an unwinnable war if the only means at our disposal are military. It is not a war that can be won simply with guns and arms; it needs to be part of an overarching political process. That is why we are very glad that the peace Jirgah that took place early in June was a success. It was part of what we believe to be the inclusive political settlement, which is so necessary in restoring the peace and security in which prosperity can increase. We are trying to support the emergence of a strong and stable Afghanistan state. There will be parliamentary elections in September, all part of the process of creating that strong and stable state, and a great deal of work is ongoing to ensure that those elections are a success. The Prime Minister himself will see President Obama in July, when no doubt this will be uppermost on the agenda.

[Lord Clinton-Davis]

I share the views expressed on both sides of the House about the soldiers who have died recently in Afghanistan. Can the noble Lord say what is happening immediately to enable the Afghans to become a more effective fighting force? What programme is contemplated to give that aim practical effect?

[Lord Strathclyde]

My Lords, a key plank of the role of British forces is to help and encourage the Afghan national security forces themselves to become better able to provide the security that is required. There are currently around 120,000 Afghan national army personnel and 105,000 Afghan national police personnel. It was agreed at the London conference a few months ago to set targets for the ANSF growth by the end of 2011 of 171,000 for the ANA and 134,000 for the ANP. That means that there is a huge role not just for British forces but for our NATO allies and partners in helping, training and encouraging Afghan national security forces to take more of the burden. It is our wish that, as they do so, we will be able to withdraw.

[Lord Dholakia]

My Lords, I welcome this Statement from the Prime Minister repeated in this House. The Prime Minister is right when he talks of the need to accelerate the process which will lead to the eventual withdrawal of Britain’s 10,000 deployment. Can the noble Lord indicate whether there is a timescale for the withdrawal? That would put an urgency on the Karzai Government to reach some sort of decisions on the basis of which they can take fuller control rather than depending on British soldiers to maintain the situation in Afghanistan. Is there any further information about the recent revelation of the news about the ISI in Pakistan collaborating with the Taliban in Afghanistan on the basis of which the insurgency seems to be gathering quite a lot of pace?

[Lord Strathclyde]

My Lords, my noble friend Lord Dholakia asked about timetables for withdrawals. The view that I have always held on these matters, which is shared by the Government, is that rather than giving artificial dates we should do what we can when we can. No British soldier wishes to stay one moment longer than needed and required in Afghanistan. The steps that we are taking and continue to take are those designed to ensure that that withdrawal can take place. We hope, as the current mission unfolds over the next two or three years, that a substantial change will take place.

I cannot comment on the question raised by my noble friend about the ISI collaboration in Pakistan, but if I have any further information I shall certainly let him know.

[Baroness Symons of Vernham Dean]

My Lords, the noble Lord the Leader of the House touched briefly on the point raised by my noble friend the Leader of the Opposition in relation to Sir Jock Stirrup but he did not answer the specific question that my noble friend put. Will the noble Lord tell the House why it is thought necessary that the Chief of the Defence Staff be asked to leave his post at this juncture?

[Lord Strathclyde]

I think that the noble Baroness is trying to stir up trouble for the Government on this subject, but I really do not think that there is any. There are no particular reasons. I am sure that there is a series of different reasons for why this decision has been taken, but Sir Jock will be staying in post until November. That also allows me to answer the noble Baroness’s question that I did not answer before: that is around the same time as we hope the SDR will be published. Sir Jock will be playing a major part in that, and he would not be if there was any discomfort or unhappiness between the Government and him. I can confirm that the relationship is as good as it should be.

[Lord Boyce]

My Lords, I welcome the statement. I notice, however, that there is a lot of emphasis on the subject of our troops coming home, which is laudable in many senses but is in danger of perpetuating the uncertainty with which this whole operation has been run for the past four years. Can the House be reassured that the Government will give full and strong emphasis to this being a fully fledged campaign, something to which the noble Lord the Leader alluded in the answer before last?

[Lord Strathclyde]

Yes, my Lords. I have said that no British soldier wishes to stay in theatre a minute longer than is required, but we have a job to do. We will stay there to complete the job that needs to be done, and today was an opportunity to lay out our general strategy and priorities. We will fund and support our troops on the ground and take steps to make sure that they are given the very best of equipment, political support and everything else that they require.

[Lord Patten]

My Lords, in warmly welcoming the statement made in another place by my right honourable friend, I wish to raise a question concerned not with great matters of security or strategy but rather with the emotional and spiritual problems that face our brave young women and young men who are serving in Afghanistan. Does my noble friend agree that they are greatly helped by the advice and counsel that they receive from chaplains of all sorts? I use that term generically, from Muslim via Jewish to Christian and back. Will he confirm that such spiritual and emotional support, which is so valuable to people on the front line, will continue to be available for just as long as our troops stay in Afghanistan?

[Lord Strathclyde]

Yes, my Lords. My noble friend has made a good point and asked an important question about how we see the welfare of our troops, not only when they are in theatre but also when they return to this country. I can tell him that my honourable friend Dr Andrew Murrison has been asked to carry out a study into the health of those in the Armed Forces and veterans to see what more can be done to assess and meet their needs. I would be surprised if that did not also look at their spiritual needs, which are all-important.

We want to put our Armed Forces in the front and centre of our national life again. We are going to rewrite the military covenant and look after their families. There is a key role for civil society in working with people who work in our Armed Forces and those who are retiring. We are also going to look at how to improve accommodation for Armed Forces families and channel more funding into state schools in barracks towns. There is a substantial agenda but we have a great opportunity, with so many members of the Armed Forces in theatre at the moment, to get it right. It was correct for the Prime Minister to lay this out right at the beginning of our term.

[Lord Craig of Radley]

My Lords, I welcome the Statement and the intention to do more for the military covenant. The Americans and President Obama have talked about withdrawal starting in 2011, and now we appear to be talking in the same terms. Can I take it that we and our American colleagues will be moving together on this, not separately?

As I am on my feet, I should like to say how important it is that the Government’s confidence in the Chief of Defence Staff, Sir Jock Stirrup, is loudly and clearly enunciated, particularly bearing in mind the avalanche of adverse criticism that has appeared in the media—in a most co-ordinated way, it would appear—following the statement by the Defence Secretary at the weekend.

[Lord Strathclyde]

My Lords, on that point I reiterate the full confidence that we have in the Chief of the Defence Staff, Sir Jock Stirrup, for the work that he has done—and, indeed, for the work that he is going to do over the next few months. As for a longer-term withdrawal, that will happen in discussion and by negotiation with our military allies in ISAF. However, I repeat: there is no intention to leave Afghanistan until the job that we have set out on has been done, and done effectively. That is, not least, because we feel that we are at a vital stage of the job that we are doing there and can see the creation of a strong and stable society in Afghanistan becoming a reality.

[Baroness Goudie]

My Lords, I welcome very much the Statement by the Leader of the House and the Prime Minister today, and the commitment to funds for the future of the Ministry of Defence. More importantly, however, there is also the commitment to the funds for development. That is extremely important for women and children in Afghanistan. We made a commitment at the London conference to assist women and children in education, not only in schools but at university. By a quota system, almost 50 per cent of the MPs in Afghanistan are women. Those women do not have access to the President or proper access to Ministers. As well as a commitment to education, we should also have a commitment to those women who are elected MPs; they should be able to meet together as a caucus and be assisted in that way, not just kept in their constituencies.

[Lord Strathclyde]

The noble Baroness is quite right. Development goes hand in hand with the work of the military and, as the Statement laid out and as I have said again this afternoon, this is very much a partnership and it must, almost by definition, include qualitative improvements in education and health throughout Afghanistan, helping younger women and young men to meet their potential. Since the London conference, good progress has taken place on commitments made there on a number of important areas: on corruption; on development and governance; and on reconciliation and reintegration. I very much echo what the noble Baroness has said this afternoon. It is uppermost in our minds.

[Lord Maclennan of Rogart]

My Lords, the Leader of the House referred to the success of the Jirgah earlier this month. Can he say in particular whether greater acceptance was manifested at the Jirgah by the people of Afghanistan of the Karzai Government as representing their interests, and whether specific measures were taken—or have been indicated—on the corruption which has been undermining the acceptability of that regime?

[Lord Strathclyde]

My Lords, it has long been well known that there are problems of corruption in Afghanistan, but a presidential decree has strengthened the high office of oversight and the refocusing of Afghan ministries on tackling corruption. I do not think that any of us would be complacent in saying that the problem faced in Afghanistan is very substantial. My noble friend mentioned the Jirgah; that is but part of a process, but it is an important part in gaining the confidence of people and thus the greatest possible acceptability of the Government to govern in Afghanistan. As I said, parliamentary elections will take place in September. That is a further step on the way. If those elections can, as I very much hope, take place well away from a background of political corruption, that will be another way of demonstrating support for the new Government through normal parliamentary means.

[Lord Brooke of Sutton Mandeville]

My Lords, given that we have little time on our side, may I ask my noble friend a personal question? His courtesy to your Lordships’ House is such that it is difficult to imagine that he could increase that courtesy but, when he is repeating a Statement made by the Prime Minister, will he contemplate rising to do so after the Prime Minister has sat down? Unless he does so, it is impossible for the Printed Paper Office to release the Statement to Back-Benchers. Alternatively, will he contemplate changing the rules of engagement of the Printed Paper Office?

[Lord Strathclyde]

My Lords, my understanding has always been—this just goes to show how you can get things wrong—that the prime ministerial Statement is issued as the Prime Minister stands up, but perhaps that is not the case. I shall certainly make inquiries, as I think that it is helpful for noble Lords to have a copy of Statements. I hope that I can encourage my noble friend by saying that I will look into this and that, if any action is required, I shall see whether it can be taken.

Olympic Games and Paralympic Games 2012

Monday 14th June 2010 Lords Chamber

Motion to Take Note (Continued)

16:16

[Lord Patten]

My Lords, let me pick up the baton of the Olympic and Paralympic debate before my noble friend’s welcome Statement. I remind the House that a good maxim in the planning of great public projects in London is: “Never forget the Dome”. Another maxim is: “Always stick closely to the core reasons why any public project in London is being brought into existence”. There is much talk in the media and by the commentariat about everything connected to the 2012 Olympics and Paralympics, ranging from urban renewal and legacy, via green initiatives, to the better understanding of foreign languages, but it can be much too easy to lose focus on the core considerations. The last Government disastrously and hilariously lost control of the Dome project because they had wandered off from the core considerations that the Dome was all about.

I believe that there are three core considerations affecting the 2012 Olympics and Paralympics. The first are the competitors—the athletes who compete in the Games. That is why we have the Olympics in the first place, although sometimes when one listens to debates one wonders whether other people realise that. The second core consideration is the security of those athletes and of those who watch them in ever more threatening times. The third is the ability of athletes and spectators to get with ease to all the venues. I am thinking not just of the Olympic Park in east London, which is what we hear about most of the time, but of all the other venues to which people will wish to go.

On the first core issue—the athletes—I must declare my interest as a member of the advisory board of the British Olympic Association. I am convinced that athletes’ interests have been constantly advanced by the British Olympic Association under the chairmanship of my noble friend Lord Moynihan—whose speech we look forward to almost as much as we do to the maiden speech that is coming down the track from the noble Baroness, Lady Grey-Thompson, which is why so many of us are in the House this afternoon—and, in relation to the staging of the competition itself, under the chairmanship of my noble friend Lord Coe. We could not be in better hands than those of those two great Olympians.

Secondly, I am very far from convinced that the previous Government’s legacy on Olympic security is good. The noble Lord, Lord Shutt of Greetland—my noble coalition partner—made only a short mention of security; we heard almost as much about the wonders of the two Olympic mascots, Mandeville and Wenlock. I think that security may deserve greater consideration, so I shall now give it that consideration. I was lost in admiration at the persistence of my noble friend Lady Neville-Jones, now the Minister for Security in the Home Office, in trying to extract information on these issues from the then Security Minister, the noble Lord, Lord West of Spithead, who is not in the House this afternoon. The Minister winding up will be relieved to hear that I do not hold him responsible in any way for the noble Lord, Lord West of Spithead.

I think we all share the pleasure in the fact that the Winter Olympics 2010 passed off in Vancouver and elsewhere without any serious security incident. Many congratulations to the Canadian Government on this great achievement, which was, however, costly. The Canadian Government’s original planning assumption was that 175 million Canadian dollars would be spent on security at the Winter Olympics. That grew in predicted cash expenditure to around 1 billion Canadian dollars by the eve of the Games. I think that figure will have grown considerably because of the extra military deployed around the Games themselves.

We must now turn our attention to the protection that is needed in London. Much has already been spent in the run-up to 2012 on security precautions. I pay tribute to John Armitt and his colleagues in the Olympic Delivery Authority and the precautionary actions they have taken against the insertion of latent explosive devices in the pipe work of the buildings in east London. I hope that exactly the same precautions are being taken—here I seek reassurance from the noble Lord, Lord Shutt of Greetland—in any building activities at any other Olympic venue. The fact that there are so many different venues is something that will present opportunities for those who wish to disturb the Games in different ways. In the mean time, while we all welcome the fact that the Olympic Park in east London has been brought in on time, it will be empty for a long period and there will be considerable cost associated with the successful guarding of the venue.

Once the Games commence, the opportunities for attack are manifest, probably much more tempting at the secondary venues, and even more so at the training camps, where athletes will be in the run-up to the Games. Thus, while the high level of security at the Olympic Park is welcome and evident, the other venues are, in part, at present, on all the publicly available information that we have, wide open to severe security risk. This is something to which those with responsibility in this area must turn. I do not believe that it was looked at seriously at all by the last Administration. We all think about explosives; we just heard about improvised explosive devices when my noble friend repeated the Prime Minister’s Statement from another place. However, I am advised that the threat represented by explosive devices can be nothing compared to the threats represented by ICDs—those improvised chemical devices that have not yet been successfully used at any great sporting event, largely due to good chemical prevention plans. There will doubtless be lessons to be learnt about these preventive strategies from Vancouver 2010. In the mean time, the classic model remains how apparent specific threats in the run-up to the football World Cup in 2006 were dealt with by the German authorities. I commend their approach to their chemical surveillance plan—which was barely noticed by visiting spectators—to those concerned with trying to prevent any use of ICDs in the Olympic Park, at secondary venues or in training camps.

Finally, I come to transport. We should all remember, again, the dreadful Dome experience of the last Labour Government—not just for its inability to set the Thames on fire as promised, but its total inability to get people to a venue with ease, most notably on the first night, with the poor VIPs struggling to get in and those endless queues. Transport for London and our mayor bear a heavy responsibility and burden in getting spectators in and out while ensuring that the rest of London gets about its daily business unaffected. That is an issue on which many a London taxi driver has given me their opinion in recent weeks and months, generally starting, “I dunno, guv”, and going on in ways that many noble Lords can imagine.

So far, so good; doubtless security on different transport modes such as rail or bus is being considered just as much as it is at the perimeters of venues large and small. However, the timing is misfortunate as these transport issues are likely to be highly politicised in the run-up to the Games given the cauldron of London politics and the fact that the run-up to the Games is paralleled by the run-up to the 2012 mayoral elections. Transport and transport issues will probably break out of the cosy bands of bipartisanship that link us in your Lordships' Chamber and another place, and doubtless in the mayoral elections. I suspect that politics will out. Amidst all the attention on transport delivery, we also have to consider ticketing. Ticketing is vital—this is my last point—because there is a potential threat of cyber attack on transport infrastructure ticketing as there is on ticketing in the park and the subsidiary venues. The previous Government badly lagged in their efforts to achieve a properly integrated national cyber security strategy. I am far from convinced that we have our defences up to deal with these issues. If my noble coalition partner Lord Shutt of Greetland has time to answer that point, I should very much welcome assurances that security issues at secondary venues and training camps are being taken just as seriously, and that we are looking hard at how we mount our defences against cyber attacks on ticketing of anything from buses and trains to hotels and getting in and out of the Games themselves.

16:25

[Lord Pendry]

My Lords, I am grateful for the opportunity to contribute to a debate that is so important to many of us. I thank the noble Lords, Lord Shutt and Lord Moynihan, for initiating it. In passing, I congratulate my noble friend Lady Billingham on speaking in this debate from the opposition Front Bench. She has much to contribute.

I am pleased to see so many noble Lords who can speak with such authority on this subject. I hope that I shall be forgiven for reminding the House—as I have done in the past—that I was the only MP to defy the boycott of the 1980 Olympics in Moscow and witness the noble Lord, Lord Coe, winning the 1,500 and the 800 metres. I congratulate the noble Lord, Lord Moynihan, on winning a silver medal at those Olympics. I do not see something as important as the Olympic and Paralympic Games as a partisan issue. I place on record how pleased I am that the noble Lords are so intrinsically involved in the delivery of our Games, particularly given their sporting heritage. I agree with what the noble Lord, Lord Patten, said about that.

I take this opportunity to welcome another of our country’s greatest athletes, the noble Baroness, Lady Grey-Thompson, of Eaglescliffe, who I am sure will make an impressive maiden speech today. She is the most successful disabled athlete in our history with 16 paralympic medals, 11 of which are gold. We all know that her influence stretches beyond medal success. As an ambassador for sport, particularly paralympic sport, she has inspired many and changed the way people in this country and around the world view disability sport. Retirement has perhaps made her busier than ever with her roles at UK Sport, UK Athletics, Transport for London and the Women’s Sport and Fitness Foundation. She is helping to shape the future of sport in this country at a strategic level. I am so pleased that she will be able to do that in this House. She is certainly an inspiration to me. On a personal note, I am delighted that she will be involved in the All-Party Group on Sports, which I chair, and into which we are hoping to breathe fresh life over the course of this Parliament.

In the short time available to me, I want to touch on a few different aspects of the magnificent prospect that the London Olympic and Paralympic Games offer us. They are a unique opportunity to allow us to inspire the whole nation. The building of the Olympic Park is taking place, the velodrome’s foundations are laid, the flagship Aquatics Centre will be a sensation, and the stadium is an established feature of the London skyline. If the progress on the facilities is anything to go by, our Games will be something to be proud of. The regeneration of east London is firmly under way. I am looking forward to visiting the Olympic Park tomorrow with the Mayor of Newham, the noble Lord, Lord Mawson, and other Members to see this progress with our own eyes.

The question remains, however: will we have the athletes to grace these fine arenas? There are noble Lords in this Chamber who are better placed than I am to provide an update, but if British performances in the Swimming World Championships and the Duel in the Pool last year, as well as in the cycling World Cup series, are anything to go by, we are in great shape. We have the European Athletics Championships to look forward to this summer. I am confident that the unprecedented levels of investment in and support for our sportsmen and women will allow them to take this form into the Games. The signs are certainly encouraging.

However, we have to be realistic. We know that budget cuts are inevitable. Indeed, they have already started, with the Secretary of State for Culture, Media and Sport announcing that the budget for the Games will be reduced by £27million. It is clear that widespread public spending cuts will be felt throughout society. If that is to be the case, one can only hope that the Secretary of State will do his utmost to limit the worst effects of these cuts as they bite into the Olympic budget. I heard what the Minister said about this, and we wish him a fair wind in taking part in these debates and ensuring, as far as possible, that the cuts will be mitigated. In other words, any budgetary constraints in this area must be sensible and strategic. This is too important to jeopardise by slashing crucial budgets, and in the long run that will do us no good, given that we all know that the Games, if delivered properly, will be good for the economy. I urge the Minister to ensure that this Government bring the commitments that they made in opposition into government, and remain absolutely committed to delivering an incredible Games.

One area where I have been encouraged by statements from the new Ministers is in the area of legacy—not the hard legacy of new world-class facilities, but the soft legacy of sustained increased participation in sport. This will be the focus of the rest of my speech. For me, legacy is arguably the most important aspect of the whole issue. The 2012 Games provide us with a once-in-a-lifetime opportunity to inspire a generation—an entire nation—through sport. Nothing brings people in this country together more than sport, and we must not waste this opportunity. The future of an entire generation depends on it.

Let us be clear about the facts. As I stated in a previous debate which I initiated in this House, too many people in this country are overweight or obese. Far too many of them are children. In fact, the NHS Information Centre report on obesity published last year stated that 30 per cent of girls aged between two and 15 and 31 per cent of boys are classed as overweight. Of those girls, 16 per cent are obese, and the figure is 17 per cent for boys. These figures are the result of a steady and worrying increase in recent years. Its direct cost to the NHS has reached £500 million per year, with a further £2 billion cost to the wider economy. The worst-case projection of recent trends suggests that 75 per cent of the population will be suffering the ill effects of excess weight within 15 years, with spiralling annual costs. If the Games can inspire the generation of children and young people who are suffering those ill effects, the trend will reverse. Their physical activity will bring many other benefits, too, in terms of education, community cohesion and tackling anti-social behaviour.

We need to get real about legacy and take it seriously, and there are some basic but vital starting points. CCPR has found that millions of pounds have been diverted from grassroots sport into the delivery of the Games. This cannot happen any more. We need more joined-up thinking about how we treat community sports clubs. We need to move on from the current ludicrous situation where a Minister in one department waxes lyrical about the amazing contribution that sports clubs make to our national life, while another department adds yet another layer of regulations on to the volunteers who run the clubs.

Business rates are going through the roof for amateur sports clubs; utility and water drainage costs are calculated at commercial rates for amateur clubs, which they just cannot afford; music and alcohol licensing costs and requirements are far too high for clubs to be able to handle; and amateur clubs receive widely unsympathetic VAT treatment by Her Majesty’s Revenue and Customs. Those are big problems on their own but, when combined, they are terminal for many clubs. CCPR’s Sports Club Survey found that the average amateur club operates at a margin of £1,300 a year, and volunteers now spend more time in the office than they do delivering sport. More costs and more administration will kill clubs up and down the country, and that cannot be allowed to happen. Without them, the legacy cannot be achieved, as there will be nowhere for people to go to play sport.

We need recognition from the Minister today that this legacy, which we all support, can be delivered only through a thriving community sports network, and we need a clear commitment from him that he will work across government to help community sports clubs. On the whole, they do not need charity or government handouts; they need our genuine, thoughtful, meaningful support and the space to be able to deliver the sports that they love in their communities.

The new Government are building on a good base. There are some fantastic initiatives and programmes out there. I shall not waste the House’s time by covering them in detail, but the free swimming initiative is having a huge impact at grassroots level, the Football Foundation, of which I am president, does fantastic work providing sport to young people throughout the nation, the legacy action plan is a good start and the appropriate steering groups are in place. It is now time to bring all these programmes and strands of work together in order to seize this incredible opportunity for our country. The Games will be a success—of that I am sure. It is our duty as politicians to ensure that no one involved rests until the inspirational legacy is secured. It is a duty that we should not take lightly.

16:37

[Baroness Grey-Thompson]

My Lords, it is with great pleasure that I address this House for the first time on a debate that is close to my heart, but first I should like to say what a privilege it is to be a Member of this House—something that I, and perhaps my politics professor at university, never thought would happen.

I have been overwhelmed by the kindness shown to me before and since my introduction into this House. I express my deep thanks to my sponsors, the noble Lord, Lord Coe, and the noble Baroness, Lady Finlay. I also thank the Convenor of the Cross Benches, the noble Baroness, Lady D’Souza, and the many other noble Lords who have taken the time to welcome me.

I also take this opportunity to thank the numerous members of staff—the Doorkeepers, Attendants and police of the parliamentary estate—who appear to be able to spot a confused glance at 20 paces and who have kindly and gently guided me in the right direction.

I know that the noble Lord, Lord Coe, was very keen to contribute to the debate today. However, he is tonight hosting an annual fundraising event for the charity established in the memory of his mother and, as he is unable to stay for the whole debate, he has asked me to pass on his great regret that he cannot contribute. However, he assures noble Lords of his continuing thanks for their interest in the progress being made towards staging the Games in 2012.

I spent 20 years of my life having the privilege of wearing a British tracksuit competing for our country. That is something that will always be truly special. I hope that I have learnt through my athletics career that to be successful requires time to learn the rules, persistence but, above all, hard work. I sincerely hope that I can serve this House well.

While competing, I recognised that the career of an athlete can be relatively short, so I involved myself in the wider aspects of sport, such as the Sports Council for Wales, UK Sport, UK Athletics, the London Marathon, the London bid for the 2012 Games and, to widen my experience, other organisations outside sport such as the National Disability Council and Transport for London. In this debate, I declare an interest in that I sit on a number of LOCOG committees.

When I started in athletics some 27 years ago, the United Kingdom was a very different place for disabled people. My parents fought hard to get me into mainstream education—something that I strongly believe gave me the right platform on which to build my sporting career. Back then, the word “Paralympic” and the spirit that the Games came to represent were not yet known. As I am sure many noble Lords will be aware, it was at Stoke Mandeville that Professor Sir Ludwig Guttmann, the eminent spinal surgeon, recognised that disabled people not only enjoyed doing sport but indeed were competitive. Sport then and now continues to help challenge attitudes towards disabled people, and in 1960 the first international games for disabled people were held.

In my early career, two things had a profound effect on me: watching the 1984 Olympic Games and the noble Lord, Lord Coe; and, in 1985, seeing a fellow Welsh wheelchair athlete, Chris Hallam, win the London Marathon. Those inspired me to take sport more seriously. I am very proud of my Welsh roots and the support that I received there. The same goes for the north of England, where I now live.

It was not until 1988 that the term “Paralympic” was used and, as that was my first Games, it changed my life. I became involved in the bid for 2012 because from the beginning it was not about hosting the Olympics and then having to put on another event a couple of weeks later; it was about organising the Olympic and Paralympic Games with one committee of the same high quality. For me, the Paralympic Games have two messages. They are about one person or a team winning and the rest not—about sport at its purest level—and about spreading inclusion and change.

The Games that we expect, and I know we will see, will be well organised, with exciting sports presentation, but it is behind the scenes—the Games that we do not immediately think about—that has the ability to promote significant change. London has led the way in organising a Paralympic Games that will raise the bar for sponsorship, sustainability, transport and inclusion that other countries will want to follow. The Games grow every quadrennial, and nations want to be part of them, but for that they need social provision for disabled people. This is just one way in which the Games extend influence. One has only to look at what the Chinese Paralympic team was able to achieve in a few short years, finishing top of the medal table in both 2004 and 2008, to see that change can come. I sincerely hope to welcome their team to London in 2012, along with many other countries that are finding it the right time to think about how they provide for their disabled people.

There are many examples of good practice within LOCOG. Because of its passion for diversity and inclusion, unprecedented numbers of disabled people are applying to work for it, and the organisation has become one of the most attractive employers of choice for disabled people. That has happened because we aimed high. At the 2012 Games, the British Paralympic team will have about 300 athletes, and through them we have a once in a lifetime opportunity to showcase disability sport and to educate and enthuse the British public, who already show great support.

I recognise that the legacy of the Olympics and Paralympics is not the responsibility of the organising committee nor of the Games—I know that the noble Baroness, Lady Ford, is working on that. We know from previous Games that in the autumn of 2012 there should be a spike in participation rates in physical activity, but we need to work hard right now to maximise that, because I believe—perhaps surprisingly—that elite competitive sport is not quite for all. Involvement in physical fitness can help lead to improved learning, greater confidence and general wellness: all the things that we want for our young people.

I recognise that we have to face many challenges in sport in the tough economic times ahead. We need to ensure that all young people continue to have access to great physical activity both in and outside school; that disabled children have the right and the opportunity to be included; and that girls find the right environment in which to develop their skills to allow them to compete in the wider world. We know that currently women are employed in only one in five of the top jobs in sport. To be a successful nation, not just in sport but in business, we should challenge that, because sport is a microcosm of society.

The few weeks of the Games cannot change all these things, nor are they meant to. They are meant to be a spectacular showcase of the best that we have to offer. We all need to grasp the opportunity of the Games being on home soil to inspire our nation to think differently and to include every part of our great nation. It is an amazing opportunity for us all to pull together.

There are 807 days until the opening ceremony of the Paralympic Games and 774 days until the opening ceremony of the Olympic Games. For the athletes hoping to compete, there are perhaps 1,700 or so training sessions. There is a lot to do and much that we should hope to do. I wish the noble Lord, Lord Coe, and the noble Baroness, Lady Ford, success with their work, and wish our Paralympic and Olympic teams the best of luck in their preparations.

16:45

[Baroness Morgan of Huyton]

My Lords, it is an honour to speak in today's debate after the noble Baroness, Lady Grey-Thompson. I congratulate her on her maiden speech, which demonstrated how significant her contribution will be in this House. She is not only one of the great figures of British sport in the past 20 years, with an astonishing 11 Paralympic gold medals and six London Marathon victories, but has done much to promote sport in this country through a wide range of community and voluntary-sector initiatives, as we have heard a little about today. Her significant expertise and experience on Olympic and Paralympic issues will be a tremendous asset to the House. Many of us have watched her feats with open mouths over the years. It is indeed a pleasure now to be able to gain from that experience in our debates.

The last time we discussed the Olympics was on a spectacularly snowy evening, as I recall. Many people disappeared into the blizzard to try to get home, so it is good that it is an altogether brighter spectacle today. As usual, I declare an interest as a board member of the Olympic Delivery Authority. The broad support for the project from all sides of the House evident in the debate earlier this year shows the strength of the political consensus that exists around the successful delivery of the Games in 2012. The very fact that 2012 was barely mentioned as an issue during the general election is testament to that. Therefore, despite what the noble Lord, Lord Patten, said, I am reasonably optimistic that even the 2012 mayoral elections will stay as one on the Olympics.

I should like, first, to acknowledge the strength of the relationships across the key the 2012 delivery agencies. I pay testament to the work of noble Lord, Lord Coe, and his team at LOCOG; the noble Lord, Lord Moynihan, and his team at BOA; and the noble Baroness, Lady Ford, and her team at the Olympic Park Legacy Company.

Our success to date has been built on partnership and I like to think that the whole 2012 project in all its enormity has been a coalition project before coalitions became so fashionable. We are now approaching two years to go before the Olympic and Paralympic Games begin in 2012, and there is growing interest and scrutiny of the Games’ delivery plans. I welcome today’s debate as an opportunity to give the House a progress report on the 2012 construction programme, for which the ODA is responsible.

I am pleased to tell the House that the ODA remains on time and within budget to deliver its construction programme, with more than 65 per cent of the venues and infrastructure for 2012 now complete. Personally, I remain hugely impressed by David Higgins, chief executive of the ODA, and his team. It is almost impossible not to underestimate the enormity of the task that they have undertaken. They have been utterly focused, resilient and effective since they began in 2006. As a board member, I have found it remarkable to come across so many impressive people, all working with the same commitment—whether they are engineers, the team working with local communities or logistics, or so many others. The enthusiasm is tangible.

Of course, it is the measure of their success that the media have got pretty bored. After all, where is the fun in on-time and on-budget? The continuing support of the public has been crucial in preventing the expected dip in decent and fair coverage. The detailed scrutiny in Parliament has also been a vital part of this. That is not to say that it is all done and dusted. We are 65 per cent there, but some of the most difficult parts of the construction remain. However, it is going well. It is important to remember that our target date for completion for the majority of the programme is the summer of 2011 in order that venues can be handed over for testing.

In the six months since 2012 was last debated in this House there has been significant change in the park. For example, the 14 lighting towers on the Olympic stadium have been lifted into place. The roof is going on and seats will shortly be installed. The three swimming pools in the aquatics centre have been completed and tested.

Construction is well under way across the Olympic village site, including the academy, the new world-class education campus being built within the village. The transformation from a brownfield site to a new park in London is under way, with planting starting next week in the north of the park. The work on the Olympic park is more than just another construction project; it is something that encapsulates the very best of the UK. I take this opportunity to talk briefly about one specific venue, the velopark, which epitomises that. It contains the five characteristics which are integral to and which are reflected across the whole park: notably, the commitment to regeneration and legacy; excellence in design; sustainability; accessibility; and engineering and project delivery.

The site of the velopark in the north of the Olympic site has a historic relationship with cycling. It was the home of the Eastway Cycle Circuit, a course formerly used by Olympians such as Bradley Wiggins, and now relocated to another part of east London. It was also the most contaminated part of the site as it had been a post-war tip. The 6,000-seat velodrome will host the Olympic and Paralympic indoor track cycling events in 2012, alongside the BMX circuit. After the Games, these facilities will be joined by a road-cycle circuit and a 7.5-kilometre mountain-bike course. Furthermore, you will be able to hire a cycle and bike around the park, so it will be accessible to everyone.

The legacy velopark will be unique worldwide in combining all cycling disciplines in one cycling hub, and its legacy has been developed in consultation with the cycling governing bodies and the community users. The 2012 velodrome has a perfect success model to follow in Manchester, which has become the busiest velodrome in the world, with an oversubscribed track programme, producing 40,000 rides per year for all riders—novice to elite, from 9 to 79 years old. Following the success in Beijing, cycling is one of the fastest growth sports in the UK. With a legacy operator secured—the Lea Valley Regional Park Authority—the facilities will be available for both elite and community use for generations to come.

The design team for the velopark was chosen following a lengthy competition. The shortlisted teams were assessed by a jury which featured leading names from the design world and Olympic champion Chris Hoy. This ensured that the track was designed around the needs of the athletes. Design, innovation, and creativity lie at the heart of this project and the innovative design of the velodrome has challenged the notion that velodromes have to be functional, dark, unremarkable buildings. The ODA wanted to create something special and if you drive along the A12 you will see that the velodrome dominates the skyline with its iconic roof designed to reflect the geometry of the cycling track.

We also want to make this the fastest track in the world, so the designers and contractors have procured hard-grown pine from Siberia, which will then be planed in Germany, and brought to the site in the coming months to help to create a record-breaking track. The facility is a beacon to sustainability and it has a unique cable-net roof which weighs roughly half that of any similar building, helping to create a highly efficient building. It will include the use of daylight through roof lights and external glazing which reduces the need for artificial lighting and allows natural ventilation. Also, water-saving fittings built into the design allow the collection of rainwater for reuse in the building, helping to reduce water consumption.

Ensuring accessibility to the venue presented real challenges for the design team. Most other indoor cycle tracks offer only limited accessibility as a result of the complexity of accessing all areas around the track. Our design overcomes this by adding two ramps beneath the track area which access the infield. The 6,000 seats are split above and below a fully accessible public concourse that runs around the perimeter of the trackside seating, allowing wheelchair access to the best viewing points in the venue.

The velodrome will showcase the best of UK engineering and construction with companies from across the UK coming together to build the venue. It is on time and within budget and will be the first venue on the park to be completed next year. It is being constructed by a British company, ISG, which was also responsible for replacing the track at the Manchester Velodrome. Suppliers from across the country are also involved, with the steel coming from Bolton, for example, which is providing jobs in difficult times. We are the best in the world at track cycling and we want to give our Olympians and Paralympians the best chance of success in 2012. Testing the venue for a year and training inside it will be an important part of that, so it has to be finished on time.

In conclusion, the project remains on track and within budget. It will create a park that showcases the best of UK plc in all our venues. I think we would all agree that the economic, sporting and social benefits of 2012 are already showing. When you look at the effect that the World Cup has had on South Africa, you start to grasp the effect that will be created here in 2012. The spirit of the Olympic and Paralympic Games speaks to the whole country, young and old, and is especially vital in tough times.

Finally, as my noble friend Lady Ford said earlier, I would be extremely happy to arrange visits to the site in east London for fellow Peers who have not visited the park. By seeing the construction at this stage, rather than when it is finished, you start to understand the scale of the work that has been undertaken.

16:55

[Lord Addington]

My Lords, it is a great pleasure to take part in this debate. I take this opportunity to welcome the noble Baroness, Lady Grey-Thompson, from these Benches—or rather from this tier of these Benches, as I am sure my colleagues in the coalition will also take the chance to welcome her. I still keep thinking of her as Tanni Grey-Thompson rather than as a Baroness.

I got accused of being an expert on sport when I spoke in the debate on the Queen’s Speech. I told the noble Earl, Lord Howe, that I would eventually forgive him for that slight. There is expertise in this debate, and the noble Baroness encapsulates it better than just about anyone else here. I hope that we will see her speak here not only on this subject but also on disability matters. Once again, I speak with a degree of self-interest because I was disability spokesman for my party for 14 years, and I currently speak on sport. I suggest that the noble Baroness and I will be bumping into each other a fair bit in this Chamber, and I welcome her to it.

The main thrust of this debate about the Olympics is that we are getting ready and have got over the hard yards. I believe that the noble Lord, Lord Coe, used that expression when congratulating the entire Olympic movement on being fairly boring as far as the press are concerned because, as the noble Baroness, Lady Morgan, said, there were dozens of very grumpy journalists who had articles about how the Games would be delivered late and over budget. They have dumped them. We have got to encourage everybody to make sure that they have to think of something new to say. We are on the edge of being able to go for it.

No matter how great the venues are, if they are the only thing that is left, they will not touch more than a very small percentage of the population. Enthusiasm for sport in general and for participation and volunteering can be generated by these Games, which have the opportunity to go beyond a small section of the sporting public and touch those beyond that group in a way that nothing else can. We must encourage that.

When he opened this debate, my noble friend spoke about school sport. I will upbraid him slightly for that because schools cannot deliver this by themselves. People who have been involved in this for many years have always recognised that they are merely a part of it. It is the link between school-age sport and clubs that will lead to growth. I have given my noble friend a little notice that I hope that when he answers, he will let us know the intermeshing of clubs that will allow competitive sport to go on—I do not know why I am using the phrase “competitive sport”; I think non-competitive sport is simply exercise—and be a part of people’s lives. The drop-off ages are 16, 18 and 21, and it does not take a genius to work out why—that is when people stop going to institutions where sport is compulsory or easy. It does not matter about making it easy or compulsory in those places if you do not have somewhere to go. If the Government do not do this, in effect they will be systematically wasting quite a lot of money. They have got to build up the link.

Also, to be honest—and this is true of all Governments; there is nothing I am saying here that I did not say a few months ago, so I might be forgiven if I get mostly the same answer again because it is a work in progress—we must make sure that sport is taken seriously by the rest of Government, not just by the DCMS, although now that it has the Olympics it should be more coherent. However, unless the Department of Health and the Department of Education are prepared to ensure that sport really fits in, and unless local government decides that it is really going to integrate sport and allow it to have a place, it does not work. You have got to make sure that it all meshes together. In the time I have been here, this has become better understood across government; it is not a party political issue. Sport and government have got to come together.

There has got to be more drive towards this, but it is always a case of “Oh, that’s not really my responsibility”, so it does not happen. I have heard that for most of the 13 years I have been here. The whole of government as well as Ministers at the top have to make sure this happens. I have also spoken more times than I care to mention about having to punch through the Chinese walls in Whitehall to get anything done. We have to make sure that there is a central drive. If the Olympic Games achieve their potential, they will provide a wonderful way of kicking some holes in those walls and making sure that people understand what they are doing.

I will not ask my noble friend a specific question about the importance of integrating sports medicine more closely in the medical structure. All these things must take place to make up the whole, but we must remember the central theme. We have an opportunity of doing ourselves a considerable favour in the long term and of throwing the biggest party on earth. If we mess this up, we will deserve everything we get.

Office for Budget Responsibility

Monday 14th June 2010 Lords Chamber

Statement

17:01

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, with the leave of the House, I shall now repeat a Statement made earlier in another place by my right honourable friend the Chancellor of the Exchequer.

“Mr Speaker, with permission, I would like to make a Statement on the Office for Budget Responsibility, which this Government created on coming into office. This morning, for the first time in British history, we have opened up the Treasury books and allowed the publication of an independent and comprehensive assessment of the public finances. From now on, Governments will have to fix the budget to fit the figures instead of fixing the figures to fit the budget. I would like to thank Sir Alan Budd, the members of the Budget Responsibility Committee, and all the staff for the impressive work they have done.

There has been some interest in whether the OBR will publish all the relevant underlying assumptions and judgments driving the forecast. Today’s report does more than that. There are over 70 pages of detailed material, much of which has never been seen before. For the first time ever, the Government are publishing the assumptions that lie behind the estimates for average earnings, property prices, interest rates, financial sector profits and, crucially, a five-year forecast for annually managed expenditure. This includes a forecast for the amount of debt interest that we as a country will pay over the coming years.

The creation of the OBR has already impressed the international community and has been praised by the International Monetary Fund and the G20. We will now move to put the OBR on a statutory footing with legislation included in the Queen’s Speech. So from now on, Members of Parliament sent to this House to scrutinise how the Government spend taxpayers’ money will for the first time have access to the honest figures.

Let me now turn to those figures and what the OBR has uncovered. First, the forecasts for growth in the economy. The OBR is forecasting growth to reach 1.3 per cent this year and 2.6 per cent next year. In future years, the OBR’s forecast is for growth of around 2.8 per cent in 2012 and 2013, and then 2.6 per cent in 2014. The forecasts for growth are, sadly for our country, lower in every single year than the figures that were announced by the previous Chancellor at the time of the last Government’s Budget in March. He told us that growth would soar to 3.25 per cent in 2011 and then to 3.5 per cent in 2012. At the time these forecasts were given, neither the Bank of England nor 28 of the main 30 private institutions producing forecasts for the UK were offering such an optimistic central view of the economy. We can only speculate as to why such rosy forecasts for a trampoline recovery were produced only weeks ahead of a general election.

Let me now turn to the OBR’s forecasts for the public finances. The latest out-turn data show public sector net borrowing for the last year was £156 billion. The OBR is forecasting that it will be £155 billion this year. It is the highest budget deficit of any country in the European Union with the exception of Ireland. It is £10 billion less than the forecast given only a month before the end of the last fiscal year, but I can tell the House that, based on the OBR’s figures, the £10 billion advantage we start with decreases to only £3 billion by the end of the Parliament. The reason for that is that the cyclically adjusted current balance—commonly known as the structural deficit—is forecast to be higher in every single year than what this House was told in March.

This is the most important figure in this report because the structural deficit is the borrowing that remains even when growth in the economy returns, and it is the structural deficit that is a key determinant of whether the public finances are sustainable. This year, the structural deficit is forecast to reach 5.2 per cent of GDP; that is £9 billion higher than we were told in March. Next year, the structural deficit will be £12 billion higher than we were told.

Turning to debt, the OBR’s forecast sees it rising as a share of GDP throughout the Parliament, and the interest on that debt, which we as taxpayers have to pay, also grows every year. Let me be the first Chancellor in modern history to give you those numbers for the coming years. The OBR forecast is that this is what Britain will have to pay for its debts: £42 billion this year, then £46 billion next year, then £54 billion, then £60 billion, reaching £67 billion in 2014-15—more than a quarter of a trillion pounds coming from the pockets of the taxpayer over the course of this Parliament simply to service the debts left by the previous Government.

The figures produced by the OBR also give us a new insight into the spending plans we inherited as a Government. They show that, given the OBR’s assumptions, the previous Government would have had to find £44 billion of spending cuts in departmental budgets in order to deliver their plans. I can confirm that I have found no evidence at the Treasury for how even a single pound of these £44 billion of spending cuts were ever to be achieved.

There are two other very important considerations that relate to these forecasts, and which understate the situation we inherited. First, these are central forecasts with a fan chart around them to represent the great uncertainty that exists, rather than a Treasury forecast based on an arbitrary reduction in the trend level of output. As a result, they understate the increase in the structural deficit and the reduction in growth. Secondly, these projections have been based on recent markets interest rates, which are about a third of a percentage point lower in Britain than at the time of the election, and, as is widely acknowledged, this in part reflects the investors’ confidence that the new coalition Government will take action to deal with the deficit. As a result, as Sir Alan points out in his report,

‘in present conditions the likely result is that these economic forecasts are biased upwards’.

This is absolutely crucial to understanding today’s figures, because if we had followed the fiscal path set out by the previous Government it would, in Sir Alan’s words,

‘lead to higher interest rates and so lower economic activity’,

than forecast in the OBR report.

Let me conclude with this. The independent report published today confirms that this coalition Government had inherited from its predecessor one of the largest deficits in the world; forecasts for growth lower than the country was told at the time of the election; a larger structural deficit than previously admitted; a debt interest bill larger than the schools budget. It is indeed worse than we thought. And the public would have known none of this if we had not set up the Office for Budget Responsibility. Next week I will return to the House to explain what we will do about it. In the mean time, I commend this Statement to the House”.

My Lords, that concludes the Statement.

17:10

[Lord Eatwell]

My Lords, I thank the Minister for repeating the Statement made by his right honourable friend in another place. This is a remarkable Statement, not only because so little of it relates to the concrete forecasts in the document that it purports to describe but also because it fails to note comments that the OBR makes on the earlier analysis of the economy presented by my right honourable friend Alistair Darling.

During the past few weeks, since the formation of the coalition Government, we have been subject to a barrage of statements from the Prime Minister claiming that the underlying position of the economy is far worse than that laid out by Mr Darling in his March Budget. For example, the Prime Minister said on 7 June:

“The overall scale of the problem is even worse than we thought”.

Yet what does the OBR report argue? I quote the OBR’s press notice:

“The nominal figures for the deficit and net borrowing are better in all years than in the March Budget”.

On numerous occasions, the Chancellor of the Exchequer has cast doubt on his predecessor’s integrity in presenting economic forecasts—he could not even resist the odd snide remark today. Yet the OBR report states:

“The forecast is based on a range of possible outcomes around a central view … This differs from previous practice under which some assumptions were designed to add caution to the fiscal forecast”.

As the official press notice puts it, the methodology of the OBR replaces,

“in some cases, deliberately cautious assumptions”.

So not only have things turned out better than Mr Darling argued in March but the reason is probably that he was so persistently cautious. Mr Darling is owed a formal apology. I hope the noble Lord will make that apology which the OBR report demonstrates in all common decency to be necessary.

The general forecast in the OBR report is for a lower trend rate of growth than was presented in the March Budget. What is not made clear is how the assumptions made by the authors of the OBR report differ from those on which the earlier forecast was made. It is the variation in the assumptions that is the source of the different forecasts.

In the limited time available, I have managed to unearth the fact—and it took some unearthing—that the assumed rate of growth of the eurozone is significantly lower, which, given what has happened since March, is perfectly reasonable. Will the Minister tell us what other key assumptions have been changed, and why? How has the assumed rate of growth of consumer expenditure been changed, and why? How has the assumed rate of the growth of business investment been changed, and why?

There is but one key element in the OBR report which might be deemed critical of the previous Government, and on which Mr Osborne focused in the Statement. It is the so-called structural budget deficit—not the actual budget deficit—which the report shows to be worse than was reported in the March Budget. I hope that your Lordships will forgive me if I spend a few moments unpicking this disagreement.

The structural budget deficit is an estimated deficit when the economy is operating at an estimated normal level. The OBR finds that this is worse than was reported in the March Budget. Why? The problem is estimating what is the normal level of the economy and how far below it we are now. The OBR makes a crucial assumption: that instead of the economy operating 6 per cent below normal in 2009, it was operating only 4 per cent below normal. Everything hangs on that single, crucial assumption. For if we are nearer normal operation than we thought, then the deficit under normal circumstances would be bigger than we thought. But what about this assumption? The OBR admits that it is “very tentative”. It says:

“Estimates of the underlying supply potential of the economy and the amount of spare capacity are uncertain at the best of times. In the aftermath of the financial crisis, which is likely to have had an adverse effect on the supply potential of the economy, such estimates are subject to greater uncertainty than usual”.

This—a figure subject to great uncertainty—is described by Mr Osborne in the Statement as,

“the most important figure in the report”.

He is grasping at straws. The key case for his deficit hysteria is based on an estimate,

“subject to greater uncertainty than usual”.

Then we have the debt interest figures, of which Mr Osborne makes so much. But again he cannot resist fiddling the figures by giving the total of debt interest, not the increase in debt interest due to the recession, including amounts that would have had to be paid anyway.

The Statement also makes much of the independence of the OBR—an independence which we applaud. When the Minister replies, will he confirm that all the assumptions in the forecast for Mr Darling’s March Budget were audited independently by the National Audit Office, and that the assumptions in the OBR report have not been so independently audited? Would he also confirm that it is normal practice that ONS statistics are seen by Ministers just 24 hours before their release? Would he tell the House when Ministers had sight of the OBR report? What is remarkable about the OBR is that it demonstrates how damaging would be the substantial cuts that the Government declare that they plan to make in public expenditure. The report demonstrates that the measures taken by the previous Government have set the economy on a path of steady deficit reduction, halving the deficit in three years, and setting the economy on a path of fiscal stability. All that will be threatened by the deficit hysteria of the coalition. The OBR report demonstrates with unerring clarity that their masochistic desire for an age of austerity is not only bizarre but unnecessary.

17:16

[Lord Sassoon]

I thank the noble Lord, Lord Eatwell, for his points, but it really is not a picture of the public finances that this Government have inherited that I recognise at all, or of the history nature of the formation of the OBR and the publication today of this astonishing new document which, for the first time, lays out transparently and independently the forecasts and numbers on which the Chancellor can form his budget. A position in which the public sector net debt is forecast to continue to rise from the 2009-10 level of £53.5 billion up to £74.4 billion at the end of the forecast period in 2014-15 speaks for itself. The reason that the deterioration in the numbers is so striking today is partly because the structural deficit turns out to be significantly worse and the sustainable growth rate to be not nearly as it appeared from the numbers that the previous Chancellor set out, which were thought to be completely incredible by forecasters at the time—and the OBR has confirmed this today. The document also sets out that, even in the numbers that the Chancellor presented in his March Budget, £44 billion-worth of cuts were assumed which were not explained anywhere in those numbers. They are set out for the first time today in a full forecast of total managed expenditure, for the full five-year forecast period. So the document exposes the total size of the inheritance that we were left—the fact that the plan for dealing with the deficit did not exist and that the structural problems of the economy are far worse. All we have in response from the noble Lord is to pick at the quite proper caution with which Sir Alan Budd and the OBR present their numbers. This is the first time that numbers like this have been presented. They have presented them quickly and at a time of an inheritance of huge problems in the economy, and all that the noble Lord can do is draw attention to the proper caution with which the OBR has rightly presented its numbers.

The noble Lord also questions the independence of the OBR’s numbers in relation to those presented in the past by the Treasury. It is indeed the case that Treasury numbers have been ticked up by the National Audit Office, but it is false to compare an independent forecast produced by the Office for Budget Responsibility with the NAO audit of the Treasury numbers.

In answer to a question from the noble Lord about when the Chancellor saw the forecast, I assure him that an initial view of the numbers was shown to the Chancellor on Friday 28 May with a further update on Thursday 3 June. The OBR then shared the report with the Chancellor on Wednesday 9 June.

It might help further to clarify that the document that sets out the forecast is not required to be audited by the NAO under the code for fiscal stability in the Finance Act 1998, which applies to the Budget itself, although I do not think that the noble Lord was suggesting that the OBR numbers should be subject to NAO scrutiny.

17:20

[Lord Barnett]

My Lords, I have not had the opportunity to go through as much of the detail as my noble friend Lord Eatwell, who I thought did very well and exposed so much of this so-called “independent” report. We were told just now in an answer by the Minister that the Chancellor saw some figures on 28 May, so the so-called “independent” OBR was consulting the Treasury all along. Is that true? Was it really being consulted all along, or is it truly independent—any more independent than all the other “independent” forecasts we get from all kinds of sources?

More important is the accusation by the Chancellor that the figures previously issued in the name of Treasury officials, not by the former Chancellor, were dishonest—that they were fiddled by Ministers and yet Treasury officials allowed them to go out in their name. Is that not rather insulting of officials?

More seriously, how many Treasury officials who were doing this job before are still there? Or are they now working for the OBR? Perhaps the Minister will tell us. He also referred to this five-year forecast. Most people, including myself, would be reluctant to forecast a few months ahead, let alone five years. Will he reassure us that that forecast will not be amended every few months by the independent OBR?

More importantly, will he confirm what the assumptions were for unemployment if the Chancellor’s deficit reduction programme, to be announced in the Budget, is anything like the rhetoric we hear at the moment?

[Lord Sassoon]

I am grateful to the noble Lord, Lord Barnett. He enables me to confirm the nature of the independence of the OBR. To call into question the independence of Sir Alan Budd and his committee—as he went on to say, that is not the most important thing, so perhaps I should pass over it and move on.

I also rather resent, on behalf of the Treasury officials with whom I work every day, the thought either that they were in some way party to some conspiracy before or that they are not capable of doing work, then or now, of the highest quality. The difference now is that the OBR has set out critical fan charts to show central forecasts and probability distributions around those forecasts. Noble Lords may tut-tut, but this is a practice that has been adopted by the Bank of England in its forecasts for many years.

[Lord Eatwell]

And they were wrong.

[Lord Sassoon]

The forecasts are transparent; people have been able to see how it has formed its views on all its forecasts. As for Treasury Ministers in the past, they have plucked numbers out and it has been non-transparent. Here we have a degree of transparency by which you can hold the Treasury to account, going forward. The noble Lord also asked whether the five-year forecasts will be amended very regularly. Certainly, the OBR will be publishing in conjunction with the Budget again, and, as it said in its document and terms of reference, it will be publishing its forecasts regularly.

[Lord Jones of Birmingham]

My Lords, we have just witnessed a great display of who said what to whom, and of “Oh yes he did” and “Oh no he didn’t”, that would frustrate every businessman and woman in this country, because—I hope that the Minister will comment on this—without doubt, whoever is right or wrong, this country is in the economic dippy-doo. The only way out of this is to trade our way out, to generate the wealth that will create the jobs in the private sector and generate the taxation to pay down the deficit.

When the Minister was repeating what the Chancellor of the Exchequer had said in another place, at the end I heard that next week we are going to hear what he intends to do about it. I urge the Minister to go back to his colleagues and, whatever they do next week and however or whenever they cut—when we hear so much about public spending, of how much or how little we are going to spend and, at the end of the day, of ring-fencing it or cutting it more quickly—to ask whether anybody has ever thought about earning the stuff, because without earning it you cannot cut it. I would welcome a comment on what we are going to do about generating the business growth that will render all of this at least relevant.

[Lord Sassoon]

My Lords, the noble Lord, Lord Jones of Birmingham, raises a critical point: how are we going to get growth going again, as none of this public expenditure gets paid for unless we get the private sector economy growing strongly? While my right honourable friend the Chancellor will be setting out in his Budget next week the important strands of our growth strategy, I stress that what is so critical about the creation of the OBR and the early action that was taken on the initial £6 billion of cuts is the credibility that gives to the new Government’s plans to grip the appalling economic situation we have inherited. That has already started to give confidence to the markets, as has been seen in the low interest rates. The critical importance of keeping interest rates low has to be one of the first foundations on which we can rebuild sustainable growth in the private sector.

[Lord Higgins]

My Lords, arising from the point that has just been made, does my noble friend agree that while it is important to grow our way out of the problem it will not be the case that we can grow our way out of the structural deficit? By definition, that is something quite separate from the possibility of growing one’s way out. This is indeed a very depressing report, although it is extremely helpful to have the figures which have been given. I have two points for my noble friend.

First, it is clearly extremely important that we should reduce the deficit as soon as possible, but what has not been mentioned at all is the extent to which it is proposed to fund the deficit meanwhile. That does of course have very important implications for the level of aggregate demand. Can my noble friend say what the policy is on funding the deficit as we go along in advance of actually managing to reduce it?

Secondly, in the same context, one of the extraordinary things that happened under the previous Government was the policy of so-called quantitative easing. There is a general assumption, not least in the financial press, that this to some extent increased the money supply and therefore increased economic growth. As far as I can establish, that simply is not true, certainly in relation to the size of the so-called quantitative easing. The reason is that, while the Bank of England was increasing the quantity of money by purchasing it in the market, the Debt Management Office, which Mr Brown had removed from the Bank to the Treasury, was busily selling debt, so the two totally cancelled each other out, as far as one can establish. Does my noble friend agree that it is important to get the Debt Management Office back in the Bank of England so that two completely contrary policies are not pursued at the same time?

[Lord Sassoon]

I am grateful to my noble friend Lord Higgins for his questions. Funding the deficit will be critical. As I pointed out, the level of borrowing will continue to rise throughout the forecast period to £74.4 billion in public sector net debt terms in 2014-15. The scale of the task should not be underestimated. What is critical to funding the deficit in a safe way is maintaining the UK’s credit rating and central to that is having a credible plan. The foundation stone of that credible plan is the revelation today of the true state of the nation’s finances, with some decent forecasts five years out on which all else, including the funding plan, can be built.

My noble friend’s second question was about the mechanics of selling debt. The Debt Management Office operates under a clear and transparent plan, which sets out exactly what the Treasury requires it to raise in the markets each year, consistent with the Budget forecasts. So far this year, the office has carried out that plan successfully and I have every expectation that it will continue to do so.

[Lord Desai]

My Lords, if the Office for Budget Responsibility is to be independent, it is essential that its report should not be made a political football—we do not discuss the MPC’s report in the manner in which we discuss the OBR’s report. I particularly welcome the fact that the OBR has not only a fan diagram for the growth rate but one for public sector net borrowing. However, it would have been better if the report had presented a range of numbers for the debt and the deficit, as well as for growth. If growth is uncertain, as it surely is, especially as you go forward, all the numbers on the deficit and the debt are equally uncertain. I am speaking neither for nor against what the Government intend to do but, if we set up a specialist agency, it should perform its function in a way that illuminates the uncertainty surrounding public policy. That uncertainty will help the Minister’s right honourable friend the Chancellor as well as everyone else, as it is important not to pretend that the numbers for 2014-25 are hard and fast, as the noble Lord wishes to do.

[Lord Sassoon]

My Lords, the noble Lord, Lord Desai, has made an important point by drawing attention to the huge illumination, to use his word, of the public finances and the forecast going forward. He makes some interesting technical points about how some of the data should be forecast. All I can say is that, if Sir Alan Budd is not listening now, I will take back the noble Lord’s points and relay them to him, as it is for him to decide how he lays out his forecasts in future.

[Baroness Noakes]

My Lords, I congratulate the Government on their commitment to a level of transparency that we have never before seen. This is a wonderful first move. We should also congratulate the Office for Budget Responsibility on producing in a very short time what I think people have to accept is a very impressive document.

Does the Minister agree with my noble friend Lord Higgins that the report is a depressing read? Nowhere is it more depressing than on the fact that the structural deficit is much worse than we were previously led to believe. That makes the call from the noble Lord, Lord Eatwell, for an apology quite inappropriate, as we were led to believe that the structural deficit was different. The noble Lord, Lord Eatwell, has tried to pick holes in these calculations, but does my noble friend agree that realism and transparency will serve the people of this country much better than unwarranted and hidden optimism, which is what we had from the previous Government?

The Office for Budget Responsibility will be an important part of the way in which Budgets and economic management are handled going forward. It is clearly important that the status of the office is put on to a permanent footing as soon as possible, so that we do not have to take the criticisms from the Benches opposite about its independence and so on. Will my noble friend say when we are likely to get legislation to achieve that?

[Lord Sassoon]

I am grateful to my noble friend Lady Noakes for her remarks and I echo her congratulations to Sir Alan Budd, the OBR and the Treasury officials who have been moved across into the OBR, as what they have produced in such a short time is a remarkable achievement. I agree that the report makes a depressing read in that it exposes how threadbare the inheritance from the previous Government was. On the other hand, it makes a stimulating and positive read, in the sense that we can use it as a basis on which to construct credible Budgets from now on. I also agree that it is important to put the OBR on to a permanent footing. Legislation will be brought forward as was set out in the Queen’s Speech.

[Lord Falconer of Thoroton]

I apologise to the noble Lord, Lord Sassoon, for not being here when he made his Statement. I was trying to get here but unfortunately I was blocked by the Armada in the Royal Gallery and had to go round another way. I thank him for repeating in this House the Statement made by the Chancellor of the Exchequer.

I am struck by the harshness of the Minister’s attacks on the previous Government and by the fact that he says that what the Office for Budget Responsibility has done is transparent. The difficulty is that what it has done has been done incredibly quickly and, as the noble Lord, Lord Eatwell, pointed out, has inevitably been based on assumptions that are difficult to make. The most significant thing is the political interference. I was amazed when the Minister said that the Chancellor of the Exchequer had spoken to Sir Alan Budd on 28 May, on 3 June and again on 9 June. In order to deliver on transparency, will the noble Lord, Lord Sassoon, tell us what was said in those conversations? If not, there will be doubt about the transparency.

[Lord Sassoon]

My Lords, first, I am delighted that the noble and learned Lord, Lord Falconer, was not defeated by the Armada and managed to come through triumphantly, although it sounds as though it was a close-run thing. What I said and what I will repeat is that the Chancellor saw an initial view of the forecasts on Friday 28 May and saw a further update on Thursday 3 June. The OBR then shared its report with him on Wednesday 9 June. I am completely at a loss to know why sharing numbers and the final report should in any way impinge on the office’s independence—

[Lord Falconer of Thoroton]

Perhaps I might explain and give the noble Lord an opportunity to comment. This is the reason why the rule was made that numbers were not to be shared with Ministers except during the few days before. I am sorry that I did not make that clear.

[Lord Sassoon]

I am grateful to the noble and learned Lord for the clarification, but to compare the process around the formulation of a report by the OBR with the release of numbers by the ONS is to compare chalk and cheese.

[Lord Newby]

I begin by agreeing with the noble Lord, Lord Desai, who said that what is most welcome about this report is the extent to which it explains the uncertainties that the Government face in producing detailed economic forecasts. I also find the fan charts very welcome. It is extraordinary that the noble Lord, Lord Eatwell, finds them risible when they are used, as the Minister said, by the Bank of England and reflect a better view of reality than a single headline figure.

When the Office for Budget Responsibility was being established, the Government said that its members would be available to give evidence to relevant parliamentary committees. Given the importance of the work of the office, will the Minister urge its members to come before the relevant committee of your Lordships’ House—namely, the Economic Affairs Committee—so that there can be a forensic discussion of their work, along the lines that noble Lords would clearly like to see?

[Lord Sassoon]

I am grateful to my noble friend Lord Newby. I will certainly pass on his request that members of the OBR come forward as he suggested. I am sure they would want to. It would reinforce the fact that, as they clearly set out in the foreword to their document, all the judgments in the forecast have been made or agreed by the Office for Budget Responsibility. There has been no ministerial involvement, so it would be entirely right that the office, rather than Treasury Ministers or anybody else, should answer for its forecasts.

Gulf of Mexico Oil Spill

Monday 14th June 2010 Lords Chamber

Statement

17:42

[The Parliamentary Under-Secretary of State, Energy and Climate Change (Lord Marland)]

My Lords, with the leave of the House I will repeat a Statement made by my right honourable friend the Secretary of State for Energy and Climate Change in another place. The Statement is as follows.

“The House will wish to join me in expressing our deepest sympathy for those bereaved or injured in the explosion on 20 April, and for all the individuals and communities affected by spilling oil, or fearing that they will be affected over the days and weeks to come. Our thoughts must be first with them. On 20 April, an explosion and subsequent fire on board a drilling rig operated by Transocean, under contract to BP, in the Gulf of Mexico tragically killed 11 workers. On 22 April, the rig sank. On the seabed, 1,600 metres below, substantial quantities of oil were leaking into the ocean. The blow-out preventer, which should have sealed this leak, failed. The causes of the accident are now subject to a US presidential commission of inquiry and to civil and criminal investigation.

There has never been such a large leak of oil so deep in the sea. Attempts by BP, working under the direction of the US authorities, to seal the leak were not successful. The company then pursued a strategy of capturing as much oil as possible. In recent days, more than 15,000 barrels a day of oil have been recovered. However, it is also now thought that the leak is worse than previously thought. The US Government’s estimate of the daily flow of the leak is now 35,000 to 40,000 barrels per day. BP hopes to be able to increase significantly the amount of oil it is capturing, but very large quantities of oil continue to be released into the sea. Moreover, the leak will not be fully stopped until August at the earliest, when the first relief well which BP is already drilling should enable the original well to be plugged. There is also an enormous operation to address the impact on the environment of oil already in the water. Working under US Coastguard Admiral Thad Allen, over 2,000 boats have been involved, skimming the water and using dispersant chemicals. Thousands of workers and volunteers onshore are removing oil and maintaining coastal defences. The House will wish to join me in paying tribute to those involved in this work.

We understand and sympathise with the US Government’s frustration that oil continues to leak at the rate it does. To appreciate the scale of this environmental disaster, each week a quantity of oil equivalent to the total spillage from the Exxon Valdez is escaping into the Gulf of Mexico. The US Administration have said that BP is doing everything asked of it in its effort to combat the spill. We of course look to the company to continue in this and will do everything we can to help. The key priority must be stopping the environmental damage. In their phone conversation at the weekend President Obama reassured the Prime Minister that he has no interest in undermining BP’s value, and that frustrations in America have nothing to do with national identity. We have offered the US authorities dispersant chemicals, and will respond quickly and sympathetically to any request from the US authorities for help.

Honourable Members will remember that in 1988 the Piper Alpha rig in the North Sea exploded, with 167 fatalities. Following that disaster, our regulatory regime was significantly tightened, and we split the functions of licensing and health and safety in the UK. The US has announced that in future in the US these functions will be dealt with by separate organisations. We hope that we have useful experience to offer of building and operating such a system. Officials from my department and the Health and Safety Executive have been discussing this with their US counterparts. Here in UK waters, it is my responsibility to make sure the oil and gas industry maintains the highest possible standards. I have had an urgent review undertaken.

It is clear that our safety and environmental regulatory regime is already among the most robust in the world. The industry’s record in the North Sea is strong. However, with the beginning of exploration in deeper waters west of Shetland, we must be vigilant. Initial steps are already under way, including doubling annual environmental inspections by DECC to drilling rigs. I will review our new and existing procedures as soon as detailed analysis of the factors which caused the incident in the Gulf of Mexico is available, building on the work already begun by the newly formed Oil Spill Prevention and Response Advisory Group. Given the importance of global deep-water production during our transition to a low-carbon economy, I will also ensure that lessons and practice are shared with relevant regulators and operating companies.

I now turn to the position of BP. It is hugely regrettable that the company’s technical efforts to stop the spill have, to date, been only partially successful. I acknowledge the company for its strong public commitment to stand by its obligation to halt the spill, and provide remedy and payment of all legitimate claims. As BP’s chairman has said, these are critical tasks for BP, which it must complete to rebuild trust in the company as a long-term member of the business community in the United States, in the United Kingdom and around the world. BP remains a strong company. Although its share price has fallen sharply since April, the company has the financial resources to put right the damage. It has exceptionally strong cash flow, and will continue to be a major employer and vital investor here and in the USA. In many ways, BP is effectively an Anglo-American company, with 39 per cent of its shares owned in the US, against 40 per cent in the United Kingdom.

There has been much speculation in the press about the impact on UK pension funds and whether the company will pay a quarterly dividend. This is entirely a matter for the BP directors, who will no doubt weigh all factors and make a recommendation to their shareholders that is in their best interest—which of course includes the best interests of many UK pension funds. Many citizens have real and legitimate worries about their pensions, but I reassure the House that not only is BP financially sound but pension funds that hold BP shares generally also hold a very diverse portfolio of assets. Their exposure to a single company, even a company as economically important as BP, is limited.

In concluding my Statement, I wish again to express the Government’s profound sympathy to those in the US affected by this accident and its aftermath. The priority must be to address the environmental consequences of this spill. Our concentration is on practical measures that can help in this. This disaster is a stark reminder of the environmental dangers of oil and gas production in ever more difficult areas. Coupled with the impact of high-carbon consumption, this highlights yet again the importance of improving the energy efficiency of our economy and the expansion of low-carbon technologies. We must and will learn the lessons of these terrible events”.

My Lords, that concludes the Statement.

17:49

[Lord Hunt of Kings Heath]

My Lords, I start by thanking the Minister for giving advance notice of the Statement and for keeping the House informed of developments. I join him in expressing sorrow for the 11 people who died in the original accident, for those who are injured and for the many communities affected. It is a reminder of the dangers that come with life in the oil and gas industry, as we saw in the North Sea last year and, as he said, in the Piper Alpha tragedy so many years ago. We owe a great debt of gratitude to those who work in such a crucial industry. I also join him in expressing concern about the environmental impacts of the spill, which cannot be underestimated. The efforts being made to try to minimise the damage are to be applauded and supported. I agree that the key priority must be to stop the environmental damage. I am glad that this country has offered help to the US authorities. Has that help been accepted? Does the Minister acknowledge that his department’s international energy division has enormous experience and expertise to offer in that regard?

I wish to ask the Minister more specific questions arising from the Statement. First, given the scale of the spill and its consequences, there can be no question that those responsible must be held accountable. However, that accountability should be judged and discharged fairly. I have noted his comments on the position of BP. Does he agree with me that all the companies involved—Transocean, Halliburton, BP and others—should be subject to investigation, and that finger-pointing at BP alone is unhelpful? I echo his remarks about BP’s importance and strength as an international company.

Secondly, does the Minister agree with me that any process of learning lessons needs to look not just at the actions of private companies but at those of the United States Minerals Management Service and at the general level of regulatory standards for deep- water drilling in place in the US and around the world? Will he comment on his specific understanding of the regulatory standards in place in the Gulf of Mexico, and whether they were relaxed in any way?

Thirdly, in the review that he has announced of the UK’s licensing regime, including that for drilling in deep waters such as west of Shetland, will he confirm that not only will the lessons of the incident in the Gulf of Mexico be fully learnt but that our own regulatory and licensing capacity will be enhanced, not diminished? Is it not ironic that we learnt only over the weekend of the coalition’s review of health and safety law? It is very easy to sneer at and criticise the Health and Safety Executive, but I am proud of its achievements since the passage of the Health and Safety at Work Act. Will the Minister assure me that this review will not undermine the effectiveness of the Health and Safety Executive in the North Sea? I pay tribute to the work of the Minister’s department, based in Aberdeen, which licenses oil and gas in the UK continental shelf. I had the privilege of visiting the department’s office in Aberdeen on a number of occasions and was impressed by the commitment, dedication and hard work of its staff. Will he assure the House that the requirement to ensure an effective licensing regime in the North Sea will be fully taken into account in any budgetary cuts envisaged in his department?

Fourthly, does the Minister agree with me that the central lesson of what happened in the Gulf is that the world cannot simply rely on digging deeper and deeper for oil? Following the Prime Minister’s call with President Obama, I was disappointed that there was not a clearer message from both sides of the Atlantic on the need to make the transition to a post-oil economy. In that context, does the Minister agree with me that the best thing that could emerge from this tragedy is a renewed push towards low-carbon energy, with Europe moving to 30 per cent emissions reductions, America passing a climate and energy Bill and the securing of an international treaty at Cancun in December?

The Statement emphasises the need to expand low-carbon technologies. Does the Minister agree with me that we need to play our part by maintaining, not cutting, the industrial policy support for the low-carbon transition, including the money for Sheffield Forgemasters, ports for offshore wind and support for tidal and wave power? Why are the proposed loans to a number of key companies in that sector now in jeopardy? Will he commit to report further to this House on the important matters contained in the Statement?

17:56

[Lord Marland]

I thank the noble Lord for an excellent speech, as we would expect from someone who has only recently left the department. I will pass on his tributes, which will be warmly received, as I passed on their tributes to the noble Lord at an earlier Question Time.

The noble Lord asked whether help had been accepted. The answer is yes. We have had a very good dialogue across the water since this dreadful event occurred. This is amplified by the fact that the American Government will adopt the excellent measure that we initiated—both Governments were very heavily involved in this to their great credit—of separating the Health and Safety Executive from licensing. That is a fundamental issue. As yet, our help in providing such things as detergents has not been accepted—I think because the Americans feel that they have that in hand. As to our future regulatory standards, the Minister and the department have carried out a very quick and detailed review. I am sure the noble Lord will be pleased to hear that we have seen nothing which suggests that we do not have very high standards in all that we have done in the North Sea. The previous Government should also be congratulated on all the fine work that they have done in that regard. However, we have set up OSPRAG to review the aftermath of this incident. That body has practitioners from the industry and is chaired by Mark McAllister, the chief executive of Fairfield, an oil operating business. They will have already met and are earnestly reviewing the situation.

I make no comment on budgetary cuts until after the Budget—noble Lords would not expect otherwise. However, I completely agree with the noble Lord—this was made clear in the Statement—that we must accelerate the development of low-carbon energy that he so carefully pronounced.

17:59

[Lord Sewel]

My Lords, I thank the Minister for repeating the Statement. He will be aware that many of BP’s US assets, particularly those in the Gulf, came via the takeovers of Amoco and ARCO. Is there any evidence to suggest that these operational assets were not properly integrated within the BP structure and have been managed almost as a quasi-independent operation? Can I push the Minister further on the US regulatory regime, because there is a view in the industry that the US has failed to learn from the lessons of others, particularly those learnt in the North Sea? I understand that some aspects of drilling this particular well would, for example, have been illegal in the North Sea.

[Lord Marland]

I thank the noble Lord for his two questions, both of which were extremely valid. I can state categorically that there is no evidence that this project was not managed properly. I think that I am right in saying that Transocean is the largest contracting operator in the world. It has great experience and this was very much an integrated programme. On US regulation, as I have mentioned, I am sure that there will be a lot of deep thinking—as there always is after such a tragic and dreadful environmental disaster—by the US Government, who will be searching deeply for the changes that they should make. We commit to keeping noble Lords advised on those developments.

[Lord Jopling]

My Lords, whatever the ultimate cost of this tragedy to the oil companies concerned, can the Minister give a broad indication as to the extent to which those companies are covered by their various insurers?

[Lord Marland]

Obviously, I cannot go into specific detail as to insurance coverage; that is for the companies and their balance sheets. I admit that I used to be in the insurance business and have a rough idea of what is going on. I am sure that some insurance salesman will be keen to sell a little more as a result. The message that we have received from the London insurance market is that the insurance companies are there to pay for the losses, which they have already estimated. They are in the process of providing for those losses and, indeed, have already paid north of half a billion pounds-worth to some of the companies involved.

My noble friend put his finger on a broader point. Only 65 per cent of the oil well was owned by BP; 25 per cent was owned by an American company called Anadarko and 10 per cent by Mitsui. As regards the drilling well itself, Transocean was the drilling contractor, Cameron was the manufacturer of the blow-out preventer, Halliburton was responsible for the cement casing, and we should give great credit to BP that it has stood up to be counted through these very difficult times and has been prepared to stand in the spotlight. It has behaved extremely properly in this regard, as one would expect of a major multinational corporation.

[Lord Jones of Birmingham]

My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for an excellent exposition of the consequences, and I am grateful to the Minister—especially for his last comments. Perhaps I may ask for his response on two aspects. First, the Statement in another place mentioned that the payment or not of the dividend from BP, which concerns pension funds on both sides of the Atlantic and will further affect the share price in one way or another, was a matter for BP and did not concern this Government. I should welcome the noble Lord’s comments on the fact that that is clearly not the attitude of the gentleman to whom the Prime Minister spoke on the telephone over the weekend, given that President Obama made it very clear that it is very much the business of the White House as to whether BP pays a dividend. How will this Government stand up and be counted on behalf of the pensioners of Britain?

Secondly, the Statement mentioned, and we read last week about, the possibility of criminal proceedings coming out of this. Will the attitude of the United Kingdom to any request for extradition of people who might be indicted be, I trust, the same that the Americans would apply to any request to extradite people from America to Bhopal in India?

[Lord Marland]

The noble Lord poses some interesting questions. He knows as well as I do that BP is a $100-billion company with a $35-billion cash flow—even after the recent reduction in its share price. It is in a strong balance-sheet position to suffer the losses from this horrendous disaster. The noble Lord may also know that BP pays its dividend quarterly, unlike many corporations. The BP board has agreed, and is committed, to a review of that position before 27 July and we are in that period. The noble Lord would not expect me to comment on criminal proceedings, would he? I am afraid that that is a matter for the law courts, not me. Doubtless we will follow the issue with interest. As regards the Government, I admire the way that the Prime Minister, David Cameron, has handled this matter; he has dealt with it in a calm and steady dialogue, rather than volatile rhetoric. In these circumstances, we have to be very careful to follow that path, because there is an awful lot at stake, as I hope I mentioned in the Statement.

[Lord Redesdale]

My Lords, will regulation of novel technologies be looked at? The disaster happened at the very limits of the technical abilities that we are considering, and other technologies are particularly worrying. The development of unconventional gas fields, using geological processes which have not been tried or tested, could cause untold damage. Therefore, I hope that the Minister will look very carefully at unconventional gas. I hope that he will also recognise that many of us have been impressed by President Obama’s level-headed approach, considering the view taken by the British press. We are not talking about a disaster just in cash terms; this disaster could lead to the extinction of a number of species. The brown pelican may well be brought to the edge of extinction. If an American company had brought about such a disaster—although I am not saying that BP alone brought it about—in the North Sea, the political pressure from the press to point the finger of blame would be extremely strong. In the light of such enormous pressure, the attitude of the American President is to be commended.

[Lord Marland]

I thank the noble Lord, my coalition colleague, for his kind remarks. I was rather heartened by the recent pictures that I saw in the papers of the effort being put in to saving the pelicans, although I do not know how true they are, because you can never believe everything you see in pictures. That effort has been paid for by someone, and I suspect that BP has a strong hand in ensuring that it takes place, because it is deeply committed to restoring the Gulf to where it was. New technologies will of course be looked at carefully. This demonstrates that the world is searching high and low for carbon-intensive energy, and we are moving towards scraping the barrel. As I said earlier, we have to accelerate our low-carbon development because this is a massive environmental wake-up call, so of course we will be looking at the new technology.

As I also said earlier, I think that the rhetoric and conversation between President Obama and our Prime Minister was exactly what one would want to hear following this recent tragedy, in that it was calm, sensible and not inflammatory, as has been reported. That is what is required in solving any problem.

[Lord Hunt of Chesterton]

My Lords, I think it would be as well to recall the remarks of the American ambassador for fisheries and oceans, Mr Bolton, who commented four years ago that many parts of the Gulf of Mexico were ecologically dead due to the vast quantities of nitrogen coming down the Mississippi. Enormous areas of that ocean are in a very bad state. I do not want to go into what is tiny or trivial; an integrated approach is important to the whole ecology of the Gulf of Mexico in the context of this accident and indeed other incidents. In the UK we have the Natural Environment Research Council, and I strongly recommend the Minister to get in touch with it. We have excellent scientists who are able to take an overall view and from that we can perhaps then get a more rational approach.

[Lord Marland]

My Lords, one of the great things about a debate such as this is that one learns so much. I am very grateful for the noble Lord’s comments on nitrogen flowing from the Mississippi; it is true that we have a very heavily polluted world. As I said earlier, if nothing else, I hope that this will be a massive environmental wake-up call, and I should like to take up the opportunity of meeting the noble Lord’s colleagues.

[Lord Williamson of Horton]

My Lords, perhaps I may take the Minister back to day one for a moment. The cause of this accident was the failure of the blow-out preventer. Do we know whether it was a failure of the equipment, which was owned and provided by Transocean and was therefore the responsibility of that company, or whether it was a failure of the fitting of the blow-out preventer, which I understand was done by Halliburton, as was the concreting? Either the equipment or its fitting failed, and that will be a very important point for the future. I simply ask whether we know that already or whether we have yet to find out.

[Lord Marland]

This morning I met Iain Conn, the chief executive of refining and marketing for BP, who is on the board of BP. He gave me a very clear picture, which has been developing over time. Seven safeguards failed, so it was a most exceptional accident. As the noble Lord rightly said, the concrete casing and the blow-out preventer failed, but another five things should have locked in to prevent that happening. It is remarkable that all those safeguards should have failed. Clearly, the finger of blame will be pointed in all sorts of directions but I do not think that that will help to solve the current problem. We will doubtless be left with the presidential inquiry, which will take place afterwards. Our own OSPRAG group will review that and ensure that lessons are strongly learnt.

[Lord Moynihan]

My Lords, first, I declare my interest as a non-executive director of Rowan Drilling, a US-based shallow-water jack-up drilling company. I was one of the Energy Ministers responsible for implementing the recommendations emanating from the Piper Alpha disaster, and I congratulate the Minister on immediately undertaking a review of the UKCS operating and drilling activity. Will he ensure that the safety case regime is at the heart of that review? Will he also reflect that the response by the British Government to the Piper Alpha disaster was measured and constructive, without emotive political rhetoric from either side of the House, and underwritten by seamless, calm and reasoned collaboration between the British Government, their agencies and the American operators in the North Sea? Does he agree that that is the most effective response, however tragic the human and environmental consequences?

[Lord Marland]

I thank my noble friend Lord Moynihan for his comments; again, it is very useful to have the input of someone who has experience in this field. I well remember the Piper Alpha incident and the horrific pictures surrounding it, and I was deeply involved in the insurance loss. What was vivid in my mind—and I hope that it will be vivid in our minds at the end of all this—was the incredible effort made by people such as Red Adair in dealing with that dreadful disaster, as noble Lords will probably remember. All efforts were made from both sides of the Atlantic to ensure that the problem was solved, and that, I am reliably informed, is what is happening now in the US. BP is not alone in this; it has the full support of the oil industry companies, and that, I think, will be obvious as time passes by.

Safety is at the heart of this and must be in the future. We need to ensure that an accident such as this one or Piper Alpha does not happen again on our shores. I do not have the statistics with me but let us remember that more than 4,000 deep-water wells have been dug since 1980. Therefore, to date this has been a very satisfactory and productive development. It is dreadful that this accident has happened but one hopes that it is a freak event.

[Lord Kilclooney]

My Lords, I thank the Minister for his Statement and especially for its measured and moderate terms. However, is it not important not to get emotional about this subject, not to become personal and not to express oneself in crude terms, such as “kicking people’s asses”? Does that not let down the people of the United States of America?

[Lord Marland]

As I said earlier, I am very impressed by the calm rhetoric that has been shown from this side of the Atlantic and by the response from President Obama to the conversation that he had with our Prime Minister. At our level, we have been having very constructive and positive dialogue with our respective departments in the US, trying to find a constructive way forward. Clearly, with horrendous disasters on a scale such as this that affect the environment and many people’s lives, there is bound to be volatile and probably over-the-top rhetoric. However, I am glad to say that from the Government’s point of view the matter has been dealt with calmly, and I applaud the fact that that is as the noble Lord would wish to see it.

[Lord O'Neill of Clackmannan]

My Lords, the Minister’s tone has been very measured and I congratulate him on setting up the OSPREY exercise, which is very useful. However, the learning curve will be travelled up only by the United Kingdom. We have an international business with British associations but it would appear to adhere to different safety standards in different parts of the world. People do what they need to do or what they can get away with, rather than having a gold standard. Once we get OSPREY and look at the picture against the experience of Piper Alpha, would it not be better to try to get international agreement which is binding on all the players so that we do not have the kind of pantomime in which people say, “Oh yes we do, oh no we don’t”, every time there is a disaster? We have learnt a lot from Piper Alpha. Let us hope that we are not too complacent about it but that, as a consequence, we feel emboldened to say to other people, “We’ve tried to get our house in order. Why don’t we try to get all our houses in order at the same time?”.

[Lord Marland]

The noble Lord makes an incredibly valid point, which I hope I have answered. I should mention that the name is OSPRAG, which is difficult for me, let alone the noble Lord, to say—I have to have it written down in front of me. It stands for Oil Spill Prevention and Response Advisory Group, and I am glad that he welcomes it. As I said earlier, we are communicating at all levels with US government departments to ensure that we achieve this gold standard. As the noble Lord rightly said, the world cannot march out of tune. I think that the early steps by the US Government to separate safety and licensing are a major breakthrough. That separation was started in this country and it delivers a gold standard. I can only assume that everyone will learn a lot from this incident, as they did following Piper Alpha, and that they will adopt the very important safety standards that are now required.

Olympic Games and Paralympic Games 2012

Monday 14th June 2010 Lords Chamber

Motion to Take Note (Continued)

18:20

[Lord Hoyle]

After those two very important Statements, I return to the Olympics debate. First, I congratulate the noble Baroness, Lady Grey-Thompson, on her wonderful speech. It brought to the House her experience in her particular field, and the fact that she is working so hard to make the Olympic Games a success. I thank the noble Baroness very much indeed, and all of us here look forward to hearing from her in future; I hope that she will keep us informed on progress.

We have talked about the achievement of the Olympic legacy. My noble friend Lord Pendry said that that is one of the most important things that will come out of the Olympics. I agree with him completely. I do not want, any more than he did, to go down the path of the pessimists who are saying that nothing can be done and that the Commonwealth Games did not bring any more participation. That is not the way to look at it; we must look at how we are going to improve it and what we are going to do about it.

I agree with the noble Lord, Lord Addington, whose expertise in sport I have listened to on so many occasions, that it is about bringing together schools and sports clubs and, if I may say so, the important role of local authorities in this direction. We have already seen the success in the provision of free swimming; more than 80 per cent of local authorities participate in that. All those roles must come together if we are to achieve the result that we all desire: that more people participate. According to last figures that the Sports Council produced, although there was an overall increase in the number who were participating—and a very welcome one, if I may say so, in non-white groups participating in sport—there was a drop in the number of women and people with disabilities who were participating, so we have a lot of work to do there. I have one or two questions for the Minister. Have the Government now abandoned the target that we gave to Sport England of 2 million people participating by 2012? Is that still a target or not? I would welcome anything that he has to say about that.

The noble Lord, Lord Patten, dealt with transport. I agree with him to some extent: we must not be complacent about that. We have to move a lot of people to and from the Games, as well as keeping up the normal public transport services. We cannot rely on saying that there will be fewer people or cars on the road in August. A lot of work has been done, but I hope it is sufficient to move those people. I want to ask the Minister about the VIP routes which are being set up. As we know, there are many venues, including Wimbledon. I say to my noble friend who will reply to the debate that playing the tennis there will be a world’s first in that it is being played on grass. I know that she will correct me if I am wrong about that. There is Wembley, Earls Court, Eton and all the other areas. What is the position of the VIP tracks which are being established for the athletes and officials to move quickly from one venue to another? As I understand it, a lot of people would not mind disruption to their normal life for a few days, but if it is to go on for six weeks, we might find a lot of opposition. If the Minister could update me about that, I would be very pleased.

Another thing is the transformation of east London. We have heard a lot of the positive aspects about that. How far are we going in relation to the additional housing that will come after the Olympics have finished—not only taking over where the athletes have lived but expanding—and the social housing, of which more than one half is scheduled? Are the plans going ahead? Are we on schedule to achieve that?

While we are talking about construction—I am sorry that my noble friend Lady Morgan is not here at the moment—I am very pleased that construction is going to British companies, but it was also said that local people would be employed by the contractors. Is that happening? Equally importantly, how many unemployed local people are now working on those sites and how many of the apprenticeships are going to local youths? Those are the kind of measures by which we can judge how positive the results are.

We are all proud of what is being achieved in the Olympics themselves, and we all want to make it a blueprint for the future. We want to demonstrate—we have made a very good start on this—that it is wonderful not only to live in the United Kingdom but to visit it. The Olympics provide us with a lot of business opportunities. Our companies which are participating are gaining expertise for future world events that I hope will stand them in good stead.

I am also pleased that there will be a future for the stadium. In instances in the past, stadiums have been neglected after the Games are over. What has been a showpiece at the time has been quickly forgotten. None of us wants that, and it looks as if there is a future for the stadium. In the Commonwealth Games in Manchester, there was a future for the stadium, where Manchester City now plays. That has been a very useful development, because it means that events are taking place there all the time, crowds are going there, and work has been brought to the area by people coming to watch the game. It is important that we mention what might happen to the stadium.

I know that I have asked the Minister quite a few questions, but what about green sustainability? I am sure that he has something about that in his notes. We know the record of his colleagues in that part of the coalition: they have always been interested in sustainable energy. Therefore, why has the green turbine been abandoned? After all, 20 per cent of the renewable energy was going to come from it. I would be very pleased to hear from him why they have gone down that route.

Overall, all of us must say, so far, so good; it is a real success story. I believe that, the way that things are going, we can present something of which we can be proud. Many of the Olympic Games of the past have been wonderful events for the country that staged them. In our case, I want to see not only that it is a magnificent event at the time but that we look to the future and sustain what has happened for the development of the East End of London for the wealth of the people who live there and for the benefit of the country, and that having invested so much money in this project we get a return from it.

18:29

[Lord Moynihan]

My Lords, I thank the Minister for attributing success in securing this debate to me. That comes as something of a surprise since I was grateful to the usual channels for securing a debate on this subject before the general election. But a two-for-the-price-of-one Motion on the Order Paper is always worth while, especially when it comes with a brilliant maiden speech from my noble friend in sport, the noble Baroness, Lady Grey-Thompson. First, I declare my interests: I am chairman of the British Olympic Association, a director of the London Organising Committee and a member of a number of International Olympic Committee and European Olympic Committee commissions and committees.

The debate will focus on progress made towards the successful hosting of the London Olympic and Paralympic Games in 2012. The theatrical analogy sometimes employed is that it is the Government who are building the Olympic theatre, the London Organising Committee which is putting on the show, the British Olympic Association which selects, manages and leads the British actors and actresses word perfect, and the mayor, who has the legacy for the Olympic park when the curtain falls.

It is right that we can report that most of the focus in this debate is on how well all four players comprising the four members of the Olympic board are progressing. The starting point is the host city contract signed between the mayor, the British Olympic Association and the International Olympic Committee. The contractual undertakings, including the duty to establish the London Organising Committee on which both the mayor’s office and the British Olympic Association are represented, have been honoured. The Government, with the support of the noble Baroness, Lady Morgan, through the Olympic Delivery Authority, have ensured the efficient delivery of the sites under the leadership of John Armitt and David Higgins. The staging of the Games is making progress, on time and on budget, within the £2 billion LOCOG budget which was secured under the outstanding and astute direction of my noble friend Lord Coe and without recourse to public money. His team is making good progress.

The British Olympic Association has announced that it intends to take a full team to the Games. Despite signing away the rights in early 2005 for significantly less value than the income required to undertake its duties as a host nation Olympic committee, the BOA has, under the direction of its chief executive, Andy Hunt, and chief commercial officer, Hugh Chambers, managed to strengthen its balance sheet, governance and organisational structure from what only six years ago was to many a glorified travel agency and which today is a strong national Olympic committee. It is in line with the NOCs of Germany and the United States, where it plays a key role in the working of the International Olympic Committee, the wider Olympic family and, as evident by the Minister for the Olympics and Sport, Hugh Robertson, in choosing to make his inaugural speech at the new BOA headquarters in Charlotte Street last week, it has taken a seat at the top table of policy formulation and administration in British sport.

The announcement last week that the British Olympic Association would have a powerful athletes’ commission demonstrates that it will place the interests of the athletes first and will ensure that their interests are always at the heart of policy formulation within the organisation. The Minister announced to the press that he would be looking to the BOA to consult on a wide range of sporting issues as he implements the far-reaching changes to the structure of sports administration throughout the United Kingdom.

In this work, we at the British Olympic Association will support the Government in a constructive and comprehensive way. It is written into the Olympic charter that the national Olympic committees should be constructive in their engagement with government. It is also a key component of the IOC objectives that the autonomy of a national Olympic committee should be respected by government. I believe that on both those issues significant and positive progress has been made with the new Government since 9 June.

Today, we also have far more representation than ever before on International Olympic Committee and European Olympic Committee boards. I know that your Lordships will be delighted that in recent days Sir Clive Woodward has been appointed to the International Olympic Committee coaching commission, the Entourage Commission. Adam Pengilly, one of the skeleton athletes in the winter Games, is the first to be elected by his peer group from this country to membership of the International Olympic Committee. At the European level, Andy Hunt, chief executive of the BOA, has been appointed to the EOC Games Commission and Jan Paterson, also from the BOA, has been appointed to the European Olympic Committee’s Sport for All and Youth Commission.

Finally, in the context of the theatrical analogy, the major’s office, under the leadership of Ken Livingstone and, more recently, Boris Johnson, has been consistently supportive in prioritising the Games as a showcase for London and for sport in 2012, and for preparing the way for the noble Baroness, Lady Ford. I am confident that all parties will retain the all-party approach to the Games, about which the noble Lord, Lord Pendry, spoke and which was a feature of the debate in your Lordships' House in 2004. That debate unanimously supported the British Olympic Association’s proposal to bid to host the Games in London in 2012 and did much to persuade Tony Blair, the then Prime Minister, and his Cabinet to support the bid and, in the case of Tony Blair, to undertake so much work to secure the Games with his presence and personal contribution in Singapore when the decision was made.

If I were to be asked what are the two major challenges to a successful Games, I would say security and transport. Noble Lords have addressed these items, not least my noble friend Lord Patten with his expertise and eloquence. Despite the challenges, I believe that everything possible is being done to minimum the risks that they pose. However, there is a third area of concern and it is one shared by many noble Lords in their contributions today. That is where I will focus my remaining comments—the area of legacy. The Games will of course be judged by the British people, not primarily on the magnificent Olympic park or the tremendous support of the volunteers, although these are key and critical issues. As has been pointed by the noble Lord, Lord Pendry, they will be judged by the success of Team GB and a strong medal tally, boosted by the sound of the national anthem being played at medal ceremonies.

The next generation will judge the success of the Games by the legacy endowed to the people the length and breadth of the United Kingdom. The legacy from the Games will come in two areas of activity. The first is the urban regeneration legacy from the Olympic park. In too many countries that legacy has led to expensive white elephants populating the landscape and budget deficits of host cities for decades after the curtain falls on closing ceremonies. I believe that that will not be the case in London. If I am right, that will be directly the result of the strong oversight of the noble Baroness, Lady Ford, as chair of the Olympic Park Legacy Company and the day-to-day leadership provided to that organisation by the chief executive, Andrew Altman.

The noble Baroness shares the vision of many of us that the Olympic park needs to become a great place for events, a centre for high performance, a resource for community sport, a focus for active recreation, a magnet for sports tourism and a catalyst for education, Olympic legacy and sports-related research and culture. It needs to be bold in its ambition and its aspiration. The noble Baroness, Lady Ford, fully understands this challenge. She has worked hard with the British Olympic Association to ensure that sport was properly placed at the heart of this programme—for sport had been lacking in written documentation when she arrived and in the many speeches on this subject.

Working with the mayor’s office, the Olympic Park Legacy Company is creating a signature urban park, which will build communities based on family housing—both private and public sector—to be a catalyst for regeneration and convergence and a premier centre for sport and leisure. Let us take the handball venue, from which a multi-purpose facility can emerge after the Games to cater for commercial and community use and elite sport. It can also be a centre for economic innovation: for example, the vast media centre can house research, media and university facilities. They are all capable of holding a mirror to the diversifying economy of London.

In all those areas, the new Government can rightly shine a torch on how the private sector can play a greater role and on how savings can be made on the delivery mechanisms while not impacting the front-line benefits of this vision. Every step should be taken based on planning, promotion, partnerships and cost-effectiveness so that the reinstatement and handover of the facilities during the period from 2012 to 2014 can be transformational, delivering activation and regeneration. I hope that the same approach will be applied to the sports venues outside the park, from Eton Dorney to Weymouth, to take two examples. For the ministerial team and the mayor that is a major challenge and I hope the Minister will comment on it. If they empower the Olympic Park Legacy Company, those aspects that I have outlined today of the legacy challenge will be secure.

A second aspect to legacy is sports legacy. The noble Lord, Lord Addington, echoed the concern of many about the lack of sports legacy to date. The delivery of a successful sports legacy from the Games will, I contend, be more challenging. To date, five years of multiple committee work with red threads, a lot of papers and cross-departmental bilaterals led by civil servants have delivered very little of substance save for some rays of outstanding good practice—for example, in the case of swimming which has been alluded to—to dampen the voices of the critics who fear that the Olympic Games will leave no more sporting legacy than tennis has derived, on occasions, from Wimbledon following a wet August when the rackets which were dusted down in the enthusiasm of the championships are put back in the cupboard until next year.

A week ago, as mentioned by the noble Lord, Lord Hoyle, who was right to focus on this, Sport England, the body created to ensure that more people participate in sport as a result of the 2012 Games, announced a drop in participation among some absolutely key groups. The National Audit Office report contained the following criticism:

“In the North East and London, participation fell across all priority groups, with London showing a decrease in women’s participation of 9 per cent”.

That is despite London being the host city of the Olympic Games 2012. The National Audit Office concluded:

“Linking financial information to performance information is crucial for the Department and for Sport England’s Board in determining the value for money of Sport England’s activities and making strategic decisions”.

This situation is wholly unacceptable for a nation enthused by sport, by the World Cup and by the Olympic and Paralympic Games. Five years ago, Kate Hoey and I chaired an all-party group and the Independent Sports Review was produced. We reviewed the multiplicity of quangos involved in the delivery of sports policy and we wrote:

“The hands-on running of sport and recreation in the United Kingdom is now largely undertaken by the five National Sports Councils, nine Regional Sports Councils in England and nine Regional Sports Boards in England”.

It was described by the Olympics Minister of the time as an organisational nightmare. The use of those quangos allowed Government to influence matters from a distance, keeping problems at arm’s length.

Last week, the Minister took the final step in a reform process which, in my view, had been long overdue since the introduction of the lottery by the Conservative Party under Prime Minister John Major. It has since been diverted into a range of government initiatives; it has deviated from the original pillars and spawned a bureaucracy. The decision made by Hugh Robertson, the Minister, and echoed by the Minister on the Front Bench today, to return the lottery to its original objectives and establish a one-stop shop with three divisions—the Youth Sports Trust, Sport England and UK Sport—can deliver a lean, efficient and focused one-stop shop, working with the British Olympic Association and the British Paralympic Association to empower the governing bodies, clubs, schools and volunteers of the country. Such empowered people are the only people capable of arresting the decline in sporting activity in our host city. Bringing together those three divisions will be an important step forward. I hope that Hugh Robertson, the Minister, who has already earned significant respect from all sides of the House and support from the world of sport, will chair the new body in its initial years. His authority will be needed to bring about the process of change necessary to provide a sports legacy from 2012.

In conclusion, the policy for sports legacy should focus on a few well targeted and clearly defined sports legacy objectives. I know and commend the work done by the noble Baroness, Lady Campbell, in this context. Competitive inter-schools sports leagues and nationwide school games, based on primary and secondary schools, need to be included. That also was announced by the Minister and I warmly welcome that initiative. I wish him and the Government every success in delivering an urban regeneration legacy and a sports legacy worthy of the Games.

18:44

[Lord Hall of Birkenhead]

My Lords, I, too, congratulate the noble Baroness, Lady Grey-Thompson, on her maiden speech. It was a truly inspiring speech from someone who has inspired so many people.

I want to speak about the cultural side of the Olympics and what it means for this country. I must declare an interest as chairman of the Cultural Olympiad and a member of the board of LOCOG.

In 2005, the strength of our cultural offering played a significant part in our bid to host the Olympic Games. The originator of the Games, Baron de Coubertin, believed in a link between sport and the arts. Indeed, in 1948, the last time the Games were hosted by Great Britain, medals were given for the arts. Of course, de Coubertin was inspired by the ancient Games in which artists played their part alongside sportsmen. When London won the Games we promised to put culture back at the core of the Olympic programme. Our Cultural Olympiad was launched at the end of the Paralympic Games in Beijing nearly two years ago. It is a four-year programme of events inspired by the Games which will run until the last day of the London 2012 Paralympic Games. It is designed to give everyone in the country, especially young people, a chance to be a part of London 2012. The aim is to make a real impact which will leave a legacy lasting well beyond the Games themselves.

Just under a year ago, I was asked by the then Government and the Mayor of London to chair a board to run the Cultural Olympiad. I did not then, and I do not now, underestimate the challenge that we face. I said yes because I believe that this country has an enormous opportunity, with the spotlight on us in 2012, to showcase the breadth of our creativity, and the vitality of our arts and culture and heritage.

To do that we put together a board that met for the first time last autumn and which I believe includes the key organisations and key people who can help to deliver something very memorable indeed. We have also brought together the key stakeholders and funders. As I believe that broadcasting will be central and defining to people’s perception of what we offer culturally, the BBC’s director-general is also on the board. As with everything—perhaps even more so in the area of arts and culture—joining together to make sense of this extraordinary opportunity is phenomenally important.

Once formed, our first priority was to appoint someone to direct the Cultural Olympiad. In January this year, we announced the appointment of Ruth Mackenzie, formerly an advisor on broadcasting and cultural policy for the Department of Culture, Media and Sport. Before that she was the general director of the very successful Manchester International Festival, and has had many other jobs too. We have also brought in some real heavyweights to help her so we have a team in place now which is focused on delivery.

Many things have already been put in place for the Cultural Olympiad and are already involving people right across the UK. In 2008 and 2009, more than 1.5 million people participated in almost 1,500 events during what is called Open Weekend. That is an annual event which, this year, takes place between 23 and 25 July. On top of that, more than 180 cultural projects have been awarded the Inspire mark. That is a new idea which allows projects inspired by what the Games can do to attach the 2012 logo to their work. Through these projects there have already been 1,000 public performances and 2,200 workshops with audiences totaling almost 4 million people.

I shall give an example of what has been going on. Two years ago, at the time of the Beijing Games, the Essex Jiangsu festival took place celebrating 20 years of relations between Essex and the Jiangsu province in China. It brought performances and events to the UK for the first time, and gave local people the opportunity to take part, make new international relationships and develop new skills.

Another, but very different, project is the bandstand marathon. This is a national celebration of music performed by local musicians in their local cities, towns and villages, and is the most widely spread Inspire mark project in the UK. Last year, there were 120 simultaneous concerts in bandstands across England and Wales with more than 3,000 musicians from traditional brass and silver bands. In the south-west, they played to more than 50,000 people.

Those are just two examples—there could be many more—of how all sorts of people right across the UK are already getting involved. This is exactly what the Cultural Olympiad should be about at this stage: people and communities coming together. Listening to conversations about things that the Olympics are allowing to happen is really quite humbling. People are able to plot things because 2012 is happening, and they are things that they otherwise would not have done. That in itself will be a legacy.

Quite apart from the Inspire mark projects, some big programmes have also been announced for 2012. One very significant programme, which is especially appropriate for the country that led the world with the Paralympics, is called Unlimited. Led by the UK’s arts councils, it is the country’s largest-ever commissioning pot for art made by people with disabilities. In fact, we think it may the largest ever in the world. We have just announced some of the commissions which we hope will change perceptions in the ways in which the Paralympics, in the sports world, have changed perceptions. British companies such as the Graeae Theatre Company and Candoco Dance Company are world leaders, and they have already been commissioned for 2012. Candoco will engage two disabled choreographers to each make a large-scale dance piece for disabled and non-disabled dancers, including people from Beijing and Rio de Janeiro. Another big project is River of Music. It will be the largest series of free concerts ever on the banks of the River Thames and will involve musicians from all 206 countries participating in the Games. Young people from all over the UK will perform alongside some of the greatest pop and world musicians. It will be a very exciting weekend.

We have also announced a programme called Film Nation: Shorts, which will involve young people under 25 years old developing their film-making skills alongside professional film-makers. Some of the best films will be shown at the Olympic Park. Tate Movie will give school groups a chance to work together to create an animated film, working with some of the best animators in the world from Aardman, the Oscar-winning animation company that made Wallace and Gromit. The Tate Movie project will be the first of its kind: an animation made by children for children.

There is a lot already happening, but a couple of months ago the Cultural Olympiad board announced that the finale of the London 2012 Olympiad will be a 12-week festival across the nation opening on midsummer’s day and running until 9 September, which is the last day of the Paralympic Games. We all hope that the festival will be a way in which everybody in the UK can get involved and will give people a summer to remember. I love what Kofi Annan said about the Olympics:

“When the Olympics are staged in London in two years time, competitors from every nation will find fellow countrymen and women living here to cheer them on. The very diversity is what makes London such a dynamic, exciting and successful community”.

I hope that is what we can display to the world in our arts and culture.

There is another point about legacy. For my colleagues on the Cultural Olympiad board, developing skills and the legacy of the Games will be as important as the programme of outstanding art and culture. Planning in this area is under way, and we hope to have that completed by late autumn. Until recently, I was the founder chair of the skills council for the creative and cultural sector, so I have seen at first hand just what you can do by attaching young people to creative projects. There are lots of people who may not be able to sing, dance, paint or make music, but they can still be part of the creative process by building sets, marketing, looking after audiences or doing myriad other tasks involved in making performance happen. This is a big opportunity for us, as I know that it is for the Games as a whole, and it is an opportunity that I, and my colleagues, want to grasp in very concrete terms. To be able to say after 2012 that many young people have been given the chance to work alongside professionals backstage and that, through that, they have sorted out what they want to do with their lives is very important.

Equally, I hope that the Cultural Olympiad will show to the world what an extraordinary creative place east London is. What I see in those five boroughs is not the caricature of old. East London feels like a new city. I hope that the legacy of the Cultural Olympiad will have helped to build the creative skills and employability of the next generation of young people growing up in the boroughs around the Olympic village. Developing that is a major task for me, my board and the team.

The opportunity for us is enormous. An Ipsos MORI survey released in the past fortnight said that 87 per cent of parents felt that it was important that their child took part in cultural activities on a regular basis. I hope that the Cultural Olympiad and the festival will provide that opportunity to many young people. As if to underscore that finding, I shall end with a quotation from the mayor of Vancouver, Gregor Robertson, about the importance of culture for the winter Olympic Games. He said:

“The arts and culture I think has been the secret to our success, bringing crowds out and celebrating downtown, adding more depth to the whole event”.

In my own view, the greatest legacy for the Cultural Olympiad will be if we show not only how central culture and creativity is to huge events such as the Olympics, but how central the development of creative skills is for all our young people and how vital culture is for the country as a whole.

18:55

[Lord Berkeley]

My Lords, the House has heard a lot of good news and enthusiasm about the Olympics and about the need to ensure success. I shall focus on two things: the project and sustainability. The noble Lord, Lord Shutt, mentioned that the project is on time and on budget, which is clearly good news, but I heard him say that it is 54 per cent complete although the briefing that we have received from the ODA says 65 per cent complete. It may be that it is somewhere between the two.

Some time ago, I heard that the intention is to have the buildings up and running a year before the start of the Olympics so that everything can be bedded down and checked out. Whatever the progress, there are two years to go, and I worry because projects with a committed end date tend to suffer serious last-minute cost overruns. We saw that with the Jubilee line extension, which had to be open to get people to the Dome for the millennium celebrations. Something went wrong—it is usually the electrics or the signalling that goes wrong on these things—and although it was open on time, the signallers were probably paid 10 times the going rate per hour, the costs went through the roof and the work had to be redone. I hope my noble friend can give me some comfort that that will not happen this time because as a country we cannot afford the enormous threat of a cost overrun. The project has to be finished on time.

My next concern about the project is a major building contract worth £1 billion that has been let to Lend Lease as a PFI. The chief executive of the ODA, David Higgins, was previously chief executive of Lend Lease, which was a convenient arrangement. The problem is that the PFI has gone wrong. My understanding from press reports is that the ODA has had to bail it out with £400 million from the contingency fund.

[Baroness Ford]

David Higgins’s previous job was not as chief executive of Lend Lease. For three years prior to joining the ODA, he was chief executive of English Partnerships, but my noble friend is correct that prior to that he was chief executive of Lend Lease.

[Lord Berkeley]

I am very grateful to my noble friend for that correction. I had not picked that up from the website. However, the point is still there. There has been a £400 million grant from the contingency fund to Lend Lease. When the noble Lord responds, will he explain whether the building contract was put out to competitive tender, because many of the building contractors whom I have talked to say that they could have done the job for many millions less if it had gone out to competitive tender? It is another example of things that get rushed when one is up against a deadline. I do not expect the noble Lord, Lord Shutt, to be able to answer this evening, but it would be useful if we could have a letter setting out progress on the total budgets of the Olympics from the date the decision was made to bring them to London, the total revenues as the project has gone on, how they have changed and the outturn costs. That will help us to monitor the costs in future.

The other issue I need to raise follows on from the statement by the noble Lord, Lord Shutt, that the Games are a good example of sustainable construction. That is interesting because the ODA report, which I suspect most noble Lords have been given, mentions very little about sustainability apart from the fact that 300 trees have been planted. That is clearly a good thing, but there is not much else about sustainability. I think that the design will probably be good, but as I have mentioned in previous debates, I question the procurement policy’s failure to use rail or water for transport and deliveries—here I declare an interest as chairman of the Rail Freight Group—which has resulted in a probable 800,000 extra trucks delivering to the Stratford site during the construction period. One might say that that does not matter much, but it is a serious issue for both the Government and the mayor.

It appears that the so-called sustainable Olympic Games are going to be held in air that exceeds EU limits for PM10s, which are the small particulates—NOx and SOx—and for which the Government may well be fined £300 million in the next year or so. I want the Olympics to be a success and for them not to be compared with the Games in Beijing in terms of air quality because we ought to do better than that. I talked about this in a debate held on 5 January—I see that the previous Government applied for an extension to the time limit to comply with the PM10, which is the most urgent one, to 2011—but even as we were debating the issue in January, the hourly legal standard for ambient nitrogen dioxide for a whole year was breached in London, exactly as I predicted it would be. We will have more breaches and threats from the European Union unless we sort this out. The coalition Government’s comment on air quality on page 17 of their programme is that:

“We will work towards full compliance with European Air Quality standards”.

The Liberal Democrats did rather better by saying:

“We will aim to fully meet European air quality targets by 2012”.

Perhaps the noble Lord, Lord Shutt, in his Front-Bench role as the coalition spokesman, can make sure that happens. We need an answer on when the Government are going to meet these limits.

The Mayor of London has, frankly, not done very much over the past two years, but he has admitted that 4,300 premature deaths in London each year are due partly to long-term exposure to dangerous airborne particles. It is time that this issue was tackled at a very high level. It is important to discuss the solutions because, while I can go on explaining the problems, it is the solutions that we need to talk about because there are some. The problem with PM10s comes from older diesel engines that do not comply with the latest technical standards, and involves most vehicles that are more than four years old: lorries, buses, taxis, cars et cetera. It is interesting to note that in Paris there is now a plan for all diesel lorries to be banned within the Périphérique and replaced by electric vehicles. The French Government and the mayor of Paris can probably make changes like that more easily than we can, but it certainly would be possible for the Mayor of London to ban diesel vehicles.

Another solution would be to say, “Right. None of these vehicles will be driven around London for the month before and the month of the Olympics”, which I believe is what they tried to do in Beijing. We should do better than Beijing, and it is time to take urgent action. We cannot be compared with the air pollution found in Beijing because that is hardly the showcase for London that we want. I know that the mayor is keen to pursue this—the noble Lord, Lord Moynihan, said that he is—but we need action both from the Government and the mayor to get these levels of pollution down.

19:05

[Lord Bates]

My Lords, it has been a tremendous privilege to listen to this debate, which is the type that provides a kind of warming for the recession-battered soul. We have heard from many quarters that things are happening on time and to budget and that expectations in so many areas are actually being exceeded. That is wonderful to hear and to behold. I particularly welcome my noble friend Lord Shutt to his new responsibilities on the Front Bench, and my noble friend Lady Rawlings to her new responsibilities alongside him. This debate has also been graced by the maiden speech of the noble Baroness, Lady Grey-Thompson, whose inspirational speech has been fitting for this setting. Although she is a Welsh-born athlete, she makes her home in the great north-east of England and in that we share great pride. I am sure that she will make a strong contribution to this House.

We have heard about the tremendous work that has been done in so many areas in terms of the legacy and the organising committee, as well as on the cultural aspects of the Games as outlined by the noble Lord, Lord Hall. All that is welcome. But there is one important aspect of the Olympic Games that has been omitted. I think that I have heard every single debate on the Olympics, and I do not think it has been mentioned once: it is the issue of the Olympic truce. Today this is seen as a symbolic gesture that surrounds the Olympics, a bit like the torch relay. Everyone is a little uncertain about what it means. I have to say that I come here with no sense of piety. Were it not for a rather zealous supervisor who made me do an extended literature review for a research degree on ethics and foreign policy, I would not have come across the Olympic truce either. While it may be tangential to the modern Games, it was central to the ancient ones. The truce was actually their raison d’être. In 776 BC, the Greek King Iphitos, frustrated at the perpetual state of war, consulted the oracle at Delphi, who proposed a sporting competition to be held every four years which would have as its aim the bringing together in one place—and under a sacred truce—of all military and political leaders so that they could resolve their differences by non-violent means.

The sacred truce ran for three months and sanctions were agreed against violators. It was remarkably successful. The ancient Olympics ran, unbroken, for 1,168 years until they were ended under the Romans. During that time, violations of the truce were extremely rare. The most serious violation was an attack by the Spartans—there is a surprise—on the Persians, which earned them a suspension from the Games for that year. They did not reoffend and they were reinstated the year after.

By contrast with the record of over 1,100 years of the ancient Olympiad, built on the Olympic truce, the modern Olympiad was established in 1894 and focused on an elite sporting competition with only a symbolic truce. During the 116 years of the modern Olympiad, the Games have been cancelled three times due to war, have experienced major boycotts at least five times, and have been the focal point and the victim of terrorist attacks on two occasions. Why is this so? Is it that we are less civilised and more warlike than our Greek and Persian forebears? I think not. Of course, the world has changed and there is no longer a unifying deity in whose name a sacred truce could be called; there is no neutral ground, such as Mount Olympus and the temple of Elis, in which the Games could be held, and there is not the proliferation of non-state actors. I believe that we have not given the truce a real chance to work because of a lack of real political leadership and vision.

Attempts were made in the heady international optimism which existed after the Cold War and before the 11 September terrorist attacks on the United States to give that political leadership through the United Nations, where, in 1993, all 193 states adopted unanimously resolution 48/11, which urged member states to,

“take the initiative to abide by the Truce, individually and collectively, and pursue in conformity with UN principles the peaceful settlement of all international conflicts”.

This was very successful. In 1992 the truce was used to secure access for athletes who were caught in war-torn Yugoslavia to attend the Barcelona Games; in Sydney in 2000 it was used as a vehicle to arrange for the North and South Korean teams at the Olympics to parade together as one team; and in the Athens Olympics, a permanent body—the International Olympic Truce Centre—was established. However, throughout my research I could find no record of any action by any Government or combatant, at any time during the modern Olympiad, to take the opportunity offered by the Olympic truce to abide by the UN resolution in seeking to resolve their differences by non-violent means.

I believe, to coin a phrase, that there is a real opportunity to do things differently this time. First, London is without doubt the most ethnically diverse city ever to host the Games—a true crossroads of the world. However, it is also one which bears the scars of the aerial bombardments of World War I and World War II and terrorist attacks in the name of Irish republicanism and Muslim fundamentalism, the most recent and most deadly being the 7 July 2005 bombings, which claimed 52 lives and injured 700, and came the day after it was announced that London had been awarded the Games. It is also the place where the world came together in 1946 for the first General Assembly of the United Nations at Methodist Central Hall across the road. It is the place of the Downing Street declaration. It is the place that hosted the Live Aid concert, which drew an international response to famine in Ethiopia, and the Live 8 concert which led the jubilee campaign for debt forgiveness at the millennium.

Secondly, we have a coalition Government who have transcended narrow partisanship to create a new politics. They are uniquely positioned to secure maximum leverage for the truce should they wish to do so. They have a pivotal role as the country is a permanent member of the United Nations Security Council, the host to the Commonwealth, and a key member of the EU, NATO and the G8, as well as being a centre for world finance and trade.

I am grateful to my noble friend Lord Coe, who has patiently heard out my claims in this area for a more serious and meaningful treatment of the Olympic truce. It is, in my view—and probably in his—unfair and inappropriate to place such a serious international matter on the shoulders of LOCOG, which is already under enormous pressure to deliver a world-class sporting event, or on the IOC, which is a non-governmental body, when most conflicts involve at least one governmental party. If this is going to be a meaningful truce then it needs to be led by the Government, for they alone have the diplomatic and political apparatus of state with which to pursue it.

Many would see such a call in the present climate as at best naive and at worst dangerous. Clearly this is not an easy issue when the threat level is real and the first duty of the Government is the safety and well-being of their citizens. However, no one can be in any doubt that security concerns, as my noble friend Lord Patten said, are significant in the run-up to the Games. Surely, therefore, anything which can be done to defuse international tensions ahead of the Games is an act of enlightened self-interest.

Indeed, I was struck by the Statement on the situation in Afghanistan, delivered by the Prime Minister in another place, which interrupted this debate. Some of the turn of phrase gave me hope that perhaps the message of the ancient Olympic truce has resonance within the current corridors of power. The Prime Minister stated today that insurgencies usually end with political settlements, not military victories. That is why I have always said that there needs to be a political surge to accompany the military one. We need a political process to bring the insurgency to an end. This strikes a chord with the original objectives of the Olympic truce.

Advancing a meaningful Olympic truce and using it as an opportunity to resolve differences between and within member states is surely the greatest prize the founders of the ancient Olympics have given to the modern era. It does not require a new international mandate; it only requires us to take seriously the one that is already there. It requires the same scale of ambition and courage to be shown by political leaders operating in the corridors of power as will be evident in the sporting arena by the athletes competing in the Games. If just one gun falls silent, one life is saved, one hopeless and intractable conflict is given the prospect of peaceful negotiation and end, then it will prove to be a legacy of which this city and this nation can rightly be proud.

19:16

[Baroness Campbell of Loughborough]

My Lords, I thank the noble Lords, Lord Shutt and Lord Moynihan, for initiating this debate. I declare an interest as chair of two of the three bodies that have repeatedly been mentioned today—UK Sport and the Youth Sport Trust.

I congratulate my noble friend Lady Grey-Thompson, who is not only an exceptional athlete but a remarkable role model. What makes our great athletes role models is not the medals but the journeys they take to achieve those medals. They are role models for every young person to learn that, despite any set-backs, if you set your mind on a dream you can make it come true. She is also a woman of great principle and immense integrity, and I have no doubt that she will make an important and positive contribution to the House.

I congratulate John Armitt and David Higgins of the ODA and the noble Lord, Lord Coe, and his colleague Paul Dayton at LOCOG. They have set a new standard for us in sport of excellence, ambition and innovation. I hope the rest of us can achieve the same standard as we pursue the future of sport in this country. Finally, I congratulate the noble Baroness, Lady Ford, who, with her energy and dynamism, has brought the Legacy Company to life and driven it forward with immense purpose. I am sure that the legacy she leaves will be one that we will all treasure for a very long time.

I shall focus for a few moments on the preparation of our athletes. I believe that nothing will convince the British public more that the Games have been a success than our athletes in the Olympics and Paralympics winning medals, those glorious moments when individuals’ dreams come true. Indeed, at the Winter Olympics recently in Vancouver, the Canadian athletes not only managed to galvanise a nation together in a way that Canada had never dreamed possible but when surveyed later, not only in Vancouver but right across Canada, more than 90 per cent of the population felt that the Games had been worthwhile. I have no doubt that a great part of that was due to the athletes’ performances, which were quite outstanding.

So how is our team being prepared? I am pleased to say that we have the best resources that any team has ever had. I am the chair of UK Sport and have been so since 2003. We have four very important constituent parts of the United Kingdom—Scotland, Wales, Northern Ireland and England, each playing a significant part in the preparation of our Olympic and Paralympic athletes. UK Sport is investing more than £100 million a year of Exchequer, Lottery and private sector money in the preparation of our team. Following the Athens Olympics and prior to the Beijing Olympics, we introduced a policy of no compromise, which meant that our intention was to drive results through targeted investment. Our fourth place in Beijing, our best in Olympic Games for 100 years, and the continued success of our Paralympic team, finishing second in the medal table in Beijing, are testimony to the way in which that system has worked.

Not only is it the best resourced team in our history but it is also the best prepared. We have been fortunate enough to recruit the best performance directors from around the world. We have now a growing number of outstanding coaches. Initially, many of them were imported from overseas; now, we are home-growing our world-class coaches. They are supported by four home-country institutes that provide sports science and sports medicine support of the highest quality to every individual athlete wherever they are. There is a programme of research and innovation, linking with some of the biggest businesses in the country and finding that cutting-edge, 0.01 per cent difference in performance between gold and bronze medals. We have a new and creative talent identification programme, searching out those young people with talent who did not even know that they had it. A simple example was our tall people talent identification programme, which found a young woman who, three years on, has just won a medal in the women’s under-23 rowing world championships.

Not only are our athletes the best prepared in terms of the support system around them and the coaches and performance directors leading them but we are also staging between now and 2012 60 world and European events in 30 sports across 20 cities, giving our athletes home-country advantage. However, it is not only our athletes whom those events are preparing. More than 10,000 technical officials and volunteers will be involved in them, helping them develop the expertise that they need to be world-class at London 2012. I say to the noble Lord, Lord Shutt, that if our resources and support stay constant, I believe that this British Olympic and Paralympic team is on course for the best results ever: more medals in more sports and, most importantly, more inspiration for more young people across the whole of the United Kingdom.

However, not only do I hope that we will produce a better medal count but I also believe that, in this short time, we have produced a world-class system that is among the most envied of the world. If we can continue the investment through to 2016 and 2020, we will continue to build on the success of 2012. That is something that no other country has succeeded in doing.

I shall talk finally about youth sport and the inspiration of young people across the UK—my noble friend Lord Pendry eloquently addressed the issue earlier. As chair of the Youth Sport Trust—which is an independent company, limited by guarantee and with charitable status; it is not a non-departmental public body—I know that it has worked tirelessly for the past 10 years to create an infrastructure for school sport that many countries see as the most outstanding in the world. I have just recently returned from a visit to New Zealand and Australia to help them understand the way in which we have structured school sport in this country, which they now both envy and wish to copy.

It is critical that we sustain participation among our young people, which is the greatest legacy that we can achieve. During the past few years, all four home countries have invested in their school sports structure. In England, we have developed 450 school sport partnerships. Let us be clear: they are not just about schools. Those partnerships include every primary, secondary and special school, but, just as importantly, they include the community providers—those clubs that we talked about earlier, those community coaches, those volunteers. Each school sport partnership covers a local area which is equivalent to what might have been once the old districts. Within those, we have been able to drive opportunities for young people to participate, to perform and to lead in sport. All of that has been possible because of the investment in an infrastructure of people that stands ready to deliver the most exceptional legacy programme of all time.

This army of people is capable not only of creating new opportunities for young people, which is the easy thing to do, but of sustaining their commitment to participate, perform and lead in sport. That is equally important. The work that we do in the next two years could make a transformational difference to the lives of millions of young people.

At a time of considerable national challenge, I am reminded of a quote from Nelson Mandela:

“Sport has the power to change the world, the power to inspire, the power to unite people in a way that little else can”.

Sport can spread hope and inspiration to the world. I hope that we take the opportunity presented by London 2012 to spread hope and inspiration to the youth of this country.

19:24

[Lord Graham of Edmonton]

My Lords, it is a joy and a pleasure for me to make a contribution. Every now and again, though it is not very often, I have sat down after making a speech and heard someone say, “Now, follow that”. How on earth can we follow a speech such as the one that we have just heard, delivered with such authority, such conviction and such warmth and humanity about what we are all about? The House of Lords is enormously privileged to have within its ranks those who have contributed to this debate, whether they have done so as professionals, members of quangos or in any other way. The House has been not only well served but brilliantly served. The person who will be most indebted to those contributors is the noble Lord, Lord Shutt, who began by reminding us of how amazed he was at the detailed planning that had been done.

I do not have a prepared speech. I have listened with admiration for and been impressed by those who have given prepared speeches. Although I have a different view on prepared speeches, I understand what is happening: this is a report of work in progress. It is all around the theme which the noble Lord, Lord Shutt, outlined—I congratulate him on his new position and wish him well. It is to do not only with letting members of the groups that the contributors represent understand that their case has been made, but with telling the rest of Britain and the Houses of Parliament that any fears about whether things are being done are misplaced. For my part, I have never had any doubts; if I had, they have all been allayed. I have been an enthusiast for sport. However, there are some aspects which I should like to touch upon.

My wife Margaret attended the 1948 Olympics as a spectator. When we were in company talking enthusiastically about sport, Margaret would look around and simply say with a smile on her face, “I was there”. That is what we will give to millions of people in two years’ time. Whether they are there in person, watching on television or listening on radio, they will smile and say to their children and grandchildren: “You talk about the Olympics of 2012. I was there”.

In 1948, I happened to work for the Newcastle-Upon-Tyne Co-op. We had a sports field at Cowgate—those who know Newcastle will know where I am talking about. On that sports field in 1948, after the events, I saw Arthur Wint and McDonald Bailey. After any big sporting event, the stars who have come from all over the world go around. I am looking forward to people saying, “Do you know, I went to an event in Belle Vue in Manchester and I saw the great runner, Bolt, and Asafa Powell”.

The spin-off from enthusing people and getting them to believe that it has been well worth the time and the money cannot be measured. There are people who normally do not get excited the way we do about certain events, and yet they get carried away. For the past few months it has all been about world football—and I shall not mention the 1-1 draw last Saturday more than once. People get excited about the event. It is not only commercially exploited, as it is these days, but it takes the sport right into the room. In 1948, we did not have a television set and relied on other ways, but I remember the excitement that came from that—and so it goes on.

The noble Lord, Lord Shutt, should be congratulated on beginning a process for the past three or four hours of a report, not just to Parliament but to the country, that the slight apprehensions that might have been there five or six years ago are in practice being put behind us. That is not to say that it is going to be an easy journey for the next two years or the next 22 years, but at least we can be satisfied that the planning that was done will come to fruition.

I turn to the contributors, including the noble Baronesses, Lady Campbell and Lady Ford, the noble Lord, Lord Moynihan, and of course our wonderful noble Baroness, Lady Grey-Thompson—along with the noble Lord, Lord Coe, and Tessa Jowell. We have a marvellous team of people involved in one way or another who are to be congratulated. What will we achieve? One can see the pride that comes over in South Africa at the moment at the fact that this world event is being held in that country. That gives pride to people; they know that their country is respected by the rest of the world. That is marvellous. That is what I hope we will feel at the end of the Olympics, although of course we must think of the money and the difficulties.

When I take my son from Loughton in the middle of Epping Forest to the London Chest Hospital in Bethnal Green, I pass the site. I have seen it grow, and I have been staggered at its enormity. I reflect on the fact that in 1966 I was a member of the founding committee of the Lee Valley Regional Park. I pass that regularly as I go backwards and forwards from here to there; every time I pass it, 40 years on, I reflect on the fact that it is an established part of our local landscape, but also nationally and internationally known. Just to be associated with it is important. Our first sports director was Ron Pickering, who was a great man who inspired us to do a great many things. The authorities that formed the committee were termed riparian authorities; Newham and the River Lee were exploited and developed and grew, and the people of the area are very proud of that. In five or six years’ time, I look forward to going to Newham, Bethnal Green, West Ham and East Ham and so on, and finding people who—without their saying anything to me—I know are proud of the fact that not only the Games have come to their area but that they were there doing their bit.

As to the reservations that have been mouthed tonight over whether the legacy will be used, all we can do is be ambitious and hope that it is. I congratulate the noble Lord, Lord Shutt, on indicating to us that the transfer from one Government to another—that is, one manager to another—has been done seamlessly. There is no change in the direction or the policy, and no change in the ambition. I congratulate all those who have spoken with authority on behalf of their organisations, especially the noble Lord, Lord Moynihan —I was going to call him Colin—whom I have known ever since we both came to this House, many years ago. He gave us a marvellous résumé of what is happening as well as a forecast of what he hoped that we will see.

I speak with some emotion because in future I want to do what my wife was so happy to do, and say in a conversation, when I talk about the Olympics in 2012, “I was there”.

19:35

[Baroness Billingham]

My Lords, I begin by welcoming the noble Lord, Lord Shutt, to the government Front Bench, and thank him for introducing the debate today.

I look forward to this being the first of many debates on the Olympics over the coming months, right up to 27 July 2012. I know that the noble Lord will use his forensic skills and judgment to help to ensure that the Games will be an outstanding success. In his comprehensive opening speech, he outlined for us the progress of a project already in play, and it was a very welcome starting point. As such, I offer my good wishes to him as one Dispatch Box debutant to another.

All today's speakers have great expertise in the Olympic project. We are, indeed, so fortunate to have contributors of such calibre who can be relied upon as a unit to hold the Government to account. We welcome the contributions from the noble Lord, Lord Pendry, whose expertise and involvement is acknowledged by all of us. He reminded us of all the key factors of the Games, and sport has no greater supporter. But be warned, Minister, we will watch you like hawks and hound you like tigers if you do not ensure that London's Olympic Games are the best ever.

Before moving on to the major points to be raised by the Opposition today, I congratulate the noble Baroness, Lady Grey-Thompson, on her maiden speech. How lucky we are to have her in this House. Her experience is unique. She has long affected us in countless sporting events, and we have cheered and—I have to admit—sometimes shed a tear at her exploits. Her qualities of skill and determination ensured her world success and fame. Those qualities will ensure her success in this House. We look forward to many more contributions from her.

So let us briefly look back to the beginning of our Olympic dream. With a mixture of apprehension and excitement, the positive view prevailed, and once the decision was taken, the nation got behind it. Doubts about affordability were upset by the promise of the regeneration of one of the poorest areas in London. I know only too well, as a former chair of an urban regeneration company in Corby, how the quality of life of local residents can be transformed. It was a major factor there and will be so in east London. The Labour Government were absolutely wholehearted in their support, and I am delighted to say that today’s coalition Government are taking exactly the same approach.

The new Minister for Sport and the Olympics, Hugh Robertson, is on record as saying:

“The Games have been part of my life for so long and I’m thrilled to have the opportunity to help steer the project though to the home stretch”.

Such an endorsement is invaluable, as is the team who, from the outset, has proved itself quite brilliant in turning the project into reality. However, many speakers today have warned against budget cuts affecting the Games. Please relay the concerns from all sides of this House to the Minister.

At this moment, of course, we are all obsessed with World Cup football, and quite rightly so—let us get over Saturday and look to next Friday—but if ever a team led by Tessa Jowell and Seb Coe were to take to the Olympic stage, there would be only one winner. Quite simply, they have been fantastic and have gathered around them a team of men and women of peerless skill. Does Britain have talent? Clearly it does. Today those skills allow them to proclaim that the project is, in the jargon, “on time, on budget and on track”, and how many projects in the past decade have been able to claim that? We salute them.

My noble friend Lady Ford reminded us that the preparations for the legacy project are well under way. I know that the Minister will wish to respond to her concerns, coming as they do from such a knowledgeable source. The noble Baroness, Lady Campbell, spoke of our athletes winning Olympic medals—and who understands more than her how that success is to be achieved?

I would like to rewind the tape and remind us why the Olympic project is so important to Britain. In June 2007 the Government set out five major legacy promises that they pledged to deliver. They were to make the United Kingdom a world-leading sporting nation; to transform the heart of east London, which contains some of the five poorest boroughs in the capital; to inspire a generation of young people to take part in local volunteering, cultural and physical activity; to make the Olympic park a blueprint for sustainable living; and to demonstrate—this is particularly important—that the United Kingdom is a creative, inclusive and welcoming place to live in and visit, as well as for business.

Meeting those targets will define the project’s success. The noble Lord, Lord Addington, reminded us of the broader implications of sport in clubs, schools and colleges. Utilising the impetus of volunteering was another factor. I am sure that the Minister will wish to endorse these facets of the Olympic legacy. If we add the Olympic movement values of respect, courage, excellence, ambition and determination, the aspiration for changing people’s lives becomes apparent.

The noble Lord, Lord Bates, took us for a stiff jog around the background of the modern Olympics. We were left breathless but much better informed as a result of his input. Today, though, we have challenges. The financial collapse is impossible to ignore. Fortunately, funds are in place and the project is sound, but a belt-tightening Government will have difficult decisions to make. There are those who opposed the Games from the outset; they may well believe that their time has come and will become vocal yet again. Those voices must be countered.

The success so far of the construction of the project points the way to future economic success. It can act as a blueprint for Britain’s revival in the years ahead, building our way out of recession. My noble friend Lady Morgan reminds us that the building and engineering innovation is unique, and that is a message that we should be proud to proclaim. The regeneration of the heart of east London has the potential to transform the lives of people who live there now and, most importantly, of those who will live there in the future. So will the Government meet the demands of the local people—the legacy that was promised them: 12,000 new homes, many affordable; local jobs going to local people; and the promise at the end of the day of a stunning park that will be enjoyed for generations to come?

Will the security provisions be strong enough, as the noble Lord, Lord Patten, has asked? He gave us grave warnings, and these questions must be answered. The noble Lord, Lord Berkeley, raised similar concerns, and his timely warnings cannot be ignored. Will the transport system be in place to make a journey to the Games a pleasure, not a penance? Even the Mayor of London seems to have misgivings about that. I, too, echo the warnings from the noble Lord, Lord Patten; I remember the opening night of the Dome. Add to that the current horrors of the Jubilee line—you try getting on that at the weekend—and I assure your Lordships that we have much work to do.

I hear rumours—I almost said “ugly rumours”, but I thought better of it—that the compulsory two hours of PE now enjoyed by 80 per cent of children in state schools is under threat. Can that be so? Will the promise of a new sporting generation of young people be realised? It has taken us a decade to repair the neglect in the 1980s and 1990s of the place of sport in the curriculum. The loss of competitive school sports was immeasurable. All those teams of excited youngsters were cast aside. Now we can rebuild on the time that is spent on this in state schools.

The Minister must make his voice heard. We must give all our children a chance to play sport, regardless of their background. In so doing, we should reverse the trend where the vast majority of Olympic medals are won by those who come out of the public school system, which, unlike the state sector, has prized and encouraged sporting excellence and never let dogma destroy its sport and games systems. The noble Lord, Lord Hoyle, made a timely contribution on participation in sport, and I echo his question about whether the targets are being achieved. If we are “all in this together”, this could be a very good place to start.

Time is against us today. I know there are many more issues, such as women in sport and encouraging more people to participate in the Paralympics. These have been touched on by others and I am sure that the Minister will touch on them in his reply. The noble Lord, Lord Moynihan, gave us an encyclopaedic outline of the matrix of the various parts of the many contributing organisations and associations involved in the project. We are indebted to him not only for that but for the foresight in securing this debate today.

This is but the opening set of a very long match. We look forward to the Minister’s replies and the continued cross-party support that has been, and will be, so crucial to the success of the London Olympics—surely a project of a lifetime. This has been an uplifting debate that has shown this House in the best possible light, and we can be proud of it.

19:46

[Lord Shutt of Greetland]

My Lords, I thank all noble Lords who have contributed to today’s debate. The delivery of an Olympic and Paralympic Games has been referred to as the world’s biggest peacetime logistical operation—the equivalent of 26 world championships back to back, followed two weeks later by another 20. It will be a defining moment, when the focus of the world will be on the United Kingdom and when the people of the UK and UK business can show to the world what they can deliver. There will be many challenges along the way but I am delighted that, two years out, the key parties responsible for delivering the Games are working together to overcome them.

Many interesting points have been raised by noble Lords today, and I will do my best to respond to them in as much detail as I can. There have been two forms of speech today. I am not talking about quality, you understand; rather, there have been those who have been giving information and those who have been seeking it. Both have been welcome. It has been helpful to have givers of information; there are many people in this House in positions of influence in the whole business of the Olympics, their preparation and their aftermath, and we are fortunate that we have all these talents who can take part in this way.

People have different enthusiasms, too. Some are looking at the wonders of present-day construction, others are concerned about the Olympics themselves and some are excited about the aftermath—for them it may be a little incidental thing to host the Olympic Games, but what wonderful things we can have afterwards. Others, too, can see other things alongside these considerations, such as the culture that the Games can bring with them.

If I might look at specifics, the first speaker was the noble Baroness, Lady Ford. She told us that we had a strong hand to start with; I hope she is right. Everything that I read tells me that there is a certain strength here, so perhaps she is. Yet it was very interesting to hear from her of all the work that she is doing for the OPLC, for which we congratulate her, and of the news about the residential field study centre that she mentioned. The one question that really concerned her was on the whole business of the company that she operates obtaining a freehold without debt. All I can say there is that Ministers are aware of the strong arguments in favour of that deal and I am sure that I, and others, will encourage the review that has been undertaken to be completed quickly. In the end, it is a Treasury decision; all I can do is to hope that that goes right, because it is important that the work that she is doing goes forward.

The noble Lord, Lord Patten, warned us of the snow, with two potential winters before we get to the date of the Olympics, and mentioned sticking to the last. Yet it is quite interesting how so many people have referred to areas where perhaps a little bit could be done, here or there, that has just not been thought of. I will refer to the noble Lord, Lord Bates, later, because that brings other opportunities, but the noble Lord’s main concern has been on security. Safeguarding London 2012 and the rest of the country during the Games is one of the largest and most complex security operations ever undertaken. The noble Baroness, Lady Neville-Jones, is currently undertaking an audit and review of Olympic security planning to ensure that that is on track, which will provide a platform for a transition to a security test and exercising, looking into where things are over the coming period.

There is a very substantial budget for security—and this is a public figure—of £600 million. Some of that is contingency and not yet committed, but the whole business of security is of tremendous importance. If we look at it as a percentage, at 6 per cent or so of that which is being spent on the whole of the Olympic preparations, it is a very high figure. The noble Lord also referred to cybercrime, which the Government are keeping under review and planning accordingly. To that end, additional funding has been provided to build capacity in the police central e-crime unit and the Serious Organised Crime Agency.

The noble Lord, Lord Patten, also referred to transport, as did the noble Lord, Lord Hoyle. Of course, the aim is for 100 per cent of spectators to get to the Games by public transport. London 2012 will leave a legacy of permanent, major improvements to the transport infrastructure. We are determined to ensure that Londoners are not negatively impacted by the Games and will publish during this summer a consultation on plans for the Olympic route network—the means by which athletes and officials will travel to and from the events.

I move on to the noble Lord, Lord Pendry, who referred to the opportunity to inspire. I mentioned in my opening speech that Sport England has been asked to develop plans for the delivery of a mass-participation sports legacy. That work will necessarily consider the role of community sports clubs. The Government will be making further announcements on these plans in due course. My noble friend Lord Addington also referred to that. If one thing struck me as a theme during the debate, it has been that whole business of building up the concern about athleticism and imbuing that spirit, making certain that what is done with schools does not somehow come to a full stop when someone leaves school, but that there is a follow-through. If there is one thing that this Government must consider if they are not doing it, it is that. Reference was also made by the noble Lord, Lord Pendry, to the possibility of budget cuts. I do not believe that the Olympic budget is immune and I agree with him that any cuts to the budget should be sensible and strategic, but it has to be efficient.

I move on to the speech of the noble Baroness, Lady Grey-Thompson. It was indeed a splendid speech and I must congratulate her not just on the speech but on her skill in making a maiden speech when the right topic for her came up bang on cue. The noble Baroness, Lady Morgan of Huyton, was one of those who were able to give us information. She spoke of the impressive people she had come across during this and went into great detail about the excitement of the velodrome.

I think that I have indicated that my noble friend Lord Addington referred to the need for the follow-through and the fact that that is the one of the biggest challenges we face in developing a truly sporting nation. Keenly aware of the need to address this, we are looking to ensure that there are strong links between schools and the national governing bodies as we develop plans for delivering a new, national Olympic-style school competition. Further information will be given in due course on that issue.

I then come to the noble Lord, Lord Hoyle, who had a splendid list of questions—yes, he hit the jackpot on questions. He talked about there being 2 million participants by 2012 and asked whether that has been abandoned. On that, all I can say is that those targets are currently being considered. There are no particular guarantees on that but they are looking at targets. I think that I covered the point earlier about the routes—

[Lord Hoyle]

Excuse me. My question on the routes was about the athletes and officials; that was all.

[Lord Shutt of Greetland]

Yes, indeed; I think that I did cover that. Something is going to be put out during the summer for consultation about those routes and on getting the VIPs, as it were, from various places to the stadiums. On the issue of homes, the likelihood is that the Olympic village will become 3,000 homes and that 50 per cent of those will be affordable. Wider developments in the Olympic park will be of mixed tenure, with homes available for sale and rent, and 35 per cent of what is believed to be 10,000 to 12,000 new homes will be affordable housing. Those are the existing plans on that.

On the numbers of people employed locally, I have seen those figures in depth somewhere. I am pretty certain that the figure is that 20 per cent of the workforce on the ODA construction is people who live locally. Bearing in mind that the jobs are open for anybody to go for, that is a significant figure. Yes, it is here; of 6,442 at the end of March, 20 per cent were host borough residents and there was a target of 10 to 15 per cent, so it has gone beyond that. Currently, 199 apprenticeships have been placed with contractors. The ODA is on track to place 350 by December 2010.

The noble Lord referred to the wind turbine being abandoned. It was thought that it was safe and feasible to deliver the turbine, but new safety legislation for the particular turbine design and feedback from the industry mean that this wind turbine will not be appropriate at the Olympic park. The decision was taken on 30 April, when many of us were off electioneering. Nevertheless, a significant proportion of the renewable energy target will be met by the state-of-the-art energy centre at the Olympic park, which is due to be operational in the autumn.

The noble Lord, Lord Moynihan, was one of our speakers who by and large gave us information. He referred to security, transport and legacy. For him, there are three elements of legacy: urban regeneration; a sporting sense in the locality; and sport generally. I found the points that he made interesting. I also found it interesting to hear the noble Lord, Lord Hall of Birkenhead, warm to the theme of the Cultural Olympiad and of a summer to remember.

The noble Lord, Lord Berkeley, referred to the budget and worries about cost. When I saw the percentages, the figure of what was complete was 54.4 per cent. The idea is that, when that was written, the figure should have been 54.7 per cent, but I thought, “Well, that’s about the same”. For the infrastructure of the eight venues, the figure is 65 per cent. The difference arises between the figure for the totality of things and the figure for the venues—65 per cent and 54 per cent. Lend Lease won a contract to build the village. Given the economic downturn, it was unable to raise funding for the project, so the Government committed contingency funds to ensure that the project was built on time. The Government now own the village and will benefit from its sale post-Games.

The noble Lord, Lord Bates, referred to the Olympic truce. In many ways, his was one of the most fascinating speeches that we heard, as it was totally unexpected by me. He gave the historic context of the Olympic truce. He said that the Games began in 776 BC and lasted for 1,168 years, after which they started again in 1894. I was wondering whether all these numbers divide by four. If anyone has done the sum, please let me know. It was well worth while putting the historical context. People talk about piggybacking on something else, but perhaps piggybacking is possible. Down the road from me is the University of Bradford’s peace studies department. We could ask it whether there is an opportunity for peacemaking. That may be the opposite of sticking to the last in putting on an Olympic Games, but perhaps this is a real opportunity to look for peacebuilding.

The noble Baroness, Lady Campbell of Loughborough, was another of our speakers who gave information, showing her enthusiasm for sport, particularly youth sport.

Like me, the noble Lord, Lord Graham of Edmonton, has been impressed by the information that he has received. As he spoke about 1948, I was thinking that one of my earliest childhood memories is of the Festival of Britain in 1951. I did not come down to London—I went to Woodhouse Moor in Leeds—but I remember it. The noble Lord talked about people’s pride in being able to say, “I was there and I remember the Olympics”. Going even to one of the cultural events, if not to the Olympic park in the East End, will stick in the memory. The ability to say, “I was there”, is important.

The noble Baroness, Lady Billingham, thanked me, so I thank her and I welcome her to her role. She said that she would be hawk-eyed. Well, perhaps I will be, too. I endorse the five points that she raised, relating to the sporting nation, east London, inspiration, sustainability and the UK. Most of them had been raised by others, which is the position in which one finds oneself in summing up debates, as I know. Nevertheless, I thank her for her contribution and look forward to further opportunities of hearing from her.

I conclude by saying that now is the time for some of the final decisions to be made that will ensure a lasting sporting legacy of the Games. Along with a continued focus on ensuring the delivery of a safe and successful Games, ensuring a lasting sporting legacy for young people in the UK will be a key focus of this Government over the next two years and beyond.

Motion agreed.

House adjourned at 8.07 pm.