What steps the Government are taking to help ensure that children in fragile and conflict-affected countries can access education and learning.
Covid-19 has deepened the crisis in access to education and learning that children face, especially girls and especially in conflict. That is why Britain is championing two global targets to get 40 million more girls back into school and 20 million more reading over the next five years.
One in four school-age children globally—over 500 million children—already lived in a country affected by conflicts or climate-related emergencies before the pandemic. Violence against children in conflict settings is on the rise. More and more children are at risk of recruitment, sexual violence and attacks on their schools and hospitals. Will the Government commit to including those children and addressing the barriers to their learning in a specific target as part of the ambition to ensure 12 years of quality education for every girl?
My hon. Friend is right to point to this specific problem within the wider challenge of covid and the compound impacts in conflict situations. The support to fragile and conflict-affected states accounts for over 50% of UK aid to education through our country-led programmes. In 2020, we provided over £10 million in new funding to support refugee and displaced children’s education in some of the toughest parts of the world.
I am enormously proud of and grateful for the UK aid that goes to support the poorest children in the world. However, since 31 March, children’s centres, education projects and health facilities have all been forced to close, as Ministers have not signed off on funding agreements. My question to the Foreign Secretary is simple: when will he come to the Chamber and tell the House which aid projects are safe, what is going to be cut, the associated risks and the timeline and criteria he is using? Lives are literally at stake, and jobs are definitely hanging in the balance.
I thank the Chair of the Select Committee on International Development for what she has set out. I know that she has a passionate interest in this. Of course, we have taken a very careful approach to the allocations this year. I will be laying them in the House of Commons in the usual way, and I look forward to answering questions in her Committee on Thursday.
Three weeks ago, the Prime Minister announced that the UK would endorse the safe schools declaration, which includes a commitment to the continuation of education in situations of armed conflict. This last year has seen the biggest global education emergency in our lifetime due to covid-19, and every other G7 member has responded to the pandemic by increasing aid. Does the Foreign Secretary agree that the UK Government cutting aid to war-torn Syria and Yemen, described by UN Secretary-General António Guterres as a “death sentence”, and cutting spending on education by nearly 40% is undeniably a betrayal of the 75 million children in conflict-affected countries across the world who urgently require support to access education?
No, I do not agree with the hon. Gentleman’s rather skewed caricature. We remain one of the biggest global donors of aid. In relation to the Global Partnership for Education, I can tell him that our commitment, which we will announce shortly, will increase.
What recent assessment he has made of the (a) humanitarian and (b) human rights situation in Tigray, Ethiopia.
What recent assessment he has made of the political situation in Ethiopia.
The UK has been at the forefront of the international effort to de-escalate the very grave humanitarian situation in Tigray. There can be no military solution; conflict can only be resolved through a political settlement. I saw that at first hand when I was in Ethiopia in January.
Credible media and NGO reports have found human rights abuses, crimes against humanity, massacres and atrocities by all parties to the conflict in Tigray. The UN states that the top public health official for the appointed interim administration in Tigray has reported the use of sexual slavery and grotesque acts of sexual gender-based violence by Ethiopian and Eritrean soldiers, with more than 10,500 cases of rape being committed. When did the Foreign Secretary last speak to the Ethiopian Government to raise the humanitarian, security and human rights situations, and has the Prime Minister spoken to his Ethiopian counterpart?
I share the hon. Lady’s concerns about this, and I can reassure her that not only do we regularly raise this, but that is why I visited Ethiopia in January. I went up to Gondar to see for myself the humanitarian access. We have seen since then some improvements in humanitarian access. The Ethiopian Government have introduced a new system that requires notification rather than permission. That is a step forward, but we need further progress. In relation to those credible claims of human rights abuses that we and many have received, I note that Prime Minister Abiy has said that the perpetrators should face justice, and we certainly hold him to that assurance and support the United Nations High Commissioner for Human Rights in the planned investigations that they are working on.
I am sure that my right hon. Friend shares my concern and, frankly, horror at the ongoing reports of rape and sexual violence being used as weapons in the ongoing Tigray conflict, and joins the US Government in calling for a joint investigation by the Office of the UN High Commissioner for Human Rights and the Ethiopian Human Rights Commission into such reports. Does he agree that, with the UK hosting the G7 this summer, this is the perfect opportunity to put preventing sexual violence in conflict on the agenda and to lead a global response to such heinous crimes?
I totally share my hon. Friend’s passion and outrage at the human rights violations we have seen—indeed, not just there, but in many other parts of the world—and I can reassure her in relation to the G7 presidency priorities that, along with tackling covid and climate change, pressing for human rights, freedom of speech and accountability for human rights violations are high up on the agenda.
I think there will be considerable unanimity, frankly, and concern across the House about the situation in Tigray. It is also a test for the UK Government’s integrated diplomacy and aid policies, in that the UK is not without arms in this discussion as a significant donor to the region. I am glad that the Foreign Secretary has been in the region, but is there scope for discussions, and what discussions has he had, with the European Union and the African Union, which are also trying to create a durable peace on this, and what part has the UK played in those efforts, because I think those would be the most productive?
The hon. Gentleman is absolutely right. Normally, in this kind of situation we would expect the African Union or other regional partners to be engaged in trying to find a diplomatic dialogue and a way forward. I spoke to President Kenyatta about this and I spoke to Prime Minister Hamdok in Sudan about this, and I have also spoken to the UN and the AU about this. It is absolutely clear, for the reasons he has described, that we need a widespread caucus of like-minded countries pushing for a political solution to this because, on top of humanitarian access and accountability for human rights abuses, we need to have political dialogue. One of the most important aspects of that will be to make sure that, as soon as possible, there are elections across Ethiopia, as Prime Minister Abiy is committed to, but also in the Tigray region.
What recent assessment he has made of the human rights situation in Zimbabwe.
I thank the hon. Lady for her question and her deep interest in human rights more broadly. We remain seriously concerned about human rights in Zimbabwe, including abductions, arrests and assaults on civil society. In fact, on 1 February, we used our new sanctions regime to hold to account four specific individuals responsible for some of the worst human rights abuses. We will continue to press for genuine political and economic reform, and for Zimbabwean laws to be upheld.
In recent weeks, I have received emails from constituents about the worsening and very serious political, economic and human rights situation in Zimbabwe, as the Minister has already outlined. My part of south Wales has a vibrant and thriving Zimbabwean community, and although I accept that the Minister has made an assessment of the situation, I would like to know what concrete steps this Government are taking with allies in the region, directly through Harare and through the community groups here in the UK, because enough is enough. There are children dying from malnutrition now, and we cannot simply sit by silently any more.
Like the hon. Lady, I have a Zimbabwean community in Southend, with which I engage, but we also engage with near partners, particularly South Africa and the African Union, that are very influential. Our ambassador maintains a dialogue across ZANU-PF, and following the death of Foreign Minister Moyo, with whom I had previously had very frank engagements, I am due to meet his replacement when he gets in role and starts making international engagements. I will continue to make these points; and actually this House making the points, as the hon. Lady is doing, is very helpful, because the eyes of the world are watching the Zimbabwean Government, as are the Zimbabwean people.
What recent progress the Government have made through international co-operation on tackling climate change.
What recent progress his Department has made through international co-operation on tackling climate change.
What recent progress his Department has made through international co-operation on tackling climate change.
What recent progress the Government have made through international co-operation on tackling climate change.
What diplomatic steps his Department is taking ahead of COP26 to work with partners in the global south to tackle climate change.
As COP hosts, we encourage all countries to make a step change in ambition. The success of COP26 is a top priority for the Government and the FCDO this year. It is prioritised by Ministers and it is prioritised across our diplomatic network.
We know that climate change threatens minority rights, especially in India, where minority and indigenous groups such as Sikhs, Muslims and Dalits have a close interaction with natural resources. Can the Minister therefore advise the House how the UK Government, in future trade talks in India, intend to seek to embed positive climate change outcomes not just for UK companies and UK citizens, but for those who are most marginalised in India due to climate change?
The hon. Gentleman is right to highlight marginal groups, specifically in India but also globally. We have pledged to work with young people, faith leaders, women and indigenous people to amplify the voices of the most marginalised and will do that not only through the narrow lens of climate change but also through our overall relationship with other countries, including trade policy.
A major hurdle in reducing world carbon emissions is our need to sustainably produce 70% more food by 2050 to feed almost 2 billion additional people. Can the Minister therefore reassure me that this vital issue of global food security will be kept at the forefront of Britain’s global climate and development strategies going forward?
I can certainly reassure my hon. Friend. In fact, the global transition to sustainable agriculture, and specifically key land use, is a key focus of our COP26 nature campaign, and we are seeking to make further international progress towards climate resilience and sustainable agriculture through the transition to sustainable agriculture dialogues, which will begin next week, so the question is very timely.
I have launched a survey to better understand what matters to my constituents in Wolverhampton in protecting our precious environment. What discussions has my hon. Friend had with international partners to ensure that everybody is included in the global effort to tackle climate change?
My hon. Friend is a dynamo on climate change in his constituency, and we in our own modest way hope to be dynamos at the Foreign, Commonwealth and Development Office. We will encourage climate ambition in this critical year of COP; through our presidency we will make an inclusive COP, listening to all parties. It is important that we engage here in the UK, but also that we engage throughout the G7 across communities that are not directly affected now but will be in the future and that need to embed the ideas of climate change and ambition for the future by driving forward Executives to do more. I thank my hon. Friend for his work, and we will work with him on the international stage.
It has been revealed that UK officials have said that “greater levels of climate action are urgently needed” and that “before COP26, partners must step up with more forward-looking commitments.” I am sure such a statement would carry weight in the international community if it were not for the fact that the UK is simultaneously cutting its overseas spending, which would be helping developing economies to become greener and adapt to steps to address climate change. South Africa’s Environment Minister has called the aid cut “a concern”. What assessment has the Minister made of the impact on climate change of the UK’s cuts to funds committed to the sustainable development goals, of which tackling climate change is a central priority?
As the hon. Lady can imagine, this is a very important issue, and I have asked the question internally within the Department and can assure her that we are doubling our international climate finance to £11.6 billion over the next five years and have committed to aligning all official development assistance with the Paris agreement, so actually there is a really positive story to tell.
A recent Cambridge Sustainability Commission on Scaling Behaviour Change report says the world’s wealthiest 1% need to emit 30 times less carbon than they currently do by 2030 if we are to have a fair transition to net zero and, according to the science, save the lives and livelihoods of millions, perhaps billions, of the world’s poorest from the worst effects of the climate emergency. Given the stakes and given the UK’s historical and disproportionate carbon emissions, will the Minister commit to ensuring that not a single penny from the public purse will be used to fund or subsidise the fossil fuel industry, including through development aid?
Certainly everybody, especially those emitting the most, needs to make those reductions. We are no longer investing in fossil fuels. Various organisations clearly have a historical book of fossil fuel investment that can be managed down over time, but we are very exercised to do the right thing as individuals and as Government, and, through COP26, to be leading and ambitious and ask others to be ambitious as well.
To galvanise global support to avert the climate catastrophe, tackle poverty and improve global health in a year when the UK will host the G7 and COP26, we must bring countries together. Instead, this Government are the only one in the G7 to have taken the callous decision to cut their aid budget, which weakens our ability to bring countries together to tackle the global challenges we face. The Government’s cuts to the aid budget will remove a lifeline from hundreds of thousands of people and damage our planet, leaving us all less safe. Rather than hiding behind written statements, will the Foreign Secretary face up to his decision, make a statement to the House on his spending plans for 2021 and put his Government’s cuts to a vote?
The Foreign Secretary is attending the International Development Committee on Thursday, which will allow for a forensic examination of everything that he says, but we are here at the Dispatch Box answering questions. I myself am answering seven or eight questions. Far from running away, we are engaging in this debate, and we have a good story to tell. We are one of the best contributors in the G7 in relation to our GNI. We have the pledge of 0.7%, and we will get back to that when the economy allows. We should be proud, but we need to live within our means.
What diplomatic steps he is taking to support peace between Israel and the Palestinians.
What diplomatic steps he is taking to support peace between Israel and the Palestinians.
What steps his Department is taking to support the creation of the international fund for Israeli-Palestinian peace.
What diplomatic steps he is taking to support peace between Israel and the Palestinians. [R]
The UK is actively encouraging the parties back to dialogue. We support the decision of the Palestinian Authority and the Government of Israel to resume co-operation. We are now pushing for deeper co-operation on health and economic issues, including the re-establishment of the joint economic committee, to rebuild trust and move towards a lasting solution. We support the objectives of the international fund for Israeli-Palestinian peace and will continue to engage with the Alliance for Middle East Peace and President Biden’s Administration to identify further opportunities for collaboration. We are working with regional partners and the United States Administration to seize on the positive momentum of normalisation, alongside improving Israeli-Palestinian co-operation, to advance the prospects of a two-state solution.
I am pleased to hear what my right hon. Friend says. Does he agree, though, that a just and lasting peace must be built on the rule of law, with severe consequences for systematic breaches whoever commits them, and that all Palestinians, including those in East Jerusalem, must have the right to vote on 22 May?
We regularly call on Israel to abide by its obligations under international law, and we have regular conversations on this issue. We also encourage the Palestinian leadership to work towards democratic institutions based on the rule of law, and we welcome President Abbas’s announcement of dates for elections in the Occupied Palestinian Territories and will work closely with the Palestinian Authority to support that. We have called for elections in East Jerusalem; my right hon. Friend the Foreign Secretary has done so, and I did so with the Israeli ambassador in a meeting that we had just yesterday.
Despite assurances that, after countless delays, the EU review of Palestinian textbooks would be published in March, there is still no sign of the report. UK taxpayers’ money pays the salaries of Palestinian teachers who use material inciting violence against Israel and Jews, making peace harder to achieve. What more will my right hon. Friend do to ensure that UK aid does not prolong the conflict?
I thank my hon. Friend for her question. I remind the House that the UK does not fund the textbooks used in Palestinian schools. We understand that the EU review is in its final stages. We are not able to comment on the content of that report until it is released. We regularly engage with the EU at senior level to push for timely publication, and we regularly liaise with the Palestinian Authority to try to bring about the improvements that my hon. Friend has highlighted.
It is now five months since the US Congress passed a $250 million Act to create the international fund for Israeli-Palestinian peace, the largest ever investment in peace building. In November, our Ministers promised to examine the feasibility of the UK taking up one of the international seats on the fund’s board. Will the Minister tell us the results of that assessment and confirm that the UK will use the G7 summit to step up and help to lead this exciting new project with the United States?
We always engage positively with any steps that push towards greater peace and reconciliation between the Israelis and the Palestinians, and we have engaged with this process. As my right hon. Friend the Secretary of State said, we are currently going through a programme of work assessing what we will do with our overseas development aid, but we will continue to engage with the Biden Administration, the Israeli Government and the Palestinian Authority to pursue what has been the long-standing UK goal: a peaceful, prosperous, meaningful two-state solution.
I draw attention to my declaration in the Register of Members’ Financial Interests, because I have been to Israel with the Conservative Friends of Israel With the G7 coming to Cornwall, we should underline our commitment to international institutions and multilateral co-operation. We welcomed the US middle east partnership for peace Act in December, but does the Minister agree that it is now time for the UK to take a board seat on the international fund for Israeli-Palestinian peace?
I thank my hon. Friend for her question, which I partially answered in my prior response to the hon. Member for West Lancashire (Rosie Cooper). We have no current plans, but we always take a keen interest in any initiatives that encourage peace and co-operation between the Israeli Government and the Palestinian Authority, and indeed, the Israeli people and the Palestinian people. We will continue to work along- side Governments in the region and the US Administration in pursuit of that objective.
The International Criminal Court has decided to conduct an investigation into alleged war crimes by Palestinian armed groups and Israeli forces in the occupied territories. The FCDO has stated that the UK respects the independence of the ICC. However, the Prime Minister said that the investigation is a “prejudicial attack”, so does the Minister believe that the court is independent or not?
We absolutely respect the independence of the International Criminal Court. We do expect it to comply with its own mandate. The UK will remain a strong supporter of the ICC.
What recent discussions he has had with his G7 counterparts on global flows of official development assistance.
The Foreign Secretary and junior Ministers, including myself, speak regularly to counterparts in the G7 and other countries about official development assistance, including in supporting the response to and recovery from covid-19. The Foreign Secretary’s most recent bilateral conversations on international development with G7 partners were with French Foreign Minister Le Drian and Japanese Foreign Minister Motegi. As G7 president and host this year, we are strongly supporting work towards a sustainable, inclusive and resilient recovery, and the Foreign Secretary will host G7 Foreign and Development Ministers in May, when we will discuss sustainable recovery as an integral part of our agenda.
Are the Government not a little concerned that when they are chairing the G7 in a global pandemic, when international development has never been more important, the Germans have hit the 0.7%, the French have embraced the 0.7%, and the Americans have increased their international development spending by no less than $15 billion, whereas we in Britain are breaking our promise to the poorest, breaking our manifesto commitment on which we were all elected just over a year ago, and cutting humanitarian aid, leading directly to hundreds of thousands of avoidable deaths, particularly among women and children?
I do not accept what my right hon. Friend is saying. The UK remains a development superpower. Based on OECD data for 2020, the UK will be the third largest official development assistance donor in the G7 as a percentage of GNI in 2021. We will spend a greater percentage of our GNI than the US, Japan, Canada or Italy and, to be absolutely clear, we will still spend £10 billion on ODA in 2021. We have said that we will return to spending 0.7% on ODA as soon as the fiscal situation allows, but we have clear priorities and remain an active, confident, internationalist, burden-sharing and problem-solving nation.
What diplomatic steps he is taking to encourage international collaboration to tackle the UK Government’s grand challenges.
We are at the heart of discussions about global challenges and mega-trends, including through the UK’s G7 and COP26 presidencies. On clean growth, we will harness those presidencies to advance our climate agenda in the run-up to COP26. On artificial intelligence, in September, the UK signed a declaration with the US to drive technological breakthroughs in AI. This puts the UK at the forefront of the AI and data revolution. On science, the UK has strong science collaboration arrangements with more than 50 countries, from the research powerhouses of the US and Europe to emerging economies.
Through my work with the Prime Minister’s taskforce on innovation, growth and regulatory reform, we are looking at how we can make Brexit a real opportunity for the UK as a global science and innovation superpower to better integrate our aid and trade and to boost R&D investment, inward investment, exports and sustainable global development. Does the Minister agree that, to help developing nations to confront the biggest global grand challenges of sustainable agriculture and development, as set out in the Foresight report, including the challenge of nearly doubling world food production on the same land area with half as much water and energy, we could use variable tariffs to incentivise high-quality production, and UK aid to support tech transfer of UK agritech and clean tech for sustainable growth?
I thank my hon. Friend for all the work he does in this area. Nowadays—and when he was an excellent Minister—we provide preferential tariffs for 70 developing countries through the generalised scheme of preferences. This includes a framework covering implementation and international environment conventions. We are supporting international research partnerships and the roll-out of agritech across the poorest and most climate-vulnerable countries. This is delivering crop varieties that are more productive, nutritious and resistant to drought and pests. Our clean tech investments are enabling UK battery pioneers to develop new technologies and business models to deliver clean energy in Africa.
What steps he is taking to ensure that tackling poverty and inequality remains a focus of his Department.
What recent assessment he has made of the potential effect of reductions in the UK aid budget on poverty in developing countries.
The UK remains a global leader in international development and is committed to supporting the world’s poorest people. Based on current GNI forecasts, we will spend over £10 billion of ODA in 2021. The Foreign Secretary has set out seven priorities for the UK’s aid budget this year, all of which are in the overarching pursuit of poverty reduction. This new strategic approach will allow us to achieve greater impact from our aid budget, notwithstanding the difficult financial position that we face, and UK ODA continues to serve the primary aim of reducing poverty in developing countries.
I thank the Minister for her response. I am pleased that I am due to meet the Under-Secretary of State for Foreign, Commonwealth and Development Affairs, my hon. Friend the Member for Rochford and Southend East (James Duddridge), shortly to discuss development bonds and a specific opportunity that has arisen. What steps is the FCDO taking to embed innovative finance solutions within the Department’s work to ensure that the UK’s development approach is the most effective at combating poverty globally?
My hon. Friend makes an important point. I know that this is something she takes an interest in. Aid alone cannot deliver the sustainable development goals. The $2.5 trillion annual financing gap for the SDGs means that we need creative solutions that engage the private sector to end global poverty, and the FCDO is testing innovative financing tools that will pull private finance towards sustainable development. We are currently running a pilot on development impact bonds that will draw in impact investment to achieve the SDG outcomes, such as helping 13,000 households living in extreme poverty in rural Kenya and Uganda to set up income-generating businesses.
This Government’s decision to cut the aid budget at a time of a global pandemic and economic crisis risks pushing millions of vulnerable people in developing countries into extreme poverty. Co-operative development in sectors such as farming is vital in reducing poverty, generating wealth and power fairly among producers. Can the Secretary of State guarantee that the co-operative sectors will not be damaged by these cuts?
It is important to remind ourselves and recognise that we will still be spending £10 billion of ODA in 2021 and that the UK economy is 11.3% smaller than last year and undergoing the worst contraction for 300 years. That said, the Foreign Secretary set out clearly in his written ministerial statement on 26 January the conclusion of the cross-Government review on ODA. Driven by the integrated review, our process is really focusing on seven key priorities: climate and biodiversity; covid and global health security; girls’ education; science and research; open societies and conflict; humanitarian assistance; and trade.
What assessment he has made of the potential effect of reductions in the UK aid budget on the UK’s humanitarian work overseas.
Since 2015, the UK has provided £11 billion in humanitarian funding. As the Under-Secretary of State for Foreign, Commonwealth and Development Affairs, my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), has just stated, despite this unprecedented economic contraction, we are still proud of our contribution. We remain, in both absolute terms and percentage terms, one of the most generous ODA-donating countries in the world.
I thank the Minister for that answer. While every other G7 member state has responded to the pandemic by increasing aid, the UK Government are out there alone in choosing to cut it by approximately £4 billion this year, after a cut of £2.9 billion last year. The pandemic should have been a rallying cry to this Government, encouraging more robust and urgent investment and prioritisation action to meet sustainable development goals. Instead, this Government chose a path of staggering and shocking betrayal, turning their back on the world’s poorest. Have any impact assessments been carried out on how these cuts will affect those in conflict zones? If not, how long will we have to wait for this Government to show a shred of compassion?
I remind the hon. Gentleman and the House that the UK remains one of the largest donating countries in the G7 and indeed the world. Our commitment to that is undiminished, which is why I am very pleased that we have been able to strengthen our commitments to our headquarters in East Kilbride, in Abercrombie House. We are proud that, despite the fact that we have this economic contraction, we are still donating £10 billion in ODA.
What assessment he has made of the potential merits of using sanctions as part of the diplomatic response to the military coup in Myanmar.
What representations he has made to his counterpart in Myanmar on the reports of killings and excessive use of force by security forces against people protesting the recent military coup in that country.
The violent crackdown and killing of peaceful protesters in Myanmar are completely unacceptable and require a strong message from the international community. The UK secured G7 statements on 3 February and 23 February, as well as a United Nations Security Council presidential statement on 10 March. In response to the military’s appalling human rights violations, the UK has imposed sanctions on two key military-linked entities that fund the military’s actions and on nine senior military figures, including the commander-in-chief.
I thank the Minister for his answer. Can I impress upon him the plight of the people in Myanmar and the need to do all in the power of the Government to assist them? Do the Government intend to review the process of administering sanctions, which is often slow and difficult? Will he inform the House as to what talks are being held with other Governments, particularly those in Asia, to ensure a united approach is being taken to sanctions on the Myanmar regime?
I thank the hon. Member for her question. When we impose sanctions, we have to make sure that they are done on a properly solid legal basis. The Foreign Secretary recently travelled to Brunei and Indonesia and attended the second United Kingdom-Association of Southeast Asian Nations meeting of Foreign Ministers. We made clear our views on the coup in Myanmar and the senseless violence against civilians. We welcome ASEAN’s unique role in addressing the crisis and support its call for an end to the violence and for restraint and a peaceful resolution.
The people of Myanmar desperately need help. Medical staff such as my constituent Dr Thomas Lamb have been actively persecuted—including through arbitrary detention, torture and death—simply for attempting to treat peaceful protesters. Following the coup d’état in February, my constituent saw at first hand the atrocities committed by the junta, such as the use of gunfire and the forcible removal of innocent civilians from their homes. During his meetings with the military junta’s Foreign Minister, has the Minister raised the killings of more than 700 innocent Burmese civilians? Will he now follow the lead of Canada and the Netherlands and formally join the Gambia’s genocide case against Myanmar at the International Court of Justice?
We have been clear that we are completely steadfast in our opposition to the coup. What is happening to innocent civilians in Myanmar is obscene. We have demonstrated our strong international leadership, including at the UN Security Council and the G7. We are clear that there should be accountability for the military’s acts, both historic and recent, and that all options, including referral to the International Criminal Court, should be on the table.
The Labour party stands with the pro-democracy protesters in Myanmar, who have shown extraordinary courage in resisting the barbaric brutality of the military junta. The UK Government’s response has lacked both strength and urgency. The Minister mentioned the ASEAN conference, but the tweet put out by the Foreign Secretary shortly after that conference made no mention whatsoever of what has been happening in Myanmar; will the Minister say a little more about why? Also, 42 nations have an arms embargo against Myanmar; will the Government commit today to writing to every other UN nation asking them to join that arms embargo? Will the Foreign Secretary publicly call for the orchestrators of the atrocities that we are witnessing in Myanmar—
Order. We cannot carry on: it should be one question.
We are clear that countries should not sell arms to the Myanmar military. We played a key role in securing and strengthening an EU arms embargo following the 2017 Rohingya crisis. The Foreign Secretary welcomed ASEAN’s unique role in addressing the crisis, in line with the purpose and principles enshrined in the ASEAN charter.
What recent assessment he has made of the effect of increases in numbers of Russian forces at the border with Ukraine on peace and security in that region.
We have significant concerns about the recent Russian military build-up of forces on Ukraine’s border. We are working with our allies—I was at a NATO meeting of Foreign and Defence Ministers last week—and our objective is to deter Russia, reassure Ukraine and de-escalate the situation.
I am glad to hear that, but, in 1994, the UK, Russia and the United States of America signed the Budapest memorandum, which issued not exactly guarantees but assurances that we would respect the independence, sovereignty and existing borders of Ukraine, in return for which Kiev surrendered 1,900 strategic nuclear warheads, which was vital to secure peace in the region. Is it not now all the more incumbent on us to make it very clear that we will continue to provide political, diplomatic, scientific, financial and, if necessary, military support to Kiev?
I thank the hon. Gentleman, who has long-standing experience of this issue; I agree with his level of concern. There are three things that we are doing right now that matter. The first is holding Russia to its international commitments, including not just the ones that he mentioned, but the OSCE principles of accountability for the build-up of troops. Russia has not responded to the calls for an explanation within the OSCE. We will continue our robust approach to sanctions. He is right that we will continue to provide diplomatic support, but we will also continue to provide military support: since 2015, through Operation Orbital, we have trained more than 20,000 Ukrainian armed forces personnel.
We go now to the Chair of the Foreign Affairs Committee.
I very much welcome the words of the Foreign Secretary, but has he done an assessment in his Department about how Russia is reading the troop reductions in the British Army and the withdrawal from Afghanistan? Both will be seen from Moscow as a sign that, perhaps, NATO is not quite as serious as we are making out. What is he able to do diplomatically about that? While we do still carry a big stick, some elements seem to be looking a little weaker. Perhaps he can reinforce them by encouraging his partner in Cabinet to put more resources into the Army.
I thank the Chair of the Select Committee, but I am afraid that he is wrong. It is vital that, as well as increasing the defence and security budget in the ground-breaking way that the Prime Minister and the Defence Secretary have done, we make sure that it is agile and fit to face the challenges of the future, including from not just conventional armed forces, but cyber and the other hostile state activity. I was in Brussels on 14 April and spoke to the US Defence Secretary and the Secretary of State along with other Foreign Ministers and Defence Ministers from NATO. We are absolutely clear in condemning the build-up of troops. We are assuring Ukraine, as I have said, and we are working overall to de-escalate the situation.
Russia has amassed 100,000 troops on the border with Ukraine, Alexei Navalny lies deteriorating in a prison hospital, and a NATO ally has come under attack from the same hands as those who used chemical weapons on the streets of the UK. Yet in the 18 months since the Foreign Secretary was handed the Russia report, the UK has remained a safe haven for the dark money that helps to sustain the Putin regime, the Conservative party has taken £1 million in donations from Russian-linked sources, and oligarchs are welcomed with open arms. Seriously—I have asked him this before—what accounts for the delay in implementing the Russia report? Is it repercussions from Russia that he is worried about, or is it repercussions from his own party?
I thank the hon. Lady, but I have to say that that is a pretty weak attempt to weave in partisan political considerations in what is a very serious international issue. On the Intelligence and Security Committee report: we have already taken multiple actions against the Russian threat, exposing the reckless cyber activity—we have done that and she is aware of that; we have introduced a new power to stop individuals at UK ports to see whether they represent a threat as part of the hostile state activity; we are introducing new legislation to provide the security services and law enforcement agencies with additional tools to tackle the evolving threat from hostile states; and, as she knows, I will shortly be introducing an extension of the Magnitsky sanctions in relation to corruption Just in relation to Salisbury, it was not that long ago that the hon. Lady was campaigning for the leader of her party at the time to be Prime Minister—someone who backed the Russians against this Prime Minister who, as Foreign Secretary, galvanised the international response to the appalling attacks on the streets of Salisbury.
The difference between the right hon. Gentleman and me is that I stood up to my former party leadership when they got it wrong on this issue. It is pathetic that he cannot do the same given the gravity of the situation that this country currently faces. He has had 18 months since the publication of a report that his own Prime Minister tried to block. We have had no action on golden visas, no powers to sanction corrupt officials. Up to half of all the money that is laundered out of Russia comes through the United Kingdom and, in three years since the Salisbury attacks, it is still not illegal to be a foreign agent in this country. Meanwhile we have seen the oligarchs and kleptocrats who have profited from the Putin regime funnelling money to the Conservative party. [Interruption.] He shakes his head, but it is £5 million since David Cameron became leader. His own Minister, the Minister for Asia, has had multiple donations from a former Russian arms dealer who described himself as “untouchable” because of his links with the Kremlin. If the Foreign Secretary wants to clear this up, he can clear it up once and for all: implement those recommendations from the Russia report; defend the security, the democracy and the integrity of this country; stop the gross negligence; and give us a date by which all 23 recommendations will be implemented in full.
Can I just tidy this up? If we are going to make allegations, they have to be made on a substantive motion; that must be done in the correct manner. Things are getting heated. Let us just calm it down.
In relation to the registration of agents, all the hon. Lady has done is pick up on the action that the Home Secretary has already announced and proposed, and called for it; it is a classic action from the shadow Foreign Secretary. [Interruption.] She is talking over me because she does not like the response. The reality is that she did campaign for the former leader of the Labour party to be Prime Minister—a man who, in fact, backed Russia at the time when this Prime Minister, as Foreign Secretary, galvanised the international community in an unprecedented diplomatic reaction to President Putin. We will continue to stand up for the British national interest; the shadow Foreign Secretary will make her political points.
Let us see if we can turn the temperature down, with Dave Doogan.
If he will make a statement on his departmental responsibilities.
May I first pay tribute to His Royal Highness the Duke of Edinburgh, whose life’s work was to serve our country, often on the world stage Since the last oral questions, I have attended the UK-Gibraltar joint ministerial council and reaffirmed our commitment to delivering a treaty with the EU that safeguards UK sovereignty and the prosperity of Gibraltar and the surrounding region. I have also visited Indonesia and Brunei to forge closer ties and to join the second UK Association of Southeast Asian Nations ministerial dialogue as the UK pursues ASEAN dialogue partner status.
My constituent David Cornock tragically lost his son in Thailand in 2019. Mr Cornock is adamant that his son did not commit suicide, but was murdered—and, after supporting him for 18 months in this case, I am inclined to agree with his assessment. The FCDO insists that in order to get Mr Cornock’s son’s case reopened and properly investigated, the only avenue for my constituent is personally to petition the Thai Attorney General, with no diplomatic support. The Department provided a list of 10 Thai lawyers to expedite this; six declined, two did not respond, one did not speak English and the other wanted £25,000 upfront Moreover, thanks to the Minister for Asia, the hon. Member for Selby and Ainsty (Nigel Adams), I have since established that there is not a single instance where a UK citizen has successfully petitioned the Thai Attorney General in the way determined by the FCDO. Will the Secretary of State agree to take up this case with the Thai ambassador here in London, and, having due regard for diplomatic norms and the sovereignty of internal justice, review this wholly unrealistic protocol by the FCDO? Will he also meet me and my constituent to discuss the matter?
First of all, we at the Foreign, Commonwealth and Development Office try to give the best advice that we can as to how such cases—I have dealt with a number of these difficult cases over the years—can be raised most effectively. If it is viewed that there is political interference, it is often counterproductive. Of course, we will take another look at the case to see whether there is anything more that we can do. We give advice in good faith as to the best and most effective means to try to secure the outcome that the hon. Gentleman wants for his constituents.
The 2001 UN conference against racism in Durban degenerated into hatred, antisemitism and criticism of Israel that was excessive, disproportionate and unfair, so will the UK Government boycott Durban IV, which marks the 20th anniversary of that disgraceful 2001 conference?
We will obviously attend the UN General Assembly in September. In relation to the Durban declaration and its anniversary, let me reassure my right hon. Friend that—as we demonstrated at the Human Rights Council recently on the approach that we took to items 7 and 2—we will not support any partisan or political attacks on Israel. I reassure her that the Government are absolutely crystal clear in our condemnation of and opposition to any and all forms of antisemitism.
As we have heard this morning, this year the UK hosts the global COP summit and the G7, which give us a wonderful opportunity to lay out our leadership and ambition on a world stage. If the Government are really serious about tackling the climate emergency, where is the leadership on the deforestation question in Brazil, where, under the leadership of Jair Bolsonaro, we have seen a rise up to the highest levels of deforestation and impact on indigenous communities in more than a decade? Has the Foreign Secretary raised this directly with Jair Bolsonaro? If not, in broad terms what is he doing at an institutional level to try to address that desperate issue?
The hon. Lady is absolutely right. Deforestation is a key plank of our agenda for COP26, and I have raised it in Indonesia, where it is obviously a big issue, and in parts of Asia. I also raised it recently in a virtual meeting I had with Foreign Minister Araújo of Brazil, although he is no longer in place. The key will be galvanising international support to make sure that the measures those countries take are not economically damaging to them, while at the same time being environmentally sustainable for the world. We have a key plank of work that is focused on that area, and I can reassure the hon. Lady that it is a major component of our approach to COP26.
  As chair of the all-party parliamentary group for Tamils, I thank the FCDO for its work in securing the new resolution on accountability in Sri Lanka at the recent UN Human Rights Council sessions. However, from speaking to Tamils in Carshalton and Wallington and across the UK, there is obviously still more to do, so could the Minister outline what steps the UK is taking to implement the UN high commissioner’s recommendations on applying sanctions and travel embargos and filing cases against alleged war crimes under universal jurisdiction?
I am grateful to my hon. Friend for his question. The Minister of State for South Asia and the Commonwealth, Lord Ahmad of Wimbledon, set out the UK’s serious concerns about human rights in Sri Lanka in a statement at the UN Human Rights Council on 25 February, and the UK has welcomed the adoption in March of a new UN Human Rights Council resolution on promoting reconciliation, accountability and human rights in Sri Lanka. That UK-led resolution enhances the UN’s role in monitoring the situation and collecting evidence of human rights violations that can be used in future accountability processes. Just quickly on the point about sanctions, though, it is important to recognise that it would not be appropriate to speculate on any further designation.
I agreed with the Prime Minister when he said that his greatest mistake when he was Foreign Secretary was in relation to Russia—that he had misplayed the relationship with Russia—and I want to return to that point. We now know for certain that the two men who were involved in the Skripal poisoning, or attempted poisoning and inadvertent successful poisoning, were GRU officers, almost certainly acting on the direct command of the Kremlin, and that those two officers were also involved in a murder and an explosion in the Czech Republic. It seems extraordinary to me that this has taken so many years to come out. Why has there been such a delay in this information coming to the public, and what are we going to do to make sure that murderers on Putin’s payroll are not strolling the streets of every capital in Europe?
The hon. Gentleman will know that the Czech explosion that led to the attribution was many years ago. The decision to attribute was the product of a long investigation by the Czech authorities, and he will have seen that we stood absolutely full square in solidarity with our Czech friends In the ways that I explained earlier to the shadow Foreign Minister, the hon. Member for Wigan (Lisa Nandy), we have increased and continue to increase our measures for screening and for accountability, and of course, through the Magnitsky sanctions—which the hon. Gentleman himself has championed—we have a new means of targeting human rights abuses. To the extent that they also impinge on dirty money, which in fairness the hon. Member for Wigan spoke about, I have already made clear that we will shortly be introducing an extension to the Magnitsky sanctions to cover that.
Eight years ago, my constituent Tyrell Matthews-Burton —a young man with a bright future ahead of him—was brutally murdered in Greece. His family have fought tirelessly to bring those responsible to justice, yet despite convictions, the Metropolitan Police tell us that the Greek authorities are the stumbling block. Will the Foreign Secretary meet me and Tyrell’s family, so that we can prove that it does not matter what colour a person’s skin, this country will always fight for justice for its citizens?
Absolutely. We take the consular work that we do for citizens abroad exceptionally seriously. We deal with those cases day in, day out, often below the media or public radar. I am very happy for Ministers in the Department to look again at the case she has raised to see whether there is anything further we can do. That is very difficult and always very complex, even in European countries, but we must be able to satisfy ourselves that we are doing everything we can to provide closure and accountability for the families affected.
  What steps is my right hon. Friend taking with his international counterparts to prepare for the G7 leaders’ summit this summer in Cornwall?
I know my hon. Friend has a strong vested interest in that conference, beyond her international interest. Ahead of the leaders summit—I let her and the House know—I will be convening the G7 Foreign and Development Ministers meeting from 3 to 5 May here in London. That will be a very important opportunity to build on and tee up our work on equitable access to vaccines in relation to the pandemic, our ambitious global girls education targets, the rigorous and ambitious approach we are taking to climate finance, and commitment to media freedoms, human rights and democracy.
On the G7, what are the Government doing to address the global debt crisis engulfing the world’s poorest countries? Might I suggest that one way to show leadership on that would be for this House to pass legislation to compel private creditors to participate in debt relief and to stop them suing for debt recovery under UK law?
I thank the hon. Gentleman for his engagement in this issue. We are already doing an awful lot on debt suspension, most importantly on the common framework and on those remaining countries such as Somalia and Sudan, which were left out of the HIPC—heavily indebted poor countries—process, but there are other parties and complexities, China’s sovereign debt being one of them and multilaterals another, as well as sovereign nations’ private sector debt, which we would encourage to participate where appropriate.
The covid-19 pandemic has shone a depressing light on the digital poverty that exists in developing countries. Without access to the internet, millions of children across the world have lost thousands of hours of education. Sadly, the problem is even more acute for girls. What action is being taken to ensure that the UK uses its presidency of the G7 and the Global Partnership for Education to enable the most marginalised children, in particular girls, to return to school and catch up with their lost learning?
My hon. Friend is right to highlight this important issue. She takes a very keen interest in girls education and 2021 is a crucial year for it, with multiple opportunities for us to take co-ordinated action with our international partners to address the learning losses from covid-19. That is why the UK has put girls education at the heart of our G7 presidency. We are working with G7 members to champion two SDG 4 milestone targets: 40 million more girls in school and 20 million more girls reading by the age of 10 in low and lower-middle income countries over the next five years. The UK with Kenya will also host the global education summit in July to mobilise much needed financing.
I would like to declare an interest: a visit to Colombia with Justice for Colombia. In February, the Office of the United Nations High Commissioner for Human Rights reported on the alleged involvement of Colombian security forces in the deaths of at least 13 protestors last year. There have also been worrying reports of an increased number of protestors losing their sight after being hit with projectiles fired by police, including 19-year-old Yuri Camargo and 22-year-old Miguel Angel Linares, both in 2019. Will the Secretary of State raise the importance of full legal and disciplinary investigations of those cases with his Colombian counterparts?
First, we really welcome the Colombian Government’s continuing commitment to the full implementation of the 2016 peace agreement with FARC. We will continue to support them in doing so. Colombia is an FCDO human rights priority country. We regularly raise concerns with the Colombian Government and at the UN. We will continue to do so. Our embassy will continue to support at-risk human rights defenders, social leaders and ex-combatants, and will work to tackle the root causes of the violence.
It is brilliant to see the UK and Israel working so closely together in the roll-out of our world- leading vaccination programmes. Israel has vaccinated almost half its population with both doses of the covid vaccine, so will the Minister provide an update on the status of discussions with Israel on establishing a travel corridor arrangement?
I thank my hon. Friend for that very topical question. We welcome the success of the Israeli vaccination programme, and the co-operation between the UK and Israel on covid continues throughout the pandemic. On 17 May, the Prime Minister will announce further travel measures and which countries will fit into which traffic-light categorisations. We are looking to see how we can share health data, and we are all looking forward to hearing from the Chancellor of the Duchy of Lancaster following his visit, to get some real-life examples on what we can do here in the UK.
I am now suspending the House for three minutes to enable the necessary arrangements for the next business.
(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on Afghanistan.
Following the shocking attacks of September 11 2001, NATO allies invoked article 5 of the Washington treaty. An attack on one was an attack on us all. In Afghanistan over the two decades since, NATO has shown extraordinary resolve in a country where the soldiering is tough and operational success is very hard won. Some 150,610 UK service personnel have served in Afghanistan over the last 20 years. Hundreds of our troops have suffered life-changing injuries, and 457 of our young men and women have made the ultimate sacrifice in the service of our country. I pay tribute to their service and their sacrifice. They will not be forgotten I served in Afghanistan on two tours—the first, to Kabul in 2005; and the second, to Sangin, in 2009. My battalion lost 13 men on that second tour, with many more killed in our wider battlegroup. I have friends who will walk on prosthetic limbs for the rest of their lives, and I know people who suffered severe mental pain that tragically caused them to subsequently take their own lives. Like every other Afghanistan veteran, when I heard NATO’s decision last week, I could not help but ask myself whether it was all worth it We went into Afghanistan to disrupt a global terrorist threat and to deny al-Qaeda the opportunity to use that nation as a base for mounting further international attacks. In that mission, we were successful. By fighting the insurgency in its heartlands in the south and east of the country, NATO created space for the machinery of the Afghan government to be established and strengthened. Afghan civil society flourished. Schools reopened and girls enjoyed education just as boys did. There is a vibrant and free media. Women are not only valued and respected but are working in Afghan academia, healthcare and politics. Over 20 years we have developed and then partnered the brave men and women of the Afghan national security forces. They are now a proud army with the capacity to keep the peace in Afghanistan if empowered to do so by future Governments in Kabul Those of us who have served very rarely get to reflect on an absolute victory; only in the most binary of state-on-state wars can the military instrument alone be decisive. But two generations of Afghan children have now grown up with access to education. The Afghan people have tasted freedom and democracy, and they have an expectation of what life in their country should be like in the future. The Taliban, apparently, have no appetite to be an international pariah like they were in the late ‘90s. Our endeavours over the past two decades have created those conditions and have given Afghanistan every chance of maintaining peace within its own borders. We will continue to support the Afghan Government in delivering that, but our military could not stay in Afghanistan indefinitely, and so we will leave, in line with NATO allies, by September. Nothing in the future of Afghanistan is guaranteed, but the bravery, determination and sacrifice of so many British soldiers, sailors, airmen and airwomen has given Afghanistan every possible chance of success.
Sending our troops into conflict is the biggest decision that any Prime Minister has to make. The strategic objective must be clear, yet we now withdraw from Afghanistan, after enormous cost and human sacrifice, with the country heading towards another civil war and the Taliban on the ascent. I have visited the country many times. This cannot be the exit strategy that we ever envisaged Our nation and our military deserve answers. I request a Chilcot-style inquiry so that we can learn the lessons of what went wrong. How did we squander the relative peace of the first four years? Why were the Taliban excluded from the peace talks in 2001—a fundamental error that could have brought stability early on? Why did we adopt an over-centralised western model of governance? Why were we too slow in building up Afghan security forces, up to a paltry 26,000 five years after the invasion? Why was Pakistan allowed to harbour and train the Taliban for so long? More widely, did the ease of the initial Afghan invasion lead to an over-confidence by the US for it to then invade Iraq, meaning that we had to fight on two fronts? Should we take responsibility for the Taliban’s emergence in the first place after the US abandoned Afghanistan once the Soviets had left? Where was the British thought leadership—our situational awareness that might have influenced US strategic thinking? As we have learned in Northern Ireland, you cannot defeat the enemy by military means alone If we depart completely, a dangerous part of the world becomes more dangerous as the Taliban assumes control of the bulk of the country and once again gives sanctuary to extremist groups. Our brave military served with honour, but they were let down by poor strategic judgments that if politicians today do not understand and learn from, will impede our confidence to step forward and stand up to extremism and authoritarianism in the future. There are so many questions and it is the Government’s duty to respond.
I thank my right hon. Friend for calling for this urgent question. I do not entirely share his analysis of what would have happened next. The relatively benign, by Afghan standards, security situation in the country at the moment is not the norm; it is the consequence of the accommodation that the US and the Taliban had come to last year. That means, in effect, that there are three options for the international community. One is to prepare for a fighting season this summer once the 1 May deadline expires. The second is to come to a new accommodation with the Taliban that effectively removes all of the political imperative to reaching a solution. The third is to agree that, effectively, the military mission is done and that what remains now is a political one, and the way to accelerate that is to force the hand and agree to leave as we have done My right hon. Friend asks some great questions about the route to being in Afghanistan and the prosecution of the campaign thereafter. I think that those of us who have served, as he has done, take some solace from the way that these things are considered deliberately after the event. It is not for me to agree to such an inquiry right now, but one would hope that the lessons would be learned. I do not necessarily accept all of his analysis of how the campaign has played out, but obviously we have reached the point where the military mission has effectively culminated and what remains is a requirement for politics. To keep our people there indefinitely with 1 May approaching does not seem to me to be the right use of the military instrument.
The House will appreciate the Minister wanting to respond to this question himself. He saw two tours in Afghanistan and I know that more than 50 from his regiment were among the 454 British personnel who lost their lives there. We honour their service and their sacrifice There certainly have been some gains in governance, economic development, rights for women, education for girls and in ending Afghanistan as a base for terrorism abroad, but Afghanistan is more failure than success for the British military. Now, with the full withdrawal of NATO troops, it is hard to see a future without bloodier conflict, wider Taliban control, and greater jeopardy for those Afghanis who worked with the west and for the women now in political, judicial, academic and business roles. The Chief of the Defence Staff has said that this was “not a decision we hoped for” Did the UK Government argue against full withdrawal? What steps will NATO allies take now to ensure that Afghanistan does not become a breeding ground for terrorism directed towards our western democracies again? There is US talk of over-the-horizon operations and of building anti-terrorist infrastructure on the periphery of Afghanistan. Will Britain play any part in this, and where The Minister said that Britain’s remaining 750 troops will be out by September. When will their withdrawal begin? How many UK contractors helping Afghan forces to maintain equipment are in Afghanistan? Will they withdraw at the same time as UK troops? How many Afghanis who helped British troops are still in Afghanistan, in danger and in need of the special scheme to settle in the UK? Ending military deployment should mean expanding diplomatic and development support, yet Britain cut direct aid to Afghanistan last year by a quarter. This year, will the Government reverse that cut Finally, where does this withdrawal leave the Government’s strategy of forward deployment in a region that sits between the three main state threats identified in the integrated review? Does this cause the Secretary of State to reconsider his decision to cut Army numbers by another 10,000?
First, I am grateful to the right hon. Gentleman for his reflections on the service and sacrifice of the UK armed forces. I am not sure that I accept his characterisation of the situation as defeat. Many members of the armed forces will reflect, as I do, on their tactical and operational successes in their individual tours and in the districts for which they were responsible. If they arrive in a district and the school is shut, but when they leave, it is open; or if they arrive in a district and the market has six stalls, but when they leave, it has 20—those are the sorts of successes that show them with their own eyes that their service has been worth it and they have done good The shadow Secretary of State picks up on what the Chief of the Defence Staff said in his interview on the “Today” programme last week, and I do not think that anybody in the UK Government would shy away from his very honest assessment of what happened. I think we should be clear that the disagreement, to the extent that there was one, was over a matter of months, rather than over staying there for four years more As I said, there is a logic to this, because we were at a decision point no matter what. On 1 May, the accommodation would run out and we would be preparing for a fighting season; or we would need a new political accommodation with the Taliban, and that would remove the political imperative altogether; or we would take the decision, as the President did, and with which NATO subsequently agreed unanimously, to leave and, in doing so, to force the pace of the political process. I think that is the right thing. The opportunity to prosecute counter-terrorism missions from the wider region into Afghanistan is something that we are working up with our NATO allies and the Americans at the moment. I am sure that the UK will have a role in that The exact withdrawal timeline is not one that I intend to share publicly—I am sure the right hon. Gentleman will understand the operational security reasons why that is the case—but a withdrawal from Afghanistan this year is not unexpected. It was completely within our planning last year and over the winter. We can achieve the timeline that is required without any cost to our other planned military activities this summer. I can reassure him that my right hon. Friends the Defence Secretary and the Home Secretary are working with all appropriate haste to make sure that those who have served alongside us in Afghanistan are looked after in the future.
I was in Afghanistan with the Afghan resistance, and I know that when the foreigners leave, the theological justification for jihad finishes. The problem we have is that Afghanistan still faces attack from the Taliban, fully supported by Pakistan’s Inter-Services Intelligence, with the simple aim of conquering the country. Given the success since 2015 when the coalition moved into an advisory CT mode, what is the coalition’s plan now to prevent even larger swathes of the country from falling to the Taliban—indeed, to prevent Kabul itself from falling? If it does, I would call that strategic failure.
I share my hon. Friend’s assessment of the requirement for regional partners not only to step up and take a stake in Afghanistan’s peace, but to behave responsibly in the way they go about their diplomatic affairs in the region. His characterisation of what remains of the coalition is, if he does not mind my saying so, somewhat out of date. We have been down to a residual counter-terrorism mission for some time. For five years or more, the coalition has not extended its writ across the whole country. Actually, the Afghan national security forces have done a good job of maintaining security within the borders of Afghanistan since the NATO mission stepped back towards the current CT mission. I am full of optimism for what the Afghan national security forces could achieve. It depends, of course, on their being empowered to do so by a future Government in Kabul.
Like the Minister and the shadow Secretary of State, I pay tribute on behalf of the Scottish National party to all those who served, and of course, we remember all those who sadly lost their lives in Afghanistan. All of us want the Government to get this right. I accept that there are no easy, clearcut, black and white ways forward, but I share some of the concern at the somewhat over-optimistic assessment that the Minister comes to the House with today. There is no absolute victory, of course—there is victory of sorts—but the peace is unstable. Governance is better, but it is still unstable, and the Taliban are not the outfit they once were, but they still pose a threat. The Chair of the Select Committee, the right hon. Member for Bournemouth East (Mr Ellwood), made some excellent points on how lessons are learned about what went wrong, because some things did. I return to the question he asked, which the Minister was not quite clear on: what is the Government’s view of a Chilcot-style inquiry? If we are all committed to getting this right, that is the kind of thing that surely needs to happen This might be the end of one of America’s forever wars, as it is sometimes known, but for Afghanistan, it remains immensely uncertain. What does the post-September relationship look like with the Afghan Government? I say this to the Minister on foreign aid. We can either have peace and stability in countries such as Afghanistan, or we can have foreign aid cuts; we cannot have both. If the Government are committed to a stable future for Afghanistan—which, in fairness, I believe they are—they need to reverse not just the cut that the shadow Secretary of State mentioned but the cut in its entirety across the foreign aid field.
May I remind the SNP spokesperson that he has one minute, not the more than two minutes that he has taken?
The hon. Gentleman is entirely right to ask what the mechanism is for solidifying the peace within Afghanistan, but I am not sure that I see what the international military presence would do to solidify that peace any further. What needs to happen now, as we have seen in Northern Ireland and many other conflicts in which we have been involved in the past, is this deeply imperfect and—for those of us who have served —uneasy reality that all parties, irrespective of the role they played in the conflict, need to come together and make the politics work. I think that the conditions are right for that to happen now I do not mean to sound over-optimistic. My eyes are wide open. I said in my answer that the future for Afghanistan is uncertain—of course it is. But there is a set of Afghan national security forces in place now that are capable of maintaining the peace, and I genuinely believe that there is a political will to achieve that and an expectation within the Afghan public that their politicians will achieve that How the lessons are learned from this campaign, as they were with Iraq, is for my right hon. Friends the Prime Minister, the Foreign Secretary and the Defence Secretary to decide in due course. Of course, in everything we do in the Ministry of Defence, we look at what we have done, and where it worked, we reinforce, and where it did not work, we change. Within the integrated review, there is already a recognition that the way we have done our business in the last two decades may not be the way that we do it in the next On the hon. Gentleman’s final point about the relationship with the Afghan Government and the need to financially support them, as the Secretary-General of NATO said, this is not the end of our involvement in Afghanistan; it is just the start of a new chapter. That new chapter is one that remains every bit as committed to supporting the Afghan national Government, and this year alone the UK will spend up to £70 million on supporting the Afghan security forces. Such support—both diplomatic and financial—is key to ensuring the future that we envisage for Afghanistan in the absence of a military contribution.
Alongside its regular colleagues, the Territorial Army has served with distinction in Afghanistan, not least 21 Special Air Service Artists Rifles, which, as a formed unit, demonstrated its extreme gallantry by winning three Military Crosses in the fighting in Nad-e Ali in Helmand in 2008 as well as a Conspicuous Gallantry Cross at a later date. On the back of that highly distinguished record, will my hon. and gallant Friend retain the option to deploy the Army Reserve on live operations abroad, both as attachments to regular forces and in their own formed units?
Within the 150,000-plus service personnel who have served in Afghanistan, there will be many thousands of reservists who have mobilised and answered their nation’s call, and they have done so with great distinction, as my hon. Friend describes. He will be pleased to hear, I am sure, that the design of our armed forces for the next decades recognises absolutely the importance of the role that reservists play both as individuals, with the expertise that they bring to the force, and as formed units. There is every intention of building on their success in Iraq and Afghanistan as we look at how we use the reserves in the future.
Let us be quite honest about this: we are where we are today because the United States is going to do what it is going to do. Some of us will remember the scenes of Saigon in 1975, with people who had helped the US forces scrambling desperately to get on board the helicopters. Those who were left faced imprisonment and in some cases execution. So my question is very clear: the Minister and the shadow Secretary of State have touched on the fate of those Afghanis who have helped us—the translators and the like—but will we give them asylum and will we give them residency in the UK to thank them for what they have done? Let me go further: will we extend the same offer, because there is interchange, to those who helped the US forces if the United States refuses to do so?
The hon. Gentleman asks me a very straightforward question, and I hope I can give him a very straightforward answer. Between 1 May and the completion of the withdrawal in September, any attack on NATO troops will be responded to robustly. The withdrawal will happen in good order; there will be none of the scenes that he evokes from previous conflicts. The plans are well established, and I have every confidence in the ability of our military and the militaries of our allies to deliver them. He is quite right to raise our responsibility to those who have served alongside us. It is not for me to pre-empt the decision that is yet to be made by the Defence Secretary and the Home Secretary, but I can reassure him that they are both seized of our responsibility, and I know they are working with all appropriate haste to make sure that a solution is put in place.
I pay tribute to the service of my hon. Friend the Minister, with whom I served a lot in Afghanistan and a lot in the Ministry of Defence. May I just say that the work the NATO troops are currently doing in Afghanistan is hugely important—not because they are in combat operations, as the Minister rightly says, but because they are enabling the Afghan troops and supporting them with medical aid, logistics and so on? So while I recognise that this withdrawal cannot be avoided by the UK, because fundamentally it is a US decision, what assessment have he and his Department made of the implications for the responses of others? He will know that the perception that we may not endure on an operation, even when we are no longer in combat, will weaken the way we are seen by our enemies and may lead our allies to doubt us.
I think that our resolve has been tested and demonstrated by the longevity of the mission. We could arbitrarily say, “Well, if we were to stay for another 10 years or 20 years, that would even further show our resolve”. I think the alliance set itself a set of military objectives, which were broadly achieved. It is clear that the politics must now take over. My hon. Friend is entirely right to point, however, to the wider range of effort that goes on and the degree to which that underpins the operational effectiveness of the Afghan national security forces. Clearly the military presence within Afghanistan itself will come to an end, but our ability to remain connected to the Afghan military academy remotely is undiminished, and likewise our ability to host Afghan officers and NCOs on military courses in the UK. All of that will I think, first, help to strengthen the connections between the Afghan and UK armed forces, but secondly, help to continue to develop their capacity so that they sustain their own operations and ensure that there is a lasting peace within Afghanistan.
I do believe that the decision by the United States, ourselves and NATO to pull out military personnel at this stage will be wrong. I think it only gives succour to the Taliban. We do not have a stable situation in Afghanistan yet. Can I ask the Minister what support is being given to women during the peace process? He knows the importance of women within Afghan society, and their advancement is so important. What is he doing to give support to women to ensure that they have a strong platform and to ensure that things such as girls’ education are protected?
The hon. Gentleman picks up on one of the great successes of the intervention in Afghanistan: for 20 years schools have been open to girls, and the education of girls remains one of the Government’s key foreign policy aims. Around the world seldom are those aims underpinned by military effort, however, and there are two things from which we should take heart. First, there are now so many women, relatively speaking, within the Afghan institutions—its Parliament, academia and media—that there is an expectation within Afghan civil society that women and girls will have more rights than what they had to endure under the previous Taliban Government. Secondly, the Taliban want legitimacy within the international community if or when they become a part of a future Afghanistan Government. Therefore it is reasonable to expect that they will not want to be the international pariah that they were, so they will be responsive to the diplomatic efforts to promote opportunities for women and girls that we are pursuing bilaterally and through the United Nations and our alliances. I wholly expect that future Afghan Governments would not want to reverse all the great progress that has been made in this important area over the past 20 years.
My hon. Friend speaks with great experience and knows of what he talks, but I am still struggling to understand precisely what the NATO strategy or plan is here. In addition to the great bravery and sacrifices of our own military, some very brave Afghan leaders, including women, believed that NATO would stay the course and will now feel very let down while the Taliban have little need to negotiate but increasingly will be in a very strong position. Does this not underline the very real limits of hard power and the importance of using soft power judiciously?
I thank my right hon. Friend for his question. He is of course correct that the military could underpin an accommodation of sorts almost indefinitely, but that is not an enduring solution for any country. The decision NATO took last week recognises that we are at a moment of decision. The accommodation with the Taliban is coming to an end, so the decision is to extend the deal, which removes the political imperative, to fight this summer, and who knows where that would have gone—and from a position of having far fewer troops in Afghanistan than has been the case since five years ago—or to force the pace of the political settlement. All those options are imperfect, but what matters now, exactly as my right hon. Friend says, is that the Governments who have formed the alliance now use their soft power to ensure that the parties come round the table and an enduring peace is found.
Our withdrawal from Afghanistan was announced without a peace-day deal in place and with the security situation continuing to deteriorate. Many who fought in, and are still affected by, the conflict are wondering just what it was all for. We cannot allow either the Afghan security forces to be completely overrun or terrorist groups to re-establish training camps, so what operational capability will the Government make available to prevent this from happening?
The decision to draw down our military presence within Afghanistan has been announced, and I know that the hon. and gallant Member will appreciate that we will need over the next couple of months to work through the intricacies of what capabilities may endure in Afghanistan. However, it is clear that the United Kingdom will not tolerate an ungoverned space in Afghanistan from which international terrorism can find a base and from which attacks on the UK homeland or those of our allies can be mounted. A CT effort within the wider region will be required to counter that, and of course the alliance reserves the right to go back in if the security situation deteriorates to such an extent that our national security is threatened.
As we have heard, 457 brave men and women of our armed forces have paid with their lives to protect us here at home, and countless others have been wounded. I sincerely hope that their sacrifice has not been in vain. I seek my hon. and gallant Friend’s assurance that this withdrawal will not see a reluctance on our part to combat terrorism in the future, for, as Edmund Burke said so succinctly, the only thing necessary for the triumph of evil is for good men to do nothing.
My hon. Friend is entirely right. I should be clear that, as I hope the integrated review made clear, the UK has an ambition to be a force for good in the world and that where terrorism threatens the UK’s interests or those of our allies, we will be present, building the capacity of partner forces and helping to remove that instability and insecurity around the world. What we have learnt over the past 20 years is that there are ways of doing that, and the vision we have set out in the integrated review is for a far more intelligent way of doing that: developing capacity, tackling insecurity and being a force for good around the world.
I am sure that we all pay tribute to the service and sacrifice of all those who served and of those who, sadly, lost their life. General Sir Nick Carter, Chief of the Defence Staff, said in a recent interview that although he respects the decision of the Biden Administration, it was “not a decision we hoped for” Will the Minister confirm whether the MOD feels confident in the ability of the Afghan national security forces to defend the Afghan Government and their people without the current NATO presence in Afghanistan?
I fear that that question invites a reprise for all the answers I have already given, but, yes, the Afghan national security forces have the capacity to maintain peace within Afghanistan. The key is whether they are empowered to do so by a future Government in Kabul.
Does my hon. Friend agree that the United States should be a global neighbourhood watch in the middle east, not just a superpower that draws down the blinds? Does he share my grave concern, and that of many colleagues, that the withdrawal of troops will boost Sunni extremism, not just in Afghanistan, but in Iraq, where the Sunni ISIS death cult threatens Iraq and Kurdistan? Will he consider gifting surplus military and medical kit to the Iraqi Kurds in Kurdistan, rather than leaving it in Afghanistan?
IS and the Taliban are no friends, and I suspect that that will moderate the march of IS in Afghanistan. My right hon. Friend invites me to set out how we might gift the equipment we have been using in Afghanistan. Some of it will be gifted to the Afghan national security forces. Where we have critical capabilities that we want to recover to the UK, we will of course do that. Whether or not those are in due course re-gifted in other theatres is a decision for us to take over the next few months, but I note his suggestion.
I think we are all aware that the risks in Afghanistan remain and are significant, and although over the past decade they have metastasised through different iterations and dispersed through the region, they still have significant roots in Afghan territories. So how will the Minister ensure that the strategic expertise brought by our armed forces’ soft power can be utilised to reduce the risk of the resurgence of violence and to support the Afghan security forces for as long as they require us?
The institutional connections between the UK Ministry of Defence and our armed forces, and the Afghan Ministry of Defence and armed forces are as strong as one would expect them to be, given that those relationships have been forged in combat over the past 20 years. As I said in response to an earlier question, there is every intent to continue to mentor the Afghan national security forces and MOD remotely, and to continue our involvement in the Afghan national military academy remotely, and of course to give the opportunity to Afghan officers and non-commissioned officers to attend courses in the UK that will maintain those connections and develop their capability.
I pay tribute to my hon. and gallant Friend for his service. Some three years ago, I had the privilege of visiting Kabul and seeing the Welsh Guards serve in Afghanistan and contribute to the building of a civic and civil society in the community. Given the fragility of that society, what tangible steps does my hon. Friend propose to take, as we leave Afghanistan by September, to ensure that the steps taken in recent years are not lost?
My right hon. Friend has seen with his own eyes the good work that has happened. As I said in response to the hon. Member for York Central (Rachael Maskell), there are opportunities to maintain those connections even without a physical presence on the ground. I have every confidence that we will do so. This is not just about politics and ministerial decision making; there are friendships between our armed forces that mean that the UK armed forces and UK MOD want to see the Afghan army, the Afghan security forces and the Afghan MOD succeed in the future. We will do everything we can to maintain those connections and develop capabilities so that the green shoots that my right hon. Friend saw can grow.
May I add my tribute to all those who served and those who tragically lost their lives? I visited Helmand in 2009, when I believe the Minister was on his second tour, and I saw at first hand the bravery, dedication and professionalism of our armed forces and all those who worked with them in extraordinary circumstances. That will never be forgotten. They did make a difference The Minister mentioned those who are living with life-changing injuries, including some of those he served with. Of course, those injuries are not just physical; tragically, there are mental health consequences for many, and there are also issues with housing, access to public services and so on. Will he give a cast-iron guarantee that we will continue to meet our debt of obligation to all those who served in Afghanistan, whether it is with respect to their physical health, their mental health, their housing or other needs, for as long as that is necessary?
I thank the hon. Gentleman very much for his question. Yes, the Ministry of Defence and Her Majesty’s Government will continue to meet that obligation. One of the things that came out of the conflict in Iraq and Afghanistan was huge public recognition of the debt that we owe to our armed forces, and a recognition of the sacrifice and the commitment that they make on behalf of our nation. It is absolutely incumbent on those of us who now have the honour of making policy in Government to ensure that we live up to those obligations and that our veterans of Afghanistan, Iraq and all other conflicts are properly looked after.
I pay tribute to my hon. and gallant Friend and, indeed, all those who served with distinction in Afghanistan. Clearly, the economy of Afghanistan—in particular the farming community—will be vital to preserving peace and security in the region. Will my hon. Friend update the House on what will be done to encourage farmers to develop products and crops rather than feeding the illegal drugs trade, which has caused so much damage not only to the region but to the rest of the world?
My hon. Friend has taken me well out of my comfort zone. If he will indulge me, I might need to write to him.
I, too, pay tribute to all the veterans of the Afghanistan conflict, a number of whom are residents at the Cranhill Scottish Veteran Residences complex in my constituency. My hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald) was right to link this issue back to the decision to cut foreign aid. The Minister should not just listen to him; James Cowan, the chief executive officer of the HALO Trust and a former commander of British troops in Afghanistan, said: “I have seen first-hand the importance of foreign aid. But the prime minister has announced a £4 billion cut in UK aid – money that is vital not only to the wellbeing of vulnerable people worldwide, but also British national security” He is not wrong, is he?
This issue has been touched on in previous questions. There is a commitment to spend up to £70 million in Afghanistan this year alone in support of the Afghan security forces, and of course there is an aid package beyond that. Very obviously, the end of our military contribution in Afghanistan does not mean the end of our wider diplomatic and development agenda in the country, and I fully expect that the UK Government will maintain that commitment so that we can do our bit in helping Afghanistan to succeed in the future.
This nation has a proud record, as indeed do many Members of this House, of responding to need around the globe. Decisions to get involved are not taken lightly. Questions of purpose and measures of success are rarely clearcut, and they always come at a cost. We have already heard that, for 454 British troops in Afghanistan, it was the ultimate sacrifice. For many more, including veterans and families that I have met here in Aberconwy, it is something they continue to carry day by day. Will the Minister join me in paying tribute to the veterans of the conflict in Afghanistan and their families? What assurance can he give them that their work and their sacrifices will be remembered?
This Government, and indeed our nation, place huge importance on our duty to remember the sacrifice of those who have given their lives in the service of our nation around the world. I have every confidence that we will continue to do so, and when we reach remembrance events in the autumn I think people will be particularly focused on the end of our military operations in Afghanistan and the sacrifice made there Beyond that, I hope that Afghanistan veterans such as myself and six other Members of the House will reflect on their personal experiences in that country and on the good that they know they did and that they saw with their own eyes. Cumulatively across the whole country over 20 years that amounted to an environment in which the Afghan Government could establish itself and grow and in which civil society could flourish. We have set the conditions within which Afghanistan has the chance of a peaceful and secure future.
I join the Minister in paying tribute to all those who were deployed to Afghanistan, and it is right that we remember today the 457 who paid the ultimate price, as well as those who are now living with life-changing injuries. I first visited Afghanistan in 2003, and then on numerous occasions up until 2010, and the Minister is correct to highlight the success stories. One of those is the Afghan security forces, and Britain can be quietly proud of the work it did at the Kabul officer academy in developing that force. However, operationally, the Afghan security forces are dependent on allied air power, so will Minister highlight whether there are any plans to give that air support once we withdraw?
Clearly, the announcement was that there will be no military presence in Afghanistan. Air support can come from outwith Afghanistan, and I suspect that decisions on that would be based on the security situation at the time. However, I think that the priority of all in NATO is to force the pace of a political settlement, which our departure does. What we should all hope for is a successful political outcome, where the capabilities that the right hon. Gentleman draws our attention to would not be required.
Will my hon. and gallant Friend tell the House how confident the Government are that the peace negotiations will bring the right governance and security to Afghanistan by September and, in particular, that women will continue to have rights under a future regime? Only in the last few months, several women have been targeted for assassination, apparently by the Taliban. The treatment of women under the Taliban was totally unacceptable, and as the co-chair of the all-party parliamentary group on women, peace and security, I do not want to see any reversal of women’s rights in Afghanistan, but I am afraid I do not share the Minister’s optimistic outlook on this issue.
I thank my hon. Friend for her question and for her work in chairing the APPG, to which I think my right hon. Friend the Minister for the Middle East and North Africa and I will present the annual report in the coming weeks. The work on this issue is important and characterises so much of our contribution to conflicts. My hon. Friend will be aware that 3.7 million girls are now in school—a huge step forward from zero, which was previously the case. There is an expectation in Afghan society that is far more powerful than any military stick that may be wielded, and one can only hope that that is irreversible. The genie is out of the bottle, and once women and girls have that expectation and it becomes the norm in society, it is awfully hard—even for the Taliban—to reverse it.
The allies’ withdrawal from Afghanistan is causing deep concern for those who placed their lives on the line as invaluable interpreters for British forces. We know that the Taliban will exact revenge on those who supported the alliance, so what steps are Ministers taking now to fulfil our responsibility and our promises to ensure that the remaining interpreters and the families of those who are already here—I still have ongoing constituency cases where there are problems—are rescued? This is about honouring our promises.
I hope that the hon. Lady will have taken some reassurance from my earlier answers on the work of the Defence Secretary and the Home Secretary. I am sure that they will come forward with an answer imminently.
Will my hon. Friend join me in paying tribute to the locally employed civilians throughout Afghanistan, who were a vital help during our deployments? Colleagues have asked questions about interpreters and their safety, and I was pleased by his answer that, during the drawdown, people who had helped our forces will not be abandoned. However, once we have left, will he give us some assurance that all the many hundreds of locally employed civilians and the interpreters—the people who have risked their lives, their family’s lives and their safety—will not be abandoned?
I refer my hon. Friend to my previous answer. I have seen with my own eyes just how integral those locally employed civilians were to the success of our mission. We owe them a debt. There is work going on in Government to make sure that that debt is paid.
There are no easy answers in Afghanistan and I pay tribute to the service of personnel who have worked so hard to bring peace to the country. I reiterate the SNP’s strong support for a Chilcot-style inquiry into our engagement in Afghanistan to learn the lessons. On aid, we regret deeply the cuts to the aid budget, but I do not doubt the Minister’s sincerity and commitment to Afghanistan. Would he accept and agree with our call to exempt Afghanistan from any cuts to the wider aid budget, because now is precisely the time to step up that support, not scale it back?
I know that the hon. Gentleman will forgive me if I refrain from making policy on the hoof at the Dispatch Box, but the suggestion is noted, and, as I have made clear in previous answers, it is clear that the removal of the military instrument does not bring with it an end to our commitment in Afghanistan. I am confident that my right hon. Friends the Foreign Secretary and the Defence Secretary will be listening to the contributions about the importance of making sure that we continue to support an Afghan civil society and military to underpin the peace that we all hope for.
Improvements in Afghanistan’s society, such as to girls’ education, are welcome and, as the Minister said, show signs of an improved future for Afghanistan’s people. However, freedom of religion or belief remains severely curtailed. Does he share my concerns about that, and what can be done to address it?
Afghanistan is a deeply Islamic and conservative country. As my hon. Friend will know from the amazing work that she does as the Prime Minister’s special enjoy for freedom of religion or belief, those countries are hard ones in which to espouse the values that she so enthusiastically campaigns for. I know that she will keep all the pressure that she can on the Prime Minister and my colleagues in the Foreign, Commonwealth and Development Office. She is absolutely right that this is a very important hallmark of a free democracy, and we should have every expectation that the sort of things that she would want to see are things that we are comfortable and enthusiastic about discussing with Afghan Governments in future.
Can the Minister give specific examples of actions that the Government now intend to take as we withdraw from Afghanistan to support and ensure that all the improvements that have been taking place over the past 20 years in the human rights of women and girls, such as access to education and healthcare, will not be reduced or reversed?
I can. The bilateral relationship between the UK Government and the Afghan Government will endure, and so, too, will our engagement through multilateral forums such as the UN. These are hard-won steps that have made Afghanistan a better country. Our expectation must be that nobody involved in the peace process would want to row back from those, and the international community must be united in ensuring that they do not.
As we draw down our forces in Afghanistan, the United Kingdom can look proudly at the contribution that we have made to supporting and developing the local security forces. Because our military contribution ends, that training and assistance need not, so will my hon. and gallant Friend confirm that, moving forward, we will continue to offer support and training to the Afghan security forces, including, for example, by posting cadets at Sandhurst?
That is exactly the sort of support that we envisage. The agreement is that there will be no military presence within Afghanistan, but that does not diminish in the slightest our ability to continue to have a strong relationship with the Afghan national security forces and to develop their capability either from the outside in or by bringing them to study and train in the United Kingdom.
I congratulate the Chair of the Defence Committee, the right hon. Member for Bournemouth East (Mr Ellwood), on securing this question and on his excellent contribution, because whatever way the British Government try to present it, the unconditional withdrawal from Afghanistan is a humiliation. No parliamentary vote was held to authorise the invasion 20 years ago, nor was democratic endorsement sought for the disastrous escalation of UK involvement in Helmand province. Is it not time that it was enshrined in law that major military engagements and significant escalations of conflict must be endorsed by this House and, I would argue, when Welsh troops are involved, by the Senedd as well?
That last point is clearly somewhat problematic. People from across the United Kingdom serve in our units and they serve as the UK’s armed forces. I suspect that the hon. Gentleman knows how impractical his suggestion is, but perhaps he is playing to an audience back home As for the hon. Gentleman’s earlier point, it would be impractical in the extreme for all operational decisions, some of which have to be taken with some haste, to be a matter for a vote in this House. The detail that underpins those decisions often cannot be fully shared at the Dispatch Box, for obvious reasons. The Government have, throughout, made every effort to be transparent about the way the Afghanistan campaign has been progressing. I remember there being regular updates to the House on it and the opportunity for Ministers to be held to account, but I am not sure that military planning by parliamentary vote is necessarily the way to show the coherence of the military instrument to our adversaries overseas.
I am concerned that, with the drawdown of our troops, Afghanistan could again become a centre and base for international terrorism. Can my hon. Friend update the House on the steps we are taking to mitigate that risk?
I suspect that I have answered that question a few times over the last hour. This is simply the end of military operations in Afghanistan; it is not the end of the UK’s commitment to that country. Everybody is clear on that. So, too, are our partners and allies around NATO and beyond. The international effort to deliver peace and security within Afghanistan continues; it is just no longer appropriate to seek to achieve that through military means.
There are many who would say that the Taliban control a huge swathe of Afghanistan, and that this decision will mean that the Afghan security forces could be overrun. Will the Minister advise us, as an Afghan veteran? I pay tribute to that service, as I do to all the other veterans, including my own brother, Ronnie, who served two tours in Afghanistan. Can the Minister answer the question that many of them will be asking today: why oh why were they there in the first place, if we have not achieved what we intended to?
I do not accept that we have not achieved what we were there to do in the first place. We went into Afghanistan as a direct consequence of what happened on 11 September 2001. Article 5 was invoked because an attack on one was an attack on us all, and that attack originated in Afghanistan. Since then, there has been no international terrorist attack launched from Afghanistan on the UK, the US or, indeed, any other NATO ally, so in that sense the mission was achieved Actually, the mission has gone far further, as we have explored in our exchanges on the urgent question: in the 20 years that we have been there, we have given the opportunity for the Afghan Government to establish and strengthen and for an Afghan civil society to flourish. I truly believe that we have set the conditions within which a political process now has the best chances of success.
I know that the Minister will take back the very strong feelings expressed on both sides of the House that interpreters and other locally employed civilians must not be abandoned to a terrible fate at the hands of our enemies When the Minister says that the military process is over, does he not realise that the only thing that will prevent the Taliban from going back to the position they were in before we intervened 20 years will be the threat that if they try to overthrow the Government, they themselves will face a military consequence—if necessary, from outside the borders of the country? If he rules that out, he is basically giving them carte blanche.
As my right hon. Friend will know from his extensive experience of peace processes around the world, it is very likely—indeed, almost certain—that a lasting peace settlement in Afghanistan will involve the Taliban as part of the Afghan Government. It is in all our interests to support the political process as it plays out, but if there is a return to an ungoverned space that gives succour to international terrorism that is a threat to the UK homeland or the interests of our allies, we of course reserve the right to protect our interests, both unilaterally and multilaterally through NATO.
I thank the Minister for responding to the urgent question and answering 31 questions We are now going to suspend for a short while.
With permission, Mr Deputy Speaker, I would like to make a statement on our work to examine inequality across the population and set out a new, positive agenda for change The Government are committed to building a fairer Britain and taking the action needed to promote equality and opportunity for all. We do, however, recognise that serious disparities exist across our society, and are determined to take the action that is required to addressed them. Following the events of last summer, our nation has engaged in a serious examination of the issue of race inequality, and the Government have been determined to respond by carefully examining the evidence and data. We need to recognise progress where it has been made, but we also need to tackle barriers where they remain. That was why, last summer, the Prime Minister established the independent Commission on Race and Ethnic Disparities. It was tasked with informing our national conversation on race by carrying out a deeper examination of why disparities exist and considering how we can reduce them After careful study, the commission made evidence-based recommendations for action across Government, the private sector and other public bodies. The commission was established with 10 experts drawn from a variety of fields, spanning science, education, economics, broadcasting, medicine and policing. With one exception, all are from ethnic minority backgrounds. The chair, Dr Sewell, has dedicated his life to education and to supporting young people from socially deprived backgrounds to reach their full potential. This distinguished group was tasked with reviewing inequality in the UK, and it focused on education, employment, crime and policing, and health As this House will be aware, on 31 March, the commission published its independent report. I will now turn to its findings. It is right to say that the picture painted by this report is complex, particularly in comparison with the way that issues of race are often presented. The report shows that disparities do persist, that racism and discrimination remain a factor in shaping people’s life outcomes, and it is clear about the fact that abhorrent racist attitudes continue in society, within institutions and increasingly online. It calls for action to tackle this However, the report also points out that, while disparities between ethnic groups exist across numerous areas, many factors other than racism are often the root cause. Among these are geography, deprivation and family structure. For example, a black Caribbean child is 10 times more likely than an Indian child to grow up in a lone parent household. Disparities exist in different directions. People from south Asian and Chinese ethnic groups have better outcomes than the white population in more than half of the top 25 causes of premature death The report also highlights the progress that Britain has made in tackling racism, and the report’s data reveal a range of success stories. For example, it underlines the significant progress achieved in educational attainment, with most ethnic minority groups now outperforming their white British peers at GCSE level. The report also delves into the causes and drivers of some of the most persistent and enduring issues. For example, the commission has identified the disproportionate rate of black men convicted of class B drug offences. Let me be clear: the report does not deny that institutional racism exists in the UK. Rather the report did not find conclusive evidence of it in the specific areas it examined. It reaffirms the Macpherson report’s definition of the term, but argues that it should be applied more carefully and always based on evidence The commission made 24 evidence-based and practical recommendations. These have been grouped into four broad themes: to build trust; promote fairness; create agency; and achieve inclusivity There are many things that unite this House. A shared commitment to making Britain fairer for everyone is one of them. In the light of that fact, I urge right hon. and hon. Members to take the time to read the report’s 258 pages. There is also another thing that I am sure unites this House, which is abhorrence of the appalling abuse meted out to the commissioners and the false assertions made about their work in the past three weeks. It is true that this landmark analysis challenges a number of strongly held beliefs about the extent and influence of racism in Britain today. The commissioners have followed the evidence and drawn conclusions that challenge orthodoxy, and they were prepared for a robust and constructive debate. However, they were not prepared for the wilful misrepresentation of the report that occurred following its publication, such as false accusations that they denied racism exists, or that they wished to put a positive spin on the atrocities of slavery, or false statements that commissioners did not read or sign off their own report, or that they are breaking ranks. I have been informed by the chair and by individual members that the commission remains united and stands by its report This Government welcome legitimate disagreement and debate, but firmly reject bad-faith attempts to undermine the credibility of this report. Doing so risks undermining the vital work that we are trying to do to understand and address the causes of inequality in the UK, and any other positive work that results from it. For that reason it is necessary to set the record straight. This report makes it clear that the UK is not a post-racial society and that racism is still a real force that has the power to deny opportunity and painfully disrupt lives. That is why the first recommendation of the commission is to challenge racist and discriminatory actions. The report calls on the Government to increase funding to the Equality and Human Rights Commission to make greater use of “its compliance, enforcement and litigation powers to challenge policies or practices that…cause…unjust racial disadvantage, or arise from racial discrimination.” The Government even more firmly condemn the deeply personal and racialised attacks against the commissioners, which have included death threats. In fact, one Opposition Member presented commissioners as members of the Ku Klux Klan—an example of the very online racial hatred and abuse on which the report itself recommended more action be taken by the Government It is, of course, to be expected that Members will disagree about how to address racial inequality and the kinds of policies that the Government should enact. However, it is wrong to accuse those who argue for a different approach of being racism deniers or race traitors. It is even more irresponsible—dangerously so—to call ethnic minority people racial slurs like “Uncle Toms”, “coconuts”, “house slaves” or “house negroes” for daring to think differently. Such deplorable tactics are designed to intimidate ethnic minority people away from their right to express legitimate views. This House depends on robust debate and diversity of thought. Too many ethnic minority people have to put up with this shameful treatment every day, as some of my fellow MPs and I know too well. The House should condemn it and reprimand those who continue with such behaviour The commissioners’ experience since publication only reinforces the need for informed debate on race based on mutual respect and a nuanced understanding of the evidence. The Government will now consider the report in detail and assess the next steps for future policy. In recognition of the extensive scope of recommendations, the Prime Minister has established a new inter-ministerial group to review the recommendations. It will ensure that action is taken to continue progress to create a fairer society. As sponsoring Minister, I will provide strategic direction with support from my officials in the Race Disparity Unit. The group will be chaired by the Chancellor of the Duchy of Lancaster On that note, on behalf of the Prime Minister, I would like to thank the commissioners once again for all that they have done. They have generously volunteered their time, unpaid, to lead this important piece of work, and the Government welcome their thoughtful, balanced and evidence-based findings and analysis The Government will now work at pace to produce a response to the report this summer. I assure the House that it will be ambitious about tackling negative disparities where they exist and building on successes. It will play a significant part in this Government’s mission to level up and unite the country, and ensure equality and opportunity for all, whatever their race, ethnicity or socioeconomic background. I commend this statement to the House.
I thank the Minister for advance sight of her statement. It is only right that such a contentious report finally receives time for debate in this House. I have read the report, despite having to wait two weeks for an accessible version to arrive Following the Black Lives Matter movement, the commission had an opportunity meaningfully to engage with structural racism in the UK. Instead, it published incoherent, divisive and offensive materials that appear to glorify slavery, downplay the role of institutional and structural racism, and blame ethnic minorities for their own disadvantage. If left unchallenged, the report will undo decades of progress made towards race equality in the UK Since publication, the report has completely unravelled. Far from bad-faith actors, this report has been discredited by experts, including the British Medical Association, Professor Michael Marmot, trade unions representing over 5 million workers, human rights experts at the UN and Baroness Lawrence, who said it gives a “green light to racists”. Its cherry-picking of data is misleading and incoherent, and its conclusions are ideologically motivated and divisive It is absolutely clear to all Opposition Members and those across civil society that this report has no credibility, so I am disappointed to hear the Minister double down on it here today. How can she stand before us in this House and defend the indefensible? I want to ask one simple question to start: who wrote this report? Four weeks ago, she stood at the Dispatch Box and said: “It is not the Prime Minister but an independent commission that will be publishing the report.”—[Official Report, 24 March 2021; Vol. 691, c. 906.] Despite what she says about unity, can she explain why multiple commissioners have disclosed that No. 10 rewrote parts of the report? What precedent does this cronyism set for future independent commissions? Furthermore, will the Minister explain how the Government came to publish claims that there is a “new story” to be told about slavery and empire, and will she distance herself from those abhorrent remarks The Minister says that commissioners followed the evidence, but this report marks a major shift away from the overwhelming body of data on institutional and structural racism. The Office for National Statistics finds that the unemployment rate for black people is now 13.8%—triple the rate for white people—so why does the report conclude that young black people should “examine the subjects they are studying”, instead of addressing the systemic inequalities within the labour market? Black women are four times more likely to die in pregnancy and childbirth, but the report says that these numbers are so low that it is “unfair” to focus on this disparity. Does the Minister agree with those findings? Even the example about class B drug use, which she repeated today, is inaccurate, with the Cabinet Office admitting that there was a mistake. I was especially interested to hear the Minister highlight the recommendation to increase funding to the EHRC, given that her Government have slashed its funding by £43 million since 2010 This report is part of the story that Government Members would like to try to tell about fairness. They say that they are interested in addressing inequalities of geography and class, but the truth is that they are not interested in ending inequality at all. In stark contrast, the Labour party believes in ambition and potential for all, including black and ethnic minority people, but we recognise that we often start from a position of systemic disadvantage It is our job as elected representatives to level the playing field, so I want to end by giving the Minister the chance to reject this report and tell the House instead what she is doing to implement the 231 recommendations in the Timpson, McGregor-Smith, Williams, Angiolini and Lammy reviews. What is she doing to comply with the public sector equality duty, and why is she not publishing equality impact assessments? This is what her Government would be focused on if they were serious about ending structural racism. Instead, they have published a shoddy, point-scoring polemic which ignores evidence and does not represent the country that I know and love. It is reprehensible, and I hope the Minister will reject it today, so that we get on with the task of tackling institutional and structural racism, which is the lived experience of many.
It is quite clear that the hon. Lady did not read the statement, which I sent to her in advance, and she clearly did not listen to it as I read it out. She is clearly determined to create a divisive atmosphere around race in this House and this country, and we will not stand for it. We continue to push for a fairer Britain and for levelling up. Labour Members continue to look for division. They continue to stoke culture wars and then claim that we are the ones fighting them I completely reject all the assertions that the hon. Lady has made—many of them false and many of them hypocritical. Whose party has been determined to be institutionally racist by the Equality and Human Rights Commission? It is not my party; it is hers. She and many of her colleagues are the ones who are complaining about their party’s Forde inquiry and claiming that their party has anti-black racism. Why do they not look at resolving the problems in their own house, instead of trying to spread them around the rest of the country I will acknowledge some of the questions the hon. Lady has raised and seek to answer them. She asked who wrote the report. The commissioners wrote the report; that is because they were independent. It is simply not true to claim that other people wrote the report. The commissioners have put statements on the—[Interruption.] I am afraid I cannot hear myself speak because of the hon. Member for Brent Central (Dawn Butler). It would be nice if she stopped heckling from a sedentary position. Her mouth is covered, so I cannot even hear what she is saying If we look at the statements that the commissioners have made on the gov.uk website, they have been united. They have not broken ranks. They have not chosen to dissociate themselves from the report. The only thing that is happening is that Labour Members in particular continue to misrepresent what is happening. Why, for instance, will the shadow Minister not condemn the racist abuse faced by the commissioners? Why will she not condemn her own colleague, the hon. Member for Norwich South (Clive Lewis), who posted a picture of the KKK in response to the commissioners? Does she think that that is appropriate behaviour? It is the subject of a complaint to the Parliamentary Commissioner for Standards We should go back to the substance of what this report is saying, rather than continuing to try to slander the people who have written it. These are professionals and distinguished individuals who gave up their time, and I commend them for their work. I am very proud of it, and of course we will not be withdrawing the report It is clear that today’s Labour party is functionally innumerate and does not like to see statistics and evidence, so rather than focus on the numbers and the data, they run away. They just want to continue having discussions on racism, which is where they think they are strong, but I am afraid that they are not strong on this issue. We will not sit back and allow divisive rhetoric and misrepresentation to be the story on race. We are determined to create a positive national conversation about this issue based on facts and evidence, fraternity and fairness, not on nonsensical accusations So I reject the hon. Member for Battersea’s assertions. We will not withdraw the report. We will look at what recommendations to take forward. The Government have still not provided a response, but there are many issues around that structural inequality that we want to have dealt with. However, I reiterate that, just because there is a disparity, it does not mean that discrimination is the cause. If we continue to identify discrimination right from the beginning without looking at the root cause, we will continue to offer solutions that do not improve the situation. I am very happy to commend the commissioners and I reject the hon. Lady’s very divisive rhetoric and assertions to the House today.
The House and the country will be glad that the Government have come forward with this positive statement in support of Tony Sewell’s and the other commissioners’ report The commission had to put out a statement on 2 April contradicting most of the ill-informed criticisms. At the end, it said: “The 24 recommendations we have made will, in our view, greatly improve the lives of millions of people for the better if they are all implemented.” The second sentence of the first paragraph said that the report “stated categorically that ‘we take the reality of racism seriously and we do not deny that it is a real force in the UK.’” That seems plain and clear I came into politics in 1971, when the ethnic minorities in the area where I lived in south London were denied the chance to take O-levels because left-wing goodies asked why people should be forced to take O-levels in the fifth form. I said it was so that they could go on to university. With two West Indian mothers on the governing body, within three years, the first of our black pupils went on to medical school. I think we can dedicate ourselves to making life better I say to the Minister that later—not today—I would like to come and talk to her about the treatment of Gurpal Virdi, a very good Sikh officer who four times was badly treated by the Metropolitan police. The fourth time, he was prosecuted for a week and a half for something that could not have happened, following an investigation that should not have happened That is one of the things that would help to give weight to the recommendations of the Sewell commission —if things are treated fairly, when they go wrong, they are investigated properly.
I thank the Father of the House for his question and for his comments, which I completely agree with. The issue he describes around education back in the day is actually something I experienced myself. There is still much to do, but we have come a long way from 25 years ago when I first immigrated to this country. On Gurpal Virdi, I am happy to meet my hon. Friend to fully understand what happened and to see what the Government can do.
I thank the Minister for advance sight of her statement. A United Nations working group strongly rejected this report, saying that it “further distorted and falsified historic facts”, could fuel racism and twists data, among other pointed criticisms. The Minister just spoke about the lack of evidence of institutional racism, but the Runnymede Trust rightly points out that evidence of institutional racism was submitted to the commission. Twenty thousand people joined the Runnymede Trust and Amnesty International in calling for the report’s withdrawal, and 36 trade union general secretaries have repudiated the report. In contrast to the Prime Minister, who said that the report contains “interesting observations”, Scots campaigner Talat Yaqoob called the report a “whitewash of reality” produced only to let the UK Government abdicate responsibility for tackling institutional racism. How can the Minister justify a report that says policies such as the hostile environment were not deliberately targeted at the UK’s ethnic minorities? Leading clinicians have said the report will worsen systemic health inequalities. The NHS Race and Health Observatory has declared that institutional racism exists in the UK, the health and care system and across wider public bodies. In the light of those responses, will the Minister repudiate the report’s glossing over of the impact of covid on ethnic minority groups The SNP will always work hard for Scotland to be a global leader in diversity and inclusion. If re-elected, we will introduce a Scottish diversity and inclusion strategy, focusing on institutional barriers and providing education on colonial history. The Scottish Tory manifesto is silent on these issues, but in bringing forward this report, it certainly looks like the UK Government are going in the opposite direction. So can the Minister tell us specifically what the Tories are doing to tackle institutional inequality and to deal effectively with colonial history? Can she understand why so many people will be deeply disappointed with this response, which feels, at best, like a bunch of cans being kicked down the road?
Before I begin to answer the hon. Lady’s questions, I would like to point out that the PM wrote to devolved Administrations shortly after the commission was established to invite them to engage with this work. It is noticeable that Northern Ireland was keen to take part, and hosted the commission on crime and policing matters. However, the Scottish National party Administration did not engage, so I believe that the words the hon. Lady is now saying about how dedicated they are to fighting racial inequality are completely hollow. When the commission was set up, I am afraid that they did very little indeed to engage Regarding the statement by the UN experts, the group grossly misrepresented the commission’s report; the statement is clearly born of the divisive narratives perpetrated by certain media outlets and political groups that are seeking to sow division in our ethnic minority communities. It is also quite clear that the UN experts did not read the commission’s report, judging from some of their statements, which seem to have been cut and pasted from a Labour party press release. The obvious flaw in their critique is that there is no comparison to be drawn with peer countries in Europe, especially because they do not even collect data on race and ethnicity. As such, I share the commission’s disappointment in, and rejection of, yesterday’s statement by the working group of experts on people of African descent, and I will be writing back to them in the strongest of terms It is no surprise that the hon. Lady has listed a lot of left-wing groups that disagree with the report. Disagreement and debate is part of politics. We have no issues with people disagreeing with the substance of the report; what we do have an issue with is people misrepresenting it. This report was tasked with finding out why disparities exist. It was not supposed to define where exactly we are seeing institutional racism, but to call racism out where it exists, and it did that. Perhaps if the hon. Lady spent some time reading the report, rather than remarks on Twitter, she would be better informed about what it actually says.
The chief economist of the Bank of England has said that “Published pay gaps are a starting point for corporate and national accountability” Business groups have called for mandatory reporting of ethnicity pay gaps. The commission recommended investigating the causes of pay disparities, but then did not recommend mandating the reporting that would identify those disparities, so will the Minister now commit to taking a different approach from the commission, and commit to mandatory reporting of ethnicity pay gaps?
I thank my right hon. Friend for her question, and I pay tribute to her for setting up the Race Disparity Unit, which has allowed us to carry out so much forensic research On the issue of ethnicity pay reporting, the commission pointed to statistical and data issues that affect ethnicity pay reporting, and makes a recommendation as a way for employers to overcome these challenges and report ethnicity pay accurately. As I say, the Government will consider the report in detail, and we will work with colleagues in the Department for Business, Energy and Industrial Strategy to assess the implications of this recommendation for future Government policy and respond in due course. However, I take my right hon. Friend’s comments into account, and will make sure that they are addressed in the Government response.
The Minister has accused people of criticising the report in bad faith. Is she really saying that Professor Michael Marmot, a world-renowned expert in public health, is acting out of bad faith? Is she really saying that the British Medical Association and other professional associations are speaking in bad faith? It would reflect better on the Minister if she were prepared to engage with genuine criticism by experts Nobody denies that there has been progress on racial justice in this country. My parents left school in rural Jamaica aged 14; I am a British Member of Parliament. However, this is widely seen—particularly by people who have been quoted and misquoted—as a shoddy, cynical report that, to quote the UN working group, “repackages racist tropes and stereotypes into fact, twisting data” I say to the Minister that surely black and brown British people who have contributed so much to this country deserve better than this report.
What black and brown British people like myself deserve is better treatment from the Opposition Members who continue to stoke division. Of course I am not accusing Professor Sir Michael Marmot or the BMA of bad faith. The people I accuse of acting in bad faith are the right hon. Lady and her colleagues who are posting pictures of the KKK, and being advertised, as the shadow equalities Minister was, at an event preparing to denounce the report a week before it was even published. On Professor Sir Michael Marmot and the British Medical Association, I have had meetings with them and we engage with them. We take criticism from them—they are not there to endorse every single thing the Government say; they are there to provide helpful criticism and suggestions where necessary. Sometimes we agree, and sometimes we disagree. Disagreement is not a problem. What we do not want is misrepresentation, which is what the right hon. Lady and her colleagues continue to do.
Before I call Caroline Nokes, may I remind everybody, whether they are virtual or physical, that this is an opportunity to ask the Minister questions about the statement, not to make speeches?
I thank my hon. Friend for her statement. She has focused a great deal on evidence. Does she agree that narrative is also important, and that when the Government respond, it is essential that they do so in full to the 24 recommendations and get the tone right? The Women and Equalities Committee has invited Tony Sewell to come and give evidence to us, alongside other commissioners. I hope my hon. Friend will encourage him to do so, so that the Committee can hear at first hand the evidence that was presented to him and how the report was written.
I thank my right hon. Friend for her question. I agree with her that narrative is important, not just evidence. We in this House have to ask ourselves what story we are trying to tell. In the case of Conservative Members, it is a story of a shared history, shared values, shared culture and a shared future. We want to make sure that we create a sense of belonging for young people in this country, not an environment where they believe they will never be able to succeed because other people continue to tell them so despite the evidence. I will find out about the request she has made to the commissioners, and I am sure that they will respond in due course.
This is gaslighting on a national scale “The New Age of Empire”, page 95, tells us exactly what is happening. On page 103, “This is Why I Resist”, by Dr Shola, explains about racial gatekeepers, which Musa Okwonga from Byline Times talks about. My question to the Minister is this. The Government briefed a clear message well in advance of this report landing. Why did they do that?
I think it is disgusting that a Member of this House will stand up and accuse people of being racial gatekeepers. This is the same nonsense we have heard time and time again—calling people Uncle Toms, calling them house negroes and house slaves, and calling them racial gatekeepers. The fact that the hon. Lady is able to stand here and use that phrase without any shame whatsoever just shows how far the Labour party has fallen.
Answer the question!
I will answer the question, but we in this House have a responsibility to speak about this issue with nuance and responsibility, and the way the hon. Lady has carried out the debate is disgraceful. In fact, she is one of the many people who continue to stoke division in this country, and I am very sad to hear her remarks. The fact of the matter is that this report was written by professionals and experts who have a view that is different from hers. If she has a view that is not acknowledged by others, she should engage in a sensible debate, not call them racial gatekeepers.
On a point of order, Mr Deputy Speaker. The Minister has a responsibility to Parliament to answer the question. The Minister has given a statement, and she is supposed to answer the question. She has not answered this question.
That is a continuation of the question, as the hon. Lady knows.
I want to raise with the Minister concerns about certain organisations prejudging the Sewell report for political ends without fairly assessing the findings. One concerning example was the Runnymede Trust, which organised a campaign against the report over a week before it was published and broadcast a live-streamed event with Patrick Vernon, chair of Labour’s racial equality advisory group, where they argued that the report’s authors were equivalent to holocaust deniers who had been asked to develop a strategy on antisemitism. Does the Minister agree that not only does that kind of bad faith political action undermine the Runnymede Trust’s charitable objective of improved race relations, but that the shameful treatment of the report’s commissioners might actually discourage ethnic minorities from contributing to public life and public debate? I also thank her for her statement.
I completely agree with my hon. Friend. What he has described is part of the climate of intimidation surrounding the report’s authors, which I condemned in my statement and which has just been demonstrated by the hon. Member for Brent Central (Dawn Butler) I read in today’s paper that the Runnymede Trust is now the subject of a complaint to the Charity Commission. One complaint refers to the behaviour of the trust’s CEO and staff towards ethnic minorities who have a different approach to racial equality. Some of that behaviour includes calling a black Conservative a “house negro” and horrific views on mixed-race relationships expressed by one staff member, comparing white people having relationships with black people to slave masters sleeping with their slaves. I do not believe that these actions are appropriate for a charity committed to racial equality This is a good time to remind the House that the current chair of the Runnymede Trust applied to be the Labour candidate for Poplar and Limehouse in 2019, but failed to make the shortlist. I would be keen to know whether the shadow Minister condemns those sorts of remarks, or believes that they are acceptable so long as they are targeted at people she disagrees with.[Official Report, 22 April 2021, Vol. 692, c. 5MC.]
Ethnic minority communities have suffered disproportionate numbers of deaths from covid-19. The Sewell report fails to recognise that structural racism underlies many socioeconomic inequalities. There is an interconnectivity between different forms of disadvantage and discrimination but, at the heart of it, is structural racism. It is important for the Government to recognise that. Will the Government commit to working with organisations such as Operation Black Vote to implement a covid-19 race equality strategy that looks in particular at health inequalities and makes sure that the lived experience of people from ethnic minority backgrounds is listened to?
The hon. Lady will know that I have been reporting to this House quarterly on the very work that she describes—the effect that covid-19 has had on ethnic minority people and other vulnerable groups. We have explained the reasons for the causes of those disparities. The Public Health England report had a qualitative review, which talked about people’s experiences of racism in the system What we have to do now, however, is to ensure that we protect people. Our strategy at the moment is around vaccines. We have been doing everything we can to increase vaccine uptake, including significant amounts of work—which I reported to the House in February—on increasing vaccine uptake among ethnic minority groups where a large percentage of vaccine hesitancy remains, again much of it caused by misrepresentation and misinformation. I hope that the hon. Lady and members of her party will work with us in government on tackling misinformation and disinformation and will encourage those vulnerable groups to get vaccinated.
The BBC has now said that, in terms of race and culture, you are what you eat. That clearly has a narrowing implication for playwrights and authors who increasingly feel that they may write only about their personal racial and ethnic experience. Does my hon. Friend agree that that is a rather chilling thing in terms of the values that are now being put out?
My hon. Friend makes an interesting point. I believe in freedom of expression. It is important that authors, playwrights and other artists feel free to write about and represent a broad range of people, regardless of their race or ethnicity. That is what we would see in a truly diverse society with a shared culture, rather than a “stay in your lane” approach that assumes our society consists of mutually antagonistic identity groups.
The commission’s report used the phrase “Caribbean experience” as a euphemism for the slave trade. In Scotland, if the SNP is re-elected, it will fund the development of an online programme in Scotland and the UK on colonial history throughout the world. It will be able to be used in schools as an educational tool. Does the Minister agree that countries still have to face their colonial history for what it was and to have a mature discussion about its consequences and impacts?
I agree that we need to have a mature discussion, but I should let the hon. Gentleman know that the commission and its chair have been misrepresented on the comments about slavery. They have stated that any suggestion that they downplayed the history of slavery is “absurd” and deeply “offensive”: “The report merely says that, in the face of the inhumanity of slavery, African people preserved their humanity and culture.” The hon. Gentleman might be interested in the commission recommendation on new curriculum resources better to teach this complex history of the people of Britain.
I wish to report to the House and to you, Mr Deputy Speaker, that 20 Members of the House, including my hon. Friends the Members for Ipswich (Tom Hunt), for Bassetlaw (Brendan Clarke-Smith) and for Broxtowe (Darren Henry), have written to the Charity Commission complaining about the Runnymede Trust’s treatment of the commissioners and its response to the report, which, frankly, reflects the outrage of those who have had their long-standing bourgeois liberal prejudices challenged. It is important that the Minister give me an assurance today that she will make representations across Government to stop the worthless work—often publicly funded—of organisations that are promulgating weird, woke ideas and that, in doing so, are seeding doubt and fear and, more than that, disharmony and disunity.
My right hon. Friend is right. It is important that we in Government do not inadvertently promote people who are pushing divisive narratives, and I will look into his request and see what we can do across the House and across Government It is interesting that my right hon. Friend, too, raises the Runnymede Trust. He might not be aware of this, but the Equality and Human Rights Commission has written an open letter to the Runnymede Trust. In its letter of 12 April, its chair states that the Runnymede Trust made “unsubstantiated allegations” about the EHRC, questioned its “impartiality and impact” and impugned its credibility. The letter also said that the Runnymede Trust showed “an apparent misunderstanding” about the EHRC’s “mandate as set out in statute” I was really shocked to read the commissioners’ letter and to learn that the Runnymede Trust had even asked—or certainly implied—that the EHRC should be defunded, which is surely the opposite of what a charity focused on improving race relations should want, and the complete opposite of its objectives, which goes to the point that my right hon. Friend made.
In the light of the job statistics released this morning indicating that young people and London have been particularly hard hit over the past 12 months, the issue of ethnic minority employment and pay prospects is pressing for many of my constituents. The report paints a largely positive story of an overall convergence between minorities and the white majority when it comes to employment and pay, yet the official data makes it perfectly clear that the situation has not markedly improved when viewed over decades. For example, the unemployment rate for black people has consistently been more than double the rate for white people over the past 20 years. How, then, does the Minister believe that the report’s claims in this area can be squared with what the available evidence clearly illustrates, which is that structural racial inequalities remain a stubborn feature of our labour market?
I thank the hon. Gentleman for his question and for engaging with some of the contents of the report rather than in divisive rhetoric. The answer to part of the question is that many of those statistics do not control for age. In this country, black people are much younger than the rest of the population, and that often ends up skewing some of the statistics. The report paints a picture of a continuing improvement and convergence, but the employment section is the bit that highlights the most significant problems, and there is quite a lot to do on that front. I encourage the hon. Gentleman to look at some of the recommendations and to let us know whether he agrees or disagrees. Before Government respond, I would encourage Members to put forward their suggestions, based on the evidence that the commission has produced, for what we should be doing.
Video link—Liz Saville Roberts.
Diolch yn fawr iawn, Mr Dirprwy Lefarydd. While of course the commissioners must be respected, their report should undergo scrutiny. They say they did not find conclusive evidence of institutional racism in the areas examined. Dr Robert Jones of Cardiff University provides Wales-specific evidence that 36 black people in every 1,000 experience stop and search, compared with five white people; that 91 black people for every 10,000 are in prison, compared with 14 white people; and that prison sentences for black people stand at an average of 30 months, rising to 35 months for mixed people, compared with an average of 20 months for white people. To what other institutional factors does the Minister ascribe the greatest part of those disparities? Will she work with the next Welsh Government to implement Plaid Cymru’s manifesto commitment of a race equality action plan to address this issue?
I thank the right hon. Lady for her question. I think I should again clarify what the commission says on the existence of racism. It states: “Overt and outright racism persists in the UK. Examples of it loom larger in our minds because we witness it not just as graffiti on our walls or abuse hurled across our streets,” but even in private settings On the over-representation of minority groups in stop-and-search, the commission looks at the causes and at where stop and search happens. It happens in London, which is where the vast majority of ethnic minorities live, compared with the rest of the country. That does have an impact on the data. The commission also puts forward recommendations on things we can do to build trust in the police to reduce the number of stop-and-searches that are required. I have forgotten the second point that the right hon. Lady raised, but I think it was in a similar vein Discrimination is not explained by disparities alone. Sometimes it is the case; sometimes it is not. Where it is the case, the commission has identified that; where it is not, it has put forward other potential explanations.
One of the refreshing things about the report is the careful balance between acknowledging the challenges that are still very real and the progress that is happening. Here in Leicestershire, that progress is very visible on wages and employment. Does my hon. Friend agree that if we are to make further progress it is essential to acknowledge the progress that has been made and to understand the causes—how, why and where this is happening—so that we can go further and make more progress?
Yes, that is absolutely right: I do agree. We need to focus on what works and why, as well as what does not and why, so that we can target our resources where they will be most effective. The report looks at why certain groups that are very similar end up with completely different outcomes, which is why institutional racism cannot be the defining reason. When black African and black Caribbean groups, and Indians and Pakistanis, have diverging outcomes, it is clear that something else is going on. I hope that my hon. Friend will work with Government to try to find out what measures we can put in place to address these disparities.
The report talks about creating agency so that individuals can take greater control of decisions that impact their lives. In response, will the Minister recommend that English for speakers of other languages funding, which has been cut by more than 50% since the Conservatives came to power in 2010, be reinstated?
If the hon. Lady has a comprehensive proposal about that, she can write to me and we will consider it in the light of the Government response.
I served on the Youth Justice Board with the chairman of the Commission on Race and Ethnic Disparities, Dr Tony Sewell. My experience was that he always acted with integrity and that he had the courage to challenge the conventional wisdom when he found evidence to suggest an alternative perspective. Does my hon. Friend share my abhorrence at how he and his fellow commissioners have been vilified, abused and threatened? Does she share my concern that such a response risks putting off other people from carrying out important work that can help to improve our society for all communities?
I completely agree with my hon. Friend and I thank him very much for telling us about his personal experience working with Dr Tony Sewell. I believe that Keith Fraser, one of the other commissioners, is also a member of the Youth Justice Board. One reason why I believe there has been much push-back against the report is that it has not come from the usual suspects. We did not go to the race relations industry to ask people to tell us the same things they have been telling us for a long time; we went to people who work in the field such as doctors, teachers, policemen, scientists, economists and journalists—including, I might add, a former chair of the Runnymede Trust—to find out what we can do to improve disparities in this country.[Official Report, 22 April 2021, Vol. 692, c. 5MC.] We went to the people who actually had the experience in doing things rather than just talking, and I am very proud of the commission and the work it has done.
Covid-19 has highlighted the importance of family units and their critical role in our communities up and down the UK. That is why I welcome, in particular, recommendation 19, which outlines seminal plans to understand and take action to address the underlying issues facing families across all backgrounds. Will my hon. Friend put those words into actions and ensure that our local authorities support the most vulnerable families who are experiencing disadvantage and discrimination?
My hon. Friend is right that local authorities have a very important role to play in this space. I am very pleased that he has actually read the recommendation and not just the reports about the report. Local authorities have played an important part in mitigating the disproportionate impact of covid on some ethnic minorities via the community champion scheme, for which we announced funding last autumn. With regard to his other comments, the Government response is not yet prepared; it will be coming in due course in the summer. We will consider the recommendation that he has made in the light of the full report.
In her responses, the Minister repeatedly conflates disagreement with this report with misrepresentation or not having read the report, so let us draw a line under that—we have read it, but we know that institutional racism is still felt across every area of the UK and that there is no new story to tell about slavery and colonialism. She may disagree, but does she at least recognise and understand why people—more specifically the people this report is about—overwhelmingly see this report as steeped in denial and why it is viewed as a complete insult to those who have been the victims of institutional racism, such as black women, who are four times more likely to die in pregnancy and childbirth? Does she recognise that denial is a core mechanism of institutional racism? Can she explain how she plans to push ahead with this report when it is so widely rejected by those it impacts?
If the hon. Lady reads beyond The Guardian and perhaps statements in the Morning Star, she will realise that the report has been welcomed by many, many organisations, not just the Equality and Human Rights Commission, but even the Royal College of Physicians and many more. I am not here to reel out a list of who supports the Government. It is interesting that she says that I confuse disagreement with divisiveness, because it was her colleague the hon. Member for Brent Central (Dawn Butler) who just stood up there and called people “racial gatekeepers”. I wonder whether the hon. Lady agrees with that comment, which is unbelievably divisive rhetoric. What I would say to her is that she does not speak for all ethnic minorities. Ethnic minorities are not uniquely left wing, and to claim that a report about black and brown people can only talk about issues from her perspective completely ignores the fact that there are many of us, of various skin colours—she can see my face and she knows I am a black woman, just like her—who disagree. We disagree. She raises the point about maternal health, and I would like to take the opportunity to make this point: in a debate on 11 March, she said that “one in four black women dies in childbirth”.—[Official Report, 11 March 2021; Vol. 690, c. 1089.] That statistic, which thankfully she has now corrected, is completely wrong. The actual figure is not 25% of black women, but 0.34%. It is a very confusing statistic because we often represent the numbers in terms of numbers per 800,000.[Official Report, 27 April 2021, Vol. 693, c. 2MC.] What I have been doing is working on maternal health. I have spoken to the chief midwifery officer and to Dame Donna Kinnair, the head of the Royal College of Nursing; we in government have had conversations and they all accept that because the numbers are so small, it will often be very hard to target effectively, but that does not mean we will not try. We do have a maternal health strategy, which I know the hon. Lady has seen, and I wish that for once she would acknowledge the work that the Government have done, rather than repeating false statistics and pretending that nothing is happening, when that is far from the truth.
I thank my hon. Friend for her statement. The commission’s report rightly sets how geography, family make-up and socioeconomics contribute to inequality, but the report is also clear that that does not mean that racism does not exist in our country today. Echoing the McGregor review, the reports shows, for example, racism that people experience when applying for a job. Will the Government include specific policies to tackle racism at work in the response that my hon. Friend talked about in her opening statement, as well as tackling the more general economic inequality, which can affect everyone in society?
I thank my right hon. Friend for that question. Everyone has a part to play. I cannot outline the Government response now; we are still working on it, as I announced in my statement. However, the report makes recommendations not just for Government, but for the public sector, the private sector, businesses and individuals. There will be plenty that we can do to address those issues, and we will see what the Government have to say on them in their response in the summer.
The commission’s chair says that it found no evidence in Britain of institutional racism, which it defines as “racist or discriminatory processes, policies, attitudes or behaviours in a single institution.” How does the Minister for Equalities square that with the policy of holiday park operator Pontins to ban Gypsies and Travellers from its premises? Is not deliberate discrimination on the grounds of race, whether by arms of the state or private corporations, institutional racism in plain sight?
The commission looked at specific areas; it did not examine Pontins. It did not say that there is no institutional racism in Britain; as I said in my statement, it said that about the areas it looked at. I do not believe that the holiday sector was one of the areas it examined. For what it is worth, no business should discriminate against people on the basis of their ethnicity or background. I am sure that the hon. Gentleman and I share that view. I do not know the full details of the Pontins situation, but that is exactly the kind of thing that we want to address in Government, so that we can make sure that communities get fair treatment. What is good about the commission’s report is that, unlike many reports that look at race and racism, is actually looks at the Gypsy, Romany and Traveller community, especially in respect of education—many people ignore them because they are classified as white, which I do not think is the right way to go. That is one reason why it is important to disaggregate BAME and talk about specific groups.
May I thank my hon. Friend the Minister personally for reaching out after the threat that my fiancé and I received last week Since the report was published, many Carshalton and Wallington residents have asked to see the Government’s response and what action is now going to be taken. Will my hon. Friend confirm that once a response has been issued and work has begun on implementing recommendations, the GEO will begin to establish mechanisms to measure the success of measures and provide regular updates to the House?
I wholeheartedly agree with my hon. Friend. This is very much part of the ethos of the equality hub: there is no point in enacting policy and then not checking to see whether it is successful. In fact, too many resources have probably been spent on creating activities but not necessarily checking whether they are generating the benefits that we expect. I thank my hon. Friend for that question and assure him that that is the way we intend to approach these issues.
I put on record my thanks for the work of the Runnymede Trust and declare an interest as a former member of staff there, working as its public affairs manager. The Runnymede Trust is a leading race equality think-tank and has, through some of its quality work and research, helped to identify issues in respect of addressing race equality in this country I wish to focus on the commission and the issues around education. The commission focuses a lot on the educational experience of young black and minority ethnic students, but I hope the Minister will agree with me on this. A few years ago a Runnymede Trust article highlighted the fact that when a number of black and minority ethnic students who do well at GCSE and A-level go to university, their degree classifications are much lower, which has a big impact on them securing work when they leave university. Will the Minister agree to look at this issue and not just accept the commission’s report in terms of saying that for all black and minority ethnic students educational attainment is going in the right direction?
I am pleased that the hon. Lady has actually read the report. As I said, I am happy to debate and disagree, but not to be misrepresented The hon. Lady raises an interesting point about what is happening in education. I should clarify that the good news that the report highlights is around GCSEs; it probably agrees with her about what is going on in higher education. The report talks about black students being more likely to take poorer quality courses at less prestigious universities, and there is a big disparity in the fact that black students are the least likely to go to a high tariff provider and are 1.7 times more likely than their white peers to attend what the report describes as “low tariff institutions”. Part of the difference is due to the high progression rate into higher education for black students, but the report also talks about the sort of advice that they are given. It is very much an issue that we should explore further and I will encourage colleagues from the Department for Education to look into it. If the hon. Lady wants to write to them directly, I encourage her to do that I thank the hon. Lady for her question and note her comments about the former Runnymede Trust. We on the Conservative Benches have worked well with people such as Trevor Phillips, and one of the commissioners, Samir Shah, is also a former chair of the Runnymede Trust, but I cannot accept the behaviour of the current chair and some staff members.[Official Report, 22 April 2021, Vol. 692, c. 6MC.]
The Sewell report recognises that issues of mistrust and unfairness, whether they are real or perceived, really matter, especially in policing. Will my hon. Friend engage with her Home Office colleagues to develop proposals to build on the good work that has been done to make local police forces more representative of the communities that they serve and introduce more community oversight of local policing?
Yes, that is one of the recommendations in the report and it is clear from what it says that trust and fairness are key issues for ethnic minority communities, particularly when it comes to policing, as my hon. Friend has just highlighted. I understand that my right hon. Friend the Minister for Crime and Policing is already engaging with the commission to discuss its recommendations in that regard and I welcome his early initiative in doing so.
Thank you, Mr Deputy Speaker. [Inaudible.]
Sorry, Janet, we have lost you.
…to address structural inequalities of race and ethnicity in the social security system.
I am afraid that I did not hear most of the question. If the hon. Lady writes to me, I shall send her a comprehensive response in a letter.
Sorry, Janet, the volume went for whatever reason.
Does my hon. Friend agree that, because the children’s commissioner for England and the Royal College of Physicians have welcomed recommendations in their respective fields, it is clear that the Commission on Race and Ethnic Disparities was motivated by outcomes rather than outrage?
Absolutely. I welcome the support shown by those leading experts in their respective fields and I thank them for their positive engagement with the report’s findings and recommendations that pertain to them. The Sewell commission, as I understand it, adopted an approach that was driven by a need for better outcomes, not better process, which is testament to its strong desire to effect change for all, not for a selected few. I am very happy to accept that there will probably never be a race report in this country that everyone will get behind. We have very different views on it, but what we do need is to hear from those people who have different views from what we constantly hear reported.
Minister, is it common sense to want to ignore the difficult part of our history and withdraw funding from charitable organisations, including the National Trust and the Runnymede Trust, which highlight the consequences of institutional racism, as members of the so-called Common Sense Group is proposing? Is that not divisive rhetoric that stokes culture wars?
It is interesting that the hon. Lady raises that point. The Runnymede Trust has said, according to a letter from the chair of the Equality and Human Rights Commission, that the EHRC should not have funding. It implied that the EHRC should be defunded, so if she wants to talk about people who want to defund charities and organisations working on racial equality, she should ask the chair of the Runnymede Trust why she made that statement.[Official Report, 22 April 2021, Vol. 692, c. 6MC.]
May I begin by commending the Minister for her appearance at the Dispatch Box today, which has been rightly and appropriately robust at times? I very much welcome this report as it is one of the first reports on race that acknowledges the disadvantage experienced by many white working class boys in our country and also acknowledges the geographical disparities that exist. Will she ensure that the recommendations in the Sewell report are brought forward as part of the Government’s levelling-up agenda?
I thank my hon. Friend for highlighting the importance of this report and the opportunity it provides for the Government to make Britain a fairer society for all. This report is the first attempt to grip the complex reality of ethnic advantage and disadvantage. Unlike many other reports on race and ethnicity, it is also the first to include some of the profound disparities experienced by the race and ethnic majority in this country. Educational outcomes for children in this group are a critical part of the commission’s deliberations and its approach to the 24 recommendations is one that stands to benefit all, regardless of their race, ethnicity or socio-economic background. We want a country that is fair for everyone. The Government are now actively considering this report and the recommendations that it makes and look forward to publishing their full response in due course.
I thank the Minister for her statement and for responding to 28 questions.
On a point of order, Mr Deputy Speaker. I seek your guidance. During the statement, the Minister for Equalities, the hon. Member for Saffron Walden (Kemi Badenoch), made multiple accusations that I made false statements in my remarks. I want to set the record straight. Nothing in my remarks was false or inaccurate. I seek your guidance on how I can get the record corrected I hope that you will indulge me, Mr Deputy Speaker, if I very briefly make a further point. I think it is only right that I do so. When my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) made the error that the Minister mentioned, she was giving a speech sharing her personal experience of baby loss. The Minister knows that. That is why my hon. Friend made the error, and she quickly corrected the record. It was unfair of the Minister to use that in her response to my hon. Friend.
The hon. Lady has put that on the record in making her point of order, but I am sure that there will be many more opportunities for this issue to be further discussed We will move straight to the ten-minute rule Bill without any pause, but during that time, may we please have the Dispatch Boxes cleaned, if that is at all possible? I know that the Minister who will take the place of the Equalities Minister will not touch the Dispatch Box; he has given me an assurance.
I beg to move, That leave be given to bring in a Bill to establish independent local planning processes to determine housing development planning applications submitted by local authorities; and for connected purposes This Bill is designed to improve scrutiny and transparency in the planning process, particularly in the light of the growing appetite of local authorities to build more homes for private sale themselves and to act more like private developers than local authorities Hon. Members will know that at present, the foundation of our planning system rests with an impartial assessment of a planning application being carried out by the local planning authority. That assessment takes into account the council’s own planning policies and the views of a wide range of consultees. In conjunction with bodies such as the Environment Agency, Natural England and the relevant transport authority, a local planning officer will then either determine the application under delegated powers or provide an officer recommendation and allow councillors on the relevant planning committee to make the final decision, with regard to key planning issues at hand The fundamental point in the current process is that both the assessment and the determination of a planning application are independent. In the majority of cases, the current system works well, and local planning authorities can deal with the full spectrum of applications they receive from individuals, small and medium-sized enterprises, large private developers, housing associations and other parts of the public sector. Yet in a system that works well, there are examples where local authorities can effectively mark their own homework Many local authorities bring forward applications for new council housing or, in the case of unitary authorities, new schools, meaning that the council is, in effect, both the developer and the applicant. Generally speaking, those applications relate to core council and public services, so perhaps these relatively infrequent conflicts of interest could be overlooked. However, as I alluded to, many local authorities are beginning to move away from the provision of just council housing and core public services, and to focus instead on building more houses for private sale. In effect, councils are starting to act more like private developers Nowhere is this more evident than in my constituency of Eastleigh. As I have raised in the House previously, the Liberal Democrat council in my area is taking forward a large-scale application for 2,500 houses in the village of Horton Heath, all built on green fields, to the considerable dismay of local residents. The council has borrowed large sums to fund the development. It has bought land from a private developer and expanded the original planning permission for the site from 900 homes to 2,500 We already know that the profits from that development, which is overwhelmingly for private sale, are built into the council’s future budget. I hasten to add that the borough council currently has a debt of £540 million, or £4,000 for every man, woman and child who lives in my constituency. I would argue that that is not a good business model, but that questionable business model has contributed to Eastleigh’s having built 49% more housing than required by Government targets in the last three years, and it is continuing to inspire the council to build 4,311 houses in the next five years, nearly 20% more than targets ask for Naturally, this has left many of my constituents feeling angry and let down by the planning system. These plans appear to go through the council’s own planning system with ease, given that this level of overdevelopment is the policy of the Liberal Democrat administration. Many residents are rightly asking how this can be right when there is such an obvious conflict of interest We must ask ourselves: where is the independent scrutiny that we apply to other planning applications? Is there any realistic proposition that this application would be refused when the council is so heavily invested in a project, both financially and politically? To a lesser degree, would the council treat itself in the same way as a private developer when it comes to issues such as transport, flood mitigation, density or the provision of affordable housing? I say to the Minister that my experience is that it would not. It should also be acknowledged that even if the current system does not generate any difference in the treatment of applicants, the perception of applicants being treated differently is just as damaging to the whole system To be clear, I am not saying that local authorities should not be able to build and develop housing themselves. I entirely agree that they should. However, I am concerned about the lack of transparency and the absence of the usual checks and balances afforded to other developers. It stands to reason that if a local authority wants to act as a developer, it should be treated as such and should not take advantage of the fact that it is the local planning authority. That is why I believe that this Bill is absolutely vital to protect the integrity and probity of our current planning system. In simple terms, the Bill would reform the process by which planning applications made by a local authority in its own area would be determined. The process would ensure that any application made had been scrutinised and determined properly Before outlining how the reforms would operate, I will first set out the process for triggering the new independent process. The mechanism for determining applications could be triggered in one of two ways. The first way would be if a local authority brought forward any development of 300 units or more in its administrative boundary. That would automatically trigger the independent process To supplement this and to provide a mechanism for the public to trigger the process, the second way would require a level of public engagement subject to a threshold. When a local authority submitted a planning application to itself, there would be a grace period of 30 days before a planning application was processed. Local authorities would be obliged to set up an online portal that allowed people to register their request for the independent process to be triggered. If 10% of the electors of a council ward affected by the development signed the petition, the independent process would also be triggered. This would not only provide a safeguard for multiple applications just below 300 units, but allow members of the public to direct controversial applications to the independent process if a suitable number of electors was reached. This would then lead to the reforms to the actual process Once the independent process is triggered, the first step in it is for the planning application to be assigned to a statistical neighbour planning authority. The neighbouring planning authority would allocate a planning officer to act as the case officer, and the case officer would determine the application in line with host local authority’s planning policy and usual consultees. A fee would be paid to the neighbouring planning authority by the host planning authority to cover the costs in officer time. The decision would then be referred to councillors at the host planning authority for determination. The public could be assured, however, that the officer recommendation was based on an independent assessment of the planning merits The second part of the independent process would automatically refer any decision made by councillors from the host authority to the independent Planning Inspectorate. In order for the planning application to be approved, it would be necessary for a planning inspector to ratify the decision made by councillors. If the planning inspector disagreed, the application would then be referred to the Secretary of State for a final decision I believe that this small but significant reform to our planning system would bring much-needed transparency back to the current system. It would ensure that local authorities submitting their own planning applications were subject to proper scrutiny and would provide reassurance for members of the public and constituencies across the United Kingdom. It would end the conflict of interest that exists in the current system and ensure that local authorities were not granting planning permission to themselves The planning system—I say this as a former planning committee chairman—can be a game-changer for house building across the UK. However, many people still see it as opaque and favourable to big developers. This is a small step to correct that view and give our residents the reassurance that they need. I commend the Bill to the House.
I have been given no indication that anybody intends to oppose this motion, and I see no one rising, so I intend to put the Question Question put and agreed to. Ordered, That Paul Holmes, Chris Clarkson, Sara Britcliffe, Robbie Moore, Ben Everitt, Scott Benton, Andrew Griffith and Stephen Hammond present the Bill Paul Holmes accordingly presented the Bill Bill read the First time; to be read a Second time tomorrow and to be printed (Bill 286).
I should explain that, in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s chair during Committee stage, in order to comply with social distancing requirements, I will remain in the Speaker’s Chair, and I will be carrying out the role not of Deputy Speaker but of Chairman of the Committee. We should be addressed as Chairs of the Committee, rather than as Deputy Speakers Clause 30 Construction industry scheme Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Amendment 70, in schedule 6, page 121, line 1, leave out “ceases to be” and insert “is not” This amendment would allow that a de minimis amount of minor works can be disregarded. Amendment 71, page 121, line 2, after “time” insert “, but the body or person expects it to be met at any time,” See the explanatory statement for Amendment 70. Amendment 72, page 121, line 3, leave out “continuing to be” and insert “being” See the explanatory statement for Amendment 70. Amendment 84, page 121, line 4, leave out “any further” See the explanatory statement for Amendment 70. Amendment 85, page 121, line 5, at end insert “exceeding £3,000,000” See the explanatory statement for Amendment 70. Amendment 73, page 121, line 8, leave out paragraph 3 This amendment would remove the provision making businesses who fall within the current definition, but who would not fall under the new definition of “deemed contractor”, to be drawn into the new regime for CIS from 6 April 2021. Amendment 74, page 121, line 20, leave out paragraph 4 This amendment would remove the provision requiring that, when a contractor is deducting the relevant percentage from a contract payment made to a sub-contractor, they should first deduct only the cost of material purchased by the sub-contractor from the figure to which the relevant percentage deduction is applied. Amendment 75, page 123, line 17, leave out “2021-22” and insert “2022-23” This amendment would delay commencement until April 2022. Amendment 76, page 123, line 20, leave out “2021” and insert “2022” See the explanatory statement for Amendment 75. That schedule 6 be the Sixth schedule to the Bill Clause 36 stand part Government amendments 17 to 42 That schedule 7 be the Seventh schedule to the Bill Clause 41 stand part Clause 115 stand part That schedule 27 be the Twenty-seventh schedule to the Bill Clauses 117 to 121 stand part Amendment 77, in schedule 29, page 319, line 23, at end insert— “32 After section 280 of Finance Act 2014 insert— ‘280A Treatment of promoters of abusive tax avoidance schemes (1) In any proceedings for the offence of cheating the public revenue, where— (a) the person charged acted as a promoter in relation to relevant arrangements within the meaning of section 235, or the person charged gave in the course of business affirmative advice on the viability of relevant arrangements within the meaning of section 234, and (b) the relevant arrangements were abusive tax arrangements within the meaning of sub-paragraph 3(2) of Schedule 16 of Finance (No. 2) Act 2017, subsection (2) shall apply, subject to subsection (3) (2) If, at any time that the person charged acted so as to fall within subsection (1)(a), that person was aware of the course of action or intended course of action having the consequence that the relevant arrangements were abusive tax arrangements within the meaning of sub-paragraph 3(2) of Schedule 16 of Finance (No. 2) Act 2017, the actions of that person in respect of the relevant arrangements shall be deemed to have been dishonest (3) Subsection (2) shall not apply if the person charged proves that they held in good faith the belief that the course of action or intended course of action was reasonable in the circumstances.’” This amendment would cause promoters of tax avoidance schemes which are abusive (defined in existing legislation to mean schemes where it is not reasonable to regard the scheme as a reasonable course of action) to be treated as acting dishonestly for the purposes of criminal prosecution of tax offences, without dishonesty having to be separately proved by the prosecution. That schedules 29 to 32 be the Twenty-ninth to Thirty-second schedules to the Bill New clause 14—Review of changes to construction industry scheme— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to the construction industry scheme by section 30 and schedule 6 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) business investment, (b) employment, (c) productivity, (d) GDP growth, and (e) poverty (3) In this section— ‘parts of the United Kingdom’ means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and ‘regions of England’ has the same meaning as that used by the Office for National Statistics.” This new clause would require a report on the construction industry scheme provisions on various economic indicators. New clause 15—Review of effect on tax revenues— “(1) The Chancellor of the Exchequer must review the effects on tax revenues of section 115 and schedule 27, and sections 117 to 121 and schedules 29 to 32 of this Act, and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider— (a) the expected change in corporation and income tax paid attributable to the provisions; and (b) an estimate of any change, attributable to the provisions, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid (3) The reference to tax required to be paid in subsection 2(b) includes taxes payable by the owners and employees of Scottish limited partnerships.” This new clause would require a report on the impact of certain provisions of the Bill on narrowing the tax gap by comparing: (a) the expected change in corporation and income tax paid attributable to the provisions and (b) an estimate of any change, attributable to the provisions, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid. In particular, this includes taxes payable by the owners and employees of Scottish limited partnerships. New clause 29—Review of tax avoidance measures— “(1) The Chancellor of the Exchequer must review the impact of sections 117 to 121 and Schedules 29 to 32 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act, and then annually for five further years (2) A review under this section must estimate the expected impact of sections 117 to 121 and Schedules 29 to 32 on— (a) levels of tax avoidance, (b) levels of tax evasion, and (c) reducing the tax gap in each tax year from 2021-22 to 2025-26.” This new clause would require the Government to review the impact of the provisions relating to tax avoidance and publish regular reports setting out their findings.
The Government remain committed to tackling tax avoidance, evasion and other forms of non-compliance. Since 2010, we have introduced over 150 new measures and invested over £2 billion in additional funding to ensure that the right tax is paid at the right time. These efforts have helped to secure and protect over £250 billion for the UK’s public services that would otherwise have gone unpaid, and they have helped to bring down the tax gap to 4.7% in 2018-19—its lowest recorded rate. But there is still work to do. Clauses in this Bill build on our previous reforms in order to clamp down on deliberate non-compliance and make sure that everyone pays their fair share. They include measures to tighten the anti-avoidance rules aimed at those who promote and enable tax avoidance schemes. They also close a loophole in the existing anti-avoidance rule aimed at preventing non-UK resident individuals from claiming relief when they gift business assets to a company controlled overseas The clauses support HMRC’s strategy on promoting good tax compliance. As an example of that approach, the Government are amending the follower notices regime, which penalises taxpayers who have used avoidance schemes that have been shown to be ineffective, in order to make it fairer for those who comply, while ensuring that the regime remains just as effective at combating avoidance. The Bill also seeks to bring parts of the hidden economy out of the shadows by making some licence approvals conditional on tax registration and compliance. The clauses in the Bill are necessarily technical, which is in part down to the complex rules that are currently in place. Given the number of issues that we are covering and the number of speakers in the debate, I will keep my remarks fairly brief Clause 30 and schedule 6 introduce changes to tackle abuse of the construction industry scheme. The construction industry scheme is a revenue protection scheme designed to tackle evasion in the construction sector. The scheme protects approximately £7.1 billion in tax every year by requiring contractors to make deductions from the payments they make to subcontractors that they engage. Those payments count as advance payments towards those subcontractors’ tax and national insurance. The changes made by clause 30 will allow HMRC to correct employers’ CIS deductions when they are false or incorrect. Clause 30 will clarify the rules on deductions for the cost of materials and change the rules for determining which businesses will need to operate the CIS. It will also expand the scope of the current penalty for providing false information to HMRC Scottish National party amendment 74 would remove paragraph 4 of schedule 6 to the Bill, which would have the effect of removing the proposed changes to rules for deductions for materials. However, there is a clear case in public policy for these changes. Some contractors and subcontractors are interpreting the rules incorrectly at present in a way that undermines the purpose of allowing materials deductions within the scheme, which allows some contractors and subcontractors an advantage over others. The proposed rule changes will ensure a clear and consistent approach, providing a level playing field for those involved. I therefore urge the House to reject amendment 74 Amendment 73 proposes to remove paragraph 3 of schedule 6, which relates to the transitional arrangements between the old and new rules for qualifying as a deemed contractor. This would mean that many businesses would have to change their business arrangements overnight and go through the process of re-registering for the construction industry scheme under the new rules. As this could be more disruptive and confusing than the proposed transitional arrangements, I urge the House to reject the amendment. Amendments 75 and 76 would delay the commencement of this measure to April 2022 rather than April 2021. Such a delay would not be appropriate, as industry has already been consulted on the changes and any impacts are expected to be limited. Again, I urge the House to reject these amendments Clause 36 and schedule 7 amend the corporation tax rules governing so-called hybrid mismatches. These rules are intended to tackle aggressive tax planning by multinational companies that seek to take advantage of differences in how countries view entities and financial instruments. Hybrid mismatches can lead to double deductions for the same expense or deductions for an expense without any corresponding receipt being taxable. The Government have consulted in this area and are amending the rules in several areas so that they remain proportionate and do not lead to economic double taxation. That includes introducing a limited grouping matching rule and a change to the type of income that counteractions under the rules can be set off against Government amendments 17 to 42 to clause 36 have been tabled to ensure that the changes provided under that clause work and reflect the underlying policy intent. They address various technical issues that have been raised by external commentators following the publication of the Bill, and mostly change small and technical details Clause 41 will close a loophole in the capital gains tax gift holdover relief rules by preventing non-UK residents from being able to claim the relief while transferring a business asset to a company controlled overseas that they personally own. By making this change, the Government are ensuring that the relief is used fairly and only for its intended purpose Clause 117 and schedule 29 make changes to the promoters of tax avoidance schemes regime, known as POTAS. The changes allow Her Majesty’s Revenue and Customs to issue stop notices to prevent the promotion of schemes that it suspects do not work and to obtain information from suspected promoters at an earlier stage of the process than at present. They also prevent promoters from sidestepping the rules by rearranging their corporate structure to carry out activities through different entities. There are a number of other technical amendments to ensure the continued effectiveness of the regime. There are also further measures in the Bill to enhance the operation of the disclosure of tax avoidance schemes—DOTAS—rules Clause 119 changes the penalties issued to enablers of tax avoidance schemes that have been defeated in court, at tribunal or otherwise counteracted. The changes will allow HMRC to obtain relevant information from potential enablers at the earliest possible moment so as to be able to consider whether they are liable for an enabler penalty Clause 120 and schedule 31 make changes to ensure that the general anti-abuse rule can be used as intended in respect of partnerships that have entered into abusive tax avoidance arrangements Finally I turn to clause 121, which from April 2022 makes the renewal of certain licences to trade conditional on licence applicants in England and Wales completing checks with HMRC. The checks will confirm whether applicants are registered for tax, and new licence applicants will be directed to HMRC guidance about their tax obligations. I turn to the most substantive of the amendments before us today: amendment 77, which relates to the POTAS provisions that I outlined. The amendment seeks to amend schedule 29 so that anyone subject to the promoters of tax avoidance schemes regime, and promoting or enabling abusive tax arrangements, should be deemed to have been acting dishonestly unless they can show that they acted in good faith and believed the arrangements to be reasonable. This would mean, in respect of the criminal offence of cheating the public revenue, that a person would automatically be treated as dishonest where it had been demonstrated that they had promoted abusive tax arrangements as defined in the general anti-abuse rule. As such, there would be no requirement for any prosecution to prove dishonest conduct I fully agree that promoters who break the law should face the consequences of their actions. That is why the Government are putting so much emphasis on anti-avoidance measures and measures against promoters of tax avoidance in the Bill and elsewhere. We should be under no illusions about this. It is not honest to market tax schemes or arrangements that are known not to work and that at their heart feature false statements.
I will speak to new clause 29, tabled in my name and the names of the Leader of the Opposition and other right hon. and hon. Friends. It is timely to consider what the Government are doing to tackle tax avoidance and tax evasion today, with this month marking five years since the publication of the Panama papers. Those papers revealed the true global scale of tax avoidance and tax evasion and the need for comprehensive and effective action to tackle them. Of course, the clauses we are considering are far more limited in scope The Minister set out that clause 30 relates to the abuse of the construction industry scheme rules, clause 36 makes amendments to the corporation tax rules for hybrids and other mismatches and clause 41 amends the anti-avoidance rule when claiming relief for gifts of business assets. More widely, clauses 115 and 117 to 121 relate to other measures, including penalties for the promoters of tax avoidance and giving HMRC new powers to obtain information. We will not oppose those measures today. However, our concern about the Government’s approach is centred not so much on what those clauses cover but what the Bill, and the Government’s approach more widely, fail to do. Our concern is that, faced with the challenges of tax avoidance and tax evasion, and with the public clearly wanting to see definitive action from the Government, Ministers have presented a Bill of measures that are relatively minor and technical. Indeed, as the House of Commons Library analysis of the Bill concluded, it would seem that the Exchequer impact of these changes will be minimal as they are not included in the Budget report costings The truth is that three Conservative Prime Ministers and five Conservative Chancellors have failed to tackle tax evasion and aggressive tax avoidance. The Government have repeatedly promised to act, but their proposals in the Bill fall far short of the change we need. That is why our new clause would require the Government to review the impact of provisions in the Bill relating to the levels of tax avoidance and tax evasion and the size of the tax gap, and to publish regular reports setting out their findings. The Government must not be allowed to hide behind warm words on this matter. They need to be transparent about the impact, or lack thereof, that their proposals will have We also welcome the amendment in the name of my right hon. Friend the Member for Barking (Dame Margaret Hodge), which seeks to treat promoters of tax avoidance schemes which are abusive as acting dishonestly for the purposes of criminal prosecution of tax offences. This kind of change is crucial if we are to shift towards more criminal prosecutions for the promoters of tax avoidance schemes, and to shift the gear of the Government’s approach At the moment, where tax avoidance has occurred, the system lands liabilities on the tax payers, who are usually not tax experts and may have been falsely told that a tax avoidance scheme is lawful. In contrast, the promoters of tax avoidance schemes are allowed far too often to get away with it. We therefore welcome any efforts to strengthen penalties for the promoters of failed tax avoidance schemes. But we have seen nothing from the Government today to raise the stakes and to make greater use of the powers HMRC already has to bring criminal prosecutions against the promoters of fraudulent tax schemes We know that HMRC recognises its power to use criminal investigation approaches to tackle the promotion and enabling of tax avoidance schemes, but in a letter the Financial Secretary sent me in January this year, he admitted that, since the formation of HMRC’s fraud investigation service in 2016, only 20 individuals have been convicted for offences relating to arrangements that have been promoted as tax avoidance. An average of around four people a year does not feel like a concerted effort.
My hon. Friend is making a great speech. Does he agree that it seems disproportionate that more people, in an adjusted sense, tackle benefit fraud than tackle big business or dodgy individuals who are taking money from the public purse?
I very much agree. My hon. Friend makes an important point about the Government’s priorities, and about the lack of priority they give to going after the promoters of tax avoidance schemes and those who evade paying tax, in comparison to other actions in Government. We are seeking to put pressure on them today to address that imbalance HMRC’s criminal investigation policy states: “Criminal investigation will be reserved for cases where HMRC needs to send a strong deterrent message” However, we know that fraud through the promotion of tax avoidance continues at scale, involving at least an estimated £20 billion in 2018-19, so it is hard to imagine why Ministers would not support a stronger deterrent message being sent by the greater use of criminal prosecutions Part of the answer may be the understaffing of HMRC. In a response on 11 January this year to a parliamentary question, the Financial Secretary admitted that the number of full-time equivalent employees at HMRC had fallen since 2010 from 67,553 to 58,467. That is a reduction of more than one in seven. The question of capacity in HMRC and the impact that that may have on its ability to tackle tax abuse must not be ignored. The Tax Justice Network refers to the fact that a member of staff in the compliance business stream at HMRC brings in on average over £900,000 a year on a £30,000 salary. It has pointed out that the Chancellor’s additional investment in HMRC staffing is directed towards tackling fraud related to covid spending, while previous funding increases have supported HMRC’s Brexit capacity. Its view is that the Chancellor must invest further in HMRC’s core compliance capacity Furthermore, beyond the questions around tackling the promoters of tax avoidance, the Bill is also silent on other important areas that need to be pursued, such as efforts to set up a register of overseas entities. Legislation is needed to establish a register that would show exactly who owns the foreign companies buying up British property. This would serve as a key part of any clampdown on money laundering The then Prime Minister, David Cameron, first announced plans for this in 2015, yet more than five years later, the legislation is nowhere to be seen. I bet he has not been in touch with Ministers for action over that. I would welcome the Minister using his speech at the end of this debate as an opportunity to explain whether the promised deadline of introducing legislation to set up a register of overseas entities by 2021 will be missed. If he is silent on this matter, we will take that as a yes I would like to use the opportunity of a discussion on tax avoidance to ask the Treasury ministerial team again to confirm whether the Chancellor backs plans for a global minimum corporate tax rate, as proposed by the US President. When I asked the Minister’s colleague, the Exchequer Secretary, to address this point during the Bill’s Second Reading last Tuesday, she did not respond, which I am sure was an oversight. I would therefore welcome the Financial Secretary addressing this question directly in his closing speech, to avoid any misperception that he and his colleagues are deliberately avoiding the question Our criticism of the Government in relation to tax avoidance and evasion centres not so much on what the measures in the Bill would achieve but rather on the ways in which the Bill and the Government’s wider approach fall short. The Government lack a tough and comprehensive approach to prosecuting the promoters of tax avoidance, to going after international money launderers and to pursuing those who seek to evade tax. We know that the impact of the measures in the Bill will be relatively minor and technical. The public deserve to have the Government present clearly and transparently what effect the measures in the Bill will have, and our new clause simply requires that their impact on tax avoidance, tax evasion and the size of the tax gap should be reviewed and laid in public before this House Throughout the Minister’s statements and comments, there is a clear pattern that the Government favour minor technical amendments to legislation on this matter, rather than upping their game and truly calling time on the practices that the public clearly want to see ended. Today they have an opportunity, by supporting our new clause, to show that they understand the need to be clear with the public, to recognise the need to strengthen their approach on this matter, and to commit to coming back with the resources and legislation that are needed to truly make a difference.
I want to make a few points, principally on amendment 77. Perhaps I can start by saying that I do not agree with the Opposition spokesman, who has just addressed the House so eloquently, that the Government have been slow to tackle tax abuse and tax fraud. I should, at the outset, draw the House’s attention to my entry in the Register of Members’ Financial Interests. I think the Government have been very good at tackling tax fraud, starting in 2010 when this Conservative Government first came into office. The reforms that were introduced by George Osborne, the Chancellor of the Exchequer, deliberately targeted tax abuse and set up a number of measures to try to ensure that we clamp down on it, as it is common cause on both sides of the House for us to do Where I do agree with the Opposition spokesman is in his reference to the Panama and paradise papers. That excellent work by journalists from, I think, The Guardian and the BBC exposed the fact that money laundering, dirty money and abuse in that sector were far more rampant than we realised. That is one of the reasons why the right hon. Member for Barking (Dame Margaret Hodge) and I have made so much of an effort in this House, along with colleagues on both sides of the House, to try to clamp down on money laundering and dirty money and ensure that we have sunlight as the best disinfectant on all of this. That is why we introduced the open public registers of beneficial ownership for the British overseas territories, and why we strove so hard to persuade the Crown dependencies—successfully, now—to introduce those same open registers. That is the way in which we stop kleptocrats, bent politicians, warlords and corrupt businesspeople from stealing from the Exchequer but also, of course, from Africa and Africans. That was the great benefit of the paradise and Panama papers: they showed so clearly the extent of what was going on I thought that the Financial Secretary made some very good points about amendment 77. In general, I do think that the Revenue has enough power over the private citizen in the laws of the land as they stand at the moment. However, the point I would make to the Financial Secretary—he has been most receptive in listening to the right hon. Member for Barking and me about this—is that eternal vigilance is required. As we have seen, and as amendment 77 draws attention to, there is an inequality of arms in this matter. Advisers who set up these schemes often have an aura of authority, because they are lawyers, accountants and professional people, which those whom they advise may not be I want more to be done to ensure that, where these bad schemes of tax evasion are put together by professional advisers, they do not get off scot-free while the people they put into these devices, or talk into going into them, take the rap. It is not right that they should just lose the fees that they earn, which I think is currently the position: we should toughen the financial penalties. The Minister handles these matters very well, and I know that he wants this to be more than a senior common room debate. I know that he is conscious of the balance between the rights of the individual and making sure that people are not able to evade tax. I know that he does think seriously about that, so I would just urge him to always keep an open mind on this issue This is a familiar theme. In this year of Britain’s presidency of the G7, we should remember the work that was done by George Osborne for the last G8, at which he championed the open registers that were introduced in Britain in 2016. It is a proud achievement of this Conservative Government that, at the last G8, they moved the world towards focusing on these illicit flows of money, and this year with the G7, I hope that the Minister will consider it important as well. I completely accept that we are not going to divide the Committee on amendment 77. What the Minister said about the amendment was extremely constructive and I hope he will feel it right for the House to return to this matter on very regular occasions, in pursuit of what unites us all: that people should pay their fair levels of tax.
It is a pleasure to follow the right hon. Member for Sutton Coldfield (Mr Mitchell), with whom I work very closely on this issue; it demonstrates the best of Parliament that we are able to do so across the House I rise to speak in support of amendment 77, which stands in my name and that of members of the all-party group on anti-corruption and responsible tax. Our proposals command support across the House, and I know the Minister will therefore address this issue thoroughly and seriously, not just in his response today but in the work that I know he is doing to bear down on those who enable and support tax avoidance and financial crime. I simply say this to the Minister: he may have reservations about the technicalities of our proposals, but he should at the very least accept the principle that underpins them and say so today Big corporations and high net-worth individuals who engage in tax avoidance schemes and financial crime do not dream up these schemes on their own; they are invented and developed by the huge army of tax professionals—accountants, lawyers, banks and advisers—who spend their working life trying to identify loopholes and wheezes. The schemes they devise do not just help but actively encourage people not to pay their rightful contribution through tax to the common purse for the common good. At present, HMRC may slowly and belatedly catch up, and may deem such schemes unlawful. If it does so, the individuals have to pay up and sometimes face enormous tax demands, but the enablers of tax avoidance mostly get away scot-free; at worst they may lose the fees they earned from setting up the scheme for their clients. Our amendment would hold these enablers to proper account. If advisers and promoters involved in a scheme know that the scheme does not work, they are committing the criminal offence—mentioned by the Minister—of cheating the public revenue. They are breaking the law, so they should be pursued, charged and convicted with a criminal charge That does not happen now, and our amendment seeks to make it easier for the enforcement agencies to pursue criminal prosecutions. Not only would they hold the advisers to account, but I am completely convinced that the threat of a criminal prosecution would act as the most effective deterrent and bring to a halt many of the activities of these rogue advisers. It would be the most efficient way of tackling tax avoidance at source. It is a common-sense approach to the problem, and it would be welcomed by all taxpayers, who are so frustrated by paying their tax unquestioningly while seeing others avoid tax or break the law. It would restore confidence in the tax system. It is a good idea, and I hope that when the Minister responds he will say that he shares our view that we need to amend our legislation to make it easier to pursue and prosecute advisers who deliberately promote egregious schemes that are unlawful I know from my time chairing the Public Accounts Committee how embedded the culture of avoidance, evasion and financial crime has become in our financial services sector. We saw it plainly with the revelations from HSBC, with the Falciani leaks from its Swiss branch. It was there in the PricewaterhouseCoopers leaks keenly exposing that firm’s activities in Luxembourg. The Panama papers uncovered the shenanigans involving the law firm Mossack Fonseca, while the Paradise papers disclosed the nefarious activities of another law firm, Appleby. While it may no longer be seen as cool to be involved in tax avoidance, the latest leak of documents contained in the FinCEN papers spells out the complicity of major global banks in facilitating and enabling financial crime, from tax avoidance through to fraud and money laundering Normal working people, however, often suffer the most. The film tax relief that was exploited ruthlessly by the company Ingenious Media left many facing huge tax demands, though the chief executive, Patrick McKenna, is still lauded through public appointments in the creative sector. The loan charge scheme was promoted vigorously by enablers. They walked away scot-free, but left devastation in their wake. I understand from the all-party parliamentary loan charge group that seven suicides have been reported to the group—people driven to suicide because they were conned by enablers into participating in a scheme that later unravelled. That is truly shocking I welcome the consultation that the Government have launched on tackling the promoters of tax avoidance. The all-party parliamentary group will be preparing a response to that consultation. Most advisers, of course, work in an honest and straightforward way, and we do not want to pursue with criminal charges those who make an honest mistake, but there are still individuals, companies and organisations who deliberately and wilfully promote egregious schemes that they know do not work. Such enablers move quickly, they are well resourced and they are well capable of outmanoeuvring HMRC. As soon as one wheeze is uncovered, they move on to the next. Worst of all, they act with impunity, safe in the knowledge that they will escape any real punishment if they are ever caught Why do these rogue advisers not get prosecuted? The answer lies in what the Minister said: HMRC has to demonstrate dishonesty to proceed against them and it is virtually impossible to do so. The advisers can always claim that they honestly believed that the scheme would work. We therefore want a new test, which makes criminal prosecutions feasible and practical We suggest adopting the test that is in place for the work of the GAAR—the bar for prosecution for those ne’er-do-wells should be just as stringent. It would simply make it possible and practical to take action. HMRC would have to demonstrate not simply that the avoidance scheme was not reasonable; it would have to demonstrate that it was not reasonable for anybody to think that the avoidance was reasonable. Sorry for the complication, but that is a double reasonableness threshold. I assure the Minister that that double reasonableness test is in effect the same as the “beyond reasonable doubt” test that he mentioned in his opening remarks. Of course, it would be easy for enablers to avoid prosecution —they just need to stop promoting or recommending tax avoidance that is so aggressive that they know it will fail Our amendment tackles a gross injustice in the system. People are completely fed up with reading endless stories about scurrilous tax avoidance schemes promoted by those working in the financial services sector. The perceived difference in the way that hard-working taxpayers and rich individuals are treated breeds mistrust. We suggest a practical change in the law that would make it possible to pursue the enablers, not because we want to see the courts clogged up with prosecutions against bankers, accountants, lawyers and advisers, but because we think that that is the best way of making those advisers think twice before they promote unlawful schemes. It would deter most of them from trying to cheat the public revenue. I urge the Minister, please, to be bold on the issue, to state today that he will tighten up the law and to give us the assurance that, if he does not like our particular solution, he will come forward in a timely manner with his own proposal.
I am pleased to speak in this debate and to speak to the amendments and new clauses to which I have added my name and which were detailed earlier All the SNP amendments relate to schedule 6, under clause 30. Amendments 70 to 72 and 84 and 85 seek to amend subparagraph (3A) of paragraph 2. Taken together, the paragraph would read: “Where the condition in subsection (1)(l) or (2) is not met in relation to a body or person at any time, but the body or person expects it to be met at any time, the body or person may allow for the condition to be treated as being met until the body or person is not expected to make expenditure on construction operations exceeding £3 million.” On the face of it, it does not look like a major change, but the amended wording is more in keeping with the spirit of the existing construction industry scheme. It allows, for example, for a de minimis amount of minor works to be disregarded in the operation of the scheme. Amendment 73 seeks to remove paragraph 3 from schedule 6. I know that the Minister has spoken against this amendment and amendment 74, but we have seen no convincing argument that this change is necessary just now, and we believe that it would be much better for industry to be allowed to continue with the existing scheme for the current year rather than asking it to change the way of doing things. Let us face it, with its being a major part of our recovery from the covid recession, industry has far more important things to concentrate on A similar reasoning applies to amendment 74, which seeks to leave out paragraph 4 from schedule 6. That paragraph relates to the way in which the costs of materials purchased for a construction contract are taken into account for tax purposes. The construction industry has had to meet a number of challenges this year. We do not see how changing the way in which it has to account for tax on purchases by a subcontractor for another subcontractor, for example, during this current year will help. We do not see why it needs to be done just now New clause 14 requires the Chancellor to report back to Parliament on the impact that the changes proposed in clause 30 and in schedule 6 have had on key economic indicators. One would think that it would be automatic that, when a Government make changes to the tax system, they would go back a wee while later to see whether the changes have had the desired effect. This Government are perennially hopeless at doing that. We seldom if ever see a published assessment of what impact the new legislation or changes to the tax system had. That makes it much more difficult for MPs and the public to hold the Government to account. Even more importantly, it means that, when mistakes are made—that is when, not if—there is no reliable process to identify that and to put things right For this Committee sitting alone the Government have had to table no fewer than 22 amendments in order to correct mistakes or to remove inconsistencies and ambiguity from their own Bill which they themselves commended to the House only last week. We can only hope that they have spotted all the mistakes by now, but surely with such an important piece of legislation it makes sense to ask the Chancellor to report back to us to tell us whether it is working, or whether there have been unintended consequences that need to be addressed sooner rather than later New clause 15 again requires the Chancellor to report back to Parliament, but this time on the effectiveness of various anti-tax avoidance measures in clauses 117 to 121, and the follower notice penalties in clause 115. I note that the Opposition have tabled something similar, although a bit more restricted in scope We welcome the further measures included in this Bill, but they still do not go nearly far enough. Time and again, it has been pressure from SNP MPs that has forced the Government to take any action at all on the scandalous levels of tax avoidance that they continue to tolerate. We still do not have an overarching and workable general anti-avoidance rule. We have an inadequate system of company registration and regulation that makes it far too easy for companies to hide the truth about who really benefits from the profits that they make on the hard work of citizens of these islands and who is really in control of the company. For example, the SNP has highlighted over and over again the need for legislation to combat the abuses of so-called Scottish Limited Partnerships by money launderers and organised crime. As things stand, almost anybody in the world can set up one or several Scottish Limited Partnerships and then use them to get round even the inadequate regulatory and transparency requirements that apply to other companies.
It is a pleasure to speak in this part of the debate, and I draw the House’s attention to my entry in the Register of Members’ Financial Interests It was probably 15 years after we set up our business that our own accountants came to us—we were making reasonable profits by then—and suggested that we take advantage of a tax avoidance measure, and a pretty aggressive one in our view. This was not a particularly unusual accountants—it had a decent reputation locally— but so much money potentially runs through these schemes that some promoters inevitably see an opportunity for themselves I must tell the House that we told our adviser that we did not want to take part in such a scheme, and there were two reasons: we believed that people should pay their tax—that we should all pay a fair amount of tax—but also that any person who takes up such measures should be afraid that HMRC will one day come along and say, “Those measures were not appropriate.” By that time, a lot of the money that they think they have saved has gone out in costs to promoters and the rest of it, and they are left with a huge bill Had the person who promoted that scheme to us—our accountant—thought that he would potentially end up on jail, I do not think he would have come to us and told us about it. This was a reputable local person, and perhaps he did not even think that tax avoidance at that point was fraud. Nevertheless, it certainly can be fraud, and in many cases it is. If we are willing to hold people to account, ultimately through a criminal prosecution—as HMRC can, of course, as the Minister pointed out earlier—there would be a lot less of this kind of promotion and a lot fewer of these activities Before I talk in more detail about that, I want to tackle some of the shadow Minister’s points. It is a little churlish not to recognise the steps that the Government have taken since 2010. There have been 150 measures to tackle tax avoidance; that was at a cost of £2 billion to the taxpayer, but it brought in £250 billion in contributions to our public services. Of course, the Minister said that we need to go further, but it is wrong to simply say that the Government are not doing enough. Some of those measures, such as the digital services tax and the diverted profits tax, are very significant internationally.
I acknowledge the point that the hon. Gentleman makes and the amount of money brought into the Revenue by the measures, but is he not also conscious that the sheer number of different measures has, for many taxpayers, added to the complexity? We have one of the most complex tax regimes in the world and that complexity often catches people unawares, and costs them lots of money and sometimes their businesses and their homes.
I absolutely accept that our tax system is very complex, and I have proposed a number of measures on the Floor of this House to try to simplify it. For example, abolishing business rates and replacing them with an increase in VAT would simplify the tax system, instead of having an online sales tax. However, in terms of this debate I do not think it is the complexity of the issues that catches people out. We can see that 99% of tax avoidance schemes in the UK involve disguised remuneration—these are very contrived schemes. We should look at amendment 77 carefully. As to whether it is unfair on a person who is a promoter of what I would say is an extremely contrived tax avoidance measure, I am not totally sold that that should be a problem One of the biggest problems we have is faith in the system. This Government have done a huge amount to reduce the tax gap, which is at a record low of 4.7%, but if there is a £20 billion tax gap from fraud, the person in the street might reasonably say, “Why should I pay my tax?” This creates an incentive then for people to look at ways of avoiding tax. As to whether tax avoidance is fraud, the Government’s own call for evidence last month says clearly: “The Government recognises that the design of arrangements that are sold as avoidance schemes may in fact enable fraud.” So there is a good case for being able to take these further measures, as the Government are doing through stop notices, further civil penalties and stopping individuals hiding behind corporate structures The trouble is that, as we see in many areas, not least the banking sector, which I am pretty active in through my work in the all-party group on fair business banking, these kinds of organisations see a fine—a civil penalty—as a cost of doing business; the real deterrent for people is a criminal penalty. One of the best examples of this is to be found in a completely different sector, with the personal liability for a director in the construction industry. As soon as that personal liability came in and there was the potential for someone to go to jail if they did not make sure their sites were safe or they did not put measures in place, there was a huge decrease in the number of injuries and fatal incidents in the workplace in construction. That speaks to the point that if there are real criminal sanctions that we are willing to take forward and people think that that is going to happen, this promotion of avoidance schemes will start to drop significantly We probably have better resourced areas in terms of the prosecution of avoidance; I believe there are about three and a half times this number of people in the Department for Work and Pensions looking at benefit fraud, despite the fact that it is a much lower level of fraud—the level of benefit fraud is about 10% of that seen by HMRC. A beefing up of the resources in HMRC is therefore something we should consider. We have seen very famous schemes. I believe the Ingenious film scheme cost the taxpayer £1.6 billion, but not a single promoter has been held to account for it. We need more resources, but we should also look at legislation. This country does not have a great record on prosecuting serious fraud. There are a number of examples where the Serious Fraud Office has failed to make charges stick—I think, for example, of cases involving Tesco and Barclays. That is why the SFO wants to bring in more legislation, which the Government have agreed to do, to create a corporate offence of failing to prevent economic crime. This would be a personal sanction on the directors of a corporation that failed to do that. Of course, in banking we now have the senior managers regime that the Financial Conduct Authority put in place following some of the scandals there, when nobody was held to account for the disgraceful abuse of both consumers and businesses through the past couple of decades in the sector. The excellent Minister might say that amendment 77 is not the right vehicle for this, but some beefing up of the legislation to make it easier to prosecute fraud—criminal activity—is something that we should seriously consider.
It is a pleasure to take part in this debate and to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake) I welcome the action that the Government are finally taking against the promoters of tax-avoidance schemes. My Liberal Democrat colleagues and I will be supporting new clause 29, which would require the Government to review the impact of provisions relating to tax avoidance and publish regular reports that set out the findings. We will also support amendment 77, which would cause the promoters of abusive tax-avoidance schemes to be treated as acting dishonestly for the purposes of criminal prosecution for tax offences, without dishonesty having to be proved separately by the prosecution. We believe that the measures we are considering are what the Government should have been doing earlier. The promoters of abusive tax-avoidance schemes have deprived the public purse of millions of pounds and defrauded countless people who thought that their services and the advice offered were legitimate The action being taken now comes too late for so many victims of these schemes who had no intention to do anything unlawful or to evade taxes and have already been unfairly penalised. Liberal Democrats are committed to clamping down on tax avoidance, but the retrospective nature of the loan charge is causing uncertainty and financial hardship to ordinary working families, most of whom acted in good faith. Thousands of IT support professionals, social workers, teachers, cleaners and nurses—all of whom acted in good faith, based on professional financial advice that what they were doing was legal—now face immense pressure, which is impacting on their mental health and causing serious financial hardship, which will only be magnified by the economic consequences of covid-19 Meanwhile, online tech giants and international corporations have been avoiding tax for years but have not been clamped down on in the same way, even internationally. With the load charge, the Government are going after nurses and teachers. Like many other right hon. and hon. Members in this place, I have a number of constituents who find themselves in exactly the position that I have described, facing retrospective taxation since HMRC changed its rules in 2017. One constituent whom I have been representing has attempted to correspond with HMRC on anomalies in the settlement agreement policies, but to no avail. Although he is categorised as fully compliant and not liable for the loan charge and pre-2010 loans, he is not being refunded any settlements that include pre-2010 amounts. The fully compliant are not benefiting from the pre-2010 amendments, while other categories are As I have said, we undoubtedly need to clamp down on tax avoidance—the deliberate evasion of taxes—but we should be clamping down on those who promoted it, not on those who took advice believing that it was lawful. The Chancellor must also go further than his recent decision merely to limit, in the Budget, the retrospective element of the charge to 2010; he must end the retrospective application of the rules altogether so that nobody who fell victim to such schemes before 2017 should be unfairly penalised. The Government must also further re-examine IR35 I shall end my speech there, but it is important that we recognise that the steps that we must back today should have come before us much earlier.
It is a pleasure to follow the hon. Member for Edinburgh West (Christine Jardine), but I must pick up on one of her points. She indicated that the Government had done nothing to crack down on online companies, but the evidence shows that the Government took action to ensure that if we buy something from an online marketplace such as eBay, Wish or Alibaba, the seller charges VAT. That was a significant source of lost income for the Exchequer It is right for Opposition Members to raise the Panama papers, because they highlighted to the general public—to residents up and down the country—the actions of a small number of tax-avoidance advisers and very wealthy individuals who did not want to pay their fair share. I think it is right that we should look at that in the context of the action that the Government have taken.
How delightful it is to see you in the Chair, Ms McDonagh. I am very pleased to speak to amendment 77 and new clause 29, and to have listened to the excellent speech by my hon. Friend the Member for Ealing North (James Murray). I pay tribute to Members from across the parties who have stood up for those who have been so badly affected by the loan charge scandal, and I was particularly pleased to hear my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) speaking so eloquently on Radio 4 on Sunday evening. We are getting these important messages across. I also wanted to pay tribute to the important work that is being done by the all-party parliamentary group on anti-corruption and responsible tax, led by the right hon. Member for Sutton Coldfield (Mr Mitchell) and my right hon. Friend the Member for Barking (Dame Margaret Hodge), on simplifying things and making the basics better, for example by improving the Companies House regulations. I understand that some of that is coming forward shortly, but the general picture is that things are quite slow It was lovely to listen to the hon. Member for Burnley (Antony Higginbotham) speaking about the importance of taxation. Once upon a time, I am sure that would have been quite a tricky topic for certain Conservative Members to talk about, but there is a new wind blowing. It is great to hear President Biden talking about the global minimum corporate tax level and the importance of an online sales tax, and even to hear our own Government leading the charge across Europe on the importance of introducing a digital sales tax and simplifying things to bring in the important public funds that we all need to keep our society going The scale of tax offences is clear, with a recent TaxWatch report finding that between 2009 and 2019, the UK prosecuted 23 times as many people for benefits offences as for tax offences—that theme has been echoed in today’s speeches—despite the fact that the value of tax fraud is nine times higher than that of benefit fraud. We know that American research has shown that for every $1 the Internal Revenue Service invests, it gets back $10 of benefit for the public purse, and I wonder what the consultation the Treasury ran said about incentivising officers based in HMRC so that the more money brought back, the more colleagues come on board to help them in their important work We know that a lot of this work is about priorities, and we need to prioritise criminal prosecutions so that there is not a decrease in taxation, as there has been of 39% since 2015. We need to look at the balance of the DWP employing 3.5 times more staff in compliance than HMRC. We know that we have to improve that balance, because quite simply there is much more money to be found in illicit finance and among tax avoiders than from those eking out a living on universal credit or personal independence payments The Minister will I am sure make it clear in his remarks that the Bill is intended to tackle some of these issues and to amend that imbalance, and I look forward to hearing that. However, I make the case for quicker progress so that we can move forward as fast as possible, particularly given the fact that, as the hon. Member for Burnley mentioned, the furlough scheme and some of the other schemes are quite expensive, and therefore the need to find more in this way from tax evasion is ever more pressing I want briefly to mention the importance of the provisions on freeports and the corporation tax super deduction, which do not appear to come with sufficient tax avoidance and evasion safeguards. I hope that during the debate—perhaps not right at this instant, but over the course of today—we will get some reassurances on that matter. In March, the Financial Secretary was unable to say how many additional staff HMRC plans to recruit to deal with taxation, duty, excise and customs issues pertaining solely to freeports, but I hope that that information is forthcoming. Given the attention and focus the Government gave to these announcements, we would have expected them to get the basics right, but we still have some questions that are outstanding While the Government are bringing forward—perhaps deliberately, some of us would say—a weak set of measures in the Finance Bill, other tools that we need to tackle evasion and avoidance, such as the draft Register of Overseas Entities Bill, could well sit gathering dust, since they were initially announced quite some time ago. Will the Minister use today as an opportunity to outline his views on that particular Bill On the question of illicit money, do not forget that our own Intelligence and Security Committee called London a “laundromat” for illicit and dark finances, often coming from Russia. I would hope that the Minister will redouble his efforts to understand how to clamp down on the facilitation of those finances through the UK financial system. We would have expected such a description of our capital city to force action from the Government, but we are still waiting to see exactly who owns some of the foreign companies buying up British property. Can someone still walk in and purchase a £1 million property in cash, and does the Minister believe such a way of purchasing expensive properties in London is appropriate?
I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests. Is the hon. Member aware that there are very strict requirements for people involved in the property market to check the identity and the source of funds of those she has just described?
I thank the hon. Member, and it is always lovely to have an accountant in the room. If there are some improvements, we are very grateful for them.
If I may intervene, London is one of the few cities that has no residency or nationality rule for owning residential property, and many very high-cost cities for residents to live in, such as Vancouver and Auckland, have such rules. Could this Government consider such rules, because this issue has helped to trigger the explosion in housing prices, particularly in London, but also in our other large cities?
My hon. Friend makes a very important point. I am sure it has not escaped the Treasury’s attention that prices of the top 1% of properties in the country—mainly in London—have been skyrocketing, when everybody else’s house prices have been going up by a little. That differential is quite frightening. In this terrible time when our economy has shrunk by 11%, who can afford to buy properties worth several million pounds, and do we know enough about these individuals? We know that there are big gaps in the way that Companies House operates, in terms of simply understanding who owns what, and simplifying that is the sort of thing that would make the work of HMRC much more streamlined I would also like to put on record the wonderful work being done by civic society groups to spread information and education about the importance of understanding taxation, what it does and what it purchases. It is through these campaigns—often outside this House—that we can understand how to change things. Aside from our international reputation often being questioned on the issue of Russian oligarchs, we know that the lack of action on questioning some people’s contacts with the Kremlin is costing us over £30 billion every year in lost revenue from taxes. That is a lot of money, and it would be better used to pay for the furlough, eliminate child poverty, vaccinate more children in the third world, or pay and equip our NHS staff for the heroic job that they do every single day The Government must act without delay and begin by supporting amendment 77 and new clause 29, which are a significant improvement on the weaker proposals put forward by the Government. That would send a signal that the UK will no longer be silent in the face of tax evasion and tax avoidance and is no longer a welcome home for the oligarchs and agents who see the UK as the destination of choice for their ill-gotten gains. I urge the Minister to do the right thing.
I speak in support of new clause 29 in the name of Her Majesty’s Opposition and cross-party amendment 77. I congratulate my hon. Friend the Member for Ealing North (James Murray), my right hon. Friend the Member for Barking (Dame Margaret Hodge) and the right hon. Member for Sutton Coldfield (Mr Mitchell) on their speeches Addressing tax avoidance and evasion is, of course, an important objective of the Treasury, and Finance Bills and other legislation are the vehicles to do that, but as with all tax changes, Government must assess and respond to the unintended consequences of any changes. This Government have a terrible track record on tackling tax evasion and aggressive tax avoidance. They have consistently stood in the way of Labour’s calls to clamp down on loopholes and have failed to collect over £30 billion in taxes every year. They have promised to legislate on these issues, but the proposals in the Bill fall far short of any substantive change. Instead, they have been responsible for an increasingly complex system of payment, fraught with difficulties and risks for the unsuspecting worker A growing number of working people need to work on a contractor basis, either for personal reasons or because it is the only way of getting work in their sector or with their professional skillset. Increasingly, the alternative to being a contractor is to be a PAYE freelancer—to pay tax in full but without any of the rights of being an employee and all the costs of being self-employed. This is zero-rights employment, and it is unfair We need an effective tax avoidance policy that criminalises those promoting tax avoidance, rather than going for the workers inadvertently caught up in them, as this Government and HMRC have been doing with the loan charge in particular. That is the wrong target. While ordinary people who are victims of mis-selling are facing ruin and bankruptcy, the Government have done too little, too late to go after those who promoted the schemes I acknowledge that the Bill contains measures to tackle the promoters of tax avoidance and changes the system of penalties, but those measures are extremely limited in scope. Indeed, those changes are not even included in the Budget report costings, which suggests that their financial impact must be minimal. IR35 was enacted 21 years ago to stop the practice of those who, in reality, were permanent, generally full-time workers being paid as contractors through personal services companies, as many were paying much less tax than if they had been employees. It was right to address that tax avoidance, but the Government must address the unintended consequences for workers and the labour market that have followed since then.
I am grateful to all those who have spoken in the debate. Let me start with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who, as always, brought a robust common sense, as well as the skills of an accountant, to bear, especially when it comes to holding the Opposition to account for some of their comments.
I should defend our hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). He is not an accountant; he is an estate agent.
I have been held to account by my right hon. Friend and I am grateful to him for that, because that power—if I have any power—should always be held to account. Let me put the record straight: my hon. Friend the Member for Thirsk and Malton is an estate agent, and yet with that estate agency genius he combines the forensic skills of an accountant in holding to account, indirectly, members of the Government and, directly, the Opposition. I thank him for that My hon. Friend the Member for Thirsk and Malton pointed out that these disguised remuneration schemes are highly contrived. It is terribly important to remind ourselves of that. It is all very well to complain about the loan charge, but these are highly contrived schemes. My hon. Friend reminded us—as, indeed, did my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) —of the general rule that all taxpayers are responsible for their own tax, and that if, by implication, a scheme looks too good to be true, it almost certainly is too good to be true. Those are important messages and no Government should wish to weaken that important principle that people are responsible for their own tax.
I understand what the Minister has said. Of course, most of us are aware of our own tax bands. But how can the Minister expect basic rate taxpayers—a nurse, an IT contractor, somebody working in the film industry, even somebody on minimum wage—to do due diligence when nothing they read or have been sent ever mentions loans, and when they are given a convincing narrative that their tax is being paid for and they do not need to worry? Should not HMRC and the Treasury be addressing this issue, because it is a growing part of the employment market?
HMRC is addressing these issues. That is why this Bill has so many measures in it that are focused on the disclosure of tax avoidance schemes, toughening up that regime and improving the regime against the promoters of tax avoidance. But let me say to the hon. Lady that I thought her remark was dripping with condescension towards the ordinary taxpayers of this country. The fact of the matter is that people, from whatever walk of life, are perfectly competent—they do not need to be patronised by Labour Members of Parliament—at working out when something looks too good to be true. That is why so many—such a high percentage; well over 90% of people—do manage to work out what is too good to be true and behave on that basis. To suspect otherwise, when HMRC is absolutely working as hard as it can to make sure that the truth is out there and well understood, and is closing down opportunities for misleading advertising, in a recent initiative with the Advertising Standards Authority and a whole host of other things, is completely wrong I am grateful to my hon. Friend the Member for Burnley (Antony Higginbotham) for what I thought was a very robust and thoughtful contribution. He is absolutely right to highlight that HMRC has not been slow in this area. He was right to pick up the point about VAT on online platforms, but, of course, that is merely the tip of the iceberg. The hon. Member for Ealing North (James Murray) somehow suggested that we were failing to tackle this issue. The tax gap, as he pointed out, is 4.7%—a historic low. Let me remind the House and him of some of the actions that the Government have taken—leadership on base erosion and profit shifting over many years, the diverted profits tax, the corporate interest restriction, the tax charge on offshore receipts, hybrid mismatch rules, our new digital services tax.
I very much welcome the digital services tax, which is there to try to make sure that everybody pays their fair share, as the Minister said in his opening remarks. Having said that, it does not apply to Amazon’s direct sales on that platform. It applies only to third-party merchants, so there is not that much of a level playing field between those two different cohorts. Will he look at that in future?
Brilliantly, my hon. Friend has intervened just before I was about to mention that we are consulting on an online sales tax, which is a parallel initiative. Indeed, the digital services tax includes the introduction of a new basis for tax—that is, UK user content. That itself is a flag to the energy and innovation that the Government are seeking to bring to this issue, and I thank him for his comments The hon. Member for Ealing North asked about the beneficial ownership registry on overseas companies that own or buy property in the UK. As he will know, the Government published a draft Bill. It has gone through prelegislative scrutiny. The process has, for reasons that the House will not need any reminding of or highlighting, been somewhat interrupted over the past year, but the Government plan to introduce the Bill in due course, so I reassure him on that point The hon. Gentleman raised the question about minimum corporate taxation. He should know that the Government have been, as I said, in the international vanguard in trying to drive change on base erosion and profit shifting, and processes of international tax agreement through the OECD. We were also in the vanguard of delivering the creation, originally, of the G20 commitments for a comprehensive global solution to this issue, based on two pillars, and we are leading the way, during our G7 presidency, on this issue, as the Chancellor has made clear. So we absolutely welcome the renewed commitment that the US Administration have made in this area, which we think is a very important change Finally, I turn to the important amendment 77, which was tabled by my right hon. Friend the Member for Sutton Coldfield and the right hon. Member for Barking (Dame Margaret Hodge). My right hon. Friend was right to highlight the importance of eternal vigilance—I absolutely share his view on that—and he was right, as the right hon. Lady was, to talk about the ever-shifting and evolving ways in which some of the malefactors in this area are ceasing to operate, and, of course, that is true. However, if I may say so, he erred in suggesting that the penalty on the enablers—that is to say, a sum equal to the gross fees to be collected in relation—was in any sense modest or small. It is one of the largest charges in the tax system, and because it is a gross fee, it is of course charged on the total amount of income. It is therefore income on which the promoter will have to recognise all their costs, and indeed any profit and any tax they may have paid, so it is actually a fairly formidable penalty.
I beg to move amendment 81, in page 49, leave out lines 14 to 27 This amendment would mean that the Stamp Duty Land Tax (Temporary Relief) Act 2020 no longer applies to additional dwellings.
With this it will be convenient to discuss the following: Clauses 87 to 89 stand part That schedules 16 and 17 be the Sixteenth and Seventeenth schedules to the Bill Clauses 90 and 91 stand part New clause 26—Equality impact analysis (No. 2)— “(1) The Chancellor of the Exchequer must review the equality impact of sections 87 to 89 and schedule 16 and 17 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the impact of those sections on— (a) households at different levels of income, (b) people with protected characteristics (within the meaning of the Equality Act 2010), (c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and (d) equality in England, Northern Ireland and in different regions of England (3) A review under this section must provide a separate analysis in relation to each of the following matters— (a) the temporary period for reduced rates on residential property, (b) increased rates for non-resident transactions, and (c) relief from higher rate charge for certain housing co-operatives etc (4) In this section “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of sections 87 to 89 and schedules 16 and 17 of the Bill on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a geographical basis. New clause 27—Fiscal and economic impact of 2% non- resident surcharge— “(1) The Chancellor of the Exchequer must review the impact of section 88 and schedule 16 and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter (2) A review under this section must estimate the expected impact of section 88 and schedule 16 on— (a) Stamp Duty Land Tax revenue at the increased rates of 2%, and what the revenue impact would have been if the rate had been 3%, (b) residential property prices, and (c) affordability of residential property.” This new clause would require the Government to report on the effect of the 2% stamp duty land tax non-resident surcharge on tax revenues and on the price and affordability of property.
It is a pleasure to speak for the Opposition on this group of amendments and new clauses relating to stamp duty. I rise to speak on those in my name and those of my right hon. and hon. Friends Amendment 81 will prevent the extension of stamp duty holiday from being used for second homes, buy-to-lets and investment properties. New clause 26 would require the Government to review the equalities impact of this group of clauses, including their impact on households with different income levels and on people with protected characteristics, their compliance with the public sector equality duty and their impact on the different regions and nations of the United Kingdom. New clause 27 would require the Government to review the impact of a non-residential surcharge of 2%, which it is set at in the Bill, and 3%, which, as I shall come on to, the Conservative party previously committed to Before I come on to the amendments in more detail, let me say a little about the stamp duty holiday extension. Clause 87 extends the £500,000 nil rate band until 30 June. From July until the end of September, the nil rate band will be £250,000, double its normal level; it will return to the usual level of £125,000 from 1 October. It is estimated that the total cost of this extension will be £1.5 billion by the end of 2021-22. That is on top of the £3.2 billion cost of the initial stamp duty land tax holiday announced in July 2020 The extension will of course be welcome news for those people in the process of buying a new home who face a cliff edge at the end of March. We know that many people have struggled to complete purchases in time due to the coronavirus restrictions and the significant backlog of pending transactions. In previous debates, Members raised issues of cyber-attacks on council services in Hackney that impacted the planning department and delayed people’s securing mortgages However, we have concerns about the broader effects of the policy. Our new clause 26 is intended to encourage the Government to be honest about the impact of the stamp duty holiday on the housing market. The Resolution Foundation says that the lower stamp duty liabilities have contributed to house price rises over the last eight months. House prices in England grew 7% between July and December 2020, which is highly unusual behaviour during a recession. In many cases, the rise in house prices over the period will have cancelled out the benefit of the stamp duty holiday. As the Institute for Fiscal Studies, the Resolution Foundation and others have pointed out, the stamp duty holiday has also had the perverse effect of temporarily removing the advantage that first-time buyers had in the market compared with existing homeowners. This, coupled with rapidly rising house prices, has meant that many first-time buyers continue to be priced out of the market. The Bill does nothing to address the housing crisis that affects millions of families across the country—yet again, a wasted opportunity from this Government I turn now to clause 88 and our amendment 81. It is unbelievable that, at the same time as the Chancellor is pressing ahead with a £2 billion council tax rise, he has given another tax break to second-home owners and buy-to-let landlords. This half a billion pound tax break for second-home owners and landlords is the wrong priority in the middle of an economic crisis that is hitting family incomes. Instead, this money could have been used to build nearly 3,000 socially rented homes, which is half the total built in England last year. In Wales, the equivalent tax relief has not been extended to property acquired as investment or as a second home. Labour’s amendment 81 would ensure that the extended stamp duty holiday in England and Northern Ireland followed that approach. I turn to the non-residential surcharge introduced under clause 88. During the 2019 general election campaign, the Chancellor, who was then Chief Secretary to the Treasury, said: “Evidence shows that by adding significant amounts of demand to limited housing supply, purchases by non-residents inflate house prices.” He went on to announce a Conservative manifesto commitment to introduce a non-resident stamp duty surcharge of 3%, which would have been spent on programmes aimed at tackling rough sleeping. But clause 88 introduces a non-resident surcharge of 2%, rather than 3%. As yet, we have had no explanation from the Government as to why they have watered down that commitment. We estimate that this means the Government could miss out on £52 million a year in revenue that should have been spent on tackling homelessness and rough sleeping Our new clause 27 would require the Government to review the difference between the 2% charge and the 3% charge and to reveal the lost income as a result of that decision. When the Minister stands up, perhaps he will tell us why the Government have moved from 3% to 2% We welcome clauses 89 to 91, which provide relief from the annual tax on enveloped dwellings and the 15% stamp duty charge for the ownership and transfer of property by housing co-operatives that do not have transferable share capital. The Treasury has listened to the co-operative housing sector on the issue and that is welcome To conclude, we do not believe that the Government’s clauses in this group would do anything to solve the housing crisis we face in this country. Year after year, Government have failed to build the homes we need, especially social and affordable homes. The Government are on track to miss their target of building 300,000 homes by almost a decade. The number of new social rented homes has fallen by over 80% since 2010 and home ownership is down sharply among young people, with 800,000 fewer households under 45 owning their home than in 2010. Without urgent action the housing crisis in the UK will deepen. Instead the Government have decided to give a tax break to landlords and failed to meet their own commitment on the non-residential surcharge. Our amendments will remedy these wrongs.
Last spring, we were only just beginning to understand as a nation what the full impact of the coronavirus might mean for us. We were told to stay at home and, for many people, that meant postponing plans that they might have made to move, creating considerable uncertainty. It was evident that the housing market was affected by that and it was made much worse when, on 26 March, buying and selling a property was largely put on hold. While business was enabled to resume from 13 May, there was concern about what the pandemic would mean for the market and for the jobs that rely on the sector The Chancellor announced that he would support the housing market through the stamp duty land tax holiday, quadrupling the starting threshold for SDLT to £500,000. That was designed to give a boost—indeed, the boost to the housing market that it needed to thrive through the pandemic. It has thrived: transactions in the last quarter of 2020 were 16% higher than in the same period in 2019. In other words, the SDLT holiday has given hundreds of thousands of families the confidence to buy and to sell their homes at a particularly difficult time. In turn, it has supported the livelihoods of people—tens of thousands of them, or more than that—whose businesses and jobs rely on trade with, through and from the housing market Towards the end of last year, it became apparent that the housing industry was struggling to meet the additional demand to move home and that there were delays in processing transactions. That meant that some of those moving home would not be able to complete the transactions that they had entered into until after the holiday ended, through no fault of their own. The Bill therefore extends the stamp duty land tax holiday in order to allow those buyers still to receive the relief. In addition, the nil rate band will be £250,000, double its standard level, until the end of September, in order to allow the market to return smoothly to its normal rates The Bill also introduces a non-residential SDLT surcharge. The surcharge will apply to property purchases by non-UK residents who do not come to live and work here, helping to ease house price inflation and to keep housing free for UK residents to buy. Revenue raised from the surcharge will be used to help address the issue of rough sleeping The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) raised the question about the non-resident surcharge. She may not be aware that, at Budget 2018, the Government announced that a consultation for a 1% non-UK resident surcharge would be published. Following the announcement of the surcharge, HMRC and the Treasury carried out a public consultation in spring 2019. That included questions on whether a 1% rate was set at the right level to balance the Government’s objectives on home ownership with those of the UK remaining an open and dynamic economy. Having listened to stakeholders, the Government believe that the 2% surcharge—twice the original amount contemplated—strikes the right balance in this area. That is the basis on which the surcharge has been set The Bill will also relieve the 15% rate of SDLT and the annual tax for enveloped dwellings for qualifying housing co-operatives. That change ensures that these measures are fairly targeted at companies that use so-called envelopes in order to avoid tax on their properties Amendment 81 would disapply the SDLT holiday to purchases of additional dwellings. As the Committee will know, the SDLT holiday was intended to give a boost to the entire property market, of which developers and landlords are important parts. Although those buying second homes or buy-to-let properties will benefit from that tax change, they will continue to pay an additional 3% on top of the standard SDLT rates The Government have maintained the relative advantage that buyers of main homes had before the tax change. For example, the purchaser of a second home worth £500,000 will still pay £15,000 in SDLT, compared with nothing for the purchase of a main residence. It was a Conservative Government who introduced the phasing out of finance cost relief, and the higher rates of SDLT for the purchase of additional property—all steps towards a more balanced tax treatment between homeowners and landlords On new clause 26, HMRC routinely publishes information about SDLT, collected by house price bands and by region. Of course, a full tax impact assessment, including equalities impacts, has been published for each measure Extending the SDLT holiday ensures that buyers who were affected by delays in the industry will still be able to receive the tax relief In the longer term, the Bill introduces a new surcharge that will help more people on to the housing ladder through the new non-UK residents’ surcharge. It also ensures that stamp duty and the annual tax on enveloped dwellings remain fair by making certain that only those who the Government intend to pay corporate rates of tax are captured.
I am happy to speak in support of clauses 80 to 91 and also new clauses 26 and 27 Some of the measures in this cluster of schedules and clauses do not apply to Scotland, where the land buildings transaction tax applies instead following the devolution of the stamp duty land tax. That said, I am sure that the extension of the temporary increase to the stamp duty land tax holiday with no rate band for residential property in England and Northern Ireland that will be given effect by clause 87 will be very much welcomed by those who stand to benefit from it. The increased rates for non-resident purchasers given effect by clause 88 and schedule 16 is something that is long overdue. I am also happy to support the relief from annual tax on enveloped dwellings for certain kinds of properties given effect by clauses 89 to 90 alongside schedule 17, as well as the provisions being made under clause 91 for repayment to co-operatives that are also eligible. I encourage Ministers to look positively on the reforms of property taxation that have taken place in Scotland since stamp duty was devolved. LBTT replaced stamp duty on 1 April 2015. It is very much a progressive tax in that the rates increase more than proportionately in line with the price of the property to which it has been applied. That has a very valuable role in the housing market with regard to easing house price inflation and, at the same time, exempting nearly 80% of first-time buyers from paying any kind of property tax on their first purchase of a home. My party is committed to maintaining current rates and bands within that tax regime while undertaking a review of the effectiveness of the additional allowance supplement that has also been put in place. It is in that spirit of constant review that we find much to welcome in new clauses 26 and 27, which we consider will merit the support of the Committee.
As the Committee is aware, this year’s Finance Bill is presented at an unprecedented time in British peacetime history. The pandemic has hit the economy very hard, and the Government have not stood idly by over the past year. Extensive levels of economic interventions have been introduced to protect jobs, businesses and our people in order to help them through this pandemic. The impact of this on the state of the public finances has been drastic, with the budget deficit rising to £355 million in 2020-21 and our national debt rising to £2 trillion That is of course not a sustainable position, but, as we know, the tide is turning. The Government’s excellent vaccine planning, procurement and roll-out means that we can now see the end in sight. The economy and society have begun to open up, but we are not there yet. The Budget introduced by my right hon. Friend the Chancellor of the Exchequer in March therefore had to achieve a very delicate balance in maintaining high levels of economic support during the continuing global health crisis while also laying the groundwork to repair the public finances and support our economic recovery The part of our economy that is the housing market comes in both property sales and construction. I will address my remarks primarily to the decision to extend the temporary stamp duty land tax holiday. As my right hon. Friend the Minister said, when the pandemic struck and the first lockdown began in March last year, the housing market experienced a sharp decline in sales, falling by 43% in the second quarter of the financial year compared with the same period of the previous year. Historically, a sharp drop in transactions, if left unchecked, has led to a fall in the level of house building. The Government’s action in introducing revised thresholds at the lower end of the market, abolishing stamp duty on the first £500,000 of the purchase price and setting the level at 5% for the next £425,000, has greatly alleviated the problem. In my constituency of Orpington, the average house price is currently £528,000, and the Government’s intervention has reduced the level of stamp duty on an average transaction by 91%, leading directly to a strong recovery in the local housing market That recovery is also reflected in the picture nationally. According to HMRC figures, in the third quarter of the most recent financial year, housing sales increased exponentially on the previous quarter, and in the fourth quarter transactions were at their highest level since 2007. In the short term, that is extremely welcome because the Government have achieved their objective of stabilising the housing market and maintaining confidence in the construction market. By introducing an extension of the initial stamp duty holiday, followed by a tapering of relief, the Government have taken steps both to remove the danger of a cliff edge that could have reversed all the good work done in the latter half of last year and to prevent an unsustainable long-term boom in house prices. I believe that is the right approach at this juncture In the longer term, though, I urge the Government to take a long, hard look at the structure of stamp duty. Stamp duty thresholds have not kept pace with the rise in house prices, meaning that stamp duty has become a significant barrier to purchasing. That is particularly true in places such as Orpington, and even more so in other areas of south-east England in particular, where housing shortages are most acute. In the light of the strong link between house construction and housing transactions, coupled with the Government’s desire to ramp up house building and level up the country, a review of the wider stamp duty regime would bear consideration. However, that is an argument for another day, once the battle with the pandemic is finally won For the moment, I believe that the extension of the stamp duty until the end of June is the right move, and its tapering from the end of June until October is both proportionate and unwelcome. I will support the Government on the issue this evening.
The stamp duty holiday tells us all we need to know about the Government’s priorities. Amid an awful pandemic that has seen the highest death rates in the world, when something like 4 million people have been infected and many of them will face long covid, and when something like 7.6 million people are in hunger, we need investment in the wider economy to get us moving again. In fact, with the stamp duty holiday the Government have spent much of £5 billion, over two years, on second homes. That £5 billion could have paid for 5% increases in nurses’ salaries over 15 years, given that a 5% increase would cost £330 million after allowing for the recovery of the tax on the money given in the first place In any case, it is not clear that the stamp duty holiday was at all necessary to stabilise the housing market, because immediately as the pandemic began to hit, the Bank of England reduced interests rates and in so doing reduced mortgage costs, supported prices and increased landlords’ margins at a time when tenants were still required to pay their rents. Given that the Bank of England had already taken action to support the market, the stamp duty holiday simply increased house prices by something like 7% between July and December 2020. That is not the right priority, and it is certainly not the right priority to invest money in second homes for people who are basically making money out of that investment from taxpayers and boosting the prices that first-time buyers face. That is why in Wales, where we have a Labour Government, second homes were not included in the stamp duty holiday, which was quite right. I therefore support amendment 81. Indeed, in Wales, we have made provision so that there are no rough sleepers during this pandemic, whereas in England, of course, there are. The stamp duty holiday will mean that first-time buyers will find it more difficult to buy a house because deposits will need to be bigger. We are moving to a situation in which young people who want to buy a house will almost always have to depend on their parents to do so, so the distribution of the opportunity to buy a house in Britain is getting worse and worse In a nutshell, this Budget should have invested in all our opportunities to raise productivity, increase the number of jobs, focus on the future and keep people healthy. Instead, it has been seen as an opportunity to focus on widening inequality unnecessarily. I very much support the Labour party’s amendments.
We now go to Christine Jardine, who is joining us virtually.
[Inaudible.]
We will move on to Felicity Buchan.
I speak in support of the Bill and against the amendment. The stamp duty holiday has been an unequivocal success in stimulating the market, and I welcome its extension. Many of my constituents will also welcome the surcharge for non-UK residents. In my constituency, many foreign investors buy flats and houses as financial investments, and often these lie empty; in effect, they are bank balances in the sky. This has real implications for my constituency. It leads to hollowed-out communities, and it makes it very difficult for shops, restaurants and businesses to be viable I welcome this Government’s focus on house building. Last year, we built 243,000 houses. That is the most in 33 years. For so many of my constituents, buying a house is almost an unobtainable dream. We need to build more houses, and we need to build more affordable housing. That is especially the case in London, where the Labour Mayor’s record of building housing has been lamentable. In 2016, he was given a budget of £4.62 billion to build 116,000 houses. How many had he done by December? Only 56,000—less than half. It is lamentable I also welcome the Government’s new measures on guaranteeing mortgages up to 95%. Again, this will help my young constituents and key workers to get on to the housing ladder. In my borough of Kensington and Chelsea, we have so many private renters. Some 44% of my constituents are private renters, because people cannot afford to get on to the housing ladder. Rent is a huge proportion of my constituents’ incomes. Rent is 26% of the median average income nationally. In my constituency, it is a whopping 75%, so I welcome all the support to get young people in my constituency on to the housing ladder I support the measures in the Bill, but like my hon. Friend the Member for Orpington (Gareth Bacon), I encourage Government to be more radical when it comes to stamp duty and to make a fundamental reform. Stamp duty is essentially a tax on social mobility. It prevents people from moving closer to new work opportunities. It prevents young and growing families from moving from one to two-bedroom flats to bigger family houses. It prevents older people from downsizing. In my constituency, it has led to very perverse consequences. People cannot afford to move, so they start extending their houses. That has led to an onslaught of basement developments. One house in my street went down an extra three storeys below the lower ground floor. That has now been banned by my council, but this causes undue distress to my constituents and intolerable noise and disruption that goes on for prolonged periods. We have to make it easier for people to move.
Christine Jardine, welcome back.
Thank you, Chair. Apologies, I do not know what happened just then, but it is now a pleasure to take part in this debate I will be supporting amendment 81, as will the Liberal Democrats, which would ensure that the stamp duty land tax holiday no longer applies to the purchase of second homes. I will keep my remarks short, in the light of the earlier mishap. Suffice it to say that we believe that the SDLT holiday is not effective in helping first-time buyers on to the housing market. Giving a tax break to people who have already saved money for their property and can already afford a mortgage does not entirely solve the problem. Extending the SDLT holiday would serve only to avoid a cliff edge, depriving the Treasury of much-needed funds at a time when there are many extremely pressing calls on our public finances. Combined with the new lower deposit mortgage scheme launched in the Budget, its only effect is to increase demand for housing without increasing the supply of homes. For me, and for the Liberal Democrats, that is crucial. Members can see where I am going with this: we need to increase the supply of homes The Government need to take steps to increase the number of homes being built. They first must make and then keep to their targets, support local authorities that want to build new homes and enforce affordable homes targets. That must include building 100,000 new social homes a year. The Liberal Democrats have proposed a new rent to buy scheme, where people can build up shares in housing association homes through their rent. I ask the Government to examine the merits of that proposal. These steps would be more effective in getting people on to the housing ladder. Therefore, I ask that the amendment be supported and I ask the Government to consider the rent to buy scheme as a way of realistically helping people on to the housing ladder without increasing demand for housing that is not there.
I very much welcome many of the measures in the Finance Bill, particularly the measures on stamp duty. Like many people who called for a stamp duty holiday, I welcomed it when the Government announced it and I am glad to see that it has been one of the most successful stimuli to economic activity that the country has seen. The moribund market is now racing ahead, albeit possibly slightly too fast. I recognise that homeowners need certainty—many of them are in the middle of transactions —so this is good. We are not out of the pandemic yet, so I welcome the Government’s move to extend the stamp duty holiday to the end of June. I also welcome the fact that they are removing the steep cliff edge and replacing it with a smaller cliff edge by tapering it out and extending it at a lower rate until the end of October. Those are both good measures that will keep the housing market going and give certainty to homeowners I do not support amendment 81, which proposes that these measures should not apply to second homes, although I understand the social justice argument behind it. The purpose of the stamp duty holiday is to stimulate economic activity, and whether a home is being bought to live in or as an investment property, that still involves economic activity in the housing market. Our focus here is on stimulating the market, and both those activities have equal effect Back in 2012, I co-founded an organisation called the HomeOwners Alliance, Britain’s first and only consumer group for homeowners. Our aim was to champion homeowners and aspiring homeowners and to help people to get into the housing market, recognising that home ownership is a valid aspiration for all young people, and indeed older people, and that the primary role of homes is to be lived in. They are not investments or casinos; they are to be lived in, and that should be the role of Government policy I wrote various papers on the reform of stamp duty. I will not go on about the details, but there were two particular reforms that I called for. One was an increase in the stamp duty on second homes, investment properties and buy-to-lets. The other was an increase in the stamp duty for non-residential buyers. The Government have already introduced the first of those, and I think they have raised almost as much money from that as they do from residential stamp duty. Now, in this Bill, they are introducing the stamp duty surcharge for non-residential buyers—the people who want to buy homes in this country but who have no intention of living in them. As a country, we have been very generous to such people—far more generous than most other countries—but, as my hon. Friend the Member for Kensington (Felicity Buchan) said, this has a real cost in terms of preventing other people from buying a home that they actually want to live in. It is very welcome that the Government are introducing the 2% surcharge for non-residential buyers who do not want to live in the UK. It is right that it should start low—2% is quite low; that is often the fee that we pay to the estate agent—but the Government should monitor it. There will be an opportunity to increase that rate, while ensuring that doing so does not have really bad effects on the market but that it does have an effect on demand and helps to free up properties for people who want to buy a home to live in. The money from these measures is being used to house rough sleepers, which is very welcome, but in the longer term as we raise the rate and more money is brought in, I would use that revenue to reduce the burden of stamp duty for those buying homes that they want to live in. As my hon. Friend the Member for Kensington so eloquently said, stamp duty is a big burden for homeowners. Following those thoughts for the future, I will be fully supporting the Government’s policies.
It is a pleasure to speak on this part of the Finance Bill, and I want to start by saying thank you to the Treasury for listening to people’s suggestions relating to the stamp duty land tax holiday and for listening to the voice of the industry, which called for this extension. The original decision at the start of the pandemic to provide that stamp duty holiday was brilliant. It worked. It was the right measure at the right time, and it stimulated our economy and resulted in an almost 33% increase in the amount of home moves. It kept the whole show on the road. Now, as my hon. Friends have mentioned, the decision to extend it will remove the cliff edge that we could have faced when it went away, along with the tapering of other support packages These are sensitive times, and there are fiscal measures in place that are carefully balanced to stimulate growth, support people, jobs and businesses, and project confidence to the markets so that we can credibly borrow all this money to invest in our covid response, but this stamp duty holiday cannot go on for ever; it is after all, a revenue-negative intervention from the Treasury, despite the wider economic stimuli that it creates for the painters, movers, builders, white goods salesmen and so on So what do we do with a problem such as SDLT? I do not believe that it is simply a case, as some might say, of replacing one tax with another. We do too much shuffling and tinkering with our taxation system and our housing market. As a result, our taxation system is fiendishly complicated. However, this is our opportunity for radical reform, and this clause proves it. We need to look at the role of property values in locally raised revenue. We need to include our commitments on net zero and levelling up, as well as the target of building 300,000 houses a year Other interventions, such as the freeport scheme, can provide an excellent place to start. Let us put that idea on steroids. Let us have special economic zones to deliver levelling up and green homes, and sustainable investment in businesses, jobs and homes and the infrastructure that goes with them. With levers such as the super deduction combining with our global Britain approach, we can reach out to the world to get more foreign direct investment, more onshoring of manufacturing and more global brands relocating to those areas that we will level up The property tax element is fundamental here because it relates to the homes that people live in—the people who will do the jobs that will benefit from this investment and whom we will support through the levelling-up agenda. To put it simply, we cannot do levelling up without fixing the housing market, and the way we tax it, and what we disincentivise and incentivise as a result of that taxation, are a great place to start. I therefore fully support this clause.
I do not think I will ever give a more popular speech than the one I am going to give now, because I just want to thank everyone who has made comments. I thank the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) for her remarks, which I have already answered. I thank colleagues for the speeches they have made to explore the effects, purpose and potential limits, even, of the stamp duty land tax and the holiday. I ask Members to support the clauses, and I will sit down.
This has been a good debate, and I too thank Members on both sides of the House for their contributions. Members on both sides have spoken on behalf of their constituents about the impact of the stamp duty holiday, the challenges of buying a home and the need for more action to make affordable housing a reality As I said in my opening contribution, the Opposition simply do not believe that the Government should be handing a half a billion pound tax break to buy-to-let investors and second home buyers. Once again, this is the wrong priority from a Government who are letting families down. Labour’s amendment 81 would end that unfairness, and I want to press it to a vote Question put, That the amendment be made.
With this it will be convenient to discuss the following: Amendment 64, in clause 93, page 54, line 15, leave out “substitute for the period for the time being mentioned there such other” and insert “increase the” This amendment would ensure that the Treasury can only increase, and not decrease, the period for which the temporary 12.5% reduced rate of VAT for the hospitality and tourism sectors applies. Clauses 93 to 96 stand part That schedule 18 be the Eighteenth schedule to the Bill Clause 97 stand part That schedule 19 be the Nineteenth schedule to the Bill Clauses 128 to 130 stand part New clause 16—Review of changes to VAT— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to VAT by sections 92 and 93 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) business investment, (b) employment, (c) productivity, (d) GDP growth, and (e) poverty (3) A review under this section must consider the following scenarios— (a) the extension of temporary 5% reduced rate for hospitality and tourism sectors is continued until 30th September 2021, and (b) the extension of temporary 5% reduced rate for hospitality and tourism sectors is continued until 31st December 2021 (4) In this section “parts of the United Kingdom” means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause seeks a review comparing (a) the extension of temporary 5% reduced rate for hospitality and tourism sectors being continued until 30 September 2021, and (b) the extension of temporary 5% reduced rate for hospitality and tourism sectors being continued until 31 December on various economic indicators. New clause 30—Review into the effects of replacement of LIBOR— “(1) The Chancellor of the Exchequer must undertake a review within six months of the passing of this Act of the effects of sections 128 and 129 (2) This review must consider— (a) the implications for tax revenue, (b) effects on financial stability, and (c) effects on businesses that use LIBOR as a benchmark, including businesses offering supply chain finance.” This new clause would require a review into the effects of the provisions of the Bill about replacing LIBOR.
May I say how much I love your exuberance, Mr Walker? It is never better in evidence than it was just now. Perhaps we are all getting a bit demob happy after 10 hours of close consideration of the Bill The Finance Bill includes clauses that extend temporary VAT relief for the hospitality and tourism sectors; that extend digital record keeping for VAT purposes to all businesses; that give businesses longer to make deferred VAT payments; and that add S4C, the Welsh language television channel, to an existing VAT refund scheme for public bodies. A customs clause will enable businesses that export steel into Northern Ireland from the EU to pay the same tariffs and access the same UK quotas as other UK businesses, instead of facing the prohibitive duties and quotas set out in EU legislation last year. Finally, banking clauses make changes to existing tax rules to ensure that they continue to operate as intended following the transition away from LIBOR and other benchmark rates, and update the powers to make amendments to the bank surcharge, the bank loss restriction, the bank compensation restriction and bank levy rules by regulations made by statutory instrument Clauses 92 and 93 ensure that businesses will continue to be supported by the temporary VAT relief for the hospitality and tourism sectors. The relief was introduced as an urgent response to the economic challenges faced by businesses in sectors severely affected by covid-19 restrictions. Together, these clauses will ensure that the relief continues to support the cashflow and viability of around 150,000 businesses, as well as the continued employment of more than 2.4 million people Amendment 64 seeks to remove the flexibility in the legislation that would allow for changes in the duration of the relief. As with all reliefs in response to the pandemic, the Government continue to keep the situation under review. It is important that the clauses allow for flexibility in what is, after all, still a rapidly changing environment. I therefore urge Members not to support—indeed, to reject—this amendment New clause 16 would require a review of the impact on investment of extending the 5% rate of VAT to the end of September, versus the year end, across the United Kingdom. This is technically not possible, because some of the required data does not exist Clause 94 will provide the legislative basis for the changes I announced to the Making Tax Digital for VAT service in July 2020, extending the requirement to keep digital records and submit digital VAT returns to VAT-registered businesses with taxable turnover below the VAT threshold of £85,000 from April 2022. Around 600,000 businesses have deferred VAT payments worth an estimated £34 billion as a result of the coronavirus emergency Clause 95 and schedule 18 legislate for a new payment scheme that will allow businesses that defer VAT payments from 20 March through to the end of June 2020, which were previously due by 31 March 2021, longer to pay in up to 11 equal monthly interest-free instalments. The new payment scheme has been available since February and will remain available until late June 2021. As of 19 April, HMRC has collected around £13 billion of the £34 billion that was deferred. Approximately 120,000 payment plans have so far been created, with a further £11 billion committed to being paid in monthly instalments. This means that over £24 billion of the total deferred VAT has now been secured as paid or scheduled to be paid. This is proving to be an extremely important and effective intervention Clause 96 seeks to add the Welsh language television channel S4C, the recent changes to the operating structure of which mean that it can no longer recover most of the VAT it incurs, to an existing VAT refund scheme for public bodies. That will refund VAT relating to its non-business activities of free-to-air public service broadcasting. The change will come into effect from 1 April 2021 Clause 97 and schedule 19 ensure that businesses that move steel into Northern Ireland do not have to pay prohibitive safeguard rates as long as there is capacity in the relevant quota. The EU introduced legislation last year that could have led to prohibitive duties being charged on all steel imports into Northern Ireland, making steel more expensive there than anywhere else in the rest of the UK, or indeed in the EU. This outcome would have been quite unacceptable and incompatible with the Northern Ireland protocol. The Government wrote to the UK steel sector in January to communicate a solution that allows Northern Ireland businesses to have access to UK tariffs, including UK quotas instead of EU quotas. This clause and schedule provide the legal basis for that solution.
I rise to speak to new clause 30 in the name of the Leader of the Opposition and to make a few remarks on the other provisions in this group Clauses 92 and 93 relate to the temporary VAT cuts for the tourism and hospitality sectors. These are of course among the hardest-hit sectors of our economy over the past year, and it is absolutely right that this relief is extended. Only today we learned that, of the 800,000 jobs lost in the economy over the past year, 80% are those of people under 35 years old, many of whom previously worked in the tourism and hospitality sectors. Today’s unemployment figures show that it is young people more than any others who have borne the brunt of the job loss impact over the past year. The vaccine programme of course gives us great hope and a platform for the cautious reopening of the economy, but only two in five hospitality businesses have outside space. Most of them are still not able to operate even under the conditions allowed at the time of this debate, so it is still a very tough time for the hospitality industry. After the experience of the past year, with the upsurges in cases in some countries, the emergence of new variants and vaccine resistance levels remaining uncertain, no one would yet say that we were out of the woods or that there was not still a need to support key sectors of the economy for some time yet. That is why it is right to continue the measures in clauses 92 and 93 Clause 95 relates to payment schedules for VAT. Again, it is important to show some understanding of the difficulties that businesses have faced in the past year, and it is far better to have a measure that approves a realistic repayment schedule than bring support to an abrupt end and cause repayments at a defined deadline, which could have very damaging consequences for some of the businesses concerned Clause 97 and schedule 19 relate to steel moving between Great Britain and Northern Ireland. We of course support anything that will make life easier for the steel industry right now. It is the foundation for much of our manufacturing industry, and there is a great deal of uncertainty hanging over various steel plants in the UK right now. It is impossible not to reflect that, while the Government promised us free trade with the rest of the world, we need a clause and a schedule like these precisely because they have not even been able to guarantee free trade within the UK. We hope that this clause and schedule will make it easier to move steel goods between Great Britain and Northern Ireland, but the Minister will be aware that one of the broader uncertainties surrounding UK-made steel is how to avoid its being subject to 25% EU tariffs if quotas are breached in the near future. I wonder whether he will update the House on how discussions on that matter are going and how the Government intend to avoid that. This is particularly important given the wider issues facing the steel industry at the moment New clause 30, in the name of the Leader of the Opposition, relates to the transition from LIBOR to other reference rates, and specifically to reviewing the effects on taxation of replacing LIBOR. The new clause would require such a review to take into account the implications for tax revenues of the transition, and the effects on businesses, including those offering supply chain finance The new clause relates to clauses 128 and 129, which replace references to LIBOR in legislation with references to an “incremental borrowing rate”. The history of this, of course, relates to the long effort to move away from the use of LIBOR in financial markets. The need to do so arose out of the uncovering of attempts to rig LIBOR in the interests of various individuals in the financial services industry some years ago. Indeed, I believe that the Minister and I were colleagues on the Treasury Committee when all that was uncovered The uncovering of those practices exposed much that was bad about what was happening in parts of financial trading at the time, with activity being pursued in the interests of traders rather than customers, rates being rigged for the benefit of those traders and their institutions, and bank chief executives professing ignorance about what was going on inside their own companies. The ability to game the rate was exposed; the use of opinions on cost from submitters to the rate-setting process, rather than its always being based on actual trades, produced the possibility that tiny movements in LIBOR could benefit individual institutions or traders, often by very significant sums given the volumes of trades involved. Potentially, only a tiny movement in rates was needed to generate a very big profit However, making a decision to move away from LIBOR to alternative benchmarks based on actual transactions rather than the opinion of traders was, in a sense, the easy part. So far it has taken years; no wonder they are calling it the long goodbye. The difficulty is that LIBOR has been so widely used as a benchmark for contracts around the world. Indeed, the Bank of England estimates that LIBOR has served to underpin contracts worth some £300 trillion across the world and £30 trillion here in the UK. Even in these covid days, those are serious sums Moving away from LIBOR without dealing with that contract issue leads to the potential for contractual law disputes. If a deal was agreed based on one interest rate, how will it be affected by the move to another rate? That is not an abstract or unreal problem; it could affect mortgage rates, leases of buildings—all sorts of contracts. Indeed, the issue was highlighted only this morning in the Financial Times, in a story headlined “US lawmakers warned of litigation chaos over Libor” The Government have attempted to deal with this legacy contract issue through the Financial Services Bill, which is currently ending its proceedings in the other place. How successful that legislative effort will be remains to be seen. The very least we can say is that the reality of moving away from LIBOR has proved to be more complex than the decision in principle to do so. We may not have heard the end of this matter of transitioning away from LIBOR. That is why it makes sense to have a review of the implications, which is exactly what our new clause 30 calls for Clauses 128 and 129 deal with the tax implications of this change and replace legislative references to LIBOR with the term “incremental borrowing rate”. They also provide the Government with powers to make tax changes as a result of the discontinuation of LIBOR The Government estimate that the impact of all this on Exchequer revenues will be marginal. That could be right, but the sheer volume of contracts involved here suggests that the need for a review of the implications for tax revenue is real, and that is what our new clause 30 calls for. We believe that such a review should take specific account of the impact on businesses using supply chain finance. After all, that has been very much in the news recently, and it ought to be a field with which Ministers are by now familiar. Perhaps the Minister felt special when he got the call about supply chain finance, because it is not every day that someone gets a call from the former Prime Minister, but now we find that he was not the only one. In fact, there were three Ministers in the Department, one in the Department of Health and Social Care and the industry adviser in No. 10, all of whom got the call about supply chain finance. You could be forgiven for thinking that there are few people living west of the Caucasus who have not heard from the former Prime Minister about supply chain finance. After all that, it seems only right to consider the impact of this provision and on these companies. That is why we have included them in the new clause The inquiries on the broader issue will do their work. We may well hear more of this elsewhere, but, for the moment, as regards new clause 30, I look forward to the Minister’s response at the end of the debate.
It is always a pleasure to follow the right hon. Member for Wolverhampton South East (Mr McFadden), and it is a pleasure to speak in this debate. As I spoke twice yesterday and I am on the Bill Committee next week, I will keep my remarks a little short and focus on one measure that is important to my constituency I know that the Committee will appreciate that Harrogate and Knaresborough has a very significant hospitality and tourism sector. Using data from UKHospitality, we see that before the pandemic, there were 9,464 people employed by the sector. That puts us in the top 10% of constituencies across the country. The sector is not just a Harrogate and Knaresborough one; it is important to the whole of the York and North Yorkshire economy, accounting for over 75,000 jobs. If we look across the UK, we see that the sector accounts for 150,000 businesses and 2.4 million jobs. It is a huge number of people in a sector that has been one of the hardest hit As has been mentioned, among the tax measures in the Bill is the extension of the temporary VAT cut of 5% for the hospitality and tourism sectors. That reduction was first announced last July and was very well received by the industry, but this Bill extends that to the end of September and will then bring in a further reduction of a 12.5% rate for the six months to the end of March next year. This is very welcome, and the points that were made by both Front Benchers, my right hon. Friend the Financial Secretary to the Treasury and the right hon. Member for Wolverhampton South East, were absolutely correct This initiative understands the pressures that businesses will face. The hospitality sector may be starting again but it is effectively running on empty, having had months of either zero or very limited trading. If I may quote a local businessman, Mr Ian Fozard of Rooster’s brewery and taproom—[Hon. Members: “Hear, Hear!”] Mr Fozard is obviously well known here. He said that “most businesses like ours need a sustained period of good trading to build back some reserves” Mr Fozard’s business is an excellent one and he makes a significant point. The industry needs a period of stability where it can rebuild. One challenge will be when businesses have been through the summer and they face the standard seasonal reduction but may not have built up the cash flow in reserve to see them through the leaner months. This initiative recognises that risk, so the continuity of support through the winter is welcome The sector is incredibly varied. We tend to focus on—indeed, the publicity tends to be about—pubs and restaurants, but there are also hotels and guest houses, and in Harrogate, we have the convention centre, which is a significant driver of visitors to the area. It has been a Nightingale Hospital for the last few months and while that is being deconstructed, the convention centre team have launched their restart plans, and I know that their good work is seeing the diary filled with bookings. However, my point is that this is a business-to-business sector, not just a business-to-consumer sector and, as this sector is diverse, so, correspondingly, is its supply chain. It has been very tough for the businesses in that supply chain. I know that, in my own constituency, some businesses in the supply sector will not be reopening, and businesses that have served the industry well for many years are at a crisis point I am sure that the safe reopening will release some pent-up demand. There are clear signs of that this week: we have all seen the news coverage and probably seen it in our constituencies, too. However, we should not expect the return of volume international markets any time soon and there will be some domestic customers whose confidence will need rebuilding before they engage with the sector again. For the conference industry, there will be the challenge of knowing just how much of that market will stay online having gone online over the past year. So this is a sector facing huge challenges. It is a sector that clearly interests our constituents and Members here, and it is important for employment, particularly of younger people.
I seek leave to speak to amendment 64 and new clause 16, which stand in my name and the names of my hon. Friends. We support the cut in VAT to 5% for the hospitality and tourism sectors; in fact, it was pressure from the Scottish National party that initially forced the Government to accept that measure. However, as with much of the Government’s support for businesses during the past 13 months, it is not enough Although there has been a welcome easing of restrictions in all four UK nations—in Scotland, we are particularly looking forward to next Monday, when the most significant easing of restrictions since December will come into effect—it is unlikely, indeed impossible, that the tourism and hospitality sectors will get back to anything like normal immediately. It is impossible that we will be back to normal by the end of September, and it is therefore completely irrational for the Government to arbitrarily decide that the 5% VAT rate should end on 30 September, but that is exactly what they have decided. The SNP did, in fact, table an amendment seeking to extend that date to 31 December, but that amendment was deemed to be outside the scope of this Bill. I accept that ruling, but I still urge the Government to get real, not only about the difficulties that the tourism and hospitality sectors are facing but about how long those difficulties are going to last In new clause 16, we are asking for the Chancellor to report back to Parliament on the impacts that the 5% VAT rate has had, and—very importantly—to compare that with what would have happened if it had been extended, as we have asked. We know what the 5% VAT rate is supposed to achieve, supporting businesses in those sectors, so the Government should have no qualms about assessing whether or not they have achieved that. Nor should they have any qualms about having their decision compared on an empirical basis with alternatives that have been put forward by other MPs The Minister claimed earlier that it is technically impossible to comply with that new clause because the data just does not exist. I find that frankly astonishing. If the political will is there, the data can surely be made available, and if Parliament decides that it is going to pass into law a requirement for that to happen, the job of the Government is to comply with the will of Parliament Amendment 64 asks for a minor, but important, change to the wording of clause 93, dealing with the temporary 12.5% VAT rate. Clearly, as I said earlier, we would have preferred that to remain at 5%, but the Government have rejected that proposal and gone for a 12.5% rate until 31 March 2022, presumably with the full 20% rate coming in after that date Clause 93, as currently worded, would allow the Treasury by regulation to bring that date forward, so that the tourism and hospitality sector would go back to paying the full 20% VAT rate sooner than the date that this House has agreed. That is not acceptable. Our amendment would allow the March 2022 deadline to be extended if we found—as we may well find—that the sector was taking longer than expected to recover. The only reason for bringing the date forward would be if, by some miracle, the tourism and hospitality sector recovered quicker than expected. I can see no circumstances in which those businesses will have recovered sufficiently for the increase to 20% to be brought forward earlier than March 2022 In his summing up, may I invite the Minister to contradict me and to tell me that he thinks that that will be possible—that it will be appropriate to bring forward that date? If he cannot see any circumstances in which it will be right for him to use the power to bring that tax increase forward, he should not be asking us to give him the power in the first place One consequence of the quaint way that the British Parliament does its business is that, if we want to support businesses by reducing VAT on corporation tax liabilities, it goes in a Finance Bill, but if we want to reduce the liability of other taxes such as non-domestic rates, it does not. The non-domestic rate system is one of the very few parts of the business taxation system that is devolved to the Scottish Parliament. The Scottish Government have used that devolved power to ensure that businesses in retail, tourism, hospitality, aviation and newspapers, all of which have been severely hit by covid, will pay no business rates at all during 2021-22. The small business bonus scheme takes around 100,000 businesses out of non-domestic rates altogether and, if the current Scottish Government are re-elected, that will continue for the lifetime of the next Parliament In Scotland, we have the lowest business rate poundage in the United Kingdom, the most generous relief schemes and, of course, we have the most progressive income tax system in the whole of the United Kingdom. When we see the benefits that come to the vast majority of people in Scotland from the different approach that our Government have taken using the limited taxation powers at their disposal, I hope the Government will look positively on any request by the new Scottish Government, whoever that might be, to further extend those powers.
I wish to speak to clauses 92 to 95 relating to VAT. This last year has been exceptionally tough on our hospitality industries and I welcome all measures to support our valuable tourism and hospitality businesses as they tentatively begin to open up after the pandemic. Like many others, I was delighted to be able to visit pubs, restaurants and cafés in my constituency last week. I had a particularly enjoyable Friday night drink at the Black Horse on Kingston Hill and a fantastic Sunday lunch at the Glasshouse in New Malden. I am very much looking forward to getting round to all the other excellent venues in my constituency over the next few weeks and months However, it is important to remember that tourism and hospitality will not recover overnight. While there is undoubtedly a great deal of pent-up demand for eating out and visiting the wonderful sights and attractions of our great nation, it will not be possible for all businesses to open immediately and in full. And we do not know whether the Government’s road map will be able to progress as planned. Despite the wonderful success of the vaccine roll-out, we are still at risk from new variants and there may still be a need in future to restrict people’s ability to socialise indoors. So, although we welcome the cut to the VAT rate on hospitality and tourism sales to 5% until September 2021, the Liberal Democrats argue that the cut should be extended for the whole of the financial year, instead of moving to 12.5% from September to March Household incomes also need time to recover, and encouragement to spend on luxuries and leisure such as meals out should be continued for much, much longer. Indeed, the Government could and should have gone a great deal further to support these businesses and to safeguard the jobs that they create. Many businesses are able to partially reopen this month. There are estimates that up to 60% will not be able to reopen because they do not have outside space. But they will all be faced eventually with large VAT bills, deferred over the last 12 months A much better way to support businesses would have been to provide relief on the deferred VAT owed. That would have relieved businesses of an immediate cash burden and freed up that cash flow to invest in stock, staff and making their premises covid-safe. Instead, the Government propose to start imposing penalties from June this year on those businesses that have not yet started repaying this VAT. That will fall on businesses that have had extremely limited opportunities to earn any revenue in the last 12 months. The measures to allow businesses to pay this in 11 instalments is welcome, but will not help those businesses that cannot yet reopen and will not have any cash coming in to pay any of those instalments Businesses will also be carrying a great deal of debt and it is very disappointing to see a lack of measures in the Budget to address that. In particular, many businesses will be indebted to their landlords and it is disappointing that the Government have done nothing at all to help businesses with those costs. The Liberal Democrats would have introduced a revenue compensation scheme to help businesses with fixed costs such as rent. The burden of repaying those will fall very heavily on businesses that cannot yet reopen fully. I am probably unique in the House in having direct experience of implementing Making Tax Digital for VAT reporting in my former role as an accountant for a large organisation. While the overall objectives of the programme are sound, I can tell the Minister from personal experience that they are not always straightforward to implement. I am puzzled as to why the Government think it should be a priority for struggling small businesses to deal with the additional administrative burden of implementing Making Tax Digital, at a time when they are having to deal with the huge burden of reopening in a highly uncertain time, and at the risk of further fines if they do not comply. Surely this could have waited another 12 months. The imperative to close the tax gap surely pales into insignificance when compared with the imperative to support precarious businesses at this time. How can additional red tape and administrative burden be the right response to the current crisis In short, this is not a Government who understand the needs or priorities of small businesses; it is a Government who choose to impose punitive costs and paperwork rather than provide effective support.
Dame Rosie, my humblest apologies for being late in attending the Chamber. I was badly caught out by the fact that this debate is way ahead of where I thought it would be. [Hon. Members: “Hear, hear.”] There is a silver lining to every cloud My good friend and colleague, my hon. Friend the Member for Richmond Park (Sarah Olney), has said it all, but I would like to touch on the issue of the hospitality sector. I am sure the Minister is tired of hearing this again and again, but business in my part of the world is very fragile. The hospitality sector depends on making as much money as it can during the short tourist season because the weather can be so inclement—it is like living on the fat you can make in the good times to get through the winter I give credit to the Government for the help that has been given, but I am very concerned that some tourism businesses may still yet shut down permanently. I do not know how many times I have said this in the Chamber, but the fact is that, if we lose one business, two businesses or three businesses, we are impoverishing the tourism product that we can offer in a remote part of the British Isles and, if we do that, there is less for tourists to come, see and do, or to eat and drink, and then we do not get as many tourists coming, and it becomes a downward, vicious circle. The VAT reduction we have had so far is welcome, but could we look at extending it a little further, perhaps for as long as my hon. Friend the Member for Richmond Park said? That would be very welcome. I have said several times in this place that it would be helpful if the Scottish Government and the UK Government could look at an overall, longer-term strategy to try to get businesses back on their feet, seeing them through the difficult times and nursing them so that we get to—to quote Churchill—the “sunlit uplands” that surely will come our way There is one other issue: we need some form of training element in that package. I was talking to Murray Lamont, who owns and runs Mackays Hotel in Wick, and he said: “Talk about training, Jamie, because we need to keep improving the product and making it still better because the competition is out there.” My hon. Friend the Member for Richmond Park touched on the revenue compensation scheme, and I would be extremely grateful if that could be looked at I am tempted to chance my arm and talk about banks, given the name of this section of the debate. Members will have heard me say many times that we have one branch of the Bank of Scotland in the huge county of Sutherland. That is a massive problem, but rather than incur the yawns of those on the Treasury Bench—
More, more.
I will resist the sedentary comments from the Scottish National party Member and conclude my remarks here.
Before I wind up the debate, I thank colleagues not only in this debate but in all our previous debates for the engaged and often constructive way in which they have approached the discussion. I also thank my friends on the Opposition Front Bench for their contributions. Let me pick up on some of the themes described The hon. Member for Glenrothes (Peter Grant) raised the question of the Scottish Government’s limited tax powers, but I would put it to him that what is so striking is how little the Scottish Government have used the tax powers that they have. We saw that earlier, when the hon. Member for Glasgow Central (Alison Thewliss) invited the Government to extend a relief to antibody tests, whereas of course it is perfectly within the powers of the Scottish Government to use the tax revenue they generate to fund the differential for antibody tests themselves.
I suggest that the Government cannot have it both ways. In one respect, the Minister says that we have done nothing with our taxation powers, but his colleagues north of the border would say that we are the highest taxed part of the United Kingdom. Which is it?
The Scottish Government are fully entitled to tax the Scottish people as much as they see fit in the democratic exercise of their mandate. The point I am making is that they have the scope to do so, if they wish, so they should not always be looking to the UK Government on matters of tax if the powers to make the change exist within their own competence and power The hon. Member for Richmond Park (Sarah Olney) talked about Making Tax Digital for VAT, but she ignored the fact that many small businesses have already joined the Making Tax Digital for VAT programme. The reason they have done so is that they recognise that it gives them a tremendous ability to manage their tax affairs. It also allows them to enjoy the gains of improved IT productivity. We think that those gains are worth having and worth extending to other businesses. That is one of the powerful drivers behind the Making Tax Digital project The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone)—always a delight to see in the Chamber, and I am very pleased that he took off his mask so that we could follow his remarks closely—talked about a revenue compensation scheme. Of course, if he reflects for a moment, he will see that the self-employment income support scheme is precisely a support scheme designed to assist people’s incomes. It has proved to be extremely effective in supporting millions of people on that basis I think the hon. Gentleman is right to focus on the sunlit uplands. All I can say is that if we come out of this on anything like the basis that we are projected to do by some of the independent authorities, given that this is the worst economic crisis in recorded history, there will be much to be thankful for. I will be delighted if we can get to those sunlit uplands.
I am so sorry that the Minister did not hear the first part of my speech—I could run through it again, if that would be helpful. I will chance my arm here. Last summer, the Chancellor of the Duchy of Lancaster met business representatives to talk about the sorts of issues in the hospitality trade that I was raising. I wonder whether I could crave, or look for, the favour of the Treasury Bench. Will someone in the Treasury be willing, when suitable, to meet those representatives if they came down to London, to talk about the issues, further to the discussions they have already had with the Chancellor of the Duchy of Lancaster?
I am very happy to volunteer the Chancellor of the Duchy of Lancaster, if the hon. Gentleman wishes to write to him further to that conversation. We are keenly aware of the problem. As Ministers, we spend our lives engaging with different groups. Of course we will look kindly on any suggestion that he might make, as we would on any suggestions made by any Member of this House, but I do not want him to think for a second that we need to do that in order to be keenly aware and abreast of the actual impacts that this present crisis is having on businesses and individuals I come to the points raised by the right hon. Member for Wolverhampton South East (Mr McFadden), which were very important. He rightly noted the impact of job losses on the under-35s. It is important to point that out, and we are keenly aware of that within the Government. He asked for an update on the Northern Ireland steel industry situation. As he will be aware, the Government are engaging closely with the EU on this issue. The Northern Ireland protocol is clear that it should be implemented in a way that has as little impact as possible on the everyday lives of people in both Ireland and Northern Ireland. As I say, there is close and constructive engagement on this topic. I am not in a position to give any more details of conversations that are still under way, but I can let him know that they are in those terms, and there has been reporting on this in the newspapers as well The right hon. Gentleman asked about the question of LIBOR. As he says, he and I were on the Treasury Committee when the full scale of this scandal became clear. He may recall the cross-examination I gave to Lord Grabiner on his inquiry into this issue, in which it was clear that there had been serious wrongdoing. There has been a slow and stately process of reform in this area, and businesses have been aware of the changes. Since July 2017, there has been a considerable amount of work done by the FCA. There has been a public consultation, extended because of the covid situation. There has been close engagement by a dedicated working group with industry. The Financial Services Bill reserves powers to the FCA if that is required in order to support an orderly wind-down. A tremendous amount of work has been done and is being done, and we are content with the situation as it stands Question put and agreed to. Clause 92 accordingly ordered to stand part of the Bill. Clauses 93 to 96 ordered to stand part of the Bill. Schedule 18 agreed to. Clause 97 ordered to stand part of the Bill. Schedule 19 agreed to. Clauses 128 to 130 ordered to stand part of the Bill. The Deputy Speaker resumed the Chair. Bill, as amended, reported. Bill to be considered tomorrow.
With the leave of the House, we will take motions 5 to 7 together Petitions Ordered, That Taiwo Owatemi be a member of the Petitions Committee Public Accounts Ordered, That Shabana Mahmood be discharged from the Public Accounts Committee and Dan Carden be added Treasury Ordered, That Emma Hardy be a member of the Treasury Committee.—(Bill Wiggin, on behalf of the Committee of Selection.)
It is, as always, very nice to see you in your place, Madam Deputy Speaker The Communication Workers Union and a great many of my constituents have been in touch concerning the plans set out by BT to make thousands of its loyal employees redundant. I therefore rise to present this petition on behalf of my east end constituents who want to see the massive redundancies of BT employees avoided and want to see the BT Group engage constructively in discussions to avoid thousands of people losing their employment in the middle of a pandemic The petition states: The petitioners therefore request that the House of Commons urge the Government to engage with the BT Group to avoid the compulsory redundancies of thousands of hardworking and dedicated staff members Following is the full text of the petition: [The petition of the residents of the constituency of Glasgow East, Declares that, during the coronavirus pandemic, people have undoubtedly spent more time at home with more people using their Wi-Fi for home working and home schooling; further that, throughout the pandemic, BT, Openreach and EE employees have worked tirelessly to keep us all connected and online; further that MPs from across this House will have received countless emails from BT staff and customers who are concerned with the plans set out to make thousands of BT employees redundant, close hundreds of workplaces and give no pay offer; further that the Communications Workers Union is standing by and is ready to hold negotiations with the BT Group on behalf of workers, hoping to find a solution; and further that the UK Government should engage with the BT Group in order to prevent the thousands of redundancies about to hit hardworking individuals whilst we are in the midst of the coronavirus pandemic. The petitioners therefore request that the House of Commons urge the Government to engage with the BT Group to avoid the compulsory redundancies of thousands of hardworking and dedicated staff members. And the petitioners remain, etc.] [P002660]
Long ago in a far off place, men who were just a short step from boyhood took risks, without recognising them, as they served their nation. The things they did in those distant days have stayed with them for all the years since. They were the servicemen who are now our nuclear test veterans. What they did for their country in the 1950s was of inestimable value; what we have done for them since pales by comparison As a Cabinet Office Minister, I persuaded the then Prime Minister David Cameron and then Chancellor George Osborne to make an ex gratia payment—funds of £30 million, indeed—available to nuclear veterans. Those payments were administered through the Nuclear Community Charity Fund, which was established back then, to go some way to recognising the price the veterans paid in declining health and diminished wellbeing. The veterans have struggled with all kinds of conditions attributable to their exposure to radiation during the time of the nuclear tests; worse still is the pain they feel having unknowingly passed those conditions on to their descendants I speak today for those aged men and their deserving families to ask for simply this: that the Government recognise Britain’s 22,000 nuclear veterans with a much deserved medal to mark their patriotic service. They were at the forefront of Britain’s foray into the atomic age. Atomic veterans not only risked life and limb then, during the course of their duties, but those brave British personnel faced radioactive smog and searing nuclear heat which altered their very DNA At a time of great scientific advancement, mankind’s discovery heralded a destructive power that the world did not then fully comprehend, for the lethal dangers of radiation were not at first fully understood. In the darkness of our ignorance, nuclear test veterans were drafted into a programme in which they stood just a few miles from apocalyptic explosions, flew through nuclear winds, walked through radioactive sand and drank contaminated water.
I congratulate the right hon. Gentleman on bringing this matter forward; he is absolutely right to ask for this medal. Does he agree that it is right and proper that these veterans, like most of our veterans, have appropriate recognition for their service and, further, that although the 2018 reformation of the Advisory Military Sub-Committee was welcome, the delay is not? This must be dealt with as a priority because, as we have seen from the death of one of the last remaining second world war veterans, His Royal Highness The Prince Philip, every month is precious.
Yes, I entirely agree with the hon. Gentleman. The debt does not disappear just because the years roll by, and the debt that we owe these people can be marked in precisely the way that I have recommended and that he has endorsed Nuclear power is an extraordinary force, sufficient to warp the cellular building blocks of man, but that is something that the veterans now—the servicemen then—could not possibly have understood. This was their duty. They were part of a mission to develop a safe and effective nuclear deterrent for Britain that would keep the nation safe and strong throughout the cold war; the fruits of that mission defend the realm to this very day. The details of what nuclear veterans endured in service to their country have been set out time and again over the course of a long campaign to grant them appropriate recognition.
I commend the right hon. Gentleman for the work he has done over many years on behalf of the nuclear test veterans. One reason given for not giving these men a very well-deserved medal is that they were not put in any danger. Does he agree that that is obviously ludicrous? These days we would not ask any service personnel to what they did because of the danger posed. It was clearly a dangerous situation and should be recognised as such.
I could not agree with the hon. Lady more, and I thank her for what she said. I will deal with and, indeed, reinforce the point she makes when I come to discuss the consideration of the matter so far and what more now needs to be done. She is quite right, as I shall explain For me, this journey began, as the hon. Lady suggested, long ago: I went to see the Labour Defence Minister at the time—so we are stretching back in time, Madam Deputy Speaker—the right hon. Member for North Durham (Mr Jones), who gave the case a good and fair hearing when I took veterans to see him. I know that he was then, and I imagine he continues to be, very sympathetic to the case. Time and again we have been blocked by a combination of the top brass—I do not know whether the Minister regards himself as top brass—and the military establishment in the Ministry of Defence. Politicians from all parties in this House have typically heard the sense that has been offered again today by the hon. Members for Strangford (Jim Shannon) and for Glasgow North West (Carol Monaghan) and, to a lesser extent, by me in making this argument Over the years since then, I have heard heartbreaking stories of lives forever altered by radiation sickness. I have witnessed the tireless efforts of those involved in obtaining formal recognition for the servicemen who selflessly endured the unknown risks of atomic testing. Indeed, I have come to know many such veterans well. There is, of course, a rate of attrition as these people become older and deal with some of the illnesses that I have described, but there are remaining veterans. I have come to know well one of my constituents, Douglas Hern, who was one such person drafted into the south Pacific nuclear testing programme. Every meeting I have attended and every story I have heard reminds me of our moral duty to deliver a suitable emblem of the debt that we owe not only to the more than 1,000 nuclear test veterans who are still with us but to their families. I see no reason—perhaps the Minister will tell me why it is not a good idea—why families should not collect medals on behalf of those they have loved and lost In 2019, following a meeting that I led with the British Nuclear Test Veterans Association, the then Secretary of State for Defence announced that he would ask the honours committee to re-examine whether a medal should be awarded to nuclear test veterans. He rightly stated: “We must never forget their courage and bravery in contributing to keeping their country safe during the Cold War.” Perhaps unsurprisingly, given that it met only half a dozen times in the two years after he missioned it to look at this matter, and after no testimony whatsoever from veterans or veterans’ organisations, the advisory military sub-committee refused to recommend the award of a medal model on the grounds that—the hon. Member for Glasgow North West made reference to this—such service “did not meet the level of risk and rigour” required. Not enough risk? These men flew fighter planes through mushroom clouds and felt the heat of nuclear explosions on their bare skin. Knowing what we know now of the life-altering effects of radiation exposure, to state that serving in that environment did not amount to risk and rigour sufficient to deserve a medal is—I put it as mildly as I can—bewildering, baffling, astonishing. There is clear evidence of a legacy of heartache and of pain—literally and metaphorically—that spans generations. There is a legacy of cancers that cut great men down to size before their time, wives who suffered the unimaginable pain of infant mortality, and a generation of children born with life-altering conditions The United Kingdom has a long tradition of marking the service of our personnel through the award of medals for particular operations. My father, a second world war veteran, wore them proudly. I do not have them, but I have no doubt that the Minister wears his proudly. Campaign medals have rightly been granted for novel and non-combat operations in the past. The Minister will know of the Ebola Medal for Service in West Africa and the medals awarded to remote drone operators in 2017. There are clearly established precedents for the awarding of service medals for non-combat operations. In 2012, David Cameron, the then Prime Minister, personally intervened to secure a medal for Arctic convoy veterans, so there is a specific precedent for the award of a medal long after the event it marks The time for excuses has long passed. Now is the time for decisive action. For the veterans and the mothers and fathers, children and grandchildren affected, I urge the Government to act before it is too late. It is time to step up for those who stepped forward when their country needed them. It is time our generation recognised what those generations before did to make us safe. In the twilight of their storied lives, it should be our privilege to present our nuclear test veterans with an emblem of our gratitude for what was endured in the name of Queen and country. Not to honour these good and true people who served their nation would disappoint them, but it would dishonour all of us.
I thank my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) for his speech. He has campaigned for a number of years on this and has worked tirelessly to see those who served their country get recognition for their service. I pay tribute to him for his huge efforts Ensuring that victims get the recognition they deserve is fundamental to supporting veterans in this country, as is recognised in the strategy for our veterans, and I am determined that we recognise our veterans in the correct way. The Government have committed to veterans in a way that none of our predecessors have, with more money now being spent on the veterans community than ever before. Establishing the Office for Veterans’ Affairs was a systemic change and an indication of the Government’s commitment to her veterans. Never before in previous Governments under previous Ministers has there been an Office for Veterans’ Affairs to take responsibility for these issues and to champion the needs of veterans across government I hope today to assure my hon. Friends that the contributions of those who participated in the nuclear testing programme are not unrecognised, and that the Government continue to acknowledge and thank all service personnel who participated. Importantly, as my right hon. Friend mentioned, they contributed to keeping our nation secure during the cold war and since by ensuring that the UK was equipped with an appropriate nuclear capability. We will never forget their service, and we continue to recognise all that they did for their country As hon. Members will be aware, the advisory military sub-committee, which has been mentioned, was established to reconsider historic medallic recognition cases. As has been mentioned, last year the committee considered this case and concluded that participation in it did not meet the committee’s criteria. It is important to get across to the House that this is an independent process. It operates to a strict criteria and is outwith ministerial control, and rightly so. It was not a decision that some campaign groups, veterans and their families hoped for. I understand their disappointment—of course I do.
In 2012, David Cameron agreed to award medals—I cannot remember for which campaign; it may have been the Ebola campaign—so Prime Ministers can step in to let their feelings be known and to put pressure on the appropriate people to ensure that medals are awarded. There is a role for Ministers and for Government in this. This would be a very simple way to recognise the specific and dangerous situation that these veterans were put in.
I thank the hon. Member. She is not correct; there is no formal role for Ministers to play in this decision-making process. There never has been for medals. It is important that the AMSC is able to determine for itself which medal claims should be reviewed. The terms of the sub-committee are clearly laid out, and any new submissions that might have been provided have been passed to the sub-committee. The decision on whether the case will be reviewed will be shared with campaigners by the AMSC in due course. This is not the end of the line. Those reasons will be shared As I have said, the medallic system is outside the control of Ministers, and it always has been. It is rightly in that position, protecting the integrity of the medals system—this is important—and of those who have received honours in this country. However, I am determined to continue to do all I can to support this cohort of veterans. It is fundamental to me that there is no tiered approach to veterans in this country, that those who have served for any period, in any circumstance, are recognised and supported as veterans. Therefore, although there are no dedicated compensation arrangements for UK nuclear test veterans, all claims have been and continue to be considered under the war pension scheme Any veteran who believes they have suffered ill health due to service has the right to apply for no-fault compensation under this scheme, and I encourage them to do so. War pensions are payable in respect of illness or injury as a result of service in the armed forces before 6 April 2005, with the benefit of reasonable doubt always given to the claimant. Decisions are medically certified and follow consideration of available service and medical evidence, and carry full rights of appeal to an independent tribunal.
I thank the Minister for his response. The right hon. Member for South Holland and The Deepings referred to the risk. I am not sure whether everybody here watches “Call the Midwife”, but on Sunday night past they had an article in the paper and it was about this very thing. I know that it was a drama, but it illustrated the effect on not only the soldiers, airmen and navy personnel, but the families. When it comes down to risk, is there not, as the right hon. Gentleman said, an obligation to deliver?
The hon. Gentleman gets to the nub of the problem. I have seen some of the drama on Sunday night in “Call the Midwife”, and it is clearly a good and emotive production. The difficulty the Government have is that the evidential basis linking conditions such as that to these tests is with the scientific community and in its opinion it is not of the standard whereby we can draw clear evidential proof. That is the problem we have. That is not a decision for a Minister—that is not a decision for me. I have my own views on medals, and I have worked hard to support this cohort in other ways. That is the nub of the problem, and it is a difficult one, because I know it is frustrating for the families and for campaigners. That is the situation we are in, and work continues to identify the links between illnesses that people think they received from nuclear tests and the actual radiation exposure itself.
The Minister is being extremely generous in giving way, so I am grateful to him. I understand the argument about compensation, which is why of course the then Chancellor George Osborne made an ex gratia payment—I did emphasise that—but the medal is a bang to rights case. The fact that this committee suggested an absence of risk and rigour is extraordinary. There can be no greater risk than going into a radiation cloud. Surely the Minister, with his expertise, recognises that. Can he commit tonight to refer this back to that committee and at least ask it to take evidence from the veterans and their representatives, which it failed to do last time?
There is an appeal going into this process, and I will write to the AMSC and ask it to make sure that it has seen veterans and their groups when making the decision in that appeal process. In addition to maintaining access to compensation for all veterans who have suffered ill health due to service, I am committed to ensuring the provision of excellent wraparound care. That includes access to free confidential advice and support on a wide range of issues through the Veterans Welfare Service; maintaining access to bespoke services such as the veterans trauma network in England; and levelling up veterans’ mental health provision through the launch of Op Courage I also recognise that veterans are civilians and most access support through regular NHS services wherever they live in the UK. I am rolling out a veteran-awareness accreditation programme for GP surgeries and hospital trusts, with over 800 GP surgeries and nearly 60 trusts signed up. Let me be clear: there should be no reason in this country today why any GP surgery or NHS trust is not veteran-aware accredited. This is a duty we have to the nation; it is something we all have a responsibility in. I will be relentlessly campaigning for every NHS trust and GP surgery to become veteran-aware I thank my right hon. Friend the Member for South Holland and The Deepings for his tireless efforts. Anybody who tirelessly campaigns for veterans is clearly an ally of mine. We are committed as a Government, more than any Government before us, to getting the veterans’ case right, and that includes those who participated in the nuclear test programme. Those veterans made a huge contribution to ensuring the security of each and every one of us by ensuring that we had a capable and resilient nuclear deterrent during the height of the cold war. I reiterate my absolute support for those service people and I pay tribute to their service This idea that veterans who served in the nuclear tests are not worthy is completely wrong. There is no hierarchy of veterans in this country. The challenge in this particular case is the causal link between exposure to radiation and the illnesses that then present in individuals—and their families, because this goes on for some time. I am committed to making sure that we achieve fairness. I will make sure that the views of veterans’ groups and their representatives are portrayed to the AMSC. But I also have a duty to maintain the rigour of the system. Awards and medals always have been inherently difficult and at times divisive, but I am sure we will get there in the end—we will arrive at the right answer—and I urge my right hon. Friend to keep going with his campaign Question put and agreed to.