Sammy Wilson (East Antrim) (DUP)
1. What discussions his Department has had with HM Treasury on loss of revenue as a result of fuel laundering in Northern Ireland.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
My Department has regular discussions with HM Treasury on a wide range of issues. Fuel fraud is primarily an excise offence and, therefore, an excepted matter that falls to Her Majesty’s Revenue and Customs, which works closely with the Department of Justice for Northern Ireland and its counterparts in Ireland.
Sammy Wilson
Despite the fact that over the past six years more than £2 billion has been lost in revenue as a result of criminal activities through fuel laundering, HMRC has taken only 28 cases to court, and there has been only one custodial sentence, which was suspended. Does the Secretary of State believe that that is an adequate response from HMRC or the court system in Northern Ireland?
Mr Paterson
I thank the hon. Gentleman for his question and I appreciate his knowledge of this subject, as Minister of Finance and Personnel. He makes a very good point, which I have discussed with David Ford, the Minister of Justice. We have agreed that we should work together so that Northern Ireland sentences can be appealed against if considered too lenient.
Mr Laurence Robertson (Tewkesbury) (Con)
In the Select Committee’s recent report, we identified as a major problem the fact that a marker had not been developed sufficiently quickly. Has the Secretary of State had any discussions with HMRC about the development of that marker, which would make fuel fraud and laundering far more difficult?
Mr Paterson
I am grateful to the Chairman of the Select Committee for his question and congratulate him on a very interesting report, which showed that real progress had been made—£250 million lost in forgone revenue down to £70 million, which is a major improvement. He makes a very good point about marking. There is an HMRC strategy and there is also a memorandum of understanding that has been signed with the Irish Revenue Commissioners. We keep in close touch on this matter.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
2. What assessment he has made of the effects of welfare reform on Northern Ireland.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
The reforms that we have introduced give us a rare opportunity to transform our welfare system into one that is fair to all, looks after the most vulnerable in society, and above all, always rewards work.
Mr Clarke
In view of recent criticisms of the Work programme and the Prime Minister’s view that housing benefit for the under-25s should be discontinued, can the right hon. Gentleman tell us what the Government’s policy is for youngsters? Is it to create jobs or simply to tolerate their exploitation?
Mr Paterson
I think the right hon. Gentleman underestimates the fact that the issue is devolved, and we are working closely with the devolved Minister with responsibility in this area and other Ministers in the Executive on the arrangements which will be debated shortly as the Bill is taken through the Assembly. It is very important that local circumstances are taken into account so that the Bill that emerges from the Assembly suits the circumstances in Northern Ireland.
Mr Philip Hollobone (Kettering) (Con)
When does my right hon. Friend expect the Welfare Reform Bill to be introduced by the Executive?
Mr Paterson
I am in regular contact with Nelson McCausland, the relevant Minister, and he is optimistic that he will stick to the schedule, which will enable Northern Ireland to come on stream, as planned, with the Department for Work and Pensions here.
Jim Shannon (Strangford) (DUP)
Many people in Northern Ireland view changes caused by welfare reform with increasing concern. Northern Ireland has had 30 years of a terrorist campaign. That has led to many people suffering disability, both physical and mental; 15,000 people in Northern Ireland are on incapacity benefit and employment and support allowance, and 180,000 people are on disability living allowance. Can the Secretary of State assure us that every step will be taken to ensure that the unique position of Northern Ireland is taken into account when it comes to the benefits system?
Mr Paterson
Nobody underestimates the terrible damage the troubles did to people physically and mentally, but it is worth reflecting on the fact that high rates of DLA are not unique to Northern Ireland; Merthyr Tydfil has a rate of 13%, which is very similar to that of Belfast. What I think is important is that for the first time each person will be treated as an individual, his circumstances will be taken into account and rehabilitation, re-education and training will be offered. That has not come about before.
Ms Margaret Ritchie (South Down) (SDLP)
Given that many benefit claimants in Northern Ireland have their payments paid directly into Ulster bank and, because of the ongoing debacle caused by the IT problems, have therefore been unable to access their only source of income and their own money, what assurance can the Secretary of State give that he has had robust discussions with RBS, his colleagues in the Treasury and the Department for Work and Pensions, and the Northern Ireland Executive, to find a long-term solution to this agonising problem for many people, which has heaped on them misery upon misery?
Mr Paterson
The hon. Lady is absolutely right to raise the very real problems that people both in and out of work are suffering due to the IT breakdown. I raised the matter with the Chancellor of the Exchequer and the Secretary of State for Business, Innovation and Skills yesterday. Sir Philip Hampton, the chairman of RBS, was in Northern Ireland on Monday and my right hon. Friend the Minister of State talked with him yesterday and is keeping in close touch. Ultimately, this is a problem for RBS to resolve internally, through Ulster bank, by getting the computer technology right, but the hon. Lady is right to raise the matter. This is causing horrendous problems not just for benefit claimants, but for those in regular employment.
Mark Durkan (Foyle) (SDLP)
3. What discussions he has had with his ministerial colleagues on the likely implications for Northern Ireland of banking reform and financial service regulation.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
My right hon. Friend the Secretary of State and I have been in discussion with ministerial colleagues about this matter. The action plan announced by my right hon. Friend the Chancellor on Monday will drive up standards and bring much-needed and long overdue regulation to the sector.
Mark Durkan
The Minister will recognise that Ulster bank customers are currently experiencing a third-class, poor standard of care. Does he feel that there is some risk of a similar syndrome whereby Northern Ireland is only an afterthought in the hierarchy of consideration when it comes to wider banking regulation and reform? We all rightly ask about the banking of business, but should more active consideration be given to the future of the business of banking in the region, particularly given the compound implications of reform and regulation from London and the changing Irish banking landscape, including moves on banking union?
Mr Swire
The hon. Gentleman makes a fair point, as was recognised in his exchange with the Chancellor on 28 June, when the Chancellor acknowledged that
“Northern Ireland has suffered enormously from the failure of banks in the UK and in the Republic, and it has paid perhaps a heavier price than anyone else”—[Official Report, 28 June 2012; Vol. 547, c. 476.]
On the specific point about banking reform, the hon. Gentleman will be aware that there is a Banking Reform White Paper, the consultation period for which closes in September, so I urge him to contribute. On Ulster bank, I think we should be clear that this is not a failure of banking, but a failure of IT, and we should not confuse the two.
Mr Nigel Dodds (Belfast North) (DUP)
On that point about Ulster bank and the failure of IT, I have listened carefully to what the Minister has said, but is it not frankly outrageous and unacceptable that 15 days after the problem first appeared, individuals, households and businesses still cannot access their money in the normal way? Can he outline in more detail what he and his colleagues in the Treasury are doing to provide a little more flexibility for those facing cash-flow problems?
Mr Swire
I understand that the right hon. Gentleman and some of this colleagues are meeting Ulster bank and RBS this afternoon to represent the views of their constituents, and rightly so. Let us not underestimate this. There are people in the Northern Ireland Office who cannot get money either, so this is something very close to many of us. He will be aware of the press release that RBS issued this morning. It is fair to point out in my conversation yesterday with Sir Philip Hampton, the chairman of RBS, he told me that they would
“treat our customers properly and fairly”
and that the bank will
“compensate fully for financial loss”.
We shall hold the bank to that undertaking.
Mr Dodds
I am grateful to the Minister for that answer and for raising the issue of compensation, but does he agree that, as well as reimbursing customers for direct costs, Ulster bank and RBS must ensure that where financial damage and loss has occurred, whether to a customer, either an individual or business, or a non-customer who has suffered loss as a result of the crisis, compensation in full must be paid in all those circumstances? I would welcome his support in lobbying RBS on that point.
Mr Swire
The right hon. Gentleman will certainly have the support of the Secretary of State and myself in ensuring that no one loses out as a result of this IT failure. I was specific on that point to Sir Philip Hampton and I cannot do more than repeat the words he said to me, as I have just done. I will also check with him on Monday to ensure that the bank is making progress in clearing up this sorry mess, which it says it will do over the weekend.
Vernon Coaker (Gedling) (Lab)
Does the Minister agree that the ongoing problems at Ulster bank underline the need to look at how banks operate? Frankly, this is a crisis. Many families cannot pay their mortgages or rent, get their groceries, buy food or put petrol in the car, and older people cannot get access to their pensions. The Minister has told us what he has done, but what is he doing to try to sort this mess out?
Mr Swire
I have a transcript of the shadow Secretary of State’s two interviews on the “Nolan” show, and I have read them carefully, but I am none the wiser as to what he is suggesting. When he was asked about the solvency of some businesses and about liquidity, he said that
“I would expect that government here in Westminster but also government at Stormont needs to consider what to do in those particular circumstances.”
Mr Nolan then asked:
“What could they do?”
The hon. Gentleman replied:
“I don’t know the answer to that”.
If he does not know the answer, we do: it is to make sure that this sorry debacle, involving an IT problem with the Royal Bank of Scotland and Ulster bank, which, let us face it, affected the whole UK, is cleared up quickly so that people can go about their normal business in Northern Ireland.
Vernon Coaker
What we have heard there is a complacent answer that does nothing to say to the people of Northern Ireland what should be done. What the Secretary of State and the Minister should have done, and what they should be doing now, is call an emergency summit—get a summit together—of all the people who are responsible for the situation, including the Treasury, Treasury officials and RBS senior management, and to get them to recognise the seriousness of the problem, get it sorted and get a grip. That is what the Minister should do.
Mr Swire
I am not an IT expert, but I think that appearing on the “Nolan” show twice and saying absolutely nothing does not show tremendous activity. On the shadow Secretary of State’s further point about banking reform, he will be pleased that this Government have set up an independent commission on banking reform to look at the future of banking and to clear up something that his Government failed to do over 13 years—
Julian Sturdy (York Outer) (Con)
4. What recent discussions he has had with Ministers in the Northern Ireland Executive on attracting inward investment.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
I have regular meetings with the Northern Ireland Minister for Enterprise, Trade and Investment to discuss how best we can support the Northern Ireland Executive in attracting inward investment and promoting growth. We have jointly agreed to invite ambassadors from the Gulf states, for example, to visit in the autumn in order to explore how we can promote investment and increase export opportunities.
Julian Sturdy
As with other parts of the UK, including my home city of York, Northern Ireland’s lower operational costs make it an attractive location for investment, but does my right hon. Friend agree that we must do more to promote such areas if we are truly going to rebalance our economies?
Mr Swire
Indeed. My hon. Friend makes an ingenious connection between York and Northern Ireland—the only connection that attracted investment before was probably with the Vikings, who took an early interest in both areas.
There are clearly tremendous advantages in Northern Ireland: it is not in the euro; it is extremely good in terms of education; it is a great place to live; and it has low costs, good IT, good connections and good transport connections. Yes, we can do more, but let us just look very carefully at how well Northern Ireland has done to date in attracting inward investment.
Stephen Pound (Ealing North) (Lab)
If we can move on from the battle of Clontarf, I must say that the Secretary of State is getting the reputation of being something of a one-club golfer when it comes to the Northern Ireland economy. When even yesterday’s Belfast Telegraph referred to a putative corporation tax as “an economic disaster”, one has to ask: does the Secretary of State have another driver in his bag, and will he or his caddy whip it out and show it to us?
Mr Swire
It is not a disaster; it is what we have been looking at very carefully.
There are other things that we need to do to rebalance the Northern Ireland economy, which both Governments over a successive number of years allowed to become far too dependent, for obvious reasons, and we will use any club available in our or anyone else’s bag to bring that about.
David Simpson (Upper Bann) (DUP)
On a recent visit to my constituency, the Minister will have seen some of the inward investment there, but does he agree that it is imperative that Northern Ireland retains its 100% status for regional aid?
Mr Swire
What is key, as I saw when I was with the hon. Gentleman, is planning, among other issues, which needs to be speeded up to facilitate inward investment and private sector investment, such as in the new supermarket in his constituency. Northern Ireland had automatic assisted area status, but that is not going to continue, and people in Northern Ireland mainly agree that other areas in the UK are now worse off than Northern Ireland.
Dr Alasdair McDonnell (Belfast South) (SDLP)
I inform the Minister that that is not agreed in Northern Ireland; all political parties there unanimously want Northern Ireland to retain 100% regional aid status because of the special circumstances and the poverty, under-employment, under-achievement and poor prosperity. Can the Minister assure us that he will persuade his colleagues at the Department for Business, Innovation and Skills to support that programme?
Mr Swire
I do not think that I said that regional aid was not important; I merely said that, as part of rebalancing the economy and encouraging inward investment, we need to make sure that the 2014 map covers the areas of Northern Ireland that do need assistance. We no longer believe that it is justifiable, however, for Northern Ireland as a whole to have 100% automatic coverage.
Lady Hermon (North Down) (Ind)
In evidence to the Northern Ireland Committee, we were told by one witness—I should point out that it was only one witness—that we had one airport too many and that, instead of having both Belfast International airport and Belfast City airport, we should have only one. If such a daft idea were implemented, what impact does the Minister think it would have on economic investment coming to Northern Ireland?
Mr Swire
A very negative one. The hon. Lady is absolutely right. Northern Ireland justifies two airports. They are both thriving concerns and we have had some good news on air passenger duty. [Interruption.] The hon. Member for Foyle (Mark Durkan) is saying that I should not forget Eglinton airport either, and possibly others. We should certainly have Aldergrove and George Best Belfast City airports, which should thrive. The Department of Enterprise, Trade and Investment Minister and I are very positive and optimistic; we are trying to attract more airlines to fly in and out of Northern Ireland to grow the economy. The hon. Lady is spot on.
Alok Sharma (Reading West) (Con)
5. What recent discussions he has had with Ministers in the Northern Ireland Executive on economic development.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
11. What recent discussions he has had with Ministers in the Northern Ireland Executive on economic development.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
My right hon. Friend the Minister of State and I meet regularly with Northern Ireland Ministers in support of their efforts to promote economic development and to help rebuild and rebalance the economy.
Alok Sharma
What discussions has my right hon. Friend had with the Northern Ireland Executive to encourage them to set up enterprise zones?
Mr Paterson
I have regular discussions with the First Minister, Deputy First Minister and Minister of Finance. Last year’s Budget, which became the Finance Act 2011, made that facility available. There are 24 enterprise zones in England, four in Scotland and seven in Wales. They have the capacity also to have enhanced capital allowances. I am in favour of them as a benefit for Northern Ireland, but this is a devolved issue and a devolved decision.
Eric Ollerenshaw
Does my right hon. Friend agree that economic development in Northern Ireland would be much assisted by greater competition on the ferry routes in the Irish sea? A good start would be the restoration of the ferry link between Fleetwood and Larne.
Mr Paterson
I wholeheartedly endorse what my hon. Friend is doing in trying to improve ferry links across the Irish sea. I cannot think of a better place to expand to than Fleetwood.
Dr William McCrea (South Antrim) (DUP)
Does the Secretary of State accept that economic development is being hampered in Northern Ireland by the lack of willingness among the banks to assist businesses through these difficult economic times? Surely the Government can do more to force the banks to assist our economy, bearing in mind that taxpayers are the ones who helped them in their hour of crisis.
Mr Paterson
The hon. Gentleman makes a very good point. No one could have worked harder than my right hon. Friend the Chancellor and the First Secretary, who have been working with the banks ensuring that credit is freed up. Above all, let us not forget the complete mess that we inherited—the biggest deficit in western Europe. Through the robust measures that we have taken, we have kept the confidence of the international markets and have the lowest interest rates since the middle ages.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
7. What assessment he has made of the likely effect on Londonderry of becoming the UK’s first city of culture; and if he will make a statement.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
rose—[Interruption.]
Mr Speaker
Order. The hon. Member for Ealing North (Stephen Pound) aspires to be a statesman; he should not be yelling across the Chamber—yes, you!
Oliver Colvile
I thank my right hon. Friend for that answer. May I also ask him what lessons the city of Plymouth can learn from the city of Londonderry-Derry in its bid to be the city of culture in 2014?
Mr Swire
Of course, as a west country Member of Parliament I am hugely supportive of Plymouth. The whole issue of whether the city should be called Londonderry or Derry seems to be resolved, as we are now going to call it Legenderry. Plymouth is already legendary, not least on account of its excellent Member of Parliament. My hon. Friend should get his councillors to come over to Londonderry during its year as the city of culture, and I will introduce him to all the key players who are going to make it the most happening place in Europe.
Mr Gregory Campbell (East Londonderry) (DUP)
In promoting Londonderry as the first UK city of culture, does the Minister agree that job retention and job maintenance is a crucial factor? In that context, will he speak to the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), who I assume will make an announcement on this in a written statement today, to ensure that the Driver and Vehicle Licensing Agency offices are preserved in Northern Ireland so that 260 jobs are not lost in my constituency?
Mr Swire
On the latter point, I understand that the Minister is putting out a written statement today, and I do not want to prejudge what he might say in that.
On the longer-term economic benefits to Londonderry, yes, that is a vital issue. Of course, there will be a lot of prosperity around in the year that it is the city of culture, but that should be the building block to cement the renaissance that has gone on in the city, not least with the regeneration of the Ebrington barracks site and the peace bridge.
Nick Smith (Blaenau Gwent) (Lab)
8. What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
The threat level in Northern Ireland remains at “severe”. The Government remain fully committed to countering violence in all its forms and supporting the overwhelming majority of people who want to live without fear and intimidation.
Nick Smith
The Secretary of State is aware of the so-called punishment attacks by paramilitaries on young people in Northern Ireland. These attacks are increasing, particularly in Derry, by a group styling itself Republican Action Against Drugs. What every community needs is strong policing, not vigilantes. Will he proscribe this group? [Interruption.]
Mr Speaker
Order. May I remind the House that we are discussing the security situation in Northern Ireland? This is a matter of the utmost seriousness, and I think that some display of attention would be appreciated by the people of Northern Ireland.
Mr Paterson
The hon. Gentleman makes an important point. These attacks are barbaric and inhumane and have absolutely no place in a modern Northern Ireland. The only legitimate police force enforcing law and order is the Police Service of Northern Ireland, and it is for it to work with the community. On proscription, I keep all these issues under review.
Jack Lopresti (Filton and Bradley Stoke) (Con)
13. The Chief Constable of the PSNI, Matt Baggott, recently said that the Northern Ireland Executive must do more to tackle disadvantage in the areas where dissident republicans hold sway. Will my right hon. Friend encourage the Executive to address this issue?
Mr Paterson
My hon. Friend makes an important point. The second layer of our strategy in bearing down on these groups is to get into those communities, but nearly all the projects are in the hands of local Ministers. We strongly support the CSI—cohesion, sharing and integration—strategy, which we want to be published as soon as possible, because we believe that the future is a shared future, not a shared-out future.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
12. Last night we had a briefing from senior retired police officers about the threat to national security from evidence that is being given in inquests in Northern Ireland that opens up the whole modus operandi of our security forces and security services. What do the Government intend to do to protect national security from this threat?
Mr Paterson
The right hon. Gentleman raises a very serious issue. A whole number of legacy inquests—up to 32—are coming down the track. I would like to assure him formally that measures are in place under the existing arrangements that allow an inquest to go ahead fairly, but information that might be dangerous if released to individuals can be held back. There are measures that can be worked out, but the final decision rests with the coroner. Until now, these arrangements have worked well, and they will continue in their current guise.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Given that many of those historic inquests will doubtless require the disclosure of highly sensitive national security intelligence, what discussions has the Secretary of State had with the Justice Secretary about his decision not to provide for a closed material procedure in relation to inquests?
Mr Paterson
I thank the right hon. Gentleman for that question. I have regular meetings with the Justice Secretary. I talked to him on the telephone this morning. [Interruption.] If the right hon. Gentleman would wait, I treat each case individually and remain in close touch with the local Justice Minister on such issues.
Fiona O'Donnell (East Lothian) (Lab)
Q1. If he will list his official engagements for Wednesday 4 July.
The Prime Minister (Mr David Cameron)
I am sure that the whole House will wish to join me in paying tribute to the three British servicemen who were killed in Afghanistan in the appalling incident on Sunday, Guardsman Apete Tuisovurua and Guardsman Craig Roderick of 1st Battalion Welsh Guards and Warrant Officer Class 2 Leonard Thomas of the Royal Corps of Signals. We send our heartfelt condolences to the families of the servicemen who were killed in that tragic incident. They will never be forgotten by our nation.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Fiona O'Donnell
I am sure that the whole House will want to associate itself with the Prime Minister’s remarks and to send our deepest condolences to the families of the crew from RAF Lossiemouth who were lost earlier this week.
Food prices rose by 4.6% between March last year and this year. I understand why, so will the Prime Minister spare me the lecture and tell the House what he is doing about food inflation?
The Prime Minister
First, I join the hon. Lady in what she said about the Tornado aircraft accident at RAF Lossiemouth. She is right that our thoughts should be with the friends, families and colleagues of those involved. The circumstances remain uncertain, but it was clearly a serious incident. The investigation is ongoing and more details will be released by the RAF in due course. It is a reminder of the risks that our service personnel take, not only when they are on active service, but when they are undergoing vital training for that service.
On food inflation, I would first make the point that inflation is now falling in our country, which is extremely good news. It is vital that the food prices in our shops are not too hard on people’s budgets, but the way to keep inflation down is to have a responsible monetary policy, which is what we have in our country.
Nicholas Soames (Mid Sussex) (Con)
Does my right hon. Friend agree that although the serious banking difficulties must be dealt with, it is vital that we retain the central importance of the City of London, and that any reforms must be proportionate and not damage such a brilliant asset for our country?
The Prime Minister
My right hon. Friend makes an important point. We have to get to the bottom of what has happened and we have to do so quickly. In doing that, we should bear in mind the remarks of Richard Lambert, who ran the CBI very successfully for many years, who carried out an investigation for the Labour party and whom I respect a great deal:
“the Libor scandal means that the required changes have to be tougher…that is the argument for a short, sharp inquiry. Going back to square one would, to put it mildly, be a serious mistake. The economy cannot recover in the absence of a stable banking system: nothing can be more urgent than that.”
That is not the only consideration. We must get to the truth, but we should listen to such expert opinions as well.
Edward Miliband (Doncaster North) (Lab)
I join the Prime Minister in paying tribute to Guardsman Apete Tuisovurua, Guardsman Craig Roderick of 1st Battalion Welsh Guards and Warrant Officer Class 2 Leonard Thomas of the Royal Corps of Signals, who died in the most tragic of circumstances. Our hearts go out to their families and friends. I also join the Prime Minister in his remarks about the incident at RAF Lossiemouth.
The banking scandals of the last week have revealed traders cheating and the mis-selling of insurance products to small businesses, and come on top of other scandals in the banking system and the continuing multi-million-pound bonus merry-go-round. How can the Prime Minister convince people that a parliamentary inquiry is a better way of restoring people’s confidence than a full, independent, forensic and open judge-led inquiry?
The Prime Minister
On the substance of the issue, there is no disagreement between us. This banking scandal is appalling. It is outrageous, frankly, that home owners may have paid higher mortgage rates and small businesses may have paid higher interest rates because of spivvy and probably illegal activity in the City. People want to know that crime in our banks and financial services will be pursued and punished like crimes on our streets. As well as people being held accountable, the public want rapid action to make sure that this cannot happen again.
In my view, the most important thing about an inquiry is that it is swift and decisive, is set up as fast as possible, gets going as fast as possible, reports as fast as possible and is transparent and open at every stage. That is why I favour a public parliamentary inquiry rather than a judge-led inquiry. I want us to legislate on this, starting next year.
Edward Miliband
I do understand the Prime Minister’s concerns about speed, but there are concerns also that the inquiry that has been talked about is far too narrow, focused solely on the scandal of LIBOR when we know that the problems go much wider, to the culture and practices in the City. I believe, however, that there is a way forward that we could agree upon—that we have a two-part, judge-led inquiry that is instructed to report by Christmas on the scandal surrounding LIBOR, which is his timetable. The second part of the inquiry should look, over 12 months, at the much wider area of the culture and practices of the industry. That would satisfy his requirement of speed but also the necessary requirement to look at the wider culture and practices in the City. Will he agree to my proposal?
The Prime Minister
I always listen carefully to proposals from all parts of the House. Let me make three points in response. First, on the structure and future of banking, we set up the Vickers inquiry. It reported, and we are going to implement that inquiry, which will for the first time separate investment banking from retail banking. That is a major step forward. Secondly, the parliamentary inquiry that we are proposing is wider than the right hon. Gentleman says. It will look at the culture of banking, as my hon. Friend the Member for Chichester (Mr Tyrie) confirmed this morning.
My third point—all these points need to be considered—is that the Serious Fraud Office is still considering whether to launch a criminal investigation. While that is happening, there are dangers in opting for a judge-led inquiry, which might not be able to get under way. If we want to do this as fast as possible and get action as fast as possible, I think the way we have suggested is right. There was a vote last night in which the House of Lords voted against a public inquiry, and we have made time available on Thursday—this has not happened before—for an Opposition motion and a Government motion to be debated and voted on. Frankly, what matters more than the process is the substance and getting on with it. I hope we can accept the results on Thursday.
Edward Miliband
We were in exactly the same position a year ago, when the Prime Minister initially rejected the idea of a judge-led inquiry into the press scandal and then rightly changed his mind. In justifying that decision, he said:
“I don’t believe there is any better process than an inquiry led by a judge”.
He said that would happen with
“the whole thing…pursued…by a team of barristers who are expert at finding out the facts”.—[Official Report, 30 April 2012; Vol. 543, c. 1251.]
Why is it right to have that judge-led approach to the scandal in the press but wrong for the scandal in the banks?
The Prime Minister
I think there is a very profound difference between the circumstances of the Leveson inquiry and the circumstances of this inquiry, because of course the Leveson inquiry followed a whole series of unsuccessful and failed inquiries. On this occasion we have had a very successful inquiry by the Department of Justice in America and the Financial Services Authority, which has uncovered the wrongdoing. Now what is required is swift inquiry, swift action and swift legislation. That is what you will get from this Government.
Edward Miliband
I do not think the Prime Minister has understood the depths of public concern and the depths of the lack of confidence. He says both that the inquiry that he proposes can be completed within essentially four months and that it can go as wide as it likes. That is simply not realistic. I have listened to his concerns and proposed a way forward. I ask him again for a two-part inquiry, with a judge, to complete the part on LIBOR on the Chancellor’s timetable—by Christmas—and then to look at the wider issues about the culture and practices of the City, of which there are many.
The Prime Minister
I understand the public concern about this issue, which is why I want us to get on with it. Frankly, it is this Government who are legislating to split the banks, as Vickers suggested; who are scrapping the tripartite agreement that failed so badly under the last Government; who have introduced the bank levy so that the banks pay their taxes properly; and who have introduced the most transparent regime for pay and bonuses in any financial centre anywhere in the world. As evidence that the House of Commons is getting on with it, we are going to see Bob Diamond questioned upstairs by the Treasury Select Committee this afternoon. I say to the right hon. Gentleman that we are having a vote in the House of Commons tomorrow—a vote on his motion and a vote on the Government motion. Clearly, if the Opposition motion wins, there will be a full independent public inquiry. I urge him to say now that if the Government motion is carried, he will co-operate with a full parliamentary inquiry.
Edward Miliband
I do not think the Prime Minister gets it about the depth of public concern. I hope that he will reconsider his position. He says that the Government are implementing the Vickers inquiry. On a very important issue that has come out in the past two weeks—high street banks selling dodgy products to small businesses—the Vickers commission said that it should never be allowed to happen again, yet after lobbying by the banks the Government rejected this basic recommendation of Vickers. In the light of the recent scandal, with small businesses damaged, will he now U-turn and implement the Vickers recommendations in full?
The Prime Minister
First, I will not take a lecture on getting it from a party that was in office for 13 years when all these things took place. On his specific question about the Vickers inquiry, let me repeat that it was set up by this Government and will be implemented by this Government—something that had not happened before. Under the inquiry, complex derivatives will be included in the investment bank ring fence, not in the retail banks, which we want to make safer. But let me just say this to the right hon. Gentleman: if he wants a quick resolution, he must accept the outcome of a vote in the House of Commons. I am prepared to do that. Why is he not?
Edward Miliband
If the Prime Minister wants a history lesson, let me repeat what he told the City of London on 28 March 2008:
“As a free-marketeer by conviction, it will not surprise you to hear me say that”
the problem “of the past decade” is “too much regulation”.
Does that not say it all about the double standards of this Prime Minister? Whenever these scandals happen, he is slow to act and he stands up for the wrong people. The question people are asking is, “Who will act in the national interest, rather than the party interest?” His is a party bankrolled by the banks. If he fails to order a judge-led inquiry, people will come to one conclusion: he simply cannot act in the national interest.
The Prime Minister
Everybody can see what is happening here. [Interruption.]
Mr Speaker
Order. Members must calm down. I said it to Government Back Benchers and I am now saying it to Opposition Back Benchers: let the answer be heard.
The Prime Minister
The party opposite want to talk about absolutely everything apart from their record of 13 years in government. I have to say that we may have found the Higgs boson particle, but Labour has not found a sense of shame.
Esther McVey (Wirral West) (Con)
Today is a hugely significant day for British scientists with the announcement of the Higgs boson discovery. Some 6,000 scientists worked on it worldwide—700 from the UK—and there was a major contribution from the north-west. A constituent of mine, Professor Phil Allport, head of particle physics at Liverpool university, led the ATLAS experiment. Will the Prime Minister confirm this Government’s commitment to science and to institutes in the north-west?
The Prime Minister
My hon. Friend is absolutely right to raise this issue, the immense British contribution there has been to this extraordinary breakthrough—not least that of Higgs himself—and the extraordinary work that, as she says, is done in the north-west of England. It is a very big step forward and we should congratulate everyone involved. This Government’s commitment to the science budget is without any doubt, not least because although we have had to make difficult cuts, we have preserved the science budget.
Jim Shannon (Strangford) (DUP)
Q2. The last 15 days have witnessed absolute chaos in the Ulster bank. Direct debits continue to be removed and wages have not been put into accounts. Ulster bank is owned by RBS. We, the people, have an 82% share in RBS, so the Government have a major say in what happens in the Ulster bank in Northern Ireland. Will the Prime Minister give an assurance to the 100,000 Ulster bank customers that the Prime Minister and the Government will have a direct input in addressing this issue, and that normal banking will resume immediately?
The Prime Minister
I can quite understand why the hon. Gentleman raises this on behalf of his constituents. What happened is not acceptable. Clearly, it is an operational matter for the bank, but the Financial Services Authority has been monitoring this very closely. My right hon. Friend the Secretary of State for Northern Ireland spoke yesterday to the chairman of RBS. The lessons must be learned, but I can tell the hon. Gentleman that RBS has said that it will reimburse any customer for penalty charges or overdraft fees—anything that is incurred because of these difficulties.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
Q3. To be blunt, my constituents and businesses are losing faith in their banks. What they need from the Prime Minister is a reassurance that there will be no more political skeletons in the cupboard left by the Labour party.
The Prime Minister
What matters for my hon. Friend’s constituents and, frankly, for everyone in this House is that we get to the bottom of what happened as quickly as possible. We have had a vote in the House of Lords; we will have a vote in the House of Commons; and then we need to get on with it. We are sent to this House to hold these inquiries, to find these facts, to pass these laws. Let us get on with it.
Mr David Hanson (Delyn) (Lab)
Q4. Yesterday, 117 manufacturing jobs were lost in my constituency on a rising trend of unemployment in north Wales. Will the Prime Minister confirm to the House that last week’s GDP figures showed that his Government’s performance was worse than he expected and requires change, and that the cause is his Government’s policies?
The Prime Minister
I very much regret any loss of jobs, including in the right hon. Gentleman’s constituency, particularly as, since the election, we have seen 800,000 extra jobs in the private sector. I am very concerned about the economic performance in Wales, which over the last decade or more has actually fallen further behind the rest of the United Kingdom. We need to work very hard with the Welsh Assembly Government to try to make sure that we are making Wales more competitive.
Stephen Lloyd (Eastbourne) (LD)
A key part of the Health and Social Care Act 2012 is that clinical change must be led by clinicians and patients. In my own hospital, the Eastbourne district general hospital, the majority of consultants have said that they have no confidence in the trust’s proposed clinical change, and the vast majority of the public in Eastbourne share that lack of confidence. Will the Prime Minister confirm that the local trust has to listen to the Act, the clinicians and local people in Eastbourne?
The Prime Minister
I can absolutely confirm that. Clearly, changes should not go ahead unless there is proper listening to local clinicians and local people. That is how our health service should operate. My right hon. Friend the Health Secretary will be making an announcement shortly. The good news is that across the health service in-patient and out-patient waiting times are down, and we have the best ever performance for patients waiting for longer than 18 weeks to be treated. Added to that, the number of mixed-sex wards is down and rates of infection are down; the health service is doing well.
Anas Sarwar (Glasgow Central) (Lab)
Q5. The Prime Minister will be aware that the Crown Office in Scotland has confirmed that it has been carrying out an investigation, led by the serious crime division, into allegations that several banks, including state-owned RBS, have provided false information to financial markets. Does the Prime Minister back that investigation? Given the scale of the crisis and the scale of public anger, will he back a full, independent, judge-led inquiry and, crucially, will he give us a free vote in the House tomorrow?
The Prime Minister
There are two important things here. First, we should allow all the investigative authorities to carry out their investigations and take them wherever the evidence leads them. That is true for the Serious Fraud Office, and it is true for the Financial Services Authority—we need to ensure that they have the resources necessary to do that. Then we have to consider the nature of the inquiry. The problem with the suggestion the hon. Gentleman makes is that as these investigations are ongoing, it is actually easier to hold a rapid investigation within Parliament than to set up an investigation outside Parliament.
James Wharton (Stockton South) (Con)
Q6. What message would the Prime Minister send to the emergency services, local authorities and communities across the north-east, which swung into action so effectively when the region was hit by flooding last week?
The Prime Minister
The first thing I would say is huge congratulations and thank you to the emergency services. I saw for myself—not in my hon. Friend’s constituency, but when I was in West Yorkshire—the incredible work that was done. The other thing to note is that whenever these things happen, there is an incredible coming together of community and social action to help people who have been flooded out of their homes. I am sure that everyone, in all parts of the House, will want to thank people for what they have done on others’ behalf.
Ian Lucas (Wrexham) (Lab)
Q7. On the question of a European referendum, is it the policy of the Prime Minister to be indecisive, or is he not sure?
The Prime Minister
I wonder how long in front of the bathroom mirror that one took. The point is this. There are two things that would not be right: the first would be to hold an in/out referendum now—I do not think that is the right approach—and the second would be to rule it out for all time. I have no idea what the hon. Gentleman’s party’s policy is.
Mr Julian Brazier (Canterbury) (Con)
Does my right hon. Friend agree that central to any reforms of banking must be, from the point of view of ordinary punters, two things: first, the proposals which we are already working up to ensure that people can move their accounts quickly, cheaply and easily; and secondly, an absolute guarantee that Governments will never again bail out banks?
The Prime Minister
My hon. Friend makes two very important points. On the first point, about people being able to move their bank accounts, that will be in place later this year. On the issue of bailing out banks, we need to put in place mechanisms so that banks can fail without calling on taxpayers to support them. That resolution regime, which for 13 years was left untouched by Labour, has been dealt with by this Government.
Graham Stringer (Blackley and Broughton) (Lab)
Q8. The euro now has a solid record of destroying jobs and democracy throughout Europe. The Prime Minister is failing to repatriate any powers or resources to this country. When is he going to stop dithering and allow the electorate in this country to have a referendum on the European Union to decide whether to stay in or get out of that mess?
The Prime Minister
We have repatriated one power, which is that we have got out of the bail-out that the last Government put us into, and that is saving us billions of pounds. If the hon. Gentleman takes that view, he should be sitting on this side of the House rather than that side.
David Morris (Morecambe and Lunesdale) (Con)
I want to draw my right hon. Friend’s attention away from banking for one moment—[Interruption]—and the Opposition’s attention—to more important matters: children’s lives in my constituency. Five children in my constituency have been involved in an accident on a crossing outside St Peter’s school in Heysham. I know this is a county council matter, but I would like the Prime Minister to assist me in trying to get a crossing outside St Peter’s school.
The Prime Minister
My hon. Friend is entirely right to raise a constituency case such as this, where so many people have lost their lives and where there is such a threat to safety. I will certainly look at what he says. As he says, it is a matter for the county council, but if I can help him to put his case, I will be pleased to do so.
Jonathan Ashworth (Leicester South) (Lab)
Q9. Leicester is bearing the brunt of the Prime Minister’s double-dip recession, with the sad news today that yet another business is going under, resulting in the loss of local jobs. In that context, was he as disappointed as I was at the figures released last month showing that lending to small businesses was down by £1.7 billion? Is it not clear that the Chancellor’s credit easing policies are not working?
The Prime Minister
The credit easing policy—the national loan guarantee scheme—is going to make available £20 billion of extra loans; some of that money is already available. The Merlin scheme saw lending to small businesses go up in 2011. It is difficult when the banks are nervous about the economic situation, but the Treasury and the Bank of England are doing all that they can, including through the Merlin agreement, to get money out of the banks and into hard-pressed businesses.
Sir Peter Tapsell (Louth and Horncastle) (Con)
If, as a result of this shameful banking crisis, bank executives are dismissed or forced to resign, and the boards of their banks fail to act appropriately, will the Government do their best to ensure that the delinquents are not able to walk away with their bonuses and severance payments?
The Prime Minister
The Father of the House makes an extremely good point. It would be completely wrong if people who were leaving in those circumstances were given some vast pay-off. It would be completely inexplicable to the British public, and it would not be right. I very much hope that it does not happen. In terms of what the Government can do, we are going to legislate so that all pay deals are put to shareholders with a binding vote, and those deals should include any severance payments. The party opposite had 13 years to do that; we are going to do it in two.
Mr Michael Meacher (Oldham West and Royton) (Lab)
Q10. Given that the richest 1,000 persons in Britain made gains of £155 billion in the past three years of austerity, why will the Government not charge those gains at the capital gains tax rate, which would bring in about £40 billion? That would be enough, without any increase in public borrowing, to generate 1 million or more jobs. It would be far better to cut the deficit in that way—through growth, rather than through the Chancellor’s failed slump.
The Prime Minister
I hate to remind the right hon. Gentleman, but he was a Minister in the Government whose capital gains tax rules meant that people in the City were paying less in tax than their cleaners were paying. We have lifted the rate of capital gains tax to 28% so that we have a fairer system.
Duncan Hames (Chippenham) (LD)
Q11. The pupils I met recently at Corsham primary school told me, in their own creative ways, that they liked to learn together. They know, however, that many children in other countries never get that chance. How will the Prime Minister, as chair of the United Nations high-level panel on the millennium development goals, restart efforts to ensure that all girls and boys around the world go to school?
The Prime Minister
My hon. Friend raises an important point. Many of us will have seen the “Send my Friend to School” campaign in our own constituencies; it is a brilliant way of teaching young people the importance of showing responsibility for those on the other side of the world who do not have the advantages that they do. Our aid is currently supporting 5.3 million children in primary education, and we hope to up that to 9 million people by 2014, so the Government are playing their part, but we want all of civil society—schools, parents and teachers—to join in that magnificent effort.
Mr Nigel Dodds (Belfast North) (DUP)
In addition to what the Prime Minister said earlier about the Ulster bank crisis in Northern Ireland, in which households, individuals and businesses are being denied even basic banking facilities, will he and the Chancellor talk to Her Majesty’s Revenue and Customs to ensure that some flexibility will be shown towards the liabilities of those households, individuals and businesses so that they can be helped through the cash-flow problems that are the result of problems that they did not create?
The Prime Minister
I will certainly look at what the right hon. Gentleman says. As I said, RBS has said that it will ensure that people do not lose out through banking charges, but I will discuss his point about HMRC with the Chancellor.
Margot James (Stourbridge) (Con)
Q12. I welcome the Government’s commitment to women and girls at the heart of their development policy. As this weekend’s Tokyo conference on the future of Afghanistan approaches, will the Prime Minister consider making aid to Afghanistan conditional on the protection of the hard-won rights of women and girls, which, as he knows, are under attack?
The Prime Minister
My hon. Friend makes a very important point. Whereas in 2001 fewer than 1 million children—and, of course, no girls—were attending school in Afghanistan, today 6 million children regularly attend school and 2 million of them are girls. I will reflect carefully on what she says about our aid programme and discuss it with the Secretary of State. It is important that we attach conditions and have real transparency and proper results from our aid. I think that is the only way we can take people with us as we continue to expand our aid budget at a time of economic difficulty at home. My hon. Friend is absolutely right to raise this issue because if we want a stable and prosperous as well as a safe Afghanistan, we need an Afghanistan where the role of women is properly respected.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
Q13. May I give the Prime Minister the opportunity to answer the question put to him a few moments ago by my hon. Friend the Member for Glasgow Central (Anas Sarwar)? If the Prime Minister believes in the sovereignty of Parliament, will he confirm that there will be a free vote across the House tomorrow?
The Prime Minister
There was a vote last night in the House of Lords when Labour peers were heavily whipped to vote for the Labour position. I have a clear view, the Government have a clear view and the whole of the coalition Government have a clear view about the right way ahead. There will be a motion for the Labour party, which they can vote for, and a motion for us, which we can vote for. Let me put this one more time to the Leader of the Opposition: I will be bound by a vote for a full public inquiry; will he be bound if the House votes for a parliamentary inquiry? If he cannot answer that question, people will take a very dim view of an Opposition party that stands in the way of an inquiry because they do not want their dirty washing done in public.
Andrew Stephenson (Pendle) (Con)
Q14. The Olympics provide a great opportunity to bring our nation together. Does the Prime Minister therefore share my dismay at the plans of some union leaders to disrupt this summer’s events?
The Prime Minister
My hon. Friend makes an important point. The Unite union is encouraging strikes on our buses in London. The Leader of the Opposition likes to talk about standing up to vested interests, but what have we heard from him on the trade union movement? Absolutely nothing, and the whole country will be listening to that. We want a strike-free Olympics, and Labour should talk to its paymasters about it.
Pat Glass (North West Durham) (Lab)
Q15. We all witnessed last week’s storms across the country. My own village of Lanchester hit the headlines because of the floods. We are all grateful to the police, the fire brigade, Durham county council and the Weardale mountain rescue service, but will the Prime Minister confirm that the Government will be there with real money to support these people and these agencies, and not offer just nice warm words?
The Prime Minister
Of course we will be there to do that. We are investing around £2 billion in future flood defences. Of course, all the emergency services have done an excellent job, and they remain ready to carry out further work if necessary. I also think the Government should lend a very sympathetic ear to the local councils and local organisations that are setting up hardship funds to help families, perhaps those that do not have insurance or cannot afford the excess when it comes to dealing with their problems. I have said to the Department for Communities and Local Government that we should be generous in helping people to get their lives back together again.
George Freeman (Mid Norfolk) (Con)
Will the Prime Minister join me in welcoming the news that over £1 billion has been raised in the last six months for start-ups in our life science sector—more than in the last three years combined? Does he agree that this is a massive statement of confidence in our innovation economy and in our policies to make Britain a place to do business?
The Prime Minister
My hon. Friend has a close interest in life sciences and pharmaceutical industries, and knows a lot about what he says. One of the successes with part of the EU patent court coming to London is that the patents that cover life sciences, pharmaceuticals and similar industries will be in London as well. That means many, many jobs and tens of millions of pounds of investment in this industry and in our capital city.