Westminster Hall

Wednesday 12th October 2016 Westminster Hall

Wednesday 12 October 2016

[Mr David Hanson in the Chair]

Britain-Iran Relations

Wednesday 12th October 2016 Westminster Hall

00:00

[Seema Kennedy (South Ribble) (Con)]

I beg to move,

That this House has considered relations between Britain and Iran.

It is a great pleasure to serve once again under your chairmanship, Mr Hanson—it has been many times this week—to consider the relations of this great country with Iran. I have moved the motion because I am the first Member of this House to have Iranian heritage, although there are two Members of the House of Lords who are also from Iran.

Trading and cultural relations between Britain and Iran—or England and Persia, as they were then known—have existed since the early 17th century. The English vied with the French as some of the earliest translators of Farsi poetry into European languages; anybody who knows anything about Iranian culture knows the great cultural and symbolic nature of its poetry. In the 19th century Britain’s influence began to grow through acquiring trade concessions as a means of protecting the passage to India. At that time, there was great rivalry between Britain and Russia, with different spheres of influence in different parts of the country—Russian influence in the north, and British in the west. There were informal residencies in Iran from the mid and late 18th century until well into the 20th century, and what we now know as BP began life as the Anglo-Persian Oil Company in 1909.

There was a constitutional revolution in Iran in 1910, and at that time the revolutionaries actually took refuge in the British embassy gardens. There have been high and low points to the relationship between these two peoples throughout the 20th and 21st centuries. Since 1979 and the Islamic revolution—in just that short period—full diplomatic relations between the two countries have been resumed and broken three times. That reflects the desire for contact, relationship and dialogue between the two nations, but also the great sense of distrust that remains on both sides.

I come to this debate today with my eyes open about the reality of life in Iran. I am only here today because my family was forced to flee following the Islamic revolution, and my father had his business and our home confiscated. Many hon. Members will rightly and reasonably raise the Iranian Government’s record on human rights, women, press regulation and the treatment of minorities. Those are points of difference between the two Governments, and I am sure my hon. Friend the Minister will address them in his summing up. I want to speak instead about areas where the two nations can work together.

Last year, an historic nuclear deal was signed. I am sure that all hon. Members attending today’s debate—many of whom have spoken on the subject before—will know the background, but it is worth reiterating. From 2006 onwards a series of UN and EU sanctions was imposed on the country following the International Atomic Energy Agency’s report on Iran’s nuclear programme. The Iranian regime always claimed that its nuclear programme was entirely peaceful, but the international community was alarmed by the thought of the country having a nuclear weapon and imposed a series of sanctions in relation to the nuclear programme. By summer 2013 the sanctions were having a profound effect on the Iranian people and Hassan Rouhani, the presidential candidate, fought his campaign on having serious talks with the west and getting the sanctions lifted. On 14 July last year, China, the US, Russia, Britain, France, Germany—the P5+1—the EU and Iran announced the joint comprehensive plan of action, according to which Iran would reverse its progress towards a nuclear weapon in return for the lifting of economic sanctions.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Does my hon. Friend agree that the success of the negotiations with Iran was based around the economic impact on normal people? Does that therefore suggest that if a more military attack had taken place, it would have united people against the west, because the economic impact would have been far greater?

[Seema Kennedy]

I think that jaw-jaw is always better than war-war, and we have to consider all options before we enter into any military action.

In January this year we reached implementation day, when it was agreed by the observing authorities that Iran had reduced its uranium stockpile, cut its capacity to enrich uranium and modified the heavy water reactor at Arak. At that point the nuclear sanctions were lifted. I will not address the rights and wrongs of the nuclear deal, as many other hon. Members can speak on that, but I contend that the deal has made the region safer.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I congratulate my hon. Friend on securing this debate and making a very good speech. Hon. Members have spoken about the success of the nuclear deal. Iran is reported to have launched up to nine ballistic missile tests, in defiance of UN Security Council resolution 2231, since the deal was agreed in July 2015. It is still the world’s largest state sponsor of terrorism and is funding chaos, havoc and murder right across the region through its proxies. So what is my hon. Friend’s view of the success of the nuclear deal?

[Seema Kennedy]

I would say to my hon. Friend that the deal was limited to Iran’s nuclear programme. I agree that there are many points of difference between our Governments and I am sure the Minister will address them in his summing up.

The deal made the region safer by reducing the possibility of a nuclear stand-off between regional rivals at such a volatile time. It was an example of diplomacy in a part of the world where there has been too little of it.

[David Simpson (Upper Bann) (DUP)]

Whatever the rights and wrongs of the nuclear agreements, there is still the issue in Iran of persecuted minorities, especially the Christian community. Surely it is time that was addressed, as well as the nuclear side of things.

[Seema Kennedy]

I thank the hon. Gentleman, who always speaks very powerfully in defence of Christian minorities. As I said in my opening statement, I am not blind to what happens in Iran and the treatment of certain groups. I hope that when the Minister sums up he will address what steps Government are taking through the Foreign Office, and now through our full diplomatic relations, on that issue.

[Mr Richard Bacon (South Norfolk) (Con)]

Will my hon. Friend remind the hon. Member for Upper Bann (David Simpson) that in Iran the Majlis reserves places, not only for the Jewish community but for the Christian community, in the Majlis, so that they have a part in the legislative process. That is not well-known and is something that is rare in the middle east.

[Seema Kennedy]

My hon. Friend has made the point, and I am sure the hon. Member for Upper Bann (David Simpson) has heard it.

We cannot underestimate the wider implication of the nuclear deal for bringing Iran back into the international fold, and the joy with which the deal was greeted both on the streets of Tehran and in the wider diaspora of between 4 million and 5 million people. Shortly after that, in August, the then Foreign Secretary, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), visited Tehran, which is something of a feat knowing the weather at that time of year. Full diplomatic relations were resumed this September, and in the same month British Airways resumed flights to Tehran six days per week. Just a few weeks ago at the UN General Assembly, the Prime Minister met Iran’s President Rouhani, who called the joint comprehensive plan of action a basis for closer bilateral co-operation.

There are plenty of warm words between Britain and Iran, but not an awful lot has happened since implementation day. The deal promised so much to businesses in the UK that wanted to trade, and to the Iranian people who are crying out for jobs and a better standard of living. Those promises are yet to be fulfilled. Iran has great potential as a country with which to build even stronger trade and cultural links.

Literacy in Iran is 85%, and the figure rises to 97% in 18 to 24-year-olds. The country holds 10% of the world’s oil and natural gas reserves. Historically, it has suffered from low economic growth, sharp fluctuations in revenue and low productivity, which has typically led to an overdependence on oil. Of course, we see that all over the region, and I would contend that overdependence on oil is part of the region’s problem, with a restive cohort of young people who have relied far too much on hydrocarbons.

Iran is moving towards a reduced dependence on oil, as it now accounts for only 30% of Iran’s budget and, for the first time, there is a positive trade balance in non-oil goods amounting to $1 billion. The International Monetary Fund estimates that Iran’s GDP will grow by at least 4.5% over the next year, and the rial continues to strengthen. Iran is focused on reducing inflation, and has reduced the role of its central bank to facilitate that and to make exports more competitive. Inflation is down from the historic high of 59% in the mid-1990s to 8% this year.

Companies are reticent about investing in Iran even though it is a natural market for Britain to export to. There are opportunities for British trade not only in energy, but in infrastructure. Last week, the state-owned National Iranian Oil Company sold condensate to BP for the first time since implementation day. However, anyone who has travelled in Iran knows that its infrastructure is crying out for investment, and it is said that the country needs $50 billion every year to upgrade its infrastructure. There are other opportunities for exporting British goods and services, particularly training. Businesses have told me that there is a dearth of people trained in administration and management, so the country could benefit from British expertise.

The big stumbling block about which British and Iranian businesses complain—I have spoken to the Minister about this on numerous occasions—is the remaining pre-nuclear sanctions, especially those around access to finance when doing business with Iran. Any banks with United States links are banned from doing business with the country: they are rightly terrified after the $9 billion fine that was levied on BNP Paribas. Lenders are restricted to those with absolutely no dollar exposure, which is a very small pool. Will the Minister confirm what further conversations he has had with his US counterparts on reassuring US banks that they will not be subject to large fines from the US authorities?

UK Trade & Investment statements on Iran are optimistic. UKTI says:

“There is a positive outlook for UK-Iran trade relations”,

and that the UK Government

“fully supports expanding our trade relationship with Iran and we would encourage UK businesses to take advantage of the commercial opportunities that will arise”.

But the level of such trade remains unclear. Indeed, the European Union traded €6.5 billion to Iran in 2015 and imported €1.2 billion, but I was unable even to find UK-specific statistics.

On the size of cover allocated by UK Export Finance, it states that

“the total cover allocated for Iran will be under continuous review”.

Will the Minister tell us how much total cover is allocated for Iran and when will that be reviewed? Furthermore, will he confirm how much of the £50 million facility guaranteeing payments to UK professional advisory service providers advising the Government of Iran has been spent? There have been a lot of warm words but seemingly little progress on opening up the market to British businesses. How many, if any, business opportunities have been identified as a result of the memorandum of understanding signed between UKEF and the export guarantee fund of Iran?

France and Germany have led delegations to Iran, but Britain, even with the strong historical links that I outlined in my introduction, has lagged behind. I know that other hon. Members share my concerns about the effects of Brexit on Britain’s relationship with Iran.

Many of the smaller businesses that seek to trade with Iran are those run by members of the Iranian diaspora in the UK—a group of approximately 83,000 people. On behalf of that group, I pay tribute to the Minister for his role in saving Persian GCSEs and A-levels earlier this year. Knowledge of Farsi is crucial to preserving cultural heritage, and it eases the process of doing business between the two countries.

Members of the Iranian diaspora—who are, for the most part, dual nationals—are justifiably concerned about their status if they visit Iran, particularly in the fevered atmosphere leading up to next year’s presidential election and following the imprisonment of several dual nationals. Can the Minister give any guidance to dual British-Iranian nationals on their visits to Iran?

Soft power, it is always claimed, is key to British foreign policy. We are said to be the leader in soft power—[Interruption.] Somebody is laughing; I always wonder where we get these stats from as well. We should be exploiting our place in the world and our deep historical roots in the middle east to strengthen and encourage British trade with the region.

When it comes to soft power away from trade, there have always been cultural exchanges between universities, and art and cultural heritage groups. A series of exhibitions at the British Museum in 2009 were well attended and involved loans from museums in Iran. Those exchanges have continued and are an essential part of building understanding between the two peoples.

We cannot underestimate the power of cultural exchange and soft power, nor of symbolic gestures. Has the Minister’s Department considered the suggestion by the Select Committee on Foreign Affairs that the Government admit their role in the coup to overthrow Mosaddegh in exchange for an apology for the storming of the British embassy in 2011?

There is no doubt that many of our regional allies, especially members of the Gulf Co-operation Council, have been troubled by the UK’s renewed relationship with Iran, which they see as a threat to their relationship with us. However, it is not in the British national interest to see this as an either/or relationship, as that does not reflect the reality on the ground. Some 500,000 Iranians live in the United Arab Emirates, 80,000 in Kuwait, 173,000 in Bahrain and many in Saudi Arabia. The value of trade between Iran and the GCC is approximately $14.8 billion. Surely it is in the UK’s national interest to be part of that flourishing trade of people and ideas between Iran and the GCC. Is it not in our national interest to dampen down some of the fevered rhetoric between Iran and its Gulf neighbours, to unite in combating the evil death cult of Daesh and to work towards stability in the region?

Another area on which Britain and Iran have worked successfully together in the past is Afghanistan, in supporting the national unity Government and on counter-narcotics. What conversations has the Minister had with his Iranian counterparts on co-operating to defeat the Taliban in Afghanistan?

In conclusion, relations between Britain and Iran are of long standing. They are complex and often immensely frustrating. I look forward to hearing the contributions of hon. Members on both sides of the House who bring great experience, expertise and passion to this important debate.

[Several hon. Members rose—]

[Mr David Hanson (in the Chair)]

Order. From approximately 10.27, I intend to call each Front Bencher for a 10-minute contribution. A number of hon. Members are standing, and I hope that we can self-regulate our speaking arrangements accordingly.

09:49

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. This is the first time that I have served under your chairmanship in Westminster Hall, Mr Hanson, and I wish you well. A short time ago I was involved in a debate under your chairmanship on a firearms issue, and it is good to see you here in that position. Well done to you.

I congratulate the hon. Member for South Ribble (Seema Kennedy) on securing this debate. I will take a singular approach, and Members will not be surprised that I will speak about the persecution of Christians. I am sure that, when the Minister saw me get to my feet, he said, “I know what the gentleman is going to speak about.” I told the hon. Lady this morning that I would speak about the persecution of Christians.

I have recently returned from the middle east, more specifically the country of Iraq, which borders Iran. Perhaps that has given me a fresh understanding of what is happening in these countries and the help that is needed. We are under no illusion as to the history of our relations. Britain has sought an alliance since the 13th century, yet no time has been rockier than the past decade. With the reopening of the embassy in London and the signal that a path to some form of better co-operation is on the cards, now is the time to raise these matters, which need to be addressed as diplomatically as possible.

I thank some of the people in the Public Gallery who have an interest in Iran, and specifically in the persecution of Christians. There will be no surprise that I am focusing on the persecution of Christians in that area. I understand that we do not have massive influence to effect change. I am simply highlighting pertinent issues to allow the Minister to have all the information so that any and all available influence may be exerted for Christians who face persecution.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does my hon. Friend agree that, on the issue of the persecution of Christians in the middle east and Iran, it is important that we make the highest level of representations to the Iranian authorities and across the middle east? Not only persecution but displacement and a resolute pursuit of Christians are happening in the middle east, and greater tolerance is needed for those with differing religious views.

[Jim Shannon]

My hon. Friend clearly focuses attention on what I believe we all wish to happen.

Here are some facts about Iran. As converting from Islam is punishable by death for men and by life imprisonment for women, persecution in Iran is literally a matter of life and death. Although those who are considered ethnic Christians, such as Armenians and Assyrians, are allowed to practise their faith among themselves, ethnic Persians are defined as Muslim. Any Christian activity in the Persian language of Farsi is illegal. Islam is the official religion of Iran, and all laws there must match the requirements of sharia Islamic law. Only Armenians and Assyrians are allowed to be Christians, and even they are treated as second-class citizens. Those who try to reach out to Muslims have reported imprisonment, physical abuse and harassment. In a country of 80 million people, there are only 475,000 Christians.

As my hon. Friend the Member for Upper Bann (David Simpson) said, Christians are an ethnic and religious group under great pressure and they are not left in peace to live their life according to their faith. Being a Christian in Iran can clearly be a matter of life and death. A Muslim who leaves Islam is considered an apostate and is at risk of the death penalty. Muslims are not even meant to shake hands with Christians, touch them or eat their food. Muslim-background believers often meet in house churches, but these are frequently monitored and raided by secret police.

I have brought the issue of Christians being arrested in their house churches to the Minister’s attention on a number of occasions. At least 108 Christians were arrested or imprisoned in 2015, and in several cases they have been physically and mentally abused. Pastor Behnam Irani, who is serving a six-year prison sentence, says:

“Many of my cellmates in prison ask me why I don’t just deny my belief and go back to my wife and children? I then ask myself: what cost did…the Lord pay to save me? I have decided to keep my faith in our Lord and stay in prison.”

He has no human rights and his family have no redress. He must simply live a life that we would not allow a dog to live in this country. That is what is happening to a minister and pastor of a church. That is what is happening to Christians in Iran.

It is widely reported that there are negotiations to allow Iran exemptions on the nuclear agreement. I have not been supportive in any way of any relaxation of regulations on a nation that has not proven itself to be trustworthy with such weapons of mass destruction. The Minister will recall our debate in the Chamber on the nuclear agreement and the concerns that not only I but many Conservative Members raised that night about a deal that denied human rights to many ethnic groups, and to Christians in particular.

[David Simpson]

I congratulate my hon. Friend on his speech. I agree with many of his sentiments. Does he agree that Open Doors is doing fantastic work in Iran and other countries to help persecuted Christians?

[Jim Shannon]

My hon. Friend highlights one of the key organisations. Open Doors is working hard, and it is launching its report on the middle east at half-past 2 this afternoon. I understand that invitations went out to all MPs, many of whom have replied. Many organisations are working in the middle east, including Relief International, the Barnabas Fund and Christian Solidarity Worldwide.

It is widely reported that there are negotiations to allow Iran exemptions on the nuclear agreement. If Iran is prepared to torture and kill Christians in their own country for practising what has been labelled a western religion that promotes a western lifestyle, what will it do against the hated western world with the power it will hold? Can we be secure? My answer is a definite no. I will continue to oppose any agreement that would give an unknown amount of power to an unknown foe.

We have highlighted the persecution of Christians, but followers of the Baha’i faith and many followers of the Jewish religion are also subject to unbelievable discrimination and specific debarment from education and employment. In March 2015 the all-party Christians in Parliament group and the all-party parliamentary group on international freedom of religion or belief published a joint report on the persecution of Christians in Iran. The executive summary sums up much of what needs to be said here today:

“The joint-APPG Inquiry into the persecution of Christians in Iran held two oral evidence sessions (hereafter called ‘Westminster hearings’) in December 2014, and took testimony from thirteen witnesses. Some witnesses gave their statements via video, while others were interviewed in person by the panel. The Inquiry also received statements from NGOs and experts that work in this field. The Inquiry heard that the persecution of Christians in Iran has not diminished since Hassan Rouhani took the presidential office, despite his pre-election promises of greater respect for human rights.”

The facts and evidence are there for the country to see. The summary continues:

“Christians continue to be arbitrarily arrested and interrogated because of their faith-related activities. They continue to be treated harshly, with some facing severe physical and psychological torture during periods of detention. The judiciary continues to construe legitimate Christian activities (such as meeting in private homes for prayer meeting and bible studies, or being in contact with Christians outside of Iran) as political activities that threaten the national security of Iran.”

What nonsense. The summary continues:

“Therefore Christians continue to be issued long prison sentences and/or corporal punishment. Churches continue to be pressured into ceasing all services or activities in the national language of Persian (Farsi), or are closed down.”

We have evidence of that happening, too. It continues:

“Property belonging to Christians has continued to be seized, and Christians continue to face discrimination in the workplace and in educational institutions.”

All those things are happening. It continues:

“There has been no substantive change in Iran’s human rights record since the election of President Rouhani; in fact by some indicators you could argue that things have gotten worse.”

That seems to be the case: things have gotten worse.

I will now conclude my speech, because I am conscious of the time. We must be able to exert some influence and diplomatic pressure. I look to the Minister to bring about change and to take the decisive step that is needed. Speak up and speak out for those who are prohibited from speaking for themselves, and put down a clear marker that such persecution cannot be allowed to continue behind closed doors in Iran.

09:59

[Mr Richard Bacon (South Norfolk) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hanson. I congratulate my hon. Friend the Member for South Ribble (Seema Kennedy) on securing the debate; I know she is passionate about this subject. When I was elected to Parliament, I never expected that years later I would have the opportunity to introduce her to the Iranian Foreign Minister, Dr Zarif, as I did earlier this year, and that she would say “This is the happiest day since I was elected.”

It is hard to think of a subject on which there is more ignorance than Iran and our relations with it. The hon. Member for Strangford (Jim Shannon), for whom I have a lot of respect, spoke articulately about the persecution of Christians. When I went to the World Against Violence and Extremism conference 18 months ago, which was organised by the President of the Republic, I was surprised to be the only British person there apart from my translator, who is British-Iranian and British-born but speaks Farsi. There was a former Prime Minister of Norway; the former President Zardari, the widower of Benazir, from Pakistan; and the former Anglican Bishop of Washington, a Catholic cardinal, a professor from the Massachusetts Institute of Technology and various others from the United States. I said to our Iranian hosts, “You should target those in the United States Congress who speak out most against you and get them to come here and see what a normal country Iran actually is.”

I ended up becoming chair of the all-party group on Iran slightly by accident, when my hon. Friend the Member for Wyre and Preston North (Mr Wallace) became a member of the Government and asked me if I would do it. The reason I got involved in the group was that four years ago, in 2012, it was seriously said that this country might consider attacking Iran with bombs. I was a Member of Parliament in 2003 when we attacked Iraq, and I voted against it. The arguments made in 2012 sounded eerily familiar to me. I decided that I was not going to trust anyone else’s opinion, so I went to the International Atomic Energy Agency in Vienna, met the nuclear inspectors who were going to Iran, heard what they had to say and wrote it down in a hardback book, which I still have. They said, “We have no evidence of nuclear weapons-grade material.” It is also worth recalling that Iran is a signatory to the non-proliferation treaty, which various other countries such as India, Pakistan and Israel are not.

The real ignorance, though, stems from something else. As my hon. Friend the Member for South Ribble pointed out, our history with Iran goes back for several centuries. Relatively little of that history, particularly over the past 100 years, reflects well on this country. There are a lot of reasons, many of them good ones, why the Iranians have been very prickly towards us.

[Mr Gregory Campbell]

I ask the hon. Gentleman to reflect on what he said about his attendance at the conference. I have no doubt whatever that it would be a good thing for more people to go to Iran and see what type of country it is. However, he said that Iran could be seen as a normal country.

[Mr Bacon]

Yes.

[Mr Gregory Campbell]

Presumably he will take the opportunity to rectify that comment in the light of the litany of instances of persecution of Christians in that country.

[Mr Bacon]

No. There is persecution throughout the world. Many people think that abortion is a fundamental human right and that for a country to make it illegal is not normal. I happen to disagree with them, but the hon. Gentleman and the hon. Member for Strangford represent constituencies in which abortion is still illegal. I think that is a decision for local people to make locally, but what constitutes “normal” is actually a very wide spectrum.

The key point that needs to be understood is that after 9/11, while much of the middle east was yodelling in the street at the destruction of the twin towers and the murder of many thousands of people, including many Muslims, Iran flew its flags at half mast, held candlelit vigils and offered the United States strategic and logistical help in the fight against the Taliban, which was accepted,.

I hope the hon. Member for Strangford, as a serious religious man, will listen carefully to this: what is least understood about all these imbroglios, and indeed about what is going on in Syria, is that to the Taliban, al-Qaeda and now Daesh, the first enemy is not the west and not Christians but the Shi’a. It should come as no surprise to anyone that the Iranians are supporting the Shi’a in Syria, or that the Iranians were opposed to the Taliban who wanted to kill the Shi’a. It should come as no surprise that the Iranians were deeply opposed to al-Qaeda, which particularly attacks the Shi’a.

[Jim Shannon]

I do not disagree with the hon. Gentleman, but the point that my hon. Friend the Member for East Londonderry (Mr Campbell) and I are trying to make is that 108 Christians were arrested and imprisoned last year. That is hardly an indication of a Government that is open and inclusive of Christianity. Pastor Behnam Irani is serving a six-year prison sentence because he is a Christian who refused to accept the Muslim religion and wanted to preach to his people. That is an example of what is taking place.

[Mr Bacon]

Did the hon. Gentleman say 108?

[Jim Shannon]

Yes, 108.

[Mr Bacon]

That is exactly the same number of people who were beheaded in Saudi Arabia last year. I know that that is equally irrelevant, but let me just point out—[Interruption.]

[Several hon. Members rose—]

[Mr Bacon]

I will not give way at the moment. I have the floor, and I will not give way. This is a free Parliament and I will have my say, and what I want to say is that we will have better relations with Iran and more opportunities to influence it, including on questions of Christianity, if we talk to it.

After I went to the British embassy in Vienna and met the British ambassador, the diplomats dropped us off outside the door of the Iranian embassy, where Ambassador Soltanieh, Iran’s ambassador to the IAEA for many years, was still in residence. I was amazed that the British diplomats, who were paid for by our constituents’ taxes, said to us at the door of the embassy, “We’ll be leaving you here—we won’t be going in. We’re polite to them when we have to be, but we have as little to do with them as possible.” I remember being shocked and thinking, “Do you think it’s just possible that if you knew the names of Ambassador Soltanieh’s grandchildren, you might have a better relationship and get more engagement?”

Hon. Members, including my hon. Friend the Member for South Ribble, have talked about commercial relations. I commend to them the speech made in this Chamber on 26 March 2014—at column 117WH of the Official Report—by the former Foreign Secretary and right hon. Member for Blackburn, Jack Straw, in which he talked about commercial trade between Iran and the United States. Despite there being no diplomatic relations, the US’s trade is going up at the same time that Iran is using commercial penalties to discriminate against other companies, particularly British companies—although I am pleased to say that Group Lotus, the largest private sector employer in my constituency, opened a car dealership in Tehran two weeks ago and sold 20 cars.

I will not concentrate on the geopolitics any more, because other Members will doubtless have things to say about that and I do not want to take up too much more time. In my remaining minutes, I will refer briefly to another matter. I have mentioned that it is hardly a surprise that Iran is involved in protecting the Shi’a. What is not known is that in 2003, through the Swiss ambassador, the Iranians made an offer to the United States that would have involved support for the Arab League’s 22-state Beirut declaration. It would have involved mutual recognition of Israel; an end to military support for Hezbollah and help with its conversion to a purely political party; and intrusive nuclear inspections. I very much regret to say that the United States rejected that offer and managed in the process to call Iran part of the “axis of evil”. It is hard to think of a more crass way to respond to such an offer. The direct consequence was the election of the hard-liner Ahmadinejad.

Iran is a very complex place. My hon. Friend the Member for South Ribble said many insightful things, but one of the most insightful was that it is not either/or situation. It is complex and nuanced, and there are plenty of people in Iran who want the relationship to fail.

Five Iranian MPs came here last year for a very successful visit. We had quite a lot happening in Westminster and Whitehall, and we took them to see a professor of literature at Cambridge for what proved to be an extremely fruitful exchange. It was a low-key visit, partly because we understood from talking to the diplomats that the Iranians were concerned that any failure of the visit would strengthen the hand of the people back in Iran who wanted to point at them and say, “You see? We told you it wouldn’t work.” In fact, the reverse occurred.

You don’t make peace with your friends; you make peace with your enemies. I do not think we should have enemies—we should try hard to work co-operatively with everyone. There is a huge amount to do on Iran. Let us not forget that, following the implementation of the joint comprehensive plan of action, the IAEA has said four times in four reports this year that Iran has met its obligations. It is not completely obvious whether we are meeting ours. I wrote to the Governor of the Bank of England about that recently, because at the moment British-Iranian registered banks that are UK-authorised and regulated are unable to do business in the UK or send and receive sterling payments. They cannot even easily pay their council tax. An Iran Air flight that lands at Heathrow has to have enough fuel to be able to take off again and land in Vienna, where it can fuel up and pay. Many other countries in Europe have managed to sort out such payments, so I hope that the Minister will address that. I know he thinks he will need the help of the Treasury, which is why I copied my letter to the Governor to the Chancellor of the Exchequer.

It is worth pointing out that on the Bank of England website, among its various roles in undertaking a wide range of policy and operational responsibilities that are vital to the functioning of a smooth economy, the Bank itself clearly states:

“It is also the role of the Banking Directorate”,

which is within the Bank of England,

“to respond to unpredictable and exceptional events in the financial system.”

I think we have an exceptional event in Iran. There is, in effect, an exceptional circumstance that requires an extraordinary solution.

No one pretends that this is easy or that we will solve all the problems overnight, but I invite Members to join the all-party group and support our endeavours for better relations. We have an interesting meeting coming up on 18 October with Sir William Patey, the former British ambassador to Saudi Arabia; Professor Ali Ansari from the University of St Andrews; Jack Straw himself; and Michael Stephens, a research fellow from the Royal United Services Institute. They will be talking about Iran-Saudi relations, which is the real fulcrum of the problem that we have in the middle east.

[Several hon. Members rose—]

[Mr David Hanson (in the Chair)]

Order. Three hon. Members from the same party have risen to speak. We have approximately 16 minutes; the maths speaks for itself.

10:11

[Dr Matthew Offord (Hendon) (Con)]

I congratulate my hon. Friend the Member for South Ribble (Seema Kennedy) on securing the debate. I introduced a debate on human rights in Iran on 28 June. I do not intend to repeat all the issues that were raised then. Given the amount of time I have, I shall concentrate on two issues: the information that emerged over the summer about a massacre in 1988, and Iran’s regional aggression.

It has become known that, in 1988, the Iranian regime executed more than 30,000 people. Many of them were political prisoners held in jails. Some were people who had been released from jail, having served their sentence, but who were then summarily recalled and executed.

The majority were serving prison sentences for political activities or, as I said, had already finished their sentences. After a fatwa was issued by Ayatollah Khomeini, the wave of executions began in late July 1988 and continued for a few months. Many of those killed refused to repent their beliefs and as such were executed. What action is the Minister taking to ensure that the regime in Tehran not only acknowledges what happened but takes action to ensure that those responsible, many of whom are still in power, are brought to justice? Will the Minister ask the United Nations High Commissioner for Human Rights, the UN Human Rights Council and the UN Security Council to order an investigation to achieve that?

I turn to some issues that have arisen in the past 15 months, since the nuclear deal was agreed. I was very much against the deal. I was disappointed that the issue of human rights was decoupled from the deal, because that was a missed opportunity to put pressure on the Iranian regime. I think it was a vainglorious attempt by President Obama to secure a legacy—a legacy that will not actually be achieved. We have seen that with the number of people that Iran has continued to execute over the past 15 months. My hon. Friend the Member for South Norfolk (Mr Bacon) talked about abortion and what is and what is not normal. It is not normal to execute nine-year-old girls.

[Mr Bacon]

I did not say it was.

[Dr Offord]

I never suggested that my hon. Friend said it was, but I am saying that it is not normal to execute nine-year-old girls, or boys at the age of 15 or, indeed, to gouge out anyone’s eyes. It is not normal to execute people in the ways and numbers in which they are currently being executed in Iran. There has been much comment in the debate about the different sections of Iranian society that have been persecuted, including the Sunnis, the Kurds and the Baha’i. I received an email from the National Union of Journalists about its brothers and sisters in Iran who are not able to undertake their work as journalists and are not in a free civil society. I do not feel that that is normal either.

In July this year, the UK’s ambassador to the United Nations expressed his concern about Iran’s regional aggression, declaring that the ballistic missiles tested by Iran are designed to deliver nuclear weapons. In his speech to the UN Security Council, Ambassador Rycroft made it clear that Iran’s

“continued testing of ballistic missiles which are designed to be capable of carrying nuclear weapons is destabilising to regional security and inconsistent with Resolution 2231”,

as others have said already.

In the past 12 hours or so, there has been much comment in the media about the Foreign Secretary’s comments, in yesterday’s debate on Syria, about the role of Russia. But Russia is not the only game in town. Russia may have what we might call interests in—or may interfere in—Ukraine and Syria, but Iran interferes in and has much greater interests in other parts of the region. It interferes not only in Yemen, but in Syria, Lebanon, Iraq and Afghanistan. The tentacles from Tehran continue to spread. That has been allowed and achieved as a result of the nuclear deal unfreezing assets that the Revolutionary Guard and others are using to cause dissent in the region.

10:15

[Kit Malthouse (North West Hampshire) (Con)]

It is a great pleasure to serve under a fellow Liverpudlian, Mr Hanson.

I rise to speak in this debate because, for me, Iran represents a fork in the road for British foreign policy. Yesterday, we saw highlighted starkly the limits of the isolation and damnation until the point of intervention policy of the past 20 years. Given that we cannot afford, militarily, socially or financially, to do the same again, our approach to Iran is critical.

Before I continue, I acknowledge and reiterate the fact that, for our own safety and for that of the Iranians, we cannot waver on the question of Iran gaining nuclear weapons. It needs to understand that working with the P5+1 is vital, because it is far better to deal with us in a rule-bound international system than to chance its hand with other, perhaps more powerful, nations in the region. For our own part, we cannot allow the Iranians to trigger a proliferation race across the whole middle east and add layer upon layer to existing nuclear states’ deterrence calculations. That would be a recipe for disaster, especially in a region where civilian control over military arsenals is imperfect and the experience of safety issues is less developed.

Following the deal, it was pleasing to see the reopening of the embassy and the risks of a nuclear standoff far more remote than we had feared a few years earlier. I, too, remember the cover of The Economist in February 2012, and the headline “Bombing Iran”. It seems that sanctions worked in Iran, but it could be argued that we saw their limits. They arguably forced the end of the Ahmadinejad Government and brought forward a more conciliatory one in Rouhani’s Government, but it is unrealistic to expect the people to blame only their own Government for their hardship and it is imprudent to weaken the position of Rouhani versus hardliners.

From now on, perhaps we should attempt to build bridges to generate good will. We need to change the calculation of interests in Tehran so that the costs of a combative approach are seen as being far greater than those of a co-operative one. Yes, that signal should be sent with strength and not appeasement, but it does require us not to be openly hostile. Progress can be made, and it should be, not least because we know that our own western liberal culture is a kind of benign Japanese knotweed. It is invasive, and it starts in no better place than at the intellectual level, in academia. Although we are right to acknowledge the regime’s oppressive treatment of academics and disregard for the principles of free speech and free exchange that are so vital to academic debate, Iran still has a highly educated population, as others have pointed out—I gather it has 97% literacy among the young—and the potential to reach and surpass its previous achievements is there, if we engage.

Some promising moves are already under way in academia. For example, the School of Oriental and African Studies has just introduced the option of an exchange or visit to Iran as part of a course; the University of Cambridge has just signed a direct exchange agreement with the embassy; the British Institute of Persian Studies has a Tehran institute; and SOAS and the Universities of Edinburgh, Oxford and St Andrews all now offer Persian at degree level. Such trusses of co-operation can help to build and strengthen the bridge of understanding between the UK and Iran, which can only aid relationships at a political level.

More of the same would be positive. We should not forget that President Rouhani himself is a product of the University of Glasgow and does not have the same hostility towards the UK as his predecessor. He speaks English with a Scottish accent—or so I am told. This is cheap diplomacy, but it can build links among people in our societies that enhance the level of understanding among Governments. Business links, tourism and investment will surely follow. I agree with my hon. Friend the Member for South Norfolk (Mr Bacon) that we cannot allow the US to declare itself the world’s financial policeman. Our firms should not fear US sanctions for following UK law.

If we acknowledge that our diplomacy can gradually change Iran and its stance towards the world, we must acknowledge at the same time that Iran has enormous influence in the middle east. Given how deeply it is in our interests to see a stable and prosperous middle east, and how great the costs of failure are, as we are seeing, we cannot ignore the opportunity that engagement with Iran offers. Put simply, even if it seems to follow from our current configuration of alliances that we should be hostile, to be so would be to give in to “enemy of my enemy”, or rather “friend of my enemy is my enemy” thinking, in its crudest form.

[Mr Bacon]

Is my hon. Friend as surprised as I am that many people seem to be surprised that Iran would wish to exercise influence in its region? That is what all countries do in relation to their neighbours.

[Kit Malthouse]

It comes as no surprise to me, and of course it is reinforced by the hostile posture that the west has had thus far. Whenever we are hostile to countries—whether it is Russia or wherever—the first thing they do is turn inwards and look to their immediate region for defence. So it is no surprise that Iran has done the same.

As hon. Members have already said, Iran today is without doubt troublesome and destructive; some appalling things happen there. However, that will continue to happen and Iran will continue to be troublesome and destructive, even if we continue our tough line. Surely it cannot be in our interest to adopt an aggressive stance towards Iran at a time when there is an uncertain Saudi Arabian leadership transition, a worsening Syrian war and Russian aggression. The prize of a warmer relationship between Britain and Iran is too great not to try for it. The real prize is preventing Tehran’s alignment with Moscow from crystallising, and a de-escalation of the proxy fight between Iran and Saudi Arabia that has enflamed Syria, Iraq and Yemen. We should not take that alignment as set in stone, especially given that we have so much more to offer Iran than Russia or the Syrian Government do. We should try. Succeed, and the whole region starts to look very different and a less threatening place. One would not expect Saudi Arabia to be as confident without the west at its back. Détente between the two would beckon. Our relations with Lebanon would also improve. The resolve of Assad to win could diminish and with less backing for and more restraint of the Revolutionary Guard and Hezbollah, Israel, crucially, would be safer. That would be a great prize indeed, and a boon even if half-achieved.

Moving away from the arena of great power politics, however, one could also note that too much of the conversation about Iran today proceeds on the basis that the current Government are a temporary evil to be waited out. As in 2012, our rhetoric has failed to move on from Iraq, even if our belligerence has. We cannot expect Iran to trust us if we occasionally let slip that we would attack it if we felt sufficiently strong, brave or bored. In the Iranians’ calculation, the case for proliferation must look incredibly strong. In their position, we would do it, so we must change their position. Indeed, signalling, as the US did, that we have no intention of ever working with Iran was one of the most damaging errors the west has ever made, as my hon. Friend the Member for South Norfolk said. President Bush used absolutist language that had no place in state-to-state relations and, given our alignment with the US, we are implicated in that unhelpful position. That makes for a poor foundation for fruitful relations with a country of nearly 80 million people, most of whom hunger for engagement.

From the time of the revolution, Iran has been consistently portrayed as the regional “bad guy”; the west was even happy to excuse Saddam Hussein’s attacks upon it. However, as Lord Temple-Morris has noted in the other place, the bulk of ordinary Iranians want to be connected to the west and are not ideologically anti-American. They watch the BBC via illegal satellite dishes and I gather that in 2013 nearly 2 million of them voted by telephone in the Iranian version of “The X-Factor”, broadcast from the UK. The existence of this class—this plurality of voices—which we can help without over-offending the Government, steadily and carefully over the years to come can bring the change in Iran that the ayatollahs will find irresistible.

10:23

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

May I first congratulate my hon. Friend the Member for North West Hampshire (Kit Malthouse) on making pretty much the speech that I was going to make? He has covered some important points. Equally, my hon. Friend the Member for South Ribble (Seema Kennedy) made an excellent opening contribution, and I congratulate her on securing this debate. She said two important things: that jaw-jaw is better than war-war; and that it is not a black-and-white situation.

Let us think of the alternative. I remember standing in the House of Commons when the nuclear deal with Iran was announced, and there and then I asked the then Foreign Secretary what the alternative would have been. He was very clear—the alternative was that we would have gone to war. What debate would we be having in this House today if we were dropping bombs on Iran—bombs that would have done nothing, because we know from the inspectors that the targets were probably sunk in eight miles of mountainside? More importantly, and as my hon. Friend the Member for South Ribble has pointed out, we are talking about an educated nation. As my hon. Friend the Member for North West Hampshire said, we are talking about a nation that has a desire to grow, to move forward and to become middle-class, as a lot of the west already is. Nothing will unite a nation more, and encourage fighting back and proliferation more, than attacking it. We would do the same thing.

However, what we must make clear is that Iran is not a wonderful country that we should hold up as an example. Clearly, there are massive human rights abuses in Iran. Clearly, there is still funding of terrorism in the world and threats to other nations. We must bear that in mind. However, if we were to take the view that we will simply not engage with countries that do those things, as I am sure my hon. Friends from Northern Ireland will confirm, we would break off relationships with the USA, because of the amount by which it funded the IRA in the 1980s. Do we really want to turn our back on countries throughout the world because we do not agree with what they do? Are we not in this place to be diplomatic and to work on the international stage to bring about the changes that we need to bring about? Are we in this Chamber today, and in our other Chamber, approving of Saudi Arabia’s actions in Yemen? No, we are not; of course we are not. But will we achieve anything by just walking away from the table and saying to Saudi Arabia, “We no longer want to deal with you”? As my hon. Friend the Member for South Ribble said, these situations are not black and white.

However, there is a genuine concern about the actions that take place around Israel, and as a democratic state we have a duty to ensure that we support fellow democratic states that see terrorist organisations trying to undermine them. Also, we must accept that Iran at this stage may be putting more money into Hezbollah and Hamas, but that does not mean we walk away and say, “I’m sorry, Iran. We’ve decided that we’re going to bomb the backside out of you, like the rest of the middle east”, which, quite frankly, is going to hell in a handcart. How do we resolve the situation in Syria? Not easily, but Iran will be a major point of reference in that.

I will finish by simply saying, “Well done”, to my hon. Friends the Members for South Ribble and for North West Hampshire. They have made some excellent points. It is a complex situation, but my goodness—today’s debate is far better than the debate we would have been having if we were killing hundreds of thousands of innocent people.

10:27

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

Thank you for calling me to speak, Mr Hanson; it is a pleasure to serve under your chairmanship.

I, too, congratulate the hon. Member for South Ribble (Seema Kennedy) on securing this debate. She mentioned that she is the first person with Iranian heritage to be elected to the House; I am the first MP from the council estate of Castlemilk, but her heritage is perhaps slightly more exotic than mine.

At the outset, I must say that I thought the hon. Member for North West Hampshire (Kit Malthouse) made an excellent speech. I did not buy all of it, but I thought he struck a very good balance. It is undoubtedly a good thing that we are now in a position to have these positive discussions with Iran. Indeed, I welcome the developments that have brought us to this point and I invite the House to reflect on a fact that I had hoped I could make mine, but it was stolen by the hon. Gentleman—namely, that the current President of Iran was educated at university in Glasgow. It was at Glasgow Caledonian University, as opposed to Glasgow University; I say that just to correct the record.

I have listened with interest to the contributions that have been made. Indeed, I share some of the optimism that some people feel that we are moving in the right direction, but I also think we have to pause for thought. The nuclear deal is to be celebrated; I observe that it has been one of the Government’s few foreign policy successes. In fact, I recall that, as a new Member, I attended the Foreign Office briefing for new MPs, when the Chancellor of the Exchequer, the right hon. Member for Runnymede and Weybridge (Mr Hammond), who was then the Foreign Secretary, had just flown in from the talks about the nuclear deal. He then briefed us on his departmental responsibilities. However, progress is required in many other areas—some of which have already been outlined by the hon. Member for Strangford (Jim Shannon) and other hon. Members—before we should be too enthusiastic about entering into a commercial embrace with Iran.

Members have stated correctly the need for consistency. Indeed, the hon. Member for Strangford and I have been consistent in speaking out against human rights abuses in countries such as Saudi Arabia, which has been mentioned several times this morning. That consistency requires us to do the same when it comes to Iran. Should we be so comfortable about embracing a country that is part of a tangled web of complex relationships that are causing so many problems around the world and in fact are working in direct opposition to our own foreign policy objectives? I am not suggesting we cut all ties and walk away, but the relationship has to be thought through and balanced.

We have to consider what Iran’s relationships with some of its proxies in the middle east mean for that strategy—its relationship with Hamas, Hezbollah and the Assad Government in Syria. What those relationships represent is not good for peace in the middle east. In fact, they undermine some of our own objectives in the middle east. If we get the strategy wrong, we risk a very dangerous outcome.

From my knowledge and interest in UK-Saudi affairs, I would say it is imperative that, before we embark on a full commercial relationship with the Iranian regime—let us not doubt for a moment that that many of these businesses will be closely linked to the Iranian deep state—we do not allow it to reach the stage that it has with Saudi Arabia, where commercial considerations trump good foreign policy making.

What of the human rights record in Iran, much of which was brilliantly outlined by the hon. Member for Strangford? Although in some respects it is not quite as medieval as Saudi Arabia, there are enormously alarming cases that should cause us to pause for thought, such as the case of Nazanin Zaghari-Ratcliffe, which has been mentioned several times in the House. She is a British-Iranian citizen who has been subjected to 45 days of solitary confinement, denied legal representation and subsequently sentenced after a secret trial to five years in prison on unspecified national security charges. This is one of numerous cases of the Iranian authorities imprisoning dual nationals, which they do not even recognise, on unspecified charges.

I listened to the hon. Member for South Norfolk (Mr Bacon) with an open mind, and I listened with interest to his description of visiting Iran. Perhaps when he returns he can ask to visit the notorious Evin detention centre, which is well known for housing political prisoners, intellectuals and academics, many of whom we have celebrated here this morning.

The case of Salman Rushdie, a personal hero of mine and one of the world’s most celebrated essayists and novelists, is more widely known. He has spent a large chunk of his adult life in hiding in this country with a death sentence hanging over his head because the Iranian Government did not like some words he had written in “The Satanic Verses”. The hon. Member for South Ribble opened her remarks by talking about the importance of celebrating poetry and cultural links with Iran. Perhaps if we had had some of that at the time of the publication of his book, Mr Rushdie would have been a free man for longer than he has been allowed to be.

Members may have thought that the case of Mr Rushdie had almost died and gone away, but as recently as this year the Iranian state media added $600,000 dollars to the existing cash that was offered for the killing of Mr Rushdie, one of the finest advocates for free speech that this country has ever been home to.

I am pleased that our diplomatic relations have been upgraded, but that did not happen overnight. The Minister, his Department and several of our allies applied themselves over a long period of time, often when it seemed hopeless and when entrenched interests tried to veto progress, to achieve the circumstances that brought us the nuclear deal, resulting in the change in diplomatic relations. It shows what can be achieved when there is political will to achieve progress in relations with hitherto hostile states.

I appeal to the House—perhaps not the hon. Member for South Ribble who secured this debate, because of her own personal experience—not to be so naive and idealistic as to think that we have reached a point where trade relations can be normal with Iran. If a price is to be put on UK-Iranian relations, let it be calculated in progress on human rights and a foreign policy that does not continue to undermine our own interests in the middle east.

10:34

[Catherine West (Hornsey and Wood Green) (Lab)]

It is a pleasure to serve under your chairmanship once again, Mr Hanson. I congratulate the hon. Member for South Ribble (Seema Kennedy) on her excellent speech, and particularly her references to her own family. It is always a pleasure to hear about other Members’ backgrounds and their interests in Parliament. I want to put on the record my interest in Iran, not least because of my reading the novel “Persepolis” by Marjane Satrapi, which I am sure many Members know and which has been made into a lovely film. I hope many can watch that film and learn about Persia, its history and about the beautiful Farsi language.

We are so lucky to have room 52 at the British Museum just down the road, so that we can go and see all the beautiful cultural treasures from Cyrus the Great’s 6th-century Persian empire. We also have my alma mater, the School of Oriental and African Studies. I am delighted to hear from other Members today that SOAS is offering trips to Iran as part of scholars’ interest in that wonderful country. One day I hope to visit Persepolis and see the wonderful marbles. Of course, Iran has 21 UNESCO world heritage sites.

I also want to put on the record my appreciation and that of Labour Members of the role of the European Union foreign team, including the excellent work that Cathy Ashton did, in developing the big step forward that was made in July 2015 in what is now called the Iranian nuclear deal. Sometimes we forget the important role that the European Union has played in foreign affairs.

I look forward to the Minister’s comments on Iran. I ask him whether we can anticipate what resources there will be in the Foreign Office in years to come, when we may be doing foreign affairs in a slightly different way following our Brexit negotiations. How many experts in the Foreign Office speak Farsi, for example? I am sure we have a couple with us today, but is there an argument for increased resource so that we can meet demand?

Members are right not to have too rosy a view of Iran. I was pleased that the hon. Members for Glasgow South (Stewart Malcolm McDonald) and for Strangford (Jim Shannon) mentioned the persecution of Christians and other minority groups. We know that many gay people have a very difficult time in Iran. We also know that the arbitrary imprisonment of human rights activists is a common occurrence, which many Members raise regularly at Foreign Office questions.

Following the question asked in the House of Lords in September 2016, will the Minister update us on the release of Nazanin Zaghari-Ratcliffe? Many constituents have written to Members about her case. It is great that we have so many constituents who are concerned about the position of women in Iran. I am sure the hon. Member for South Ribble also feels strongly about that, and I am sure she will raise that matter if she gets the opportunity, perhaps through her work on the all-party group when it visits Iran.

I pay tribute to the hon. Member for South Norfolk (Mr Bacon) and the all-party group for the work that they do. It is slightly under-appreciated outside Parliament just how much cross-party work can be done. I understand that there was a trip in recent years when the former Member for Blackburn went to Iran with my right hon. Friend the Member for Islington North (Jeremy Corbyn). I do not know whether the hon. Member for South Norfolk was present on that trip, but there is a lot that can be done, with a cross-section of interests, to promote good relations and a positive side of foreign affairs. We all come from different constituencies and have different interests, but in the end we are trying to promote dialogue and a peaceful future in the middle east.

The hon. Gentleman was right to say that we have common interests with Iran, particularly with regard to the current conflict in the middle east and how we can tackle the long-term problem of al-Qaeda and Daesh. I wonder whether we could question the Foreign Office more on that cross-section of interests, including on how we as parliamentarians could push forward on those issues.

I want to emphasise a couple of points that have come up in my research. We are focusing very much on the positive today, but there is of course always unpredictability to our relations with Iran—I think particularly of the 2011 incident when a mob stormed the British Embassy, which it is important to put on record in a debate such as this. There have been cautious steps forward, but we must not forget the importance of our staff’s safety. That incident did lead to a slight step backwards.

[Kit Malthouse]

The hon. Lady and other hon. Members have mentioned some dreadful incidents that have taken place in Iran. Would she accept that part of the argument about engaging with Iran is that we need to recognise that millions of Iranians will have been horrified at those events too? Millions of Iranians who saw the storming of the British Embassy will have held their hands up in horror at what was happening and the damage that it was wreaking to their relations with the rest of the world.

[Catherine West]

The hon. Gentleman is right to put on record how these incidents need to be regarded and to say that we need to move forward and not dwell on things, but it is equally correct to put it on record that sometimes it feels a bit like two steps forward, one step back. That is the case in any relationship—in the major foreign policy discussion that we are having at the moment around Brexit, day by day we move small inches forward and a couple of steps back. We need to be realistic about that process when talking about important, strategic places such as Iran.

I will come to a conclusion, as I am sure the Minister is keen to make his remarks. I press him on the question of providing further debating time for this important relationship; on how we can work together to strengthen our approach to tackling security concerns around al-Qaeda and Daesh, including by working with Iran at a cross-sectional interest level; and on how we can promote the understanding of cultural and language groups, through the all-party parliamentary group, our excellent universities such as SOAS and places such as the British Museum,. I was pleased to hear that the Minister had stepped in to save Farsi as a taught language. Along with Mandarin, Arabic, Turkish and Greek, Farsi needs to be on the curriculum much more regularly in our schools and universities, and I was pleased to hear of his interesting role in that. I look forward to his updating us not just on human rights concerns in Iran but on how we can work more cohesively and positively towards our relationship with that great country.

10:43

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

I thank all hon. Members who have participated in what has been an excellent debate. I begin by thanking my hon. Friend the Member for South Ribble (Seema Kennedy) for what I thought was a powerful and emotive, but very sober, reflection on Britain’s relationship with Iran. The duality of the situation that we face with Iran at this juncture was reflected in the contributions right across the field.

I was pleased that my hon. Friend the Member for South Ribble began by highlighting the history and the context in which we find ourselves today. We sometimes rush into these debates, looking at the details, without first appreciating or reminding ourselves of that bond. It is perhaps more relevant in the countries in the middle east. To them, the bonds that existed in the past are very important—we perhaps gloss over them, and we should remind ourselves. I appreciate that my hon. Friend reminded us of what happened in the 1800s and before, as our English naval capability was strengthening its ties and its trade relationships with India, Iran and the Trucial agreement that took place with the Gulf nations—indeed, the role of Persia in the great game—were all part of the tapestry that created those bonds, which were furthered by the discovery of oil and the beginnings of what is today BP. There is a legacy and history that ties us together and of which we should be reminded, as we look to embark on a new relationship following the important, generational change and opportunity that Iran now has with the nuclear deal.

We were reminded of the size of the diaspora in this country, which is connected to what happened in the 1979 revolution—about 85,000 people are directly connected with Iran. We were also reminded of the 2016 elections. Without delving too much into domestic matters, I was buoyed by the outcome of those elections and the change in the approach and direction of travel in the Majlis and in the Assembly of Experts. We are seeing the country take positive steps.

My hon. Friend the Member for North West Hampshire (Kit Malthouse) highlighted the very educated, very young population, who are as aware as anybody of what is happening in the rest of the world and are expressing a desire to have a good, solid, positive and responsible relationship within their own country, the region and the rest of the world. That is what the bulk of ordinary Iranians are asking for. The issue is—dare I say?—the old guard, who at the moment very much recognise a desire for change in their country, but are unsure of how to embark on the next steps and how to adapt to the change the people of their country are demanding of them.

Many hon. Members, but specifically my hon. Friend the Member for Hendon (Dr Offord) and the hon. Member for Strangford (Jim Shannon)—who I will call my honourable friend in this context and who has persistently and consistently raised the issue—spoke of the importance of the plight of Christians and other minorities such as the Baha’is. That shows the duality that we face here. There is an opportunity for trade, engagement and so on but there is still much work to do in other areas. We have to decide how we fit into that— how to balance that interest and opportunity while taking advantage of greater engagement and conversation to encourage change in those other critical areas.

As with other debates, I will write to my hon. Friends and hon. Members in reply to their specific questions, particularly where I do not have the answers right now. That is not a cop-out; it will allow me to give hon. Members answers in depth. I will focus the rest of my time on the questions posed by my hon. Friend the Member for South Ribble, who began by talking about the trade opportunities that exist.

We should not ignore the fact that this is the biggest new market to open up in a decade. Trade is certainly growing. Since the nuclear deal and the relaxation of sanctions, our bilateral trade has increased. I pay tribute to the Prime Minister’s envoy, Lord Lamont, who has done a sterling job in bringing leaders, for instance Foreign Minister Zarif, to meet parliamentarians and business people. That helps to create the atmosphere where business can be conducted. Lord Lamont has taken delegations out to Tehran as well.

There are clearly huge areas of opportunity, not just in hydrocarbons and traditional areas. There has been little spending on infrastructure in Tehran for more than three decades. We have a role that we can play, if we choose, but as has been expressed across the board, there is a massive hindrance at the moment. There is a huge hurdle at the moment in the form of legacy sanctions and US sanctions connected to the banking sector, which prohibit US passport holders from being able to do business—or make them worried to do business—for fear of triggering US sanctions. I have had discussions with John Kerry—with the Americans and others—and we came close to having a meeting with the Office of Foreign Assets Control, which is the US Treasury committee that focuses on this issue. We were not successful in getting that meeting, but we will persevere to make that happen. John Kerry and the director of OFAC, John Smith, said that they do not stand in the way of business being permitted in the context of the joint comprehensive plan of action. However, businesses, including big British banks, have raised the cautionary concern that US passport holders do not feel confident at the moment to go and do business in Tehran. The Government understand that we need to resolve that issue urgently.

We are also offering financial support. The Bank of England’s role was mentioned, and we have other financial services. Given the experience of the City, we are offering Tehran advice and support on how it can introduce anti-money laundering programmes and counter the financing of terrorism. We want to ensure that those products are in place as its own financial services develop.

[Mr Bacon]

The Minister mentioned the Americans. It is comforting to everyone that he came close to securing a meeting with OFAC, but it would be even more comforting if he had actually secured it, so I hope he succeeds in doing so. Is he worried, as I am, that the United States, despite not having diplomatic relations with Iran, is acting in a way that secures its own commercial interests at the expense of other western partners? It is noticeable that Germany and France are both putting pressure on the United States and reminding it to lift the sanctions, as it is supposed to do in accordance with the JCPOA obligations.

[Mr Ellwood]

My hon. Friend makes an important point. In fact, we discussed that matter in some of the forums we had with leaders who have come over from Iran. I am very much focused on going back to that committee. Unfortunately, the very people who wanted to attend felt that they might trigger the sanctions simply by being at the meeting to discuss this matter. That is the cautionary environment that we now face.

My hon. Friend the Member for South Ribble mentioned the consequences of Brexit. Let me remind everyone that, although we are backing away from direct involvement in the European Union itself, Britain is not stepping back from trying to solve the problems of the day. Britain will step up to the plate, whether on Ebola in Sierra Leone or on trying to get a nuclear deal. Although we will not be part of the EU in the future, Britain will participate in those important matters because that is who we are and what we want to do. Outside or inside the EU, Britain has a role to play on the international stage, and we will continue to pursue striking international deals, as we did with Iran.

The hon. Member for Hornsey and Wood Green (Catherine West) asked whether our embassy has the capacity to grow and whether we have the capability. Absolutely, we do. As trade starts to develop, all embassies will make an assessment of where things are moving and where developments are taking place. We have now got an embassy with a full ambassador in place, so that is already happening.

[Catherine West]

Can the Minister tell me how many people speak Farsi in the Foreign Office in London?

[Mr Ellwood]

I will certainly get the hon. Lady the details on that important question.

Our embassy is growing. I am pleased to say that ambassadors are now in place on both sides. There was some sniggering when soft power was mentioned, but I must stress that we are considered one of the world’s most important and influential soft powers. It is because we are a permanent member of the United Nations; we are committed, engaged and determined to understand the world around us; we have a hard-power capability and are the biggest military force in Europe; we have a history and a relationship with many countries around the world; and we remain committed, transparent and trusted. That all adds up to being an important soft power. That is why debates like this are important. Those things allow us to have more influence over other countries that do not have such relationships and simply shout from afar expecting change to happen.

[Mr Nigel Dodds (Belfast North) (DUP)]

I entirely agree with what the Minister said about the UK’s soft power in the world. He said that, after Brexit, we will continue to have a strong role on the world stage, in particular at the UN. I do not know whether the Minister is going to get to this point but, in relation to the nuclear deal, what is the UK’s response to Iran’s breach of UN resolution 2231 through ballistic testing and so on? What assessment has the Minister made of it? What are we doing at the UN about it?

[Mr Ellwood]

I will come to that point in a second. The short answer is that the two issues are quite separate. The nuclear deal stands alone and is specifically to do with containment of the ability to create a nuclear weapon. Resolution 2231 is to do with ballistic missiles and the capability of launching an intercontinental or a nuclear weapon using that vehicle. The tests that are taking place are triggering further sanctions separate to the nuclear deal.

The next question that my hon. Friend the Member for South Ribble asked was about dual nationals. That is a very sensitive issue, as hon. Members will be aware, because Iran does not recognise dual nationality, which causes problems and is a concern to anybody choosing to travel to Iran thinking that they will be supported by Britain in the way they would if they had sole British citizenship. That is the challenge that we face. We are working very hard on a number of consular cases, particularly those of Kamal Foroughi and Nazanin Zaghari-Ratcliffe. Those are two of the most prominent cases, and hon. Members will have had many letters on those matters. They are dual nationals, and that is the challenge that we face. I encourage anybody with a dual nationality who is thinking of travelling to Iran to look carefully at the Foreign and Commonwealth Office website before travelling so they are fully aware of the situation.

My hon. Friend the Member for South Ribble also talked about Iran’s maturing stance following the nuclear deal. The deal allows a change in attitude towards Iran and further dialogue on the human rights issues that have been discussed, to which I am afraid I cannot do justice in the short time remaining.

Iran is at a crossroads. The nuclear deal that has been signed with the UK and the other E3+3 countries is an opportunity.

[Kwasi Kwarteng (Spelthorne) (Con)]

Will the Minister give way?

[Mr Ellwood]

I cannot give way, because I have to allow a couple of minutes for the proposer of the motion to speak.

We must take a balanced approach. We must robustly enforce the nuclear deal and check the human rights concerns that have been raised in this debate, while promoting trade opportunities. We stand ready to help Iran at this juncture, but we expect it to check its proxy influence in the region around it and play a responsible role as it moves into the future.

10:58

[Seema Kennedy]

I thank colleagues for their many thoughtful and interesting contributions to this debate. My hon. Friend the Member for South Norfolk (Mr Bacon) spoke with great experience about the need for more knowledge and engagement. My hon. Friend the Member for North West Hampshire (Kit Malthouse) put Iran in the wider context of Britain’s foreign policy. My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) said rightly that it is good that we are not here having bombed Iran in 2012. My hon. Friend the Member for Hendon (Dr Offord) always speaks powerfully and he put on the record his concerns about the treatment of women and religious minorities in Iran. I thank all hon. Members for their time. I thank the Minister for his response. I asked a number of technical questions, and I look forward to his responses to those he could not answer in his speech.

Iran is a middle east superpower and a vital key in the region’s security. All avenues of engagement and dialogue to build a bridge of understanding, to quote my hon. Friend the Member for North West Hampshire, should be pursued. Debates in this House are a vital part of such bridge building, and I thank all hon. Members who attended.

Question put and agreed to.

Resolved,

That this House has considered relations between Britain and Iran.

Cycling: Lincolnshire

Wednesday 12th October 2016 Westminster Hall

11:00

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

I beg to move,

That this House has considered cycling in Lincolnshire.

It is a pleasure to serve under your chairmanship, Mr Hanson. We used to have adjacent offices, and I know that my office could sometimes be noisy, so I hope you will forgive me for that. I am pleased to see that the debate does not appear to have attracted much attention, at least among Opposition Members, but there we are.

For those who are not lucky enough to have spent time in Lincolnshire, I have to say—it is important that this is recorded for posterity in the journals of the House—that it is a beautiful place, with big skies and verdant countryside, and it is just made for cycling. As someone who gets out on their bike a fair bit, I can vouch for the fun and good exercise that is to be had as a casual cyclist, as well as the opportunity to get out into the nature, clear the head and appreciate the loveliness of our surroundings.

Many of my constituents use their bikes more practically and a considerable amount more than I do. Although many of us in the country use our cars to travel long distances from place to place, particularly given the sporadic public transport in many parts of rural Britain, I believe firmly that we need to cycle more and that cycling should be encouraged. Even a short trip saves money on fuel, which is a big expense for those who make their lives in rural Britain, and if we take advantage of cycle paths and cut-throughs, cycling is sometimes quicker than taking the car anyway. Everyone who cycles instead of using their car is of course doing their bit for the environment by saving the emissions that would have otherwise have resulted from their trip.

I sought this debate not just to pontificate on the benefits of cycling, of which my hon. Friend the Minister is no doubt well aware, but to draw attention to the good work that has been done in Lincolnshire, which I believe serves as a good example to help other areas, and to gain the Minister’s assurance that the Government will continue to do what they can to help what we do in Lincolnshire be rolled out as best practice across the country.

Lincolnshire County Council’s vision is to get more Lincolnshire residents cycling more frequently, and to get visitors to the county to use their bikes. The county council is aware that encouraging people to cycle is about a lot more than getting bums on cycle seats; it is about creating a safe environment for people to enjoy cycling and providing the facilities that will enable them to do so. I am glad that LCC recognises that cycling can boost our local economy and contribute to sustainable economic growth through the expansion of tourism, and thereby help local business. Cycling also contributes to everyone’s quality of life by reducing traffic congestion on arterial routes and in city centres, which can be a real problem for residents and visitors alike, particularly in North Hykeham, and reduces both greenhouse gas emissions and air pollution. LCC also knows, as we all do, that more cycling means more physical activity, which improves both mental health and physical wellbeing and reduces the strain on our national health service.

If we are to get more people out cycling, we must ensure that roads are safe to travel on. Many people are discouraged from using their bikes or permitting their children to use their bikes by the fear of road accidents. I have received in my postbag several examples of keen cyclists who have had near misses and other safety problems while out and about. I pay tribute to Lincolnshire Road Safety Partnership, which does valuable work, particularly with the schools in my constituency. It is vital that cyclists know the rules of the road and how to cycle safely, for the sake of both them and other road users and pedestrians. I therefore warmly welcome the delivery of 8,000 cycle training places each year in Lincolnshire schools, as well as adult cycle training through the Bikeability scheme. I would be grateful if the Minister would comment on the Government’s plans to support such programmes not just in Lincolnshire but across the country, to improve cycling proficiency. I suspect that we all remember doing the cycling proficiency certificate when we were at primary school—I certainly do—and that is incredibly important.

Lincolnshire has taken advantage of various sources of funding to improve opportunities for cycling in the county. For example, the Greater Lincolnshire local enterprise partnership has funded schemes such as Go Skegness. I see that my hon. Friend the Member for Boston and Skegness (Matt Warman) is in his place, and that scheme is about an all-modes approach to travel in his area.

In the case of my constituency, I particularly want to praise Access LN6, which is now called Access Lincoln and was set up with a grant from the Government’s local sustainable transport fund. Since its inception in 2012, that initiative has encouraged businesses, residents and communities in North Hykeham, South Hykeham and Lincoln to travel sustainably, and it is a testament to the benefits of working to encourage people to think about how they travel as well as providing the necessary infrastructure and information for them to make a change. Infrastructure improvements have been delivered, providing lasting facilities such as the major new cycle path developments on Whisby Road, Station Road and Mill Lane, and the number of cyclists continues to increase. In fact, LCC tells me that the number of cyclists in the area has doubled, which I think we can all agree is wonderful news.

More holistically, Access Lincoln works to embed sustainable travel in the ethos of our local businesses by reviewing individual travel plans and working with networks such as Lincoln Business Improvement Group, Lincolnshire chamber of commerce and Grow LN6. The county council provides support through sustainable travel officers, who work directly with businesses to enable their staff to travel to work sustainably and encourage them to think about using public transport—and of course to think about cycling. That is a valuable part of encouraging people to get out of their cars and think about their travel choices, which we all want to see. I would like to see it spread to other parts of the country. Perhaps the Minister will comment on that.

I want to highlight the continuing success of Hirebike, a casual bike rental scheme in Lincoln. Bikes similar those that are available down here in London and are frequently known as “Boris bikes,” for reasons we all know, are available to rent across the city. Our scheme was launched in 2013 and bikes are now available at 19 docking stations in Lincoln and North Hykeham, with more expansion to come as a result of Department for Transport funding, for which I am extremely grateful to the Minister. Such schemes are invaluable in promoting casual cycling, offer a sustainable way for people to get around, and employ local people. What is the Department doing to encourage and support similar schemes not just in Lincoln and London but across the entire United Kingdom?

[Matt Warman (Boston and Skegness) (Con)]

Does my hon. and learned Friend agree that as we go forward with redeveloping Skegness railway station, that would be an ideal site for a bike hire scheme of the sort that he talks about? We could develop an integrated transport hub that would allow the many hundreds of thousands of tourists who visit Skegness each year to travel around sustainably and safely and see even more of our lovely county.

[Stephen Phillips]

Of course I agree, but my hon. Friend should push his ambitions a little further. He does not just need one docking station by Skegness station, he needs them all over Skegness. If the Minister is amenable to that proposal and will fund my hon. Friend to get some bikes in Skegness, I would quite like some in Sleaford and some other places in my constituency, and I would like more docking stations in North Hykeham, please.

I know that the Government take cycling seriously, and I am encouraged by the fact that spending on cycling across England has trebled from £2 a head to £6 a head since the Conservative party came to office in 2010. I welcome the commitment to a cycling and walking investment strategy and the announcement in last autumn’s spending review of £300 million of investment all the way out to 2020. The Government’s role is to create the right policy and funding environment to deliver change, and I would be grateful for an assurance from the Minister that his Department will continue to provide such support. I very much hope that other local authorities will show the same initiative as Lincolnshire, because only in that way will the benefits of cycling—the mental health improvements, the physical health improvements, the reductions in carbon emissions and the way it just makes us a better nation—be realised. I hope that is the message that the Minister will take away from the debate.

11:08

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

It is a pleasure to serve under your chairmanship, Mr Hanson, I think for the first time in this Chamber. I congratulate my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) on securing the debate. Cycling has sometimes been most closely associated in the media with more populated urban areas such as Greater London. That is a mistake. My area has fallen very much in love with cycling over the past few years, for all the positive reasons that he has articulated. If other parts of the country are like my area, cycling is booming, which is great news.

I would like to reinforce and support the arguments that my hon. and learned Friend made for cycling. It brings benefits in tourism and brings customers to businesses, not just in Lincolnshire but all over the country. Cycling is a great way to tackle the nation’s inactivity levels and improve economic growth. Above all, it is a sustainable and enjoyable way to travel and reduce travel costs.

The Government have an ambition to put cycling at the heart of our nation. We want to become a cycling nation. Our objective is to double cycling rates. Our vision is of streets and public places that support cycling and a road network where infrastructure for cycling is always considered when local and national routes are maintained, upgraded or built.

I am sure Lincolnshire is a wonderful county for cycling, partly because, as someone who is nearby but not too nearby, my perception is that it is relatively flat. For those of us who perhaps are not the fittest—people like me—that is quite a help.

[Stephen Phillips]

Will the Minister give way on that point?

[Andrew Jones]

Of course, though hopefully not on my fitness.

[Stephen Phillips]

I am sorry, but I cannot let that go. I live in a village called Thorpe on the Hill, and it is called that for a reason. I also have something called “the cliff” that runs down the middle of my village. I would not want people to think that we do not have big skies and big, open areas in which they can cycle in Lincolnshire, but if they are also interested in a bit of exercise I can certainly point them to some hills, including Harmston hill, which I have to say completely kills me.

[Andrew Jones]

I suspect my hon. and learned Friend’s fitness levels are way ahead of mine. He makes a valuable point. He has mentioned in both his opening remarks and his intervention the Lincolnshire landscape, and particularly the big skies that one experiences. I have certainly noticed that on all my visits to Lincolnshire.

Last year, the Government awarded half a million pounds for sustainable travel in Lincolnshire through the sustainable travel transition year fund. We also made similar awards to North Lincolnshire Council and North East Lincolnshire Council. Improvements such as the Canwick Road scheme were made possible by a contribution of more £1.5 million in funding from the DFT, which was put towards the £5 million overall cost of the project. Such developments ease congestion as well as providing improved facilities for pedestrians and cyclists.

In addition, Access Lincoln, Lincolnshire County Council’s framework for sustainable travel, will build on the success of Access LN6 by continuing to encourage people to walk, cycle, use public transport and car-share, as well as supporting key infrastructure projects in the city of Lincoln. Through our cycle rail grant, the Government have provided £360,000 for an innovative new cycle hub at Lincoln station. The hub will provide more than 200 new secure cycle parking spaces, making it easier and more convenient for people to cycle to the station. My hon. Friend the Member for Boston and Skegness (Matt Warman) said he wishes to see that extended into his area. I can only agree with him on the merits of such schemes, and I wish him every success. I know he is already discussing that with the Under-Secretary of State for Transport, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). Where we have seen schemes developed, they have been successful, and I would like to see that success extended across the country.

With funding from the Department contributing to the success, Lincolnshire has made improvements to its infrastructure and made people’s experience of cycling more enjoyable. However, despite those good examples there is much more we will have to do if we are going to make this a cycling nation.

On 27 March we published the first draft cycling and walking investment strategy for public consultation. We had a fantastic response to it, with about 3,600 responses received, and more than 400 individuals attended engagement workshops around the country, highlighting the terrific appetite for cycling and walking. The draft strategy sets out our plans for creating a cycling and walking nation, with an ambition up to 2040 for making cycling and walking the natural choice for short journeys or as part of a longer journey. It includes a target to double cycling and a number of objectives to increase cycling and walking and reduce the rates of cyclists killed or seriously injured, and it explains the financial resources available in the spending period to support the delivery of the objectives.

The draft strategy also set out the actions to be taken to achieve our objectives under three broad themes: better safety, better streets and better mobility. I emphasise the key point that we cannot achieve those objectives alone. Our ambition will be delivered only if we work with local government, businesses, charities and the public. We want to support local delivery partners to do what they do best: identify and deliver individual, tailored cycling and walking interventions that are right for their areas. I think that was a key point made by my hon. and learned Friend about the progress made in Lincolnshire and that is exactly how we see progress being made across the country.

The Government have a role to play. We will take a lead on issues that require a national approach such as setting the framework and sharing knowledge and good practice. We will publish the final cycling and walking investment strategy once all considerations have been taken into account.

We have to look at funding as a part of this issue, because obviously that is important to help to facilitate change. We have made good progress. In 2010, for every person in England, just £2 was spent supporting cycling. That has gone up to £6 per person each year across England, and it is more than £10 per person in London and our eight cycling ambition cities, which include Birmingham.

[Stephen Phillips]

The Minister champions the fact that London is getting £10 a head and the rest of the country is getting £6 a head. I have to say that, not just in relation to cycling but in relation to everything, those of us who make our lives in rural Britain feel that we are constantly short-changed, because the money goes into the urban centres and not into our communities. I want his agreement that it is just not fair that the good folk of Lincolnshire will get £6 a head in this Parliament whereas the no doubt equally good folk of London, Birmingham and all these other places will get £10. It is not on, and it has to stop.

[Andrew Jones]

It is a question not of reducing funding in other areas but of improving the funding position right across the country. I share my hon. and learned Friend’s argument about how transport has been weighted towards the south-east—I represent a constituency further north than his own. The idea that transport issues exist only in the south of England is obviously nonsense that has to be corrected. That of course is one of the objectives of the Government’s spending programme, whether in High Speed 2, the road investment strategy or the control period 5 delivery plan—all such things are about injecting capacity. We have to address the significant regional imbalance.

That is not to say that I do not recognise that London has specific challenges because of its scale. It clearly has, but it is not unique in having transport challenges and those of rural areas are frequently overlooked. My hon. and learned Friend makes a valuable point and I agree with his underlying argument.

I think we have seen good progress with the cycling ambition cities, but I do not want progress to be only in small parts of our country. The spending review in 2015 included £580 million for a new access fund for sustainable transport, with £80 million of revenue funding and £500 million of capital as part of the local growth fund. That will build on the legacy of the local sustainable transport fund and its success in supporting sustainable travel to work as well as supporting the cycling and walking investment strategy. Following a competitive bidding process, we hope to be able to announce the winners of the current access fund applications later this year, by Christmas.

More than £200 million has been allocated to the cycling ambition cities, which are making progress with the delivery of cycling networks, including Dutch-style segregated cycle lanes in Cambridge, new strategic routes in Greater Manchester and a cycle superhighway in the north-east. That group meet regularly to share their experiences and learning, and I want to capture some of those and make all of that information available so that we can help to share good practice. Part of our role in Government is to pull together what good practice looks like, and encourage those with local responsibility. That is already happening in, for example, the shared space initiative; it is all about supporting local authorities in their work.

My hon. and learned Friend emphasised safety, which is obviously critical. There are still far too many people losing their lives or being seriously injured on the roads. As the Minister for road safety I am acutely aware that every life lost is a family shattered. We will do all that we can to improve the safety performance of our roads. To put things in context, ours are among the safest roads in the world. Last year was the second best year for road safety in our history, in terms of lives lost. Obviously, we want to build on that and go further, and that certainly includes cycling. I remember learning awareness and the law of the road, and how to use a bike, when I was quite small, at primary school. Bikeability is the Government’s national training programme, designed to give people the skills and confidence to cycle safely and competently on today’s modern roads. It has delivered approximately 1.9 million training places across the country since it began in 2007. We have secured a financial settlement for the next few years. My hon. and learned Friend asked for a commitment that it will continue and I am able to give him that. The funding has been secured; we have £50 million in the spending review and we expect to train a further 1 million children over the next four years.

Importantly, my hon. and learned Friend highlighted the good work being done in Lincolnshire, especially in relation to routes to school. We want to encourage children to be able to ride to school; but before that can happen, addressing parents’ natural concerns is fundamental. That is not, of course, a single initiative. We want to encourage cycling right across the transport mix. Highways England, which is responsible for the nation’s strategic roads, launched its cycling strategy in January. It outlined plans to provide a safer, integrated, more accessible strategic road network for cyclists and other vulnerable road users. It will invest £100 million in 200 cycling schemes between now and 2021.

The issue is not only funding, although that is obviously important. My Department is committed to ensuring that good cycling infrastructure is in place across the country. London has been mentioned, and there has been good progress there; but it is not just a London issue. We want to share the lessons across the country so that everyone benefits from the experience. The cycle proofing working group, which does not have the catchiest title in Government, was set up in 2013, and consists of experts from across the sector, who share knowledge, conduct research, promote good practice, and advise on cycle proofing standards to help support those with responsibility for designing and building infrastructure on a local basis. The Department has recently published case studies designed to help local authorities with the design and delivery of cycling provision.

We fully support devolution and decentralisation. It has of course been a running theme throughout this Government: the idea that local areas best know their needs and problems, and their solutions, seems self-evident to almost all Conservatives, but it has not necessarily been a feature of Government policy over the years. We are providing more capital for local infrastructure than ever before, particularly through the local growth fund. If anyone thinks that that is bad news for walking and cycling, they should reconsider. Forward-thinking local enterprise partnerships such as Greater Lincolnshire know perfectly well the value and the economic benefits that cycling can bring. We know that, because they have allocated more than £270 million to cycling infrastructure projects over the next five years.

Some of the benefits of that investment are beginning to be seen in Lincolnshire. The Go Skegness scheme has been mentioned. That project has started on site, and will transform public transport and cycling accessibility in and around Skegness. There has been a 77% increase in the number of cyclists on the Station Road cycle way, which is a key route in North Hykeham; that is fantastic. My hon. and learned Friend mentioned the Hirebike casual rental scheme in Lincoln; bikes are available to rent across the city. It was launched only three years ago in 2013, and 100 bikes are now available to rent. My hon. and learned Friend mentioned the imminent expansion and the ways in which the Department seeks to support it. The extension includes electric bikes, an interesting part of the marketplace that has made much more progress in other European countries than in the UK. I think they are likely to be a feature of the marketplace in time ahead; it may be an encouragement to participation in cycling for softies such as me.

I am trying to convey an impression of the many different ways in which the Government are committed to cycling. It is not our role to dictate what local areas spend their money on; they know themselves better than Government could, and our role is to support them by undertaking research, providing information and advice, and encouraging and promoting their work. We have been getting the message out, and it is clearly working and getting through. In future we shall go further with devolution deals, which will, I think, include more consolidated local funding pots. We will go further in supporting local bodies to create high quality local plans for cycling and walking.

We are very ambitious about making good progress with cycling, for health, environmental and transport reasons. There are not many things in this world that are fun, good for the environment, and good for us too; but cycling is one of those things. Our cycling and walking investment strategy is the first phase of a longer term process of transformational change to make this truly a cycling nation. It has been great to hear about the progress made locally in Lincolnshire, in my hon. and learned Friend’s constituency and others. He asked specifically for an undertaking that the Government will continue to support cycling, and I give him that: yes, they will. They will continue to support it financially, through publicity and the sharing of good practice. We view cycling and walking as being at the heart of our transport mix. I hope that the progress made in Lincolnshire will extend across the country, because it is exactly what we need.

11:27

[Stephen Phillips]

I am extraordinarily grateful to my hon. Friend, not only for his constructive response but for his assurances on my specific queries. I am immensely pleased to hear those assurances, as, I am sure, are my hon. Friends the Members for Boston and Skegness (Matt Warman) and for Louth and Horncastle (Victoria Atkins). I know from discussions with the latter that she knows the importance of cycling in her constituency, not only for the reasons covered in the debate but also in relation to regeneration.

[Victoria Atkins (Louth and Horncastle) (Con)]

I thank my hon. and learned Friend for securing this important debate. He will know that the Louth canal was, in its heyday, the powerhouse of the midlands engine—even bigger than Grimsby’s port, in its time. Does he welcome, as I do, the work of East Lindsey District Council, the Louth Navigation Trust and Sustrans to reopen the route along the canal for cycling, walking and other joyous pursuits?

[Stephen Phillips]

Yes, of course I agree with my hon. Friend fully about that. I am looking forward to cycling the route and, indeed, dragging her along with me, when it opens in due course. I am afraid that the price of being permitted to make her point in the debate will be that she will have to join me.

We have had an extraordinarily useful debate. Those who read it in Hansard will be left in no doubt about the beauty of Lincolnshire, and the fact that it may be the best county in the United Kingdom in which to engage in cycling pursuits. I can promise those who come that not only will they get a good bike ride; they will get fabulous lunches in some of the wonderful pubs and other places of Sleaford and North Hykeham—and, I am sure, Boston and Skegness and Louth and Horncastle. I am grateful to the Minister and to everyone who contributed to the debate.

Question put and agreed to.

11:29

Sitting suspended.

European Medicines Agency

Wednesday 12th October 2016 Westminster Hall

[Mr Steve McCabe in the Chair]

14:30

[Daniel Zeichner (Cambridge) (Lab)]

I beg to move,

That this House has considered the future of the European Medicines Agency.

It is a pleasure to serve under your chairmanship, Mr McCabe. I am grateful for the opportunity to secure the debate, which I called with the expectation of being answered by a Minister from the Department for Exiting the European Union. It is unclear to me why that is not happening; perhaps that could be No. 171 on our list of questions about Brexit. None the less, I am sure we can expect a robust and helpful response from the Under-Secretary of State for Health, the hon. Member for Warrington South (David Mowat), who perhaps can explain that to us.

I start by laying my cards on the table. I am old enough to remember the John Major Government and the Maastricht treaty; I was perhaps one of the few at that time who actually read it. I also remember the troubles that the then Prime Minister had. Despite those difficult times, one of his major achievements was to secure the location of the European Medicines Agency in the United Kingdom. More than 20 years on, that success by a Conservative Prime Minister is being put at risk by the foolish path being pursued by the Conservative Government today. John Major famously referred to some of his colleagues—I apologise for this, Mr McCabe— as “bastards”; now they are running the show.

Last week, the Chancellor wryly commented that no one voted for Brexit to make us poorer. I wonder how many knew about the potential impact on one of our key industries, the future of which we are discussing today. My guess is that very few knew and that very few were voting to destroy British jobs and to do reckless damage to one of our great success stories. The area of the country I represent is a world leader in pharmaceuticals and life sciences. The Cambridge biomedical campus is at the pinnacle of international research, with, just a few years ago, AstraZeneca choosing Cambridge as its location rather than elsewhere in the world—but that was before 23 June.

Given that the vast majority know nothing of all this, let us set out some of the details about the European Medicines Agency and the significant role it has played over the past two decades in providing a harmonised approach to medicines regulation throughout the European Union. It was set up in 1995 from predecessor organisations, is a decentralised agency of the European Union and is located in London. Its mission is

“to foster scientific excellence in the evaluation and supervision of medicines, for the benefit of public and animal health in the European Union”.

Responsible for the scientific evaluation of human and veterinary medicines developed by pharmaceutical companies for use in the European Union, it can grant marketing authorisations for medicines that allow for their use across the 28 EU member states, as well as the countries of the European economic area—Iceland, Liechtenstein and Norway.

The EMA describes its four main functions as to facilitate development and access to medicines, to evaluate applications for marketing authorisation, to monitor the safety of medicines across their life cycle and to provide information to healthcare professionals and patients. Essentially, it is tasked with ensuring all medicines available on the EU market are safe, effective and of high quality, and it seeks to harmonise the work of existing national medicine regulatory bodies, such as the UK’s Medicines and Healthcare Products Regulatory Agency. It serves a market of more than 500 million people living in the European Union and covers a market of 25% of global pharmaceutical sales, of which the UK constitutes just 3%.

We should understand the EMA in the context of the growing global pharmaceutical market and the UK’s world-leading life sciences sector. The Prime Minister herself said in July:

“It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry”.

Indeed, the life sciences sector in our country has a turnover of more than £60 billion per year and generates exports worth £30 billion. In 2014 it invested £4 billion in research and development—more than any other sector. It employs 220,000 people in our country and 25% of the world’s top prescription medicines were discovered and developed in the United Kingdom. In my constituency of Cambridge alone, there are more than 160 life science companies reinforcing the strong local knowledge economy, and contributing to the economy well outside my region as well.

In passing, it is perhaps worth noting that Cambridge is one of just a handful of UK cities making a net contribution to the UK Treasury, thanks in no small part to its vibrant life sciences industry. Thus, the Cambridge view on how we secure future prosperity may perhaps be worth listening to. Cambridge, and those in this key sector, are most certainly unhappy with the current route being taken for a range of reasons and the future of the EMA is a good example. What will be its future, post-Brexit? What will be the impact on the future of our country’s life sciences industry more generally? What will be the real impact on the NHS—the real impact, not the bus slogan? The head of NHS England, Simon Stevens, has rightly insisted that the regulation of medicines and devices must be considered during the Brexit negotiations.

What are the options? As I have noted, countries inside the European economic area are included within the EMA’s centralised marketing authorisation procedure, which means that, if the UK remains part of the economic area, the process for regulating and supplying medicines in our country might see little change, which could bring stability for the sector.

[Nick Thomas-Symonds (Torfaen) (Lab)]

It is a pleasure to serve under your chairmanship, Mr McCabe. My concern is that, outside the European Union, we will be in a position in which pharmaceutical companies will have to go to the EMA to go through the process to make the drugs available, and subsequently have to do the same thing for the purposes of UK law, which will cause delay. Does my hon. Friend agree that it is important that we have parallel processes so that there is no disadvantage to patients in this country?

[Daniel Zeichner]

My hon. Friend pre-empts the points that I will move on to. The issue of delay is really important.

I was talking about the option of staying within the European economic area. Sadly, from what we are hearing, and from what is possibly happening in the Chamber at this very moment, that is an option the Government do not seem to be entertaining. If we do not, pharmaceutical companies might have to apply separately to the UK’s MHRA if they want to supply a drug in the UK, as my hon. Friend has pointed out. Most commentators predict that that is likely to lead to a slower, less efficient regulatory process.

The Association of Medical Research Charities has pointed out that the strong and aligned medicines regulation across the EU, underpinned by science, is essential to bringing new medicines to patients in a way that minimises delay and costs. At the weekend, the chief executive of AstraZeneca made exactly that point—that, without the EMA, NHS patients would get new drugs more slowly and drug costs to the NHS would rise, meaning less money for the NHS; not quite what was written on the bus. Perhaps the Minister will confirm that the Government believe that people voted for less money for the NHS. That is certainly not the general understanding.

There is also an associated worry that smaller biotech companies, the lifeblood of our future prosperity, which in many cases are pioneering revolutionary treatments, will lack the capacity to file multiple applications at once and to handle all the associated paperwork. Some will struggle on, and we wish them every success, but I fear others will go elsewhere, to our detriment.

The MHRA finds itself in a potentially difficult place. It has commented, carefully, in response to the referendum result:

“We will continue to work to the highest levels of excellence and quality, working with and supporting our customers, partners and stakeholders to protect health and improve lives. Working closely with government, we will consider the implications for the work of the Agency. We will continue to make a major contribution globally to improving public health through the effective regulation of medicines and medical devices, underpinned by science and research.”

Those words, and the intention behind them, are encouraging, if unsurprising, but the MHRA has been put in a difficult and uncertain position. No major member state has left the EU before, so there is no model to follow for disentangling the UK’s medicines and life science industry from the EMA. The EMA and the MHRA work symbiotically and their separation is likely to be complex. The MHRA may be left with a bigger workload, and pharmaceutical developers may well prioritise the much larger EU market and delay securing regulatory approval in the UK. Indeed, US and Japanese companies already file in their home markets first before seeking approval in the European economic area. The UK, with its much smaller market, will be in danger of being at the back of the queue.

As we have heard, the EMA has allowed UK patients faster access to new treatments. It is worth noting that, in Australia and Canada, where medicines are licensed nationally, patients have slower access. On average, new medicines come to market six to 12 months later than in the US and the European Union. It seems likely we will be in the same position. Is that really what people voted for—longer delays in getting life-saving treatments? Again, I seek the Minister’s view.

The damage is not only done to us. The BioIndustry Association warns that, without Britain, the European Medicines Agency could also end up losing out. It would sorely miss the MHRA’s strengths in patient safety regulation. The Association of the British Pharmaceutical Industry has said that European colleagues are desperate for the MHRA to be retained as part of the regulatory process, owing to the high regard in which it is held. Both the ABPI and the Association of Medical Research Charities advocate ongoing regulatory co-operation between the EMA and the MHRA. The ABPI suggests that there is a strong rationale for seeking regulatory co-operation on the basis of the public health benefits to patients. The organisation says that strong, globally aligned medicines regulation has proven effective in bringing new medicines to patients quickly, without the additional costs of multiple regulatory systems. I believe we should do all we can to safeguard that.

The Government wrote in July that their renegotiation on the new European Union-United Kingdom relationship includes looking at the relationship between the UK and the EU medicines regulatory framework. I would appreciate an update on what they now believe that new relationship might look like and whether regulatory co-operation might still be possible.

[Dr Sarah Wollaston (Totnes) (Con)]

The hon. Gentleman is making a powerful case. These points were raised with the Select Committee on Health in the run-up to the referendum. Will he join me in calling for people to submit further evidence to the Health Committee, now that we have launched our inquiry into what the Government’s priorities should be during their negotiations on the terms of our withdrawal?

[Daniel Zeichner]

I thank the Chair of the Health Committee for her intervention. I certainly encourage those in my area and others to take up that offer. We will be doing so.

Let me come to the most tangible issue of all: the future physical location of the European Medicines Agency. Just last month, the Government said in a written answer to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne):

“The future arrangements which apply in relation to European Union institutions based in the United Kingdom should be determined once the United Kingdom has left the EU. It is too early to speculate on the future location of the European Medicines Agency.”

Early or not, speculation is intense, and others are moving fast to gain advantage. The EMA stated in July that it

“welcomes the interest expressed by some Member States to host the Agency in future”,

while stressing that the decision will be taken

“by common agreement among the representatives of the Member States.”

Various member states are already vying to host the EMA. The Danish Prime Minister has said he is looking at it. The Irish Health Minister has said that attracting the EMA to Dublin is one of the “more interesting” opportunities afforded by Brexit. Italy, Sweden and Spain are also reportedly expressing an interest.

The EMA employs some 900 people. What will happen to their jobs? Will those people move with the agency? Inevitably, there is concern that, should the EMA relocate outside the UK, there will be a knock-on effect on the wider pharmaceuticals and life sciences industries. When they next decide where to locate and invest, does losing the EMA hinder or help? In my view, the answer is fairly clear, but I would welcome the Minister’s view.

We risk losing jobs. We risk losing influence. On a practical level, any company that sells to the European economic area has to have a qualified person for pharmacovigilance—an experienced, senior person based in the European economic area. If we are outside that area, QPPVs would have to move out of the UK or lose their jobs. There are 1,299 QPPVs currently in the UK. That is another potential loss, and of course, every highly-skilled job lost has a multiplier effect.

Perhaps the Minister can give us an estimate of how much all this will cost us. When I asked the Secretary of State for Exiting the European Union that question in the House on Monday, he had no answer. I appreciate that the Minister, following the lead given by the Brexit Ministers, is unlikely to be able to provide detailed, concrete information at this stage. I have some sympathy; if you do not have a plan, it is probably best to say as little as possible. However, I hope that the Government understand just how important it is for the UK to retain the closest relationship possible with the European Medicines Agency. It is important for patients. It is important for businesses. It is important for innovation, and it is important for our economy as a whole.

14:39

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate on a matter of great importance. May I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing it? As my party’s health spokesperson in Westminster, I have been contacted by pharmaceutical companies about this issue, and I will try to illustrate their concerns in the short time I have.

It was not difficult to predict the tone—I mean this respectfully—of those who are presenting a particular case about the EMA, given their concerns in relation to Brexit. I have a great deal of respect for Members’ opinions on Brexit, and while we must remember that the vote of each Member carries the same weight, I gently remind the House that the die is cast. The people have spoken, and the responsibility of ensuring that we are in the strongest possible position now lies with this House.

I very much welcome this important debate. It is interesting that while we are having this discussion in Westminster Hall, the main Chamber of the House is discussing parliamentary scrutiny of the UK leaving the EU. No doubt this issue will be brought up there. The EMA is one of the mountain of details that the Government must be aware of and plan for when we enter into negotiations for leaving the EU and establishing mutually beneficial trade agreements. The hon. Member for Cambridge set the scene clearly, and although we have different opinions on Europe and Brexit, I do not see any difference in what we are trying to achieve collectively on this issue. Our opinions, focuses and goals are similar, if not exactly the same. That is important.

I will begin with the statement made by the EMA after the referendum result in June. It made it clear that its work will continue as normal. As there is no precedent for a member state leaving the EU, the implications for the location and operation of the EMA are unknown. The EMA also stated that any decision about the location of the agency’s headquarters would be made by common agreement among member states.

The Brexit negotiation team—the Secretaries of State for Exiting the European Union, for International Trade and for Foreign and Commonwealth Affairs, and the Prime Minister—will need information to set out a strategy for dealing with this issue. The Secretary of State for Exiting the European Union and his team need the thoughtful consideration of those with an insight into this matter, so that they can strike the right way forward. It is important that we do that.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The helpful debate pack we have from the Library indicates that the pharmaceuticals sector has unfortunately declined as a percentage of the economy in the past five or six years, when we have been in the EU. Does my hon. Friend agree that the outlook of every hon. Member, and throughout society in the UK, should be that we need to redouble our efforts to ensure that the line on that graph begins to go up, rather than continuing to decline?

[Jim Shannon]

I thank my hon. Friend for his comment. I was not aware until seeing the briefing pack that there had been a decrease in the pharmaceutical business over the past few years; I actually thought we were holding our own and moving forward. Brexit will give us the opportunity to move forward, so we should look positively upon where we are.

This debate is not simply an opportunity for remainers to highlight something that may be difficult to negotiate, with no desire other than to prove their opinion on Europe. There is nothing wrong with that—people have different opinions—but let us work together to ensure that we deliver.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Is it not possible that part of the reason why the pharmaceutical industry has gone down is that the clinical trials directive of 2001 was very bureaucratic? Following that, we had a fall of one quarter in trial research in the UK, particularly in oncology. That directive is due to be replaced in 2018 with the EMA’s new regulation, which will streamline it.

[Jim Shannon]

I thank the hon. Lady for her intervention and the knowledge she brings to this Chamber and the House. I hope that we can improve on what she refers to when we get into the Brexit negotiations, and through our negotiations outside Europe when article 50 is triggered next year.

Let us work together to allow the EMA and the MHRA to come to an arrangement to continue what has been a great partnership to date and has achieved many results. According to the Financial Times, the EMA outsources up to a third of its work to the MHRA, and that work is responsible for a third of the MHRA’s income. A report in The BMJ states that that work makes the UK an attractive location to carry out clinical trials. The hon. Lady outlined that in her intervention, and I know that the Minister will respond and the shadow Front-Bench spokesman will add his comments.

That relationship, which has been proven to work, does not have to die because the EMA may—I emphasise “may”—move its headquarters. Work must be undertaken to underline the fact that although we will not be in the EU, we will remain the best in Europe at this type of clinical work. We have many things to be thankful for in our experience of it. We all understand the red tape in Europe, and I find it very hard to believe that the only reason why the work was outsourced to the MHRA was the location of the EMA.

[Jo Churchill (Bury St Edmunds) (Con)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I want to return to the point made by the hon. Members for Cambridge (Daniel Zeichner) and for Central Ayrshire (Dr Whitford). The Government need to be aware of the connectivity between the university sector, the clinical trials sector, the pharmaceutical sector and beyond, and of the importance of where the EMA sits in that. I would be grateful for an assurance from the Minister that we are putting everything we can into ensuring that the situation is sorted effectively and quickly.

[Jim Shannon]

I thank the hon. Lady for her intervention and for the knowledge she brings to these debates. She is right in saying that we want a continuation of the good work with universities. Queen’s University Belfast has a partnership with pharmaceutical companies throughout the world, doing clinical trials and marvellous work, as do many other universities across the whole United Kingdom of Great Britain and Northern Ireland. We could do that even better, and we should be doing so.

It was because of the quality of service and the tendering process that we showed that this was the best place for the work to be carried out, and that will remain so no matter where the EMA locates its headquarters. I cannot blame the Republic of Ireland and other countries for putting down a marker that their country could be the home of the EMA when it is time for it to move. If this were an opportunity for business in my constituency, I would also be highlighting our ability to take the business on board. However, panic stations need not be manned tomorrow, because those countries are hoping that an opportunity will arise when we leave in the not-too-distant future.

It is clear that countries that are members of the EEA are covered by the EMA and have access to the centralised marketing authorisation procedure. That is important, as it may mean that the UK could continue to have that procedure after leaving the EU, but it will depend on the negotiations and the UK’s resulting position in the single market. If the UK did not become a member of the EEA, pharmaceutical companies would need to apply separately for marketing authorisations from the MHRA for a medicine they wished to supply in the UK. That will be covered the negotiations.

We must have faith in the negotiations and in those who have been tasked with the job. Let us support the Ministers who have been given that job and encourage them to move forward. I hope they will read the Hansard report of this debate. We are not in the main Chamber, but the contributions made here are important in formulating policy and moving forward.

I have been contacted by Muscular Dystrophy UK, which has asked me to ask some questions of those who will enter the negotiations so that they are recorded in Hansard. I am happy to do so. Will the Government ensure that there is a parallel approval system for new treatments, so that after the UK exits the EU, EMA approvals that are granted apply to the UK at the same time? Will the Government increase the capacity of the MHRA and the National Institute for Health and Care Excellence so that the regulatory and approval processes are faster and can cope with the growing number of emerging treatments for rare diseases in forthcoming years? It is important to underline the issue of rare diseases—I think every hon. Member in the Chamber today has spoken about it at some point. We are all aware of the need for medicines, investigations and work to find new medicines to heal people better.

Those questions need to be considered, and a constructive approach that accepts there will be a change and seeks to influence the way the change takes place is the best way forward as we begin to work on the details that will shape our new position in Europe outside the EU. Let us focus on that.

I am nothing if not a realist, and my decision to support Brexit was not made on a whim or through emotion. It was made after thoughtful consideration that on the whole, we can do better for our country than the way things stand. That will come about through massive change and an overhaul of systems, and this is one of the changes that must happen. The onus is now on the Government, and particularly the team that is working on the negotiations, to ensure that we address the matter and gain the best possible outcome. I thank the hon. Member for Cambridge for giving us the chance to make a contribution to finding the way forward and highlighting the work that must be done to ensure that our MHRA, and indeed our system for clinical trials, continues to encourage work to be carried out here. We need to cement partnerships so that we can make the United Kingdom of Great Britain and Northern Ireland a better place for pharmaceutical companies.

14:56

[Liz McInnes (Heywood and Middleton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I thank my hon. Friend the Member for Cambridge (Daniel Zeichner) for securing this important and timely debate. I am aware of how important academic and medical research is to his constituents and his constituency. I am also aware of the standing that the work done in Cambridge gives to the United Kingdom on a global stage. Given our current state of political uncertainty, I thank him for all the work he is doing in this area.

Some hon. Members will know that I worked as a biochemist in the National Health Service for 33 years before being elected to serve as the MP for Heywood and Middleton. Medical research and innovation have been at the very heart of my professional career, working and collaborating with others from across the world here in the UK to focus on improving the quality of patient care. Like other hon. Members, I respect and will uphold the decision of the referendum on 23 June that the British public wish to leave the European Union, but I will continue to argue that our leaving does not mean isolation from the European Union.

We must not become isolated from world-leading medical and academic research or from collaborative innovation on life-saving medicines. We must reject isolation from funding and economic prosperity. We must ensure we are not isolated from regulatory safeguards or from providing our citizens and patients with the best quality of life and healthcare. Isolation in medical terminology denotes a hospital or ward for patients with contagious or infectious diseases. We should not isolate or quarantine ourselves and become, in effect, the sick man of Europe. Keeping institutions such as the European Medicines Agency is key to the future of British science and medicine, and to accelerated access to treatments for patients in the UK.

As a representative of a north-west England constituency, I know just how important the pharmaceutical industry is, not only in providing life-saving drugs, but in providing high-skilled training and jobs. Greater Manchester has the most pharmaceutical employees of any region with just over 6,000 workers, totalling 18% of the total jobs in this industry across the UK. The pharmaceutical market in the EU as a whole employs 700,000 people. Every job in the pharmaceutical industry creates three to four more jobs through indirect employment.

As chair of the all-party parliamentary group on medical research, I know how imperative enabling timely patient access to new medicines is and how it plays a vital role in supporting the development of medicines for the benefit of patients, based on a comprehensive scientific evaluation of data and procedural clinical testing. The EMA does that by developing guidelines and setting standards, while co-ordinating the rigorous monitoring of pharmaceutical companies’ compliance with their pharmacovigilance obligations. It provides comprehensive information for the public on the safety of medicines and co-operates extensively with external parties—in particular, representatives of patients and healthcare professionals. The proposed great repeal Bill should ensure that all those aspects are preserved in UK law and harmonised with EU legislation and directives. Let us take, for example, Cancer Research UK, which directly funds more than 200 clinical trials, 28% of which involve at least one other EU country. Any change to EU legislation would put those pan-EU trials at risk.

The EMA has achieved notable and substantial advancements in its field, recommending approximately 1,000 medicines to the European Commission for a marketing authorisation for all EU member states. Those medicines benefit patients suffering from all types of diseases, including cancer, diabetes, neurological disorders, infectious diseases and autoimmune disorders. The EMA has also excelled in specialised areas such as medicines for rare diseases, medicines for children and advanced-therapy medicines. It has built a broad access to clinical data, allowing shared knowledge to be applied in future research, and has thus increased the efficiency of the development of medicines.

Of course, behind all those achievements are people. We have a duty to give reassurance immediately to the staff of the EMA. Of its 890 employees, 93% were born outside the UK. We must clarify that they will be able to continue to live and work in the UK; indeed, we must strive to end the uncertainty that so many of these workers are feeling at the moment. Although the complexities of this matter and the wider issues that this debate raises cannot be confined to a soundbite or a sentence, some of the language and tone on immigration during the past few weeks has been regrettably toxic. The French microbiologist Louis Pasteur said: “Science knows no country”. In that spirit, I advocate the positives of not only immigration, but innovation. The two are inherently intertwined in the scientific and healthcare community.

Only last week, two British scientists, Duncan Haldane and Sir Fraser Stoddart, collected Nobel prizes for science. I congratulate them and their teams on those awards. Both those eminent British-born scientists have worked in the UK and abroad, and each of them warned that the risk of Brexit could mean “a big negative” for British science.

We must continue to foster scientific excellence post Brexit, full stop. Retaining the EMA here in London is essential to harbouring and cementing those values. The time for speculation is over. The Government proclaim that they want “a country that works for everyone”, but if they do not stand up now and speak up for the scientific community, they will end up creating a country that stands isolated from scientific research and innovation —a country that is neither welcoming nor working.

15:03

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I thank the hon. Member for Cambridge (Daniel Zeichner) for initiating this very important debate.

As we know, the European Medicines Agency is a decentralised agency of the European Union, employing about 890 people and located at Canary Wharf in London, which makes it the biggest EU operation in the UK. As we have heard, its staff is multinational; only 7% are from the UK, but all now face the prospect of a painful and uncertain period that almost inevitably will lead to relocation. It is inconceivable to me that an EU institution would not be located within the EU, although that will be decided by the member states at some point after the UK has left. Given that it took seven years to establish the organisation and given the possible further complication of its recent 25-year lease for its headquarters, who knows how long it may take to disentangle?

Of course, it is not just the staff who face the prospect of an expensive move. There are likely to be repercussions for the public purse and implications for medicine regulation. We know that currently more than one third —almost 40%, in fact—of EU drug approvals are outsourced to the Medicines and Healthcare Products Regulatory Agency, which clearly places significant reliance on that business for its income. Consequently, there will be a financial gap for the UK. I would be interested to hear from the Minister how the Government plan to plug that gap.

The complications are not just financial; there may well be implications for how medicines are regulated. We seem to be looking at a hard Brexit. If the UK does not become a member of the European economic area, marketing authorisations will be required from the MHRA for the UK. I am in no doubt that the implications of that will be less efficiency and possibly longer processes for obtaining authorisations in the EU and the UK, resulting—I fear—in innovative drugs taking longer to reach patients. Some industry leaders predict delays in the region of 150 days, based on the examples of Switzerland and Canada.

According to a piece that appeared in the Financial Times, when Sir Michael Rawlins, chair of the MHRA, was asked whether it would be able to take on all the extra work registering new drugs and medical devices that is currently carried out by the EMA, he said: “Certainly not.” Considerable investment and recruitment would be required to re-establish it as a stand-alone national regulator.

The EMA is central to the harmonised approach to medicines regulation. Losing this mechanism would have huge implications for the way in which drugs and medicines are tested and marketed, with concerns already expressed by many in the pharmaceutical industry that leaving the EU will result in the UK losing out on some trials that might otherwise benefit patients, as we will no longer be part of that harmonised procedure. The pharma industry argues that the UK is involved in about 40% of all adult rare disease trials in the EU at present, but that would be undermined by a change of status. Some in the pharma industry argue that that would in itself reduce the importance of this country in the eyes of the global drug companies. Being outside the EU would mean that the UK was not part of the harmonised procedure and so might lose out on some trials that might otherwise benefit patients. Officials at the National Eczema Society say that they have been informed by two US companies that trials of new treatments will not take place in the UK in the event of Brexit.

Across the UK, the pharmaceutical industry will be dealt a hammer blow through the loss of the European Medicines Agency, which is crucial for attracting foreign investment. It is clear that international pharma companies like to be close to their regulators. Until now, the EMA has been an attraction for companies to locate their European headquarters in the UK. The Japanese Government recently published a report detailing consequences if requirements from UK-EU negotiations are not delivered. Many Japanese pharmaceutical companies operate in London because of the EMA’s location in London. The Japanese Government have said that the appeal of London as an environment for the development of pharmaceuticals would be lost, which could lead to a shift in the flow of research and development funds and personnel elsewhere.

Thanks to a reckless gamble with our membership of the EU, the UK now faces the prospect of losing being part of the EMA, which not only will mean patients losing out on pioneering and beneficial medical trials, but will leave a disastrous trail when the inevitable happens and it seeks to have its headquarters in the EU.

15:08

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

It is a pleasure to serve under you, Mr McCabe. I, too, pay tribute to the hon. Member for Cambridge (Daniel Zeichner) for obtaining the debate and for such an excellent opening speech, which laid out many of the key issues that we face.

In my constituency there is GlaxoSmithKline, which produces the largest amount of one of the key antibiotics used across the world. It is natural that there are concerns in my constituency and in that business. It is slightly tragic that we are having both of the debates on this issue today, instead of prior to the June referendum. Perhaps a little more airing of what we gain from the EU might have been helpful. Forty years of describing the EU in terms of straight bananas and bureaucracy has not been helpful.

In health, we have had nothing but gains. The two canards that were raised during the debate—people ahead of you in the queue to see the GP and £350 million a week on the side of a bus—have evaporated. Someone is much more likely to be treated by an EU national than to be squeezed out of an appointment in a hospital.

We have had nothing but health gains. The EMA is typical of everything the EU has done in many areas. Before 1995—prior to expansion, so we would be talking about 12 countries—we faced regulation in multiple languages across multiple countries. What we have seen in the EU is the development of harmonisation of regulation to the point where we have a single agency. Having one agency means, as the hon. Member for Cambridge said, that drugs get from research bench to patients much more quickly. The EMA monitors safety throughout Europe so that we can more easily pick it up when, in real-life use, there turns out to be a problem with a drug. It also helps to direct research into the big challenges that the population of the EU faces.

There has been a lot of discussion about the MHRA. It is clear that there would need to be significant investment in it. Even if we are still in the EEA or in a position to be part of the EMA, we will not have any influence. The MHRA does not just provide briefs and reviews. It was massive in influencing the structure and principles of the EMA, and such influence will be lost. The loss of influence over pharmaceutical firms that are here has been talked about. The chief executive of the Association of the British Pharmaceutical Industry has said that he foresees a major loss of inward investment in this country because of the loss of the EMA headquarters in London and because of our possible exit from the EMA.

Many such examples will come up in different sectors with regard to Brexit, but the EMA encapsulates all of it. It is not a separate bureaucracy telling us what to do. Twenty-eight countries were working together to find the slickest way to encourage quicker research and to bring it to some benefit. Research is a big part of this. It has been possible for the EMA to direct research on the challenges that the whole of Europe faces, such as antimicrobial resistance or modern plagues such as Ebola. As was mentioned, it supports research into rare diseases. One pharmaceutical firm or one academic unit would not access enough patients to ever get an answer. Across a population of 500 million, we have the real potential—we are already seeing that potential come through—to find answers to some of the horrific illnesses suffered by small groups in a population. “Suffering” is the right word, and we will lose the potential to find solutions.

Lots of drug companies do not bother trialling drugs in children because it is just too much hassle. The EMA has been able to push and say, “We need to have paediatric trials. We need to have trials in children.” That dovetails with the business of research across the EU, which has the biggest research network in the world. It is much bigger than in China and the US. The UK has led in benefiting from that. We put in £5.5 billion and get £8.8 billion out. The biggest share of research of all types through Horizon 2020 and framework 7 has been done in this country, and we are in danger of losing that.

The reason we lead in pharmaceuticals is not just because the headquarters is here; it is because of the dovetailing between academia, pharmaceuticals and universities, and the ability of researchers to move around. We have gained because English has become the language of research and science, because of America. So that has been a benefit that we have had. Of course that is a benefit that we will keep, but we are in danger of sitting out on a little rock all by ourselves.

There may be a delay if pharmaceutical firms have to go through a separate process with the MHRA, but what about British firms? What about the innovative medicines initiative, which encourages small and medium-sized enterprises and often works on the biological aspects of new medicines? They will face an absolute nightmare trying to sell their drugs in Europe. That is something that we are not giving remotely enough attention to.

I was a remainer. I am still a remainer and my population were remainers. Obviously, we are not happy with the idea of being taken out of Europe and of being taken towards such a hard Brexit, as the rhetoric has suggested in the past month. We need to realise what we may lose. We still have everything to fight for. What “Brexit means Brexit” actually means can still make a huge difference to what we manage to hang on to from the EU and what we lose completely. We need to ensure that the people who are at the table take account of this.

I worry because we are describing the EU as a shop. We are talking only about the single market and whether we will get access. Sometimes people mean that as a shorthand for everything else we have gained, but that allows us to be mentally sloppy and therefore allows someone to say, “Oh, good. We are like Canada. We have got access to the single market. Job done.” But it is not job done. The EMA was an example of Europe coming together, streamlining itself and finding a better way forward.

It has been recognised that the clinical trials directive of 2001 made it very difficult for the UK because the system became quite bureaucratic. The EMA has responded to that. The vastly streamlined clinical trials regulation starts in 2018. In fact, the EMA and the EU in this sector are getting rid of bureaucracy and making it easier for our companies and our academics to do research throughout Europe. Some 80% of all the top flight research of all kinds is international and multinational. If we do not allow the researchers to easily work with each other, we are cutting our noses off to spite our faces. We need to recognise that Europe has not just been about burning orchards or straight bananas. It has brought us huge gains in health and safety, in research and in getting drugs to patients. I call on the Minister to ensure that that message is brought home to the core Brexit team as strongly as he can manage.

15:17

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Cambridge (Daniel Zeichner) on securing this important debate and on the powerful and knowledgeable way that he made his case today. I share his disappointment that this matter is not being responded to by the Department for Exiting the European Union, but I understand that there are competing interests today. However, I hope that the Minister will undertake to raise the issues set out today with his colleagues in the Department and will answer some of the questions posed today.

I know that my hon. Friend the Member for Cambridge was and remains a passionate advocate for both the European Union and his constituency, and today he has channelled his disappointment at our impending departure from the EU into a well argued case to support key industries in his constituency. He spoke about the local interest that he has in this issue. The Cambridge biomedical campus is one of the most significant sites for medical research not only in this country, but anywhere in the world. Like him, I represent a constituency with an interest in the science and research sector, which could take on even more significance with the proposed Cheshire science corridor, which has the potential to create more than 15,000 new jobs by 2030, around a third of which could be in my constituency. Of course, I do not have to tell the Minister about that because the science corridor benefits Warrington as well as Ellesmere Port. Even before projects such as the Cheshire science corridor come to fruition, the north-west, as we have heard, is already one of the leading regions in the country for the pharmaceutical industry, employing about 18% of the total national workforce.

As my hon. Friend the Member for Cambridge said, the industry is a massive part of our country’s economy, with a turnover of more than £60 billion a year and exports worth around half of that. In 2014, it invested £4 billion in research and development: more than any other sector. It also employs some 220,000 people. I have set out those facts to paint a clearer picture of what is at stake in today’s debate and why it is so important that we begin to offer some clarity about what our plans are, not only for the future of the European Medicines Agency, but for pharmaceutical research, development and regulation more widely. I believe that the importance of the issue is reflected in the number of Members attending the debate, even though the bigger picture on our exit from the European Union is being debated in the main Chamber now.

I appreciate the tone that the hon. Member for Strangford (Jim Shannon) adopted. I think that he was saying that, wherever we came from pre-referendum, and whatever our views on the European Union, the vast majority of Members now want to ensure that our departure happens on the best possible terms. I regret the mischaracterisation of Members who request greater scrutiny and debate on the terms of exit as being involved in a Machiavellian plot to undo the referendum result. What Members are asking for is scrutiny, transparency and accountability on what is surely the most important issue that the country has faced in a generation.

My hon. Friend the Member for Heywood and Middleton (Liz McInnes) spoke from great personal experience. She was right to use the word “isolation”. We want to avoid becoming separate from the rest of the world in such an important area. She gave specific examples of the benefits of pan-European research on diseases such as cancer. The hon. Member for Linlithgow and East Falkirk (Martyn Day) raised important concerns about delays in approval, and the potential loss, on leaving the EU, of our involvement in pharmaceutical trials. He mentioned the concerns of the Japanese Government about the siting of their European bases in London. That echoes concerns that they have raised about other sectors.

The hon. Member for Central Ayrshire (Dr Whitford) clearly set out the fact that the EMA is not a body that tells us what we should do, which is how much of the European landscape is portrayed. It is part of a collaborative exercise across 28 nations, which have been making real progress. She also set out the financial benefits that this country has received from membership, and highlighted the important point about the difficulty that some smaller British companies may face in exporting their innovations, if we do not get the terms of exit right.

We all remember the famous promise, which several hon. Members have referred to, that the Brexit vote would mean £350 million a week being spent on the NHS. It is fair to say that it is accepted that that figure does not stand up and was misleading, but, as the hon. Member for Central Ayrshire eloquently pointed out, I suspect very few people who voted leave would have appreciated the threat that leaving means to jobs in the science and research sector and to speedy access to new medicines.

No one blames the Department of Health for those misleading claims. Indeed, I know from my own parliamentary questions that Ministers sought legal advice about the use of the NHS logo by the leave campaign. However, we are entitled to ask for more from Ministers on the near total absence of work to prepare for the possibility of a leave vote. For example, on 11 July, I asked the Secretary of State what assessment he had made

“of the potential effect on workforce numbers in the NHS of the UK withdrawing from the EU.”

I was told that no such assessment had taken place. On 6 September I asked what discussions the Secretary of State had had with the Home Secretary

“on the immigration status of NHS employees from other EU countries when the UK leaves the EU.”

I was told only that arrangements were being made for a meeting to take place at some point in the future. A similarly disappointing response from the Government on the issue was pointed out by my hon. Friend the Member for Cambridge, who noted that when asked about the future physical location of the EMA the Minister responded that it was “too early to speculate”.

We are not asking the Government to speculate; speculation is happening whether we like it or not. We are asking them to set out some concrete and substantive detail on what they plan to do. We have heard many times from the Prime Minister the words “Brexit means Brexit”, and that she is not prepared to give a running commentary. But investment decisions are being made right now, and if we cannot begin to provide some certainty we shall quickly find out that the UK and, in particular, places such as Cambridge and Cheshire will miss out on investment. It is about time we got some clarity on the Government’s position.

The first and most obvious point is the location of the EMA. We have already heard that countries from around the world are queueing up to offer it a new home. Having heard the benefits that it brings we can understand why they are forming an orderly queue. I know that the Minister does not want to speculate on what will happen, but will he at least set out whether, as part of the negotiations, he will take steps to try to retain the EMA headquarters in London, if that is possible? Will he also provide clarity about what steps the Government will take, if the EMA does relocate, to safeguard the headquarters of major international pharmaceutical and life sciences companies?

Beyond the future location of the EMA, there are wider issues about how medicines will be regulated in future, which could not only have an impact on investment but affect how quickly new medicines reach UK patients. Various hon. Members have mentioned that. Will we be able to safeguard the UK’s position as one of the leading locations for clinical trials in Europe? Clearly, a lot of Members feel passionately about that. Will the Government guarantee that the UK will continue to adhere to the EU regulatory framework on the authorisation and conduct of clinical trials? What assurances can the Minister give us that retaining access to the centralised marketing authorisation procedure will be a key part of our Brexit negotiations? Will the Government seek to negotiate continued access for UK research institutions to the innovative medicines initiative and other EU-funded research and collaboration programmes?

If the UK is left in the position of developing a separate regulatory framework from the EU, not only will that make it a much less attractive place in which to develop, manufacture and launch new products; it could also signify the end of accelerated access to treatments for patients in the UK, putting us to the back of the queue when new medicines are developed. Patients in Australia and Canada, where medicines are licensed nationally, have a comparative delay of six to 12 months before new medicines come to market. For people with rare conditions that could mean the difference between life and death.

European co-operation also provides some key benefits in terms of patient safety. One example is the European Centre for Disease Prevention and Control, which assists in our response to communicable diseases and pandemics. Another is the co-operation that reduces the risk of falsified medicines reaching UK patients. Can the Minister confirm that we will seek to continue to co-operate with our neighbours on those crucial issues?

What assessment has been made of the impact of the EMA’s leaving on the Medicines and Healthcare Products Regulatory Agency? As the hon. Member for Strangford said, work from the EMA is a substantial source of income for the MHRA, accounting for up to a third of its income. What provision has the Department made for the potential shortfall, particularly if the MHRA will have more responsibilities in future? As the hon. Member for Central Ayrshire said, in any scenario, it is likely that the MHRA will require further investment. What provision has been made for that?

This has been a wide-ranging and well informed debate. While we recognise that the issue does not begin and end with the physical location of the EMA and the 900 staff based there, there are at the heart of it, as my hon. Friend the Member for Heywood and Middleton said, 900 people—highly skilled and able to take their talents probably anywhere in the world—who face a future that is a vacuum. They will all have families and plans, and it is unrealistic to expect them to put their lives on hold for two or three years while things are sorted out.

I appreciate the Government’s reluctance to be drawn into making substantial commitments on the issues, but we run risks with respect to decisions about investment, future co-operation and, indeed, staff retention, if we do not begin to make our position clear. I hope that, when the Minister gets to his feet, we shall begin to get some certainty about the Government’s intentions as to seeking regulatory co-operation and, most importantly, safeguarding future investment in the sectors that we have heard about today.

15:28

[The Parliamentary Under-Secretary of State for Health (David Mowat)]

It is a pleasure to serve under your chairmanship today, Mr McCabe. I congratulate the hon. Member for Cambridge (Daniel Zeichner) and all the other hon. Members who have brought their experience to bear in the debate. I am sorry to disappoint everyone by not being from the Brexit Department. I will pass that on to those who are in it, but as has been noted, they are otherwise engaged in the main Chamber.

One reason why I am particularly pleased that we have had this debate today—I regret that all the answers may not be clear in 11 minutes’ time—is that often when there is talk in the media about the Brexit negotiations we are about to have, we hear a great deal about the importance of financial services, the City and passporting, and of the need to get those things right and the terrible effect it will have on our economy if we do not. The fact that we have had this debate, and that the hon. Gentleman and others have talked about how important the medicines industry is to our economy—not just in Cambridge, Cheshire or Scotland, but right across the country—is a reminder of the importance of this issue and has rightly put it on the agenda. I am sure the hon. Gentleman will keep it on the agenda, as will Ministers from the Department of Health.

At the start of the debate, the hon. Gentleman quoted the Prime Minister, who said:

“It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry”.

That is on the cover of a report, which I recommend everyone reads, on the structure and future of the life sciences industry post-Brexit. In a moment, I will talk a bit more about the work that the Office for Life Sciences is doing in that area. The pharmaceuticals industry is right at the centre point of where we need to be as a country in development work. It is an area that we are world-class in—an area of advanced manufacturing, which we need to be doing more of. We are leveraging the expertise and brilliant work in universities to actually make money, in a way that we do not do in all industries at all times. It is vital that we do not lose that.

I will repeat fairly quickly some of the statistics that we have heard on the structure of the industry. There are nearly 6,000 companies in the industry in the UK, and two of the major companies are GSK—located in many parts of the country, including Ayrshire—and AstraZeneca, which is located in Cambridge in particular. I have made the point earlier that a larger part of it was located in Cheshire a couple of years ago. Those are major, world-beating organisations, and for us to have an industrial future and a future as a country, we have to nurture them. In fairness, the thought that we would not do that is a nonsense. A fair challenge is to make sure that we do it right and keep it on the agenda, and I will try to address that today.

However, this is not a European industry, it is a global industry. AstraZeneca and GSK also have massive facilities in places such as Sweden and Philadelphia—all over the world. Of course it is absolutely essential that we get our relationship with the EU right. I think the point was made earlier that we have 3% of the EU market in terms of sales, although we are a lot bigger than that in terms of drug production and the importance of the pharmaceutical industry—it is probably more like 10%. GSK’s recent announcement of an £800 million investment in biologic and bioelectronic activity is to be welcomed.

The EMA was formed, as was generously mentioned, in 1995. There are 890 staff, the majority of whom are not from the UK; I think that only something like 60 are UK-based. The hon. Member for Heywood and Middleton (Liz McInnes) made the fair point that those people have families and futures, and asked how they are to be protected. The Prime Minister has said that we hope and expect that all EU nationals who work in the UK will stay here into the future. I have not heard any leader of any other country in Europe make the reciprocal point. I do not know if that is on the Labour party’s list of 171 questions, but it would be reasonable if it were. Having the EMA in the UK is of benefit to us not just because of those jobs but because, as Members have said, it is natural that people like to be close to their regulators. It would be reasonable to suppose that, although that might not be a decisive factor in many investment decisions, it would be a factor.

We also have the UK agencies: the MHRA, which covers medicines, and the Veterinary Medicines Directorate, which covers veterinary medical activities. They have 1,200 staff and 160 staff respectively. The point was made today that their activities are commingled with those of the EMA. Many of the EMA’s major committees are chaired by people from the UK, including from the MHRA and VMD. Equally importantly, the hon. Member for Central Ayrshire (Dr Whitford) made the point that 30% of its activities are done by the MHRA. The figure I have is 20%, but nevertheless, a significant amount of work done for the EMA is done in the UK. That is not just because of location—it is not just because the people who do that work are down the road. It is because they have the expertise, the science base and the people that are needed. Of course, with Brexit, all of that is up for discussion.

We have touched on the university sector, and I will not say a great deal about that. I have already made the point that the industry is an example of us successfully taking a sector with world-class, world-beating innovation and turning that into world-class, world-beating companies, in a way that we do not everywhere. It is of paramount importance that the sort of research that goes on in our universities continues. The Government intend to make sure that happens and, indeed, to increase it.

I have set out the regulatory and industry structure, but we are just about to impose Brexit on all of that. That is where we get into the territory of speculation and conjecture, and I apologise that I cannot be more definitive. Many of the questions that have legitimately been raised, in particular by the Labour spokesman, the hon. Member for Ellesmere Port and Neston (Justin Madders), will be central to any negotiation that the Government take part in. It is not possible for a Minister to address the House of Commons and say, “This is our position, these are our red lines, these are the things we are going to give a bit on and these are the things that really matter to us.” That would be nonsense. That is not how any of the commercial companies located in Cambridge or other places would deal with things. What we have to do—this is the role of Members here today—is make sure that the issues are raised with and understood by the negotiating team, because there will be trade-offs in any negotiation.

With respect to some of the Members who have spoken, I have to say that we do pay £20 billion a year to the EU. We may all vary in our view of how much value for money that provides, but the fact is the £350 million on the side of the bus was not an entirely made-up number. That did not influence how I voted in the referendum, but it was not an entirely made-up number. We pay £20 billion a year for the things that we get from the EU, one of which is the EMA and the activity around it. There is a dialogue to be had both on that amount of money and on issues such as the location of the EMA and all that goes with it. Of course, its location is one point to be discussed, and I have no idea how that will end up. The point has been made that it regulates not just for the EU but for Liechtenstein and Norway—I think there was another country as well, but I have not written it down. The UK could be another such country. For me to say it is an absolute line in the sand that the EMA must stay in the UK would be a nonsense.

A number of Members have asked what we are doing to prepare for the negotiations that will happen. That question can be divided into two parts: what are the agencies—the VMD and the MHRA—doing, and what are the Government doing? The agencies have set up groups looking at the opportunities and at how regulation might carry on into the future. A number of Members have made the point that there might be a time lag in medicines coming to the UK if they have to be regulated by more than one body, or if in the future the EMA does it separately from how we do it in the UK. That is really a decision for the UK. It is about how we choose to regulate, and that decision has not yet been made. It would be disappointing if that happened, and many of us will be working hard to ensure that it does not.

The Government have set out fairly clearly that we intend to underwrite EU payments to academic projects even after we have left the EU, to protect the important activity of research programmes. Through the Office for Life Sciences, we have set up a steering group charged with informing how we make the transition. The group is chaired by the Secretary of State, Sir Andrew Witty and Pascal Soriot from AstraZeneca, and over the next few months it will be responsible for informing our negotiating position.

I do not know how many colleagues know about the report, “Maintaining and growing the UK’s world leading Life Sciences sector in the context of leaving the EU”. I think it was put together by PricewaterhouseCoopers. It is a good start in setting out a number of issues we have heard about today and the importance of getting the process right. I very much recommend it. It does not answer all the questions, but it sets out the issues in areas such as trade, people, research, funding and regulation.

A whole string of points were made in Members’ contributions this afternoon. I do not want to spend too long on them, but the hon. Member for Cambridge mentioned that not being part of the EMA’s marketing authorisation might cause delays. That depends on how we set up regulation in this country, and there are a lot of choices. A lot of other countries, including Switzerland and Japan, regulate in different ways, and it would be premature for me to say too much about it. The hon. Gentleman also made the valid point that the EMA and the MHRA are completely intermingled, and that both benefit from the current arrangements. It is not just about the EMA contracting and hiring the MHRA. We do a lot of the work that leads to that top-level and highly professional European legislation.

The hon. Member for Strangford (Jim Shannon) reminded us that whatever we think, the country has voted and we are going to leave the EU. There is no ambiguity about that, and we have to make the most of it. That is a mature reflection, because it forces us to address the negotiations, and not to continue to go over what was on the side of the bus and all the rest of it. We are where we are, and we need to make the situation the best that it can be.

The hon. Member for Heywood and Middleton used her experience and knowledge as a research scientist to make a good speech. She made a point about people, which I tried to answer by reflecting on other EU states. She mentioned the Nobel prize winners’ remarks. I heard those remarks as well and thought that there was a slight irony in that they were asking us to remain in the EU and so on from the University of Chicago. That shows that we live in the world, not just in Europe, and we must reflect on that.

[Dr Philippa Whitford]

Those Nobel prize winners represent the last time we had a major brain drain, when, in the ’80s, we lost some of the best minds from the UK. That is one of the dangers: the people who want to be at the cutting edge will not see this as the place to be.

[David Mowat]

That is a fair point. It could be a danger. The point I was making was that they made the plea to remain in the EU from the United States, which is the leader in many aspects of science. I think we can agree that science is international—it operates in Japan, the US, the UK, Germany, France and elsewhere—and that, however we achieve Brexit, we should do what we can to avoid creating barriers to internationalisation.

[Liz McInnes]

Will the Minister give way?

[David Mowat]

Maybe we cannot agree on that. I give way to the hon. Lady.

[Liz McInnes]

There is no irony in the comments of the Nobel prize winners just because they were made by British scientists working in the United States. That fact only emphasises how international science is. We must not fall into the trap of taking the line that was spread before the referendum:—that this country has had enough of experts. Those people are experts, and we should listen to what they have to say because they are the people who know what is going on. They know what the effect on British science will be if the EMA and its principles are lost.

[David Mowat]

We can agree that the scientific principles at the core of our world-leading science must not be lost in regulation. We can also agree that science is international. It is in all our interests, and in the interests of our communities and our children, that this country continues to do world-class science as part of an international collaboration. That is the Government’s intent and will.

I will finish by talking about our world-class industry.

[Jim Shannon]

I have asked a couple of questions about muscular dystrophy on behalf of my constituents. I do not expect the Minister to give me a response today, but I remind him gently to provide a written response and perhaps make it available to other hon. Members who are here.

[David Mowat]

Clearly when I used the word “finish”, people sprang into action. I will ensure that the hon. Gentleman gets a written answer to his questions on muscular dystrophy.

We do world-class science in this country. We must continue to do so, and to have a world-class pharmaceutical industry, with all that means for value added and input to the Exchequer. Governments are not the reason why we are among the best in the world in gene therapy and cell therapy, and they are not the reason why we have built £60 billion pharmaceutical organisations GlaxoSmithKline and AstraZeneca. It is important that we get the regulatory environment right, and the Department of Health and the Department for Exiting the European Union will ensure that the negotiations we are about to have address those issues.

[Dr Wollaston]

Does the Minister agree that the reason why we have such world-class expertise is the workforce? We must be absolutely clear and send a message to the world that, within our science and research community, we will not be maintaining a list of who is here from the EU and who is a British scientist. We must unequivocally send a message that Britain is open to scientists, researchers and the medical and healthcare workforce from around the world and the EU, not just from Britain.

[David Mowat]

That last intervention—I say “last” somewhat hopefully—unites us all. It would be ridiculous if the world-class science that we must continue to do compromised on matters like that. I completely agree with my hon. Friend’s point, and there is agreement across Government about that. If we need to make that clearer, we should.

I will finish now, as nobody is springing to their feet. I thank all hon. Members, particularly the hon. Member for Cambridge, for putting the issue on the agenda. It is right and important that the topic is at the forefront of our negotiations, and that we get the right answer in the end.

15:49

[Daniel Zeichner]

I thank all hon. Members who have taken part today. As so often in these Westminster Hall debates, we have had a much more constructive, collaborative discussion than we might have had in the other Chamber.

The hon. Member for Strangford (Jim Shannon) said that the die is cast. This morning I was described on my local radio station, BBC Radio Cambridgeshire, as a “remoaner” by one of the more constructive UK Independence party MEPs. I was not sure whether to be insulted or flattered, but my retort was that I think I am a realist. Today’s debate has shown a realistic understanding of the challenges and options that lie ahead. I am encouraged, perhaps more than is helpful for the Minister with regard to his ministerial friends in the Brexit Department, by the suggestion that the European economic area option is the best one for this sector. Many of us will be making that case, and I suspect that the debate will continue. It is right to highlight the importance of the sector, and I am thankful for the opportunity to do so today.

Question put and agreed to.

Resolved,

That this House has considered the future of the European Medicines Agency.

15:50

Sitting suspended.

Child Tax Credits

Wednesday 12th October 2016 Westminster Hall

[Mr George Howarth in the Chair]

16:00

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move,

That this House has considered Government plans to restrict tax credits to two children.

It is a pleasure to see you in the Chair, Mr Howarth.

I come to this debate in great frustration. When I first uncovered this issue in the Budget on 8 July last year, I did not expect that I would still be talking about it one year, three months and four days later. Incredibly, unless the Minister can tell me differently this afternoon, the Government are still unable to say exactly how their pernicious and medieval policy will operate.

To set the context, the then Chancellor, the right hon. Member for Tatton (Mr Osborne), outlined in his Budget the Government’s intention to limit the child element of tax credits and universal credits to the first two children in a family. The Budget stated:

“The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances.”

None of the questions asked on the Floor of the House or put directly to Ministers by me or my colleagues over the past year have been answered with a justification or explanation for this fundamentally flawed policy. I want to set out my anger about writing a rape clause into our social security system and about the wider impact of the two-child policy. Neither the rape clause nor the two-child policy is fit for a Government who proclaim their support for families.

Let me deal with the rape clause first. I put on record the public opposition to it from Scottish Women’s Aid, Rape Crisis Scotland, Engender and the more than 10,000 people who signed a petition on the issue. I am deeply upset and disturbed with the attitude that the Government have taken to very vulnerable women and children. No woman should have to prove that she has been raped in order to get tax credits.

I suppose it is not in the spirit of the chummy way in which people in this place like to do things, but I am unapologetic about the way I have spoken out about the meeting I had with the welfare Minister, Lord Freud, back in May. As he is a Member of the House of Lords, I have no opportunity to challenge or question him. I have been to many meetings in my eight years as an opposition local government councillor and in my year in this place, but I have never been so furious. For a Government Minister to open a meeting by saying “I’ve had to learn a lot more about this issue than I really wanted to” is appalling, and to go on to suggest flippantly that women facing the extremes of domestic violence should just flee demonstrates a dangerous ignorance. I hope the Minister will take the opportunity today to dissociate herself from her colleague’s comments. I do not think it is radical to suggest that Government Ministers ought to understand the implications of a policy before they inflict it on some of the most vulnerable people in our society.

Children being born of rape is not something that tends to happen because a rapist jumps out of the bushes and attacks a woman, as awful as that very rare circumstance is. Rape happens when women are so vulnerable and so powerless that they are in fear for their lives. Rape happens as the result of control in relationships. Rape happens in marriage. If a woman is in such a relationship, she is not going to nip down to her local jobcentre and report to a Government official that her child was born as the result of rape. For a start, with the single household payment in universal credit, she is not going to see the money in any case; it will go straight to her partner and he will know what she has done. Nor will she want to go through a third-party reporting mechanism, as suggested by Lord Freud. She will not want to tell her family GP. If the family are not known to the social work system, she will probably not want to alert social workers. She might not yet have sought the support of her local Women’s Aid or of other sources of assistance. She will almost certainly not want to contact the police just for the tax credits.

There is no clear statement from the Government on how their policy will operate. Once the rape is disclosed, what burden of proof will be acceptable to Her Majesty’ Revenue and Customs and the Department for Work and Pensions? After all, they are not organisations known for taking people at their word. What will the time limit be? Once a woman has left an abusive relationship and is in a position of safety, will she be able to make a claim retrospectively? Can that claim be backdated? For how long? If a woman needs to claim tax credits at a later stage in her life, because that is the nature of tax credits, will she need to trawl through her sexual history to identify that one of her children was conceived by rape?

How will a claim be recorded? I cannot conceive of a way of doing that that would not be hugely stigmatising both for the woman and for the child. Lord Freud suggested to me that it might take the form of a letter that a woman would have to retain in her records at home. I cannot imagine the distress caused if somebody else in the family came across that letter at a later stage. Alternatively, will the information have to be held on the woman’s records with DWP and HMRC? Will staff have access to it? Which staff? Will they receive appropriate training? The Public and Commercial Services Union has come out against the policy because of the difficult position it would put its members in.

Tax credits may be required at different stages in a woman’s life; would her claim be flagged up on any further occasion when a claim was made, or would she have to declare it on each separate occasion and relive that abuse again and again? Asking a woman to recount such abuse, perhaps on multiple occasions, to different officials is not protection in any sense of the word. The Government are not protecting any woman, or indeed any child, with this policy. In her heart of hearts, does the Minister believe that putting women through such trauma and humiliation is worth it? The rape clause must be scrapped.

I will not be content, though, with solely removing the rape clause, because doing that would offer no protection to families either. The two-child policy must go too. Women’s Aid, the Child Poverty Action Group and the StepChange debt charity all believe that the policy runs counter to the Government’s much-vaunted family test and produces a perverse incentive for families to separate or for single parents to forgo entering new relationships.

The Government have stated that twins and multiple births will also be protected, but I have discovered that that is true only if the twins come after a single birth. According to the Government, people who have twins first have had their lot. That is despicable.

The letter I received from the Chief Secretary to the Treasury on 30 September stated that the Government’s intention was that

“all families—those in receipt of benefits and those supporting themselves solely through work—will be faced with the same sorts of financial considerations when making decisions about having more children”.

Aside from sounding as if it has come from some kind of totalitarian regime, that statement is absolute nonsense. Quite evidently, not all families start from the same point, but all families are valuable and worthy of support. The state has a duty to protect the most vulnerable among us.

The Chief Secretary to the Treasury is also quite wrong in his assumptions about those claiming tax credits. Some 63% of families who currently receive tax credits for a third or a subsequent child are in work. They are the very “just managing” families that the Prime Minister referred to on the doorstep of Downing Street. Will she make good on her commitment through deeds and not just warm words? Pursuing the two-child policy would pull the rug from underneath the very families she claims to want to protect.

The two-child policy is completely disproportionate. The Child Poverty Action Group notes that 42% of those who claim child tax credits have only one child, 36% have two children, 16% have three children and only 7% have four or more children. The policy will have a devastating impact on those families and their income but a very limited effect on Treasury coffers.

The Chief Secretary to the Treasury’s claim about people

“making decisions about having more children”

fails to recognise that perhaps when a family had their children, they were well able to afford them. I also doubt that many families make life decisions solely on the basis of their future tax credit income. Is this the thin end of the wedge from the Government? Life is not that simple. It could take only sudden illness, the death of a partner or changes to circumstances that could not reasonably have been foreseen to plunge a family into a situation in which they might need to claim tax credits. The third child that we are speaking of already exists and needs to be cared for. The extra support that tax credits provide could make the difference that gives that family enough food to eat or the ability to pay their bills. Providing for people in such situations is the very essence of why social security exists.

Evidence that I have received from StepChange demonstrates that if the two-child policy were applied to their current clients who have three or more children, 90% of those families would have absolutely no money left at the end of the month. The charity fears that, faced with mounting bills, unexpected everyday expenses and other commitments, those families will become extremely vulnerable to going into unmanageable debt. The cost of the bankruptcies that will follow will then end up being passed on to the state. StepChange’s research says that the average client that it deals with would be £327 worse off per month under the Government’s plans.

The policy also has very serious equalities implications, which the Government have not addressed at any stage. Concerns have been expressed to me by the Interlink Foundation, which represents the Orthodox Jewish community and which strongly believes that the policy will perpetuate disincentives to work for families with three or more children, as any additional earnings would reduce their entitlements. It will also make it impossible to achieve the Government’s aim of being better off in work. Interlink points out the substantial differential impact on religious communities, where reproduction, use of contraception and family size can be determined by beliefs and prevailing cultures, which the Government do not appear to have taken into account. According to Interlink’s figures, 52% of Jewish families have three or more children. For the Muslim community, the proportion is 60%. That stands in stark contrast to the population as a whole, out of which only 30% of families have three or more children. I am shocked that the Government have not addressed such a clear equalities issue.

It has been said by no less than the former Prime Minister—perhaps the Minister will repeat these claims today—that I am endlessly whinging, and that the Scottish Government now have the powers to deal with this issue. Those who say that are being extremely misleading, and also unfair to women and children in the rest of the UK, with whom I express my solidarity. The powers being transferred by the UK Government do not allow us in Scotland to set the eligibility criteria for child tax credits. Tax credits are a reserved benefit, and our Government in Scotland should not have to pay for the UK Government’s regressive policies. We have already spent £55 million on mitigating the hated bedroom tax. I would rather see the Scottish Government making positive choices, with all the powers of a normal Parliament, supporting families and lifting people out of poverty.

[Dan Jarvis (Barnsley Central) (Lab)]

The hon. Lady is making a powerful speech and I very much agree with the argument she is advancing. I am pleased that she mentioned the Child Poverty Action Group; I pay tribute to the work it is doing on this matter. Does she agree that if the Government are determined to pursue such a punitive policy, at the very least they should publish an analysis of its impact on child poverty levels?

[Alison Thewliss]

I absolutely agree. The United Nations suggests that impact assessments should be carried out on policies that affect children. Such an assessment appears not to exist for this policy.

The Scottish Government can provide top-up benefits where someone is already eligible, but not where they are not. There is also a gap: the two-child policy and the rape clause come into force early next year, but it is unlikely that the full range of social security powers will be operational in Scotland until 2018.

I shall conclude by speaking briefly about our obligations to protect and support children. I contend that the limiting of the child element of tax credits and universal credit to the first two children in a family runs counter to our obligations under the United Nations convention on the rights of the child. We are obliged by article 2 of the UNCRC not to discriminate on the basis of birth, but the two-child policy clearly does so, by apportioning value according to when the child was born into a family. We are obliged under article 3 to make the best interests of the child a primary consideration, but the two-child policy and the rape clause stigmatise, and say that the Government do not value all children equally. They also limit working parents’ ability to feed and care for the children they already have. We are obliged under articles 26 and 27 to provide access to social security and an adequate standard of living, to assist parents in the bringing up of their children. The two-child limit completely undermines that right.

The UN Committee on the Rights of the Child and the UN Committee on Economic, Social and Cultural Rights have both recently investigated the UK for its approach to welfare reform and highlighted in very strong terms their concerns about the Government’s austerity agenda and the cuts to tax credits that have already happened. In its July report, the UN Committee on the Rights of the Child stated that it was

“seriously concerned that…Recent amendments to the Tax Credits Act (2002), the Welfare Reform Act (2012) and the Welfare Reform and Work Act (2016) have limited the entitlement to child tax credits and social…regardless of the needs of the households”.

That is absolutely appalling. In their report to the UNCRC, the UK’s Children’s Commissioners said that

“measures should not discriminate against children from particular groups for example children of lone parents, children with disabilities or children from large families.”

The rape clause and the two-child policy do discriminate in those ways.

The two-child policy and the rape clause fundamentally punish families for the circumstances they are in— circumstances that may be beyond their control and in which children already exist. I urge the Minister and the Government to act in the best interests of children, as our international commitments make clear they must. I urge them to stand up for the most vulnerable in our society. Families in situations of poverty, who are working hard and doing their best, are extremely vulnerable. Women who have been raped are extraordinarily vulnerable. The Government need to think incredibly carefully about how they wish to pursue these policies, if they wish to pursue them at all. I call on the Government to protect the “just managing”—those people they say they value and wish to support—and to scrap the abhorrent rape clause and the pernicious and discriminatory two-child policy.

16:14

[The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Glasgow Central (Alison Thewliss) on securing the debate. She is right to point out that she has been determined in her pursuit of this policy. She has certainly taken every opportunity to raise the matter with Ministers. I wish, though, to put on the record my support for my noble Friend Lord Freud, who has worked tirelessly on this matter. I entirely reject the hon. Lady’s portrayal of him, and believe that she has deliberately given an inaccurate and misleading account of a private meeting.

This debate explores the limitation of tax credits to two children, which was legislated for under the Welfare Reform and Work Act 2016. I know that the hon. Lady has a strong interest in this topic, and that it is something she has raised in the past. I welcome the opportunity to set out the purpose of the policy. In so doing, I hope that I can allay many of her concerns and particularly underline that we are absolutely committed to ensuring fairness for all families.

The welfare reforms that the Government have introduced are about much more than simply money. Our reforms seek to bring about a positive change in our nation. They are about putting welfare spending on a sustainable footing, but it is important to do that in a way that protects the most vulnerable. As the Prime Minister herself has said, we will fight against the injustices we see in our society.

The current benefits structure, which adjusts automatically to family size, is unsustainable, and it is not fair to the taxpayer or to families who support themselves solely through work and necessarily make difficult choices. That is why we have announced that, from 6 April 2017, families with third and subsequent children born after that date will no longer be able to claim additional support through child tax credit and universal credit. The policy will also apply to future new universal credit claims from families with more than two children.

[Dan Jarvis]

Is the Minister prepared to commit today to publishing an analysis of the likely impact of the policy on child poverty levels?

[Caroline Nokes]

I shall address the impacts of the policy later in my speech.

The Government believe that the policy strikes the right balance between protecting the vulnerable, such as by retaining extra support for families with disabled children, and encouraging families who receive tax credits to make the same financial decisions about the number of children they can afford to support as those families who support themselves solely through work do. Parents will continue to receive help with the cost of raising children through the payment of child benefit, which will continue to be paid regardless of family size.

[Alison Thewliss]

Does the Minister accept that there is a fundamental contradiction in the Government’s saying that they will pay child benefit for as many children as are in a family but not tax credits?

[Caroline Nokes]

No, I do not accept that there is a contradiction. Later in my speech I hope to be able to set out why we have been so specific when it comes to child tax credits.

The separate disability element of child tax credit will remain payable for all disabled children. I should also be clear that those families already receiving child tax credit for children born before 6 April 2017 will continue to receive it. It is important that I pick up on the hon. Lady’s comments about the 63% of families with three or more children who receive tax credits and are in work, whom she said would be affected. She said that it would be pulling the rug out from underneath them, but that is far from the case, because the families she identified—the 63%—already have those children. We are not talking about retrospectively applying the policy; it is for children born after 6 April next year.

The reforms to tax credits cannot be considered in isolation. The Government are committed to making life easier for working families. We want to support parents claiming benefits to get into and stay in work after having a child. From September next year, the Government are extending free childcare entitlement from 15 hours to 30 hours a week for working parents of three and four-year-olds. Alongside the introduction of tax-free childcare, that support gives parents more freedom when making decisions about whether and, indeed, when to return to work.

[Alison Thewliss]

Does the Minister accept that there is a further inconsistency? Tax-free childcare is not limited to the first two children within a family; it is for all children within a family, unlike this limitation that she is seeking to impose.

[Caroline Nokes]

The hon. Lady may not like the response that I keep giving but I will continue to give it. The reality is that the Government want working families and those in receipt of working tax credits to be on the same footing and to make the same difficult decisions. I have no doubt that there will be people in this Chamber who have made difficult decisions about how many children that they wish to have and can afford to have. This issue is about fairness for all families.

Of course, as the hon. Lady will be aware, roll-out of universal credit, the Government’s flagship welfare reform, is continuing. Universal credit is already transforming lives across the country, with those in universal credit moving into work significantly faster and staying in work longer than under the old system. We are now expanding universal credit to all claimants across the country, so that everyone has the chance to benefit from the dignity of a job, the pride of a pay packet and the security that comes from being able to support their family.

The evidence shows us that universal credit is working. As I say, people move into work faster than before. For every 100 people who find work under the old jobseeker’s allowance system, 113 universal credit claimants have found a job. People on universal credit spend more time than before looking for a job—in fact, around 50% more time—and they are actively looking to increase their hours and their earnings.

More than a quarter of a million people are now receiving universal credit, with some 12,500 new claims every week. We have already launched universal credit full service in Musselburgh and Inverness, and next month we are rolling it out to Kirkintilloch, Port Glasgow and Greenock. I have had the pleasure of visiting both live service and full service jobcentres in Barnsbury and Newcastle. I was impressed by what I saw, including the commitment of the work coaches, and indeed their sensitivity and ability to respond to the different circumstances and the different needs of individual claimants.

[Alison Thewliss]

indicated dissent.

[Caroline Nokes]

The hon. Lady shakes her head, but I extend to her an invitation, which I am sure she has already received from others, to visit a local jobcentre, to see for herself how our reforms are working in action.

We also recognise that some claimants are not able to make the same choices about the number of children in their family as others. The Government have been clear that there will be exemptions for certain groups, and it is worth outlining these groups in some detail. Exemptions apply to third or subsequent children who are part of a multiple birth, where there were previously fewer than two children in the household; to children living long-term with friends or family and who are at risk of entering the care system; or to those children born as a result of rape.

[Peter Grant (Glenrothes) (SNP)]

Will the Minister give way on that point?

[Caroline Nokes]

I would give way to the hon. Gentleman but there are many really important points that I would like to get through in the time allocated to me, and I have already taken a number of interventions from the hon. Member for Glasgow Central and one intervention from the hon. Member for Barnsley Central (Dan Jarvis).

Today, I am pleased to be able to inform hon. Members that, as part of the Children and Social Work Bill, the Government have given further consideration to the position of children who are being adopted from local authority care, and we will extend the announced exemption to all third or subsequent children in these circumstances. This change will support families who care for our most vulnerable children, and they will be provided for, along with the other exemptions, in regulations.

Of course, we are aware that these exemptions are sensitive and complicated, and we want to make sure that we get this process right. That is why we are consulting with a number of stakeholders from charities, women’s representative organisations and indeed religious groups.

The Government recognise that women who have a child born as a result of rape face extremely difficult circumstances. That is why we are considering very carefully the best possible way to deliver this exemption. I want to be very clear that we are not looking to rely on or to pre-empt decisions within the criminal justice system. Instead, we are looking to ensure that claimants receive the help they need at the time they need it, using criteria that are straightforward to apply and not overly intrusive, while providing the right assurance to Government that the additional support is going to those for whom it is intended.

Our current thinking is that a third-party evidence model offers the most promising approach to strike the balance we need to achieve. This is a model where a woman can request the exemption by engaging with a professional third party, such as a healthcare professional or a social worker. This approach would not be new for the benefit system. For example, within universal credit we use a similar model for the relaxation of the requirements to be available for work in cases of domestic violence, where the evidence required is the reporting of abuse to a third party acting in an official capacity, and that model was developed with input from stakeholders. We recognise the sensitivity of this exemption and the need to get advice from experts, so we have sought views from stakeholder groups involved in supporting victims of rape to help us to develop this exemption.

The hon. Member for Glasgow Central raised a large number of issues, and I will set out the Government’s vision for a sustainable welfare system that supports working families and encourages them to make similar decisions to those made by people who support themselves fully through work. I will also respond to the intervention from the hon. Member for Barnsley Central regarding the impacts of the policy of limiting support to two children in tax credit and universal credit, while meeting our obligations as set out in the public sector equality duty. The Government have set out our assessments of the impacts of the policy as part of the Welfare Reform and Work Act 2016, on 20 July 2015, in a published impact assessment.

The Government are cutting income tax for more than 30 million people this year and we took 4 million of the lowest paid out of income tax completely during the last Parliament. By 2018, a typical basic-rate taxpayer will pay more than £1,000 less in income tax than they did in 2010. Universal credit now provides for 85% of childcare costs for families with two children; this could be worth £13,000 a year.

The number of people in work is at a record high. With the national living wage, we have given a pay rise to 1 million of the lowest paid, and we have overhauled the welfare system so that it pays to work rather than to claim benefits. The number of workless households has fallen by nearly 200,000 in the past year and now stands at 3.1 million, which is the lowest figure since records began. The number of children living in workless households has fallen by 557,000 since 2010, and there are now 100,000 fewer children in relative low income compared to the number in 2010. In the hon. Lady’s own constituency of Glasgow Central, the employment rate has increased by 2.9 percentage points since 2010, to 62.9% in March 2016. This reflects the fact that there are now 2,000 more people in work in her constituency than there were in 2010. The Government are committed to ensuring that those in work are paid a fair wage and have opportunities to progress and to achieve their potential.

The Smith Commission agreement was very clear that universal credit should remain a reserved UK Government benefit, so that there is a clear and consistent offer of vital support to people in England, Scotland and Wales. Where the UK Government decide to make changes to reserved benefits, such as eligibility criteria, or to how payments for dependent children are calculated, those changes will apply equally across England, Scotland and Wales.

However, the Scotland Act 2016 gives the Scottish Parliament and Scottish Ministers significant new welfare powers. Not only can they now work with us to change certain defined elements of universal credit, such as the way that the housing cost calculation is made, but they will also get responsibility for a range of existing UK Government benefits, which were worth £2.7 billion in Scotland in 2014-15.

Crucially, the Scottish Government also now have new, wide-ranging powers to pay cash top-ups to anyone receiving a reserved benefit, or to introduce brand new benefits in devolved areas. This means that the Scottish Government can tailor the welfare system in Scotland, to meet both their own political aims and local needs.

In conclusion, I would like to reassure hon. Members that the Government are committed to achieving these welfare reforms. Putting welfare spending on a sustainable footing, and in a way that protects the most vulnerable, is vital as we progress to a society that will give working families more control over their lives. It will also ensures fairness for all families—both those who are paying for, and those who are receiving support from, the welfare system.

The hon. Member for Glasgow Central is right to raise the issue about the rape exemption; she has made her point and she has made it repeatedly to different Ministers. However, the Department for Work and Pensions is determined to address this issue with fairness and sensitivity, to make sure that women have the opportunity to report in a safe environment to trusted professionals. It is critically important that we extend that opportunity to them and that we do not remove the exemption, because I think that would be a very dangerous and unfair thing to do.

However, it is important that we instil within the benefits system a fairness for all families, for those who make choices about how many children they can afford to have, and that will apply to those who are working and supporting themselves solely through work, as well as to those who are in receipt of tax credit. Our priority remains to help working parents by providing them with the support they need to get on in life, and in doing so we will make life easier for all families.

Question put and agreed to.

Leaving the EU: UK Tourism

Wednesday 12th October 2016 Westminster Hall

14:20

[Nigel Huddleston (Mid Worcestershire) (Con)]

I beg to move,

That this House has considered the potential effect of the UK leaving the EU on tourism.

It is a pleasure to serve under your chairmanship, Mr Howarth, and I am grateful for the opportunity to introduce this debate today. I thank all those individuals and bodies who have sent information relating to the debate to me and others.

Tourism is the UK’s fourth largest industry and our fifth biggest export earner. It contributes £127 billion to the UK economy and sustains more than 3 million jobs—about 10% of the workforce. It is growing fast. The industry incorporates more than 200,000 small and medium-sized enterprises and more than a quarter of all new jobs created since 2010 have been in the hospitality and tourism space. Yet the contribution of the tourism industry is not always reflected in the attention it receives in this place.

It is important to differentiate three key sectors when discussing the industry: domestic, which is Brits holidaying in Britain; inbound, which is overseas visitors coming to Britain; and outbound, which is Brits travelling overseas. There is also aviation, which traverses all three sectors. The three sectors are impacted by Brexit in different ways by labour market implications, regulations and, in particular, the recent weakness of the pound. It may be argued that, overall, the implications of Brexit for the domestic and inbound tourism market are generally good, while they are generally bad for the outbound and aviation sectors—but it is not quite as simple as that.

I turn first to the good news, on the inbound sector. Last year, a record 36.1 million overseas visitors came to the UK. They spent a record £22.1 billion. The 2016 figures show a continuation of that trend, with 21.1 million overseas visitors between January and July, which is 2% up on last year. Visitors from Europe play a key role in our inbound travel industry. More than 60% of overseas holiday visitors and more than 70% of business visitors to the UK were from the EU, including 0.9 million from Italy, 1.4 million from Germany and 1.9 million from France. Clearly, any additional burdens or restrictions on travel to the UK from Europe will have an immediate and negative impact on visitor numbers. Visa-free access from Europe for short leisure and business trips is certainly the desired long-term aim from a tourism perspective. One of the plus points of Brexit and the weak pound is that it makes visits to the UK comparatively more affordable, yet even with the weaker pound the UK remains a very expensive place to visit by global standards and we continue to lose market share of the global tourism market.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Gentleman on securing this important debate. In the tourism industry in Brighton, people are deeply concerned about leaving the EU. In terms of their businesses, does he agree that it makes even more sense now for the Government to commit to cutting VAT on tourism services in order to create more of a level playing field? So many of our European competitors have much lower VAT on their tourism businesses. Now is the time for the UK to commit to the same.

[Nigel Huddleston]

I agree that that is definitely worthy of consideration, as are alternatives such as looking at the VAT threshold. There are various campaigns along those lines and I will come on to that subject later.

Our decision to leave the EU was a shock to many of our friends in Europe and it could be misinterpreted as meaning we are less welcoming of foreigners. Nothing could be further from the truth and we must continue to show that we are a welcoming country. Research from VisitBritain has shown that we can be very effective at marketing our country overseas and the recent, highly successful GREAT campaign had an incredible return on investment.

[Mr Alan Mak (Havant) (Con)]

I congratulate my hon. Friend on securing the debate. He is a strong voice for tourism in his own constituency and in this House. During the summer, I visited Hong Kong to promote Havant-based businesses. I met the British consul general, who is charged with deploying the GREAT campaign in that region. Will my hon. Friend join me in urging the Minister to continue the deployment of that campaign to promote Britain as a visitor attraction?

[Nigel Huddleston]

I could not agree more. The return on investment for the campaign was £23 for every £1 spent, which is compelling. There is a good argument for increasing spending on VisitBritain, the GREAT campaign and also on VisitEngland. The Government’s introduction last year of the Discover England fund—a £40 million, three-year programme that successfully attracted a large number of high-quality bids—was also welcome, and we should consider expanding that.

The UK tourism sector is highly dependent on overseas workers, not least in London, where 70% of those working in the hospitality sector are EU migrants. Those employees actively contribute to the UK economy and provide a high-quality experience to our visitors. The Government need to provide reassurances to those people that they are welcome and valued, and that it is the Government’s intention that their right to stay will be unaffected by the referendum decision.

On the domestic tourism market, in 2015, domestic visitors spent more in Britain than ever before. Some £19.6 billion was spent by British residents on overnight trips in England alone, and more was spent in Scotland, Wales and Northern Ireland—I must make sure I get them all in. The number of domestic trips exceeded 100 million, which is 11% higher than in 2014. I am proud to say that my own region, the west midlands, saw the biggest growth, with overnight trips up 22% and spending up 26%. A weak pound will make a UK staycation an even more attractive proposition, but that may be temporary. As the hon. Member for Brighton, Pavilion (Caroline Lucas) suggested, cutting VAT on tourism and other options should be carefully considered to sustain that growth in the long term.

I am sure many colleagues will extol the virtues of their own patches in their speeches. I will turn my attention to the outbound and aviation sectors, where the outlook is perhaps a little more challenging.

Outbound tourism is an often overlooked part of our tourism economy, but it employs more than 215,000 people in businesses, including tour operators such as Thomas Cook and TUI, travel agents and airlines such as Easyjet and Monarch. UK residents made an astonishing 65.7 million visits abroad in 2015, 9.5% more than in 2014. Again, our links with the European Union are very strong. Some 76% of holidays abroad and 68% of business trips were to the EU. In 2015, 3.5 million Brits visited Italy, 8.8 million visited France and an incredible 13 million visited Spain. The weakness of the pound means that holidays overseas are inevitably going to cost more next year than this year and last year, and Brexit brings some additional uncertainties for the outbound sector. Some of the concerns for consumers include what will happen to roaming fees and the European health insurance card, passenger rights, as well as the issue of the EU package travel directive, which offers consumers protection in case of insolvency or where there is a failure to provide contracted services. I would welcome the Minister’s comments on how the Government intend to deal with those matters as we exit the EU. The unfortunate collapse of Low Cost Holidays this summer has made clearer than ever the importance of protections such as the Civil Aviation Authority’s air travel organisers’ licence protection scheme.

The UK has the largest aviation market in Europe and the third largest network of routes in the world, behind only the United States and China. It is vital that the UK aviation sector retains its place as a global leader and that we maintain the lower prices, better service and greater choice that aviation liberalisation has provided to British consumers. We need to aim for new aviation agreements as quickly as possible and to maintain the current market access that gives our airlines the right to operate air services both within and beyond Europe. We should be aiming to convince the 27 remaining members of the EU that it is in their interests, as much as ours, to maintain the aviation links that play such a key role in the prosperity of all our nations.

There is no getting away from the fact that the access the UK currently enjoys comes from our membership of the EU. That includes access not only to the EU market, but to that outside Europe, as the UK benefits from being part of the EU’s aviation agreements with other countries, including, crucially, the EU-US open skies agreement. Unless the Government reach new agreements on maintaining market access, our airlines will have no legal right to operate services, and there are no World Trade Organisation minimal alternatives to fall back on in this sector. The UK might also be able to review air passenger duty on flights. Our APD is already one of the highest in the world, and it significantly adds to the cost of flights.

Clearly, there are both challenges and opportunities for the tourism industry as the UK exits the European Union. Given the overall economic contribution of the tourism sector, it is vital that the Government pull what levers they can to protect jobs and to take advantage of the window of opportunity that the weak pound brings to attract even more visitors to the UK.

The Minister will be familiar with many of my policy asks. I believe that we must make a decision about airport expansion in the south-east quickly and start negotiations on aviation deals, access and landing slots as a matter of urgency. We should carefully review air passenger duty and the cost and processing of multiple-entry visas. We should review all EU regulations, such as the package travel directive. We should revisit and reconsider reducing VAT on tourism, and we should consider increasing the budgets of VisitEngland, VisitBritain and the Discover England fund. We must continue to find ways to attract visitors outside London, where 50% of all inbound tourism money is spent, and get more tourists into our beautiful countryside and the regions.

Those are lots of asks. To be fair, the Government are taking tourism seriously. I was very pleased indeed that one of the first publications of the new Government under the new Prime Minister was the “Tourism Action Plan”, which updated the five-point plan that David Cameron announced within weeks of the 2015 election. I also welcome the fact that cross-departmental efforts are being made to grow tourism. I hope that, through this debate and further such discussions in this place and with industry, we will be able to formulate a positive future for tourism outside the EU, but remain very much open to Europe and, indeed, the world.

[Several hon. Members rose—]

[Mr George Howarth (in the Chair)]

Order. The brevity of the hon. Gentleman’s speech is very helpful because it means that at least one or two more colleagues will be able to get in, so I congratulate him on that. To get in everybody who has expressed an interest in speaking, I am reluctantly going to have to impose a time limit of three minutes per speech. If Members take interventions—they are perfectly at liberty to do so—I may, during the course of the debate, have to consider reducing that time limit still further.

16:42

[Ms Margaret Ritchie (South Down) (SDLP)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing the debate. He and I co-chair the all-party parliamentary group for the visitor economy, and I know that he has a background in tourism and an abiding interest in it. He raised various issues. The all-party group has already undertaken an inquiry into apprenticeships—in particular, the apprenticeship levy—and we have noted the deficit in training for chefs in the hospitality industry, which needs to be pursued in this post-Brexit negotiation phase. We will also look at the issue of coastal economies.

The hon. Gentleman mentioned the issue of air passenger duty. As a representative of a constituency in Northern Ireland, I would very much like us to compete with the Republic of Ireland, where air passenger duty is at 0%. I want an equivalent level in Northern Ireland to attract more visitors to sample our historical sites. Heritage tourism is of particular importance to us. We also want a reduction of VAT on tourism because, again, we are competing with the Republic of Ireland. VAT on tourism in the Republic of Ireland is levied at 9%, whereas ours is 20%.

In the post-Brexit situation, there is the possibility—although I hope not—of an EU border on the island. I do not want to see that happening, because that could have further detrimental consequences for our tourism industry. In my constituency, tourism is a catalyst for economic development, sustaining jobs and creating new ones, because manufacturing does not exist to the same extent as it does elsewhere.

I fear that the priority for the Northern Ireland tourist sector after the referendum will be damage limitation, rather than seizing new opportunities. Contrary to the negative characterisation of our tourism industry by some Brexiteers—I am simply stating a fact—the tourism sector in Northern Ireland was already creating new opportunities and opening itself up to a wider audience before the referendum took place. We benefited considerably from the European funding mechanisms that were in place on a cross-border basis. Some areas were marketed through those mechanisms. In fact, the island of Ireland, north and south, is marketed through Tourism Ireland. Therefore, we want all forms of mitigation to be pursued, we want to retain the Interreg funding mechanisms that were dedicated to tourism development and tourism projects, and we want to develop our existing tourism products, including our Christian heritage, our general heritage tourism and our special landscape quality. In the negotiations, we want the Government to take into account our unique situation, in terms of tourism development, and we do not want to see a hard border.

16:45

[James Heappey (Wells) (Con)]

I congratulate my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate. In the main Chamber of the House of Commons this afternoon the referendum campaign is being rerun, so it is nice that in Westminster Hall we are looking at what the threats and opportunities of Brexit are for this important industry. It is also great to see the south-west so well represented. It just goes to show how important tourism is to our region, and that we are indeed the best region to visit in the United Kingdom, if not the world. It is a pleasure to serve under your chairmanship, of course, Mr Howarth.

I rise to speak in two capacities: first, as an MP for a constituency that has some fantastic tourism opportunities and for which the visitor economy is hugely important; and, secondly, as the chair of the all-party parliamentary group for the UK events industry. Both roles have effectively the same demands. The challenge of Brexit for the hospitality industry and the events industry is that they have increasingly relied on a migrant workforce. The potential that the workforce will be less available is challenging to many businesses in our sector.

Another challenge, particularly for the events industry, pertains to business travel, and meetings and conferences that are hosted in the United Kingdom. If we make it less easy for our European neighbours to visit us, we must balance that by putting in place a more permissive visa regime for business travellers from the emerging markets, which we are hoping to open up with our free trade agreements with the rest of the world. It is hugely important that we get that right so this incredible place for hosting business travel and tourism alike is somewhere that people can come to easily. When they arrive, there must be a quick and easy immigration process so that their first experience of the United Kingdom is not one of hassle.

In addition, the tourism and events industries in the UK must be able to access European-wide supply chains. Those industries are interconnected across the European Union, and there is a real danger that, if we were to leave the free market, those supply chains would no longer be available to us. It is important that, as an industry, we say that that needs to be addressed. Where supply chains exist in the EU and UK companies organise events or send tours into the European Union, they should be given all the advantages of the free market, even if the Government’s choice is that we do not remain in it.

I have set out several key threats, but there are, of course, opportunities. More than anything else, we must ensure that the UK continues to be a world-class destination for leisure or business, so that, whatever the impact of Brexit may be, we counter that by being a brilliant place to come. In closing, there are a couple of things that I think the Government should seek to do—

[Mr George Howarth (in the Chair)]

Order. I call Corri Wilson.

16:49

[Corri Wilson (Ayr, Carrick and Cumnock) (SNP)]

Almost 1.5 million visitors arrived in Scotland from the European Union last year, and spending by tourists in Scotland contributes about £6 billion to Scottish GDP. We have in the region of 15,000 tourism-related enterprises, accounting for almost 8% of employment in Scotland. What we do not have is certainty. Despite years of bickering between the factions in the Conservative party, despite promises on the sides of buses from leave campaigners, and despite almost four months of pondering by the Government since the referendum in June, we still have no idea what Brexit means.

The Prime Minister is keen to emphasise that “Brexit means Brexit,” as if that statement carried any meaning. It does not. It seems that every day there is another Tory statement that contradicts the last. Will it be soft Brexit or hard Brexit? Will we retain membership of the single market or just access to it, and on what terms? Will there be hard borders? Will European tourists need visas? Will European nationals living, working and paying taxes here in the UK be told to leave? We still do not know what form of Brexit the United Kingdom Government seek to pursue, what they hope to achieve in their Brexit negotiations or what the rest of Europe will be inclined to offer us.

The tourism industry in Scotland and across the UK is facing unprecedented uncertainty, not just because of the Brexit vote but because those who campaigned for it and those who have since jumped on the bandwagon have no coherent plan. I suspect that they never had one.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Tourism industries, wherever they are, do not exist in a vacuum but depend on other industries. For example, the food and drink industry is supremely important to tourism in my constituency, and that industry has long had protection from the EU under product designation orders. Does the hon. Lady agree that that is the sort of detail that we need to hear about from the Government?

[Corri Wilson]

Yes, absolutely. That proves what a complex situation we are in, and we need some answers.

Office for National Statistics figures suggest that Brexit could create a huge financial barrier to businesses and tourism if visa charges are levied on travel to Scotland. If EU visitors to the UK have to start shelling out £87 a pop for a standard short-stay visitor visa, how many will decide to stay on the other side of the channel? Although Scotland has much to offer, long, hot, sunny days are not our biggest draw, so we need to make it easy for holidaymakers to choose us, not put obstacles in their way. If the Tories decide that we do not get to keep the benefits of free travel for our European neighbours, the resulting financial barrier could have dire economic consequences for the Scottish tourism industry.

Scrapping the free movement of people will have an adverse impact on the workforce of our tourism industry—an industry that employs in excess of 25,000 EU nationals in Scotland. Such migrants make a valuable contribution to Scotland and are an important part of our future; they both contribute to sustainable economic growth and mitigate the effects of demographic change. Scotland’s rural economy in particular benefits from migrant workers from other EU countries. The new Prime Minister’s first commitment should have been that EU citizens would have the right to remain in the UK, but it seems that she is content to use them as a bargaining chip. It is crucial for businesses and communities across rural Scotland and the tourism sector that the UK Government provide guarantees on the residency status of EU nationals living in Scotland.

In these uncertain times, we in Scotland are working hard to support and promote economic stability and reassure EU nationals who have chosen to make Scotland their home that they remain welcome. The Scottish Government have been engaging with the tourism sector about what Brexit may mean for both EU visitors and the many EU citizens who are employed in the sector. We are committed to supporting the tourism industry by delivering a 50% reduction in air passenger duty. Tourism is worth billions of pounds to Scotland’s economy and is hugely important to local communities such as mine in Ayrshire, the home of Burns, which depends on the jobs and investment that tourism brings. It is shameful that the UK Government’s lack of clarity and direction is creating such uncertainty and instability and placing barriers in the path of that vital industry. They need to act now to reassure the tourism sector.

16:53

[Steve Double (St Austell and Newquay) (Con)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate.

I believe it was no coincidence that in July 2015, the former Prime Minister, David Cameron, chose to come to the Lost Gardens of Heligan in my constituency in mid-Cornwall to launch the Government’s tourism strategy. Tourism is clearly vital to Cornwall and its economy; it represents around 15% of our local economy—31,000 jobs and 3,000 businesses—and many more businesses in the supply chain support the industry. It would be difficult to overemphasise the importance of tourism to the Cornish economy. It is therefore vital that we consider the effect of Brexit on tourism and Cornwall’s future.

The initials signs have been positive. Virtually every tourism-related business that I have spoken to this year—whether in Newquay or places such as Mevagissey or Fowey—has reported that it is having a positive year, and some have actually said that they are having a record year. That is probably to some extent down to the “Poldark” effect, and we are grateful to the BBC for its weekly primetime advert for Cornwall on Sunday evening television, but I suspect that a lot of it is more to do with the value of the pound, which has encouraged UK tourists to take staycations. Cornwall is clearly one of the destinations of choice for holidays in the UK, but it also attracts visitors from overseas.

As we consider our position on leaving the EU, it is vital that tourism is put at the heart of our renegotiation, and we need to do more to consider inbound tourism to the UK as part of our international trade. It is an export, and we need to support it. Now is the time to invest more in promoting the UK as a tourist destination for overseas visitors.

I add my voice to some of the points that my hon. Friend made about the importance of aviation in our negotiations on leaving the EU. The current situation makes it even more vital than ever to make a decision on airport expansion in the south-east and to get international and domestic connections. We must ensure that we negotiate aviation agreements before we leave, because it is vital that we have continuity; we cannot afford not to have aviation agreements in place for just one day.

There are clearly both challenges and opportunities for the tourism industry as we leave the EU. In conclusion, I would like to invite all hon. Members to stay in the UK and come on holiday to Cornwall next year.

16:56

[Deidre Brock (Edinburgh North and Leith) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate.

I am surprised that no thinking or planning appears to have been done in Whitehall about the effects of leaving the European Union on tourism. Mind you, there does not seem to have been any Whitehall planning for the effects of Brexit on anything. Apart from the possibility of visas being introduced to stop those pesky Europeans sneaking in here without telling us, having holidays and spending money, we are only now starting to see the outcomes of the leave vote.

I assume that we all got a briefing from the Performers’ Alliance—I declare an interest as a member of the Performers’ Alliance all-party parliamentary group—that laid out its fears about performers not being able to move freely and tour after Brexit. The same thing will happen in reverse; a closed border will mean that cultural tourism will be damaged and fewer performers, artists and musicians will come here. The restrictions being imposed by UK Visas and Immigration on performers from around the world are already having an adverse impact on my constituency. Edinburgh, of course, plays host to the largest arts festival in the world every year, and performers are now regularly being refused visas for the festival. If that gets worse because EU visitors are forced down the same route, our international reputation for high-quality artistic endeavour will be affected.

In 2010, the European Tour Operators Association did some research about the effects of the UK not being in the Schengen visa scheme and concluded that UK tour operators were losing substantial business and turnover. Tourists from furth of Europe were happy to pay for one visa for the 26 Schengen countries but reluctant to pay out more cash for a visa for the UK than they had for those 26 countries. I thought at the time that the same must apply to business travellers. If they are looking for investment opportunities and can travel to the biggest chunk of Europe on one visa, some must wonder why they should pay extra for the UK. The lesson of Schengen is, of course, that free movement of people is advantageous to the economy, and especially to industries such as tourism and culture, which require people physically to move from one place to another. If we cut ourselves off from the 500 million people in the EU, how much damage will have been caused to those industries by Brexiteers?

As the walls go up to build fortress Brexit and we are told to duck and cover while the assembled intellectual might of the leave campaign protects us from foreigners, let us take a moment to think this through. Is it really to our advantage to cut ourselves off from tourists, customers, trade and exchange? Hotels need their doors open to welcome customers, and we need our borders open to welcome tourists. Brexit is doing us a lot of damage already, and the Government have to start looking at ways to mitigate that.

[Mr George Howarth (in the Chair)]

There are two Back-Bench speakers left, and I will then call the Scottish National party Front-Bench spokesman at 5.05 pm, so will the next two speakers try to share what time is left between them?

17:00

[Mrs Sheryll Murray (South East Cornwall) (Con)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) on securing time for Members to discuss this important matter. As he and the Minister will be aware, I campaigned wholeheartedly for the UK to leave the European Union. Tourism is close to my heart as my constituency is, in my opinion, the most beautiful in the UK, attracting thousands of visitors each year. I know, however, that my hon. Friend the Member for Newton Abbot (Anne Marie Morris) would intervene if she could to contest that and say the same about her constituency.

Brexit offers the opportunity to further invigorate our thriving tourism industry by reducing red tape, enabling more diversification and demonstrating that the UK remains open for business and welcomes visitors from around the world. The tourism industry contributed £56 billion in economic output in 2013, and tourism-related industries employ 2.8 million people, which is 9% of all employment. There were 36.1 million inbound visits to the UK in 2015, with London being the most popular destination, attracting 51% of all visits. However, Cornwall remains one of Britain’s most popular tourist destinations outside the capital.

Visit Cornwall’s vital work is underpinned by the Government’s five point plan, as my hon. Friend the Member for St Austell and Newquay (Steve Double) mentioned. I recently spoke to Chinese business leaders and was pleased to learn that enhanced visa services are making a positive impact, particularly as Chinese visitors spend an average of £2,500 each when visiting the UK.

It would be wrong not to acknowledge that some tourism organisations and businesses have concerns about the long-term impacts of Brexit. I understand those concerns, particularly around immigration, taxation and regulation. I will pay close attention to those issues on behalf of my constituents and raise them with Ministers if necessary. I was encouraged, however, when the Secretary of State for Exiting the European Union said that he would protect the rights of EU citizens here provided that Britons in Europe are treated in the same way.

If we all work together, Brexit will enable our wonderful tourism industry to thrive further still. I was encouraged to read in a House of Commons Library briefing paper:

“The attractions management firm, Continuum…although it disagreed with the decision”—

to leave the European Union—

“believed the UK was ‘resilient enough to survive and thrive’”

outside the European Union. I share that confidence.

17:03

[Rebecca Pow (Taunton Deane) (Con)]

I rise to support my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), particularly on his good points about visa-free travel, airport expansion and VAT on tourism. If we can address those issues and take advantage of the weak pound, there are huge opportunities to build on tourism in this country, and it is crucial that we do so. Public relations and promotion will form a big part of what we need to do to up our game.

Tourism is really important in the south-west, bringing in £10.7 billion. In Somerset alone, where my constituency is, it brings in £1.2 billion. It also employs 10% of the workforce. When the whole of Somerset was recently shut because of flooding, the consequences were dire for rural tourism: we lost something like £250 million as a result. We do not ever want to see that happen again, so we do not want an impact of leaving the EU to be that we see no tourists coming. We do not want a knock-on effect as significant as that. We must therefore make tourism, which is already important, even more significant.

I will look at one area that is a great selling point for the UK, and the south-west in particular—garden tourism, which brings £1.4 billion a year into the UK. Just in my constituency we have Cothay Manor and Hestercombe gardens. Hestercombe attracts 100,000 visitors a year, many of whom are from Germany, France, the Netherlands and Belgium. I have worked at that garden, promoting it for tourism, and there are great opportunities to build on that strength, but we must ensure that those visitors can still get here easily.

I stress in particular the importance of the Government building on all their commitments on connectivity. Our visitors have to be able to get from A to B, and I stress to the Minister that we want the injection of funds to continue.

17:05

[John Nicolson (East Dunbartonshire) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing the debate. Whether it is walkers setting off from my beautiful constituency towards the foot of Ben Nevis on the West Highland Way, or those who learn of their ancestors, discover our historic castles, enjoy our renowned food and drink or sample Scotland’s art and museums, Scotland caters for all, the length and breadth of the country.

Tourism is arguably Scotland’s most important industry, as we showcase ourselves to the world. There is significant danger that leaving the European Union will result in unnecessary barriers, which will deter visitors and investment in our country and harm this important industry.

Quite needlessly, the Scottish tourism industry now faces the real possibility of Brexit inflicting long-term damage on a sector that is so vital for Scotland’s economy and sense of self. More than three months on from the referendum, no decision has been made on the single market or the status of EU nationals living in and traveling to the country, while the value of the pound continues to plummet.

European funds are vital to the tourism sector in Scotland. VisitScotland currently draws down £11.7 million in European regional development funds. European funding support for tourism development activities is especially important in rural areas, creating jobs and boosting wealth in peripheral, relatively poor regions. Of course, projects that improve the infrastructure and tourism appeal of locations such as the highlands and islands of Scotland have received assistance from Brussels, not least the new tourist route in northern Scotland, the north coast 500, which is dubbed Scotland’s route 66. Such projects show ways of showcasing Scotland, using the natural and human resources we have to their full potential.

Unlike the United Kingdom Government, the Scottish Government have made it clear that we want EU nationals to live in the country and stay in the country. The tourism and hospitality industry in Scotland employs in excess of 25,000 European Union workers, and having access to a skilled and motivated labour market remains a priority for the industry. We do not want the free movement of people to end.

All the young dynamic people from throughout the European Union who work here could lose their jobs, and the hotel owners and managers would find them difficult to replace. Furthermore, figures from the Office for National Statistics show that Brexit could create a £270 million barrier to business and tourism from charges levied on travel to and from Scotland.

A third of Italians and Spaniards, 30% of Germans and a quarter of French holidaymakers said that a leave vote would make them less inclined to travel to the United Kingdom. Part of the reason why people come to Scotland is the warmth of the welcome, and it is vital that that continues.

Perhaps most worrying of all is the feeling that the United Kingdom leaving the European Union has generated. Increasingly, it feels to many of us that the UK is becoming more insular and less open to outsiders. When the Prime Minister said last week:

“If you believe you’re a citizen of the world, you’re a citizen of nowhere”,

that sent out a strong message to people living here and to potential visitors throughout the world. We on the Scottish National party Benches feel very different, and our message could not be more different: “If you are citizens anywhere in the world, you are welcome in Scotland.”

17:10

[Kevin Brennan (Cardiff West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate, and I thank every hon. Member who has contributed. Some excellent points have been made by the hon. Members for South Down (Ms Ritchie), for Wells (James Heappey), for Ayr, Carrick and Cumnock (Corri Wilson), for St Austell and Newquay (Steve Double), for Edinburgh North and Leith (Deidre Brock), for South East Cornwall (Mrs Murray) and for Taunton Deane (Rebecca Pow), and by the SNP spokesman, the hon. Member for East Dunbartonshire (John Nicolson).

It says something about the significant ramifications of Brexit that we are debating its impact on tourism. One would not normally think a constitutional referendum would lead to us debating the future of the UK tourism industry, so it is quite a surprise that it has come to this, but it shows how important the Brexit vote is to the future of the industry.

As has been pointed out, there has actually been a short-term boost to the tourism industry since the Brexit referendum. Despite the weather over the past few months, tourism in the UK has gone up; visitor numbers from outside the UK have risen since June 23. This July saw a 1% increase compared with the same period last year, while the number of staycations—visitors from inside the UK—has also risen since June. That is important. As hon. Members have said, tourism is an important industry that accounts for 9% of the UK’s employment.

The principal reason for that increase in tourist numbers in recent months is the weakness of the pound, which has been caused by both the impact of the Brexit vote itself and, I am afraid, by the Government’s mishandling of the aftermath of the vote. With each faltering step in their handling of Brexit, the pound has devalued further. Yesterday, its value against the US dollar dropped to below $1.23. On UK visitors who are going to Europe on holiday, one of our colleagues was in Venice recently taking a hard-earned short break away from his constituency, and he told me he was getting parity when exchanging the pound for the euro while he was there.

[Kevin Foster (Torbay) (Con)]

Will the hon. Gentleman give way?

[Kevin Brennan]

I will in a moment. What is not clear—perhaps the hon. Gentleman can clear this up for me—is whether the Government want a weaker pound.

[Kevin Foster]

If we want to talk about how things went over the summer, I must say it was a real spectacle to observe the hon. Gentleman’s own party.

I was actually going to be slightly more positive and constructive and say that one reason why people see places such as Torbay as great places to come to is that we are a safe and welcoming country and do not have some of the issues that exist in other nations.

[Kevin Brennan]

I will come on to that, but I say to the hon. Gentleman that changing the subject because he has a weak argument is not always the most powerful way to make his point. We are talking about tourism and the tourism industry. I praise Torbay—I spent many happy weeks enjoying holidays there as a child and a young man, and it is a wonderful destination.

My question is this: is the new weak pound—trading at parity with the euro in recent days, as I said—now the Government’s economic policy? Following Brexit, are the Conservatives now the party of devaluation? Surely not, because I thought stable, sound money and a strong, stable pound, with the discipline that brings to productivity, was one of the central principles of a Conservative Government. Apparently not. Hon. Members will have heard at Scotland Office questions today—I am sure they were all there—the Secretary of State for Scotland bragging about record numbers of people coming to this year’s Edinburgh Festival as a result of being attracted by the weak pound. Perhaps the Minister will confirm at the end of the debate that a weak pound is Government policy.

The effect on the pound is not the only impact of Brexit. Until the Government decide how freedom of movement is going to be reformed when we leave the EU, and how and whether those measures—[Interruption.] The hon. Member for Torbay (Kevin Foster) is free to intervene again if he wants to, rather than chuntering on from a sedentary position. Until the Government decide how and whether those measures will affect tourist entry into the UK, Britain’s accessibility as a tourist destination carries a lingering question mark, given that 73% of foreign visitors to the UK in 2015 were from Europe. Any uncertainty of that kind left unaddressed is extremely unhelpful. That point has been made by Conservative Members, though perhaps not in the way I would have made it.

Another concerning issue that has been mentioned is the importance of EU workers to the tourism sector. As has been said, tourism-related industries account for 9% of UK employment, and quite a high proportion of those workers are non-UK citizens, particularly in London. The Association of British Travel Agents and Deloitte published a report prior to the referendum outlining the potential consequences of Brexit on tourism, which stated that limits to the sector’s ability to employ people from outside the UK could lead to real difficulties in filling roles. It also found:

“Restrictions on employing EU nationals might thus exacerbate existing skills shortages. Ultimately this could have a detrimental effect on the sectors’ ability to serve consumers at the standard they expect.”

[James Heappey]

I agree with the shadow Minister. One of the advantages of the EU migrant workforce has been to provide a range of linguistic skills in a lot of our hotels and conference venues. If we are going to lose that, we could really do with some better language training in schools to replace it.

[Kevin Brennan]

I hope we are not going to lose it. I think we can have both, and that ought to be our aim going forward. I do not think the hon. Gentleman intended to say in any way that those people should be sent home and that we should, over a period of time, train their replacements. Of course we should improve language skills in our schools, and of course we should get more UK citizens to fill jobs in the tourism industry, but it is equally important that we do not suggest that we do not welcome diversity in our tourism industry in this country.

One problem is that some of the Government’s post-Brexit messaging is potentially damaging to Britain’s blue chip brand. At the Conservative party conference we saw the Home Secretary seriously announce, at least in the headlines, a misguided policy of publicly listing foreign workers. The Government have subsequently clumsily withdrawn that, but we have seen all this before. I have seen this movie many times over: at the Conservative party conference, Ministers announce right-wing policies that deliver plenty of tabloid headlines and claps in the conference hall, but then inevitably row back from that extreme position in subsequent days. The problem is that their message is heard, not just in Britain but overseas.

I am afraid that xenophobic sentiment, at the service of inflamed rhetoric to generate a lurid headline, keep the tabloid editors happy and send out a dog whistle to the right, is an ugly thing. Shame on the Home Secretary for risking Britain’s reputation abroad for hospitality and tolerance for a few moments of glory on the front pages of the redtops. That sort of behaviour not only damages Britain’s brand abroad but ultimately short-changes the British public. In the long run, British tourism will thrive not on the attractiveness of our weather but on the attractiveness of our welcome. It will thrive not because Britain is cheap because of the weak pound, but because Britain is rich in culture, heritage and hospitality. British tourism will flourish not by shrinking to little England slogans but by confidently projecting a greater Britain with a warm and open welcome to visitors to all of its parts—to Wales, to Northern Ireland, to Scotland and to England—often through the gateway of one of the world’s most diverse cities, London.

Coming from Cardiff, I should mention before I finish that the Champions League final will take place there next year, and we hope that the road to Cardiff will lead to many visitors coming from overseas. UK tourism needs greater clarity from the Government on Brexit and clearer messaging that we are open and welcoming to the world, and that we want people from across the world to come here to enjoy our heritage, our countryside, our modern cities and sometimes even our weather, but most of all to feel that they are welcome. Devaluing the pound may work to the tourism sector’s advantage for now, but devaluing our brand as a country will do the opposite. If that continues, it will cause lasting damage to our reputation and to our vital tourism industry.

[Mr George Howarth (in the Chair)]

Before the Minister starts, she may be minded to leave a little bit of time for the mover of the motion to have the last word.

17:19

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)]

It is a pleasure to serve under your chairmanship, Mr Howarth. May I offer my congratulations to the hon. Member for Cardiff West (Kevin Brennan) on his appointment to his new role? I look forward to discussing this incredibly important issue with him on many occasions. I am grateful to my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) for raising this issue and giving me the opportunity to update the House on the position of the tourism sector following the momentous European Union referendum result in June this year.

It is fantastic to see so many colleagues here to talk about the amazing UK tourism sector. The industry’s diversity has been demonstrated by the number of different points raised by Members, in terms of both threats and opportunities. I do not have time to respond to each point in detail, but I hope that my speech will, at a higher level, reassure them that their specific issues have all been discussed.

I want to make a quick point for our colleagues from Scotland and Northern Ireland. They will be aware that tourism is a devolved issue. However, VisitBritain works to promote the whole of the UK, and what a wealth of attractions and visitor experiences it has to market. I recommend that Scottish colleagues in particular look up the Nessie hunting campaign, which was designed especially for the Scandinavian market and is excellent. While I am on this issue, colleagues who said that the budgets of VisitBritain and the “Great” campaign should be increased should feel free to write to the Chancellor and make their cases much more loudly.

As we know, the British people voted to leave the European Union, and the Prime Minister has been very clear that their will must be respected and delivered. The task is now to establish what that means for the UK and its people, which includes the challenges and opportunities currently faced by the British tourism and hospitality industries.

As others have done, I will quickly run through how important tourism is to the UK. The industry contributes more than £60 billion to our economy. In 2015, we saw the greatest number of overseas visits to the UK on record, bringing £22.1 billion into the economy. Domestic overnight spend also hit a record high of £19.6 billion in England, and the industry provides 1.6 million jobs across the country. In short, the sector has been going from strength to strength, and Britain’s tourism industry is likely to see further benefits as travel to the UK becomes more affordable and attractive to EU countries and international markets such as the USA, which is our highest value market. Moreover, domestic tourism and hospitality has seen a boost this summer, with more people deciding to holiday at home. We need to continue capitalising on such opportunities.

Figures released last month show that July was the highest month ever for inbound tourism to the UK, and overseas visitors to the UK spent £2.5 billion in July, which is 4% up on the same month last year. ONS figures also show that it was a record July for inbound visits from EU countries. Furthermore, there was strong growth from North America, including the US—which, as I said, is the UK’s most valuable visitor market—with visits up 5%. Visits from the rest of the world were also up 6%.

Overall international visitor figures from January to July were up 3% from 2015, and Chinese visits showed massive growth of 40% between April 2015 and March 2016 compared with the year before. Just under half of accommodation businesses surveyed after the Easter holidays to July stated that advance bookings were very good, which is a record for the VisitEngland tourism business confidence survey. I think we can all agree that those are encouraging signs.

We should not forget why tourism is so successful in this country. To put it simply, we have a great deal to offer. We have extraordinary heritage, beautiful landscapes, great sporting events and some of the finest museums in the world. That will not change in a post-Brexit world. That is proved by the news that has broken during this debate that we have won the bid to host the 2019 UCI road world championships in Yorkshire. That great sporting event will bring a huge boost to local tourism.

As my hon. Friend the Member for Mid Worcestershire mentioned, we published the Prime Minister’s tourism action plan just before the August bank holiday. The document highlights our stunning scenery, monuments and cultural traditions, which will continue to draw visitors from both home and abroad. Furthermore, it reaffirms our commitment by setting out a series of new initiatives and measures to help Britain out-compete other major tourism destinations, to welcome more international visitors than ever before and to encourage more British people to holiday at home. It is vital to remember that our destinations, attractions and services across the UK will continue to deliver the same high-quality visitor experience to both domestic and international visitors as they always do. No matter what, the UK remains open for business, and we will always offer a warm welcome to our visitors.

[Ronnie Cowan (Inverclyde) (SNP)]

I hear those wonderful figures on tourism across the UK, and I welcome them all, but my concern in Inverclyde is that we welcome more than 100,000 passengers off cruise ships every year. I wrote to the Minister for Immigration to clarify how we will handle visas. His response was, “The Prime Minister has been clear that Brexit means Brexit.” I am afraid that that does not wash with me. Will the Minister shine some more light on this very difficult area? We have the product, but we cannot stop people at the borders and turn them away.

[Tracey Crouch]

I am sure the hon. Gentleman appreciates that visas are a matter for the Home Office, but I can tell him that we work closely on that key issue with our Home Office colleagues. My hon. Friend the Member for South East Cornwall (Mrs Murray) mentioned the new visa scheme between China and Britain, which is working very well, and I am sure we will look at that as a template for the future.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I want to raise the issue of people actually getting here. At the moment, we are part of the open skies initiative, which allows our airlines—particularly our budget airlines—to fly backwards and forwards to Europe and between countries within Europe. If we are outside, is ensuring that we keep that advantage on the agenda?

[Tracey Crouch]

I am delighted that the hon. Lady raised that point, because my very next paragraph answers her question. For the time being, there will be no immediate difference in the way people travel. Travellers are as free to move between the UK and the EU as they were before the referendum. European health insurance cards will remain valid, and the single aviation area remains in place. However, I can reassure her that these issues are all being discussed. If Members will allow me, I will hopefully give them the reassurance they need.

The sector is strong and resilient and has overcome enormous challenges in the past such as incredible flooding in particular areas. The UK will continue to face growing competition from overseas destinations. That has always been the case, but now is the time to think about how we can tackle this even better as we reshape our engagement.

I would like to explain what we are doing within the Department to engage with this important sector. The Secretary of State for Culture, Media and Sport held a roundtable with the tourism sector at the beginning of August to give experts a more prominent voice in policy making and to listen and learn more about the new opportunities and challenges being faced. I followed that up with a Tourism Industry Council meeting last month. That has continued the honest and useful two-way conversations between the sector and Government.

Through the Tourism Alliance we have a long and thorough list of issues affecting the industry, some of which indicate a challenge but many of which highlight an opportunity. I mean this with the greatest respect to Members, but not one of them raised a new issue in the Chamber today. These are all issues we are well aware of and are working on with people within the sector. In fact, the list is much longer than those raised by Members today.

Our consultations have told us a great deal. For example, one important issue for the tourism and hospitality industries is the Government’s priority to exercise more control on the numbers of people coming to the UK, the free movement of people from Europe and crucially, as Members have mentioned, how that will impact on employment. The tourism industry employs 1.6 million people, 9% of whom—that is 144,000 people—are EU nationals, and 6% of whom are migrants but not EU nationals. We have talent within the UK that we need to continue to promote and to retain. We must ensure we upskill the workforce, so that we can rely on our home-grown employment.

I am conscious of the time. All the issues raised today have been on the agenda and will continue to be. We take this incredibly seriously. It is an important sector for the future of the United Kingdom.

17:29

[Nigel Huddleston]

I thank the Minister for her response and am somewhat reassured by her comments. I look forward, along with all colleagues in the room—who are from all corners of the UK, which is very reassuring—to continuing the dialogue. This is a complicated issue. The fragmented nature of the industry means it is challenging to engage with, and I appreciate all the efforts being made. I look forward to continuing the dialogue through the APPG, the Culture, Media and Sport Committee and all sorts of other vehicles. I appreciate the Minister’s response.

[Mr George Howarth (in the Chair)]

May I thank those who have taken part in the debate for their co-operation? We managed to get everybody in who had applied to speak, although I am mildly disappointed that nobody thought to mention Knowsley safari park.

Question put and agreed to.

Resolved,

That this House has considered the potential effect of the UK leaving the EU on tourism.

17:30

Sitting adjourned.