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Des Browne: The current situation in Basra and southern Iraq is nothing of the sort. The plan was clear: we would progressively hand over the provinces of southern Iraq to provincial Iraqi control. When we came out of central Basra and handed over to provincial Iraqi control in December, it was clear that the criminal and militia elements in the city could be dealt with only by Iraqi security forces. We went into overwatch and I made it clear that that was the plan. The Iraqi security forces are now doing that task, and our troops are deployed with them, mentoring them in the city as they do so, as are US troops who have come with the divisions that they mentor. There are some 14,000 plus Iraqi troops in Basra and about 800 American troops in the south. Those numbers are a proportion of the numbers of troops that we have. All those troops are engaged in doing exactly what we described they would do, and they are doing it very successfully. It ill behoves the hon. Gentleman to describe what they are doing in such a way.

Topical Questions

T1. [201516] Mr. Andrew Mackay (Bracknell) (Con): If he will make a statement on his departmental responsibilities.

The Secretary of State for Defence (Des Browne): As Secretary of State for Defence, my departmental responsibilities are to make and execute defence policy, to provide the armed forces with the capabilities they need to achieve success in the military tasks on which they are engaged at home and abroad, and to ensure that they are ready to respond to the tasks that might arise in future.

Mr. Mackay: When will the contract for the new carriers be signed, and will there be one carrier or, as rumoured, a second shared with the French?

Des Browne: I have made it clear to the House that we are committed to the building of these carriers—

Dr. Julian Lewis (New Forest, East) (Con): I know that!

Des Browne: In that case, I do not need to tell him. When we have achieved the necessary alignment of the work schedule, the commercial arrangements and other related matters, we will set the date for signing the manufacturer contract.

T2. [201517] Ms Katy Clark (North Ayrshire and Arran) (Lab): Can the Secretary of State advise me whether the Atomic Weapons Establishment is carrying out live nuclear work at Burghfield and what safety issues were raised by the nuclear installations inspectorate?

Des Browne: I am grateful to my hon. Friend for notice of that specific question. I am grateful for the opportunity to answer it and to displace some misinformation in the public domain about the AWE at Burghfield. The AWE is able to carry out live nuclear work at Burghfield. The nuclear installations inspectorate has provided constructive criticism about areas where safety can be improved or where there are shortfalls in the processes or systems. That is a normal part of its
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regulatory role and does not mean that there are serious concerns about the safety of the AWE at Burghfield. If the inspectorate had serious concerns, it could use its enforcement powers to stop work there and it has never done so.

Dr. Liam Fox (Woodspring) (Con): It has been reported that by mid-May British forces might be deployed to Kosovo in support of NATO’s KFOR. The House would like to know whether the reports are true. Clearly, if we have a commitment we should fulfil it, but the last time the UK deployed its spearhead land element, as part of NATO’s operational reserve force in 2004, it required more than 30 C-130 Hercules sorties and five C-17 sorties. That was before we had nearly 8,000 troops in Afghanistan as well as the air bridge that they need for logistical support. Where on earth will we find the extra lift capability for Kosovo without undermining our efforts in Afghanistan?

The Minister for the Armed Forces (Mr. Bob Ainsworth): We have had a request, as the hon. Gentleman knows, to supply the strategic reserve for Kosovo. When he talks about equipment and where we will find it, he needs to be aware that we made contingency plans some time ago, as we were aware of that commitment. Equipment was moved into theatre some months ago so that it would be there, ready and waiting, if we were called on to supply the reserve. We will respond to the request imminently and we will, of course, inform the House of our response.

Dr. Fox: Given that the equipment that is supposed to be available in Afghanistan is often not available, many in this House and the armed forces will find that answer a touch complacent. It is a bit pathetic that we are even considering the difficulties of deploying a small force to another part of Europe. This all arises because of the mismatch between funding and commitments for the armed forces under the Government. The Treasury is failing properly to fund Iraq and Afghanistan. The urgent operational requirements system means that equipment might be procured, but through-life costs are falling on the core MOD budget. The tempo of activity means that equipment is worn out prematurely and no extra funds are being made available to compensate. Again, the core budget is under pressure, which creates a serious crisis for the military and industry. Is that why MOD individuals are describing the Department in this morning’s papers as “unfit for purpose”, or are there other reasons, too?

Mr. Ainsworth: The hon. Gentleman knows that there has been a year-on-year increase in the defence budget and that the additional resources provided by the Treasury for operational requirements are over and above the defence budget. He says that it is quite disgraceful that we are trying to conduct these commitments with the moneys that we have, but he needs to reconcile that with the fact that his leader, not a few months ago, refused not only to give any commitment to an uplift in the defence budget but refused— [ Interruption. ] The hon. Gentleman knows this. I know that it upset him, but he knows that his leader refused to give a commitment to spend at the current level of defence spending. If the hon. Gentleman is going to criticise the level of defence spending in the country, he needs to say that his party would—

Mr. Speaker: Order.

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T4. [201519] Harry Cohen (Leyton and Wanstead) (Lab): It is reported that Prime Minister al-Maliki saw a US tin star general but shut the door on a British one who was accompanying him. Will the Government make it clear to him that the UK will not be goaded into fighting his sectarian civil war for him? Will the Minister also say whether his Department has made plans for British troops to leave Iraq by the end of the year, when the UN mandate runs out?

Des Browne: I shall just repeat the answer that I have given my hon. Friend on the many occasions on which he has asked for a date on which British troops will leave Iraq. We will draw down our troops in relation to developing conditions in Iraq, and if the operation in Basra continues to be as successful as its first four phases, and if it continues to be welcomed by the Basrawis, and if there is the sort of change in Basrawis’ lifestyle that has been reported, for example, in The Times by an independent reporter after a visit last week, those are all indications that conditions are moving in a direction that allows us to reduce troop numbers. May I reassure my hon. Friend that senior officers, our ambassador, and senior representatives in Iraq continue to meet Prime Minister al-Maliki regularly and work with him to take forward that operation?

T10. [201525] Mr. David Evennett (Bexleyheath and Crayford) (Con): A year ago, a National Audit Office report stated that 40 per cent. of Ministry of Defence housing was substandard. Given that those criticisms continue to be made, will the Minister update the House on the progress of the modernisation of stock, particularly as the MOD budget is in crisis?

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): We have said that we will spend about £8.4 billion over the next 10 years on housing in this country and abroad. There have been decades of neglect by your party, and we accept our responsibility— [ Interruption. ]and others.

Mr. Speaker: Order. It is best not to draw the Speaker into these matters.

Derek Twigg: Let me make it perfectly clear that we have spent sizeable amounts of money on refurbishing, modernising and upgrading properties around the country. Last week, I not only saw housing upgrades required to meet standard 1 but improvements such as new boilers, kitchens and bathrooms. Of course, we have a lot more to do, but the hon. Gentleman should reflect on the fact that part of the problem is the deal that the Conservative party made with Annington Homes, which we have to live with today.

T5. [201520] Barbara Keeley (Worsley) (Lab): Will my hon. Friend the Minister update us on plans for Veterans day? Given that the theme this year is “Honour and unite all who served”, will a place be found in the events plan for recipients of Women’s Land Army badges and Bevin Boy badges as well as recipients of Veterans day badges?

Derek Twigg: My hon. Friend is right to highlight Veterans day, and it is right that we get as many people as possible to support it. We have not finalised the
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programme, but I can tell her that more than 40 towns and cities across the country are hosting major Veterans day events, and hundreds of small towns and villages are developing their own events. The national event will take place in Blackpool, and its proposals are excellent and outstanding. Given the high focus on the armed forces, the work that has taken place on the Command Paper that the Secretary of State has ordered and the recognition study, there will be a great deal more focus this year on Veterans day and celebrating what our veterans have done.

Robert Key (Salisbury) (Con): The way in which the British Army works in theatre depends heavily on the Lynx helicopter, and if it does not have Lynxes in future, there will be implications not just for the Army but for the Navy and the Air Force. When will the decision be made on the contract for the future Lynx programme, and is the Secretary of State aware of the damage that will be caused by the delay both to the nation’s strategic ability to produce such a helicopter and, above all, to the way in which the armed forces operate?

Des Browne: I am well aware of the value of the Lynx helicopter and, indeed, helicopters to modern warfare. As in previous years, capability is under review, and when we undertake such a process there is a lot of speculation. I shall not be drawn into commenting on speculation: when there is anything to announce to the House, we will make it very clear.

T8. [201523] Mrs. Siân C. James (Swansea, East) (Lab): I am sure that my right hon. Friend is aware of the campaign by Dr. Bob Meaders in the USA to improve the quality of helmets, particularly against roadside blasts and bomb blasts. Can he assure me that the Mark 6A helmet, which is used in Iraq and Afghanistan, is sufficient, and provides maximum protection for our brave young men and women?

Mr. Bob Ainsworth: No item of protective clothing or equipment can guarantee protection against every kind of attack or accident, but I can tell my hon. Friend that the helmet offers the highest level of protection compared with the combat helmets of many other nations. It is very well thought of by our troops, and it is fitted with shock-absorbing pads—the substance of the campaign that she raised, which, of course, we are well aware of.

Ann Winterton (Congleton) (Con): Is the Secretary of State aware of the recent statement by Robert Gates, the United States Defence Secretary, referring to our recent involvement in various theatres, when he said:

The US Defence Secretary is to set up a taskforce. Does the Secretary of State agree with his sentiments, and will he do the same?

Des Browne: I know that the hon. Lady keeps abreast of all the issues concerning the changes in the operational environment and the challenges that those
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generate for equipment, particularly the platforms that we use. I also know that she is well aware that we have, particularly during the last two years, made some great progress in investment in such platforms, which provide the maximum protection to our troops. The point that the US Defence Secretary has been making repeatedly to his own armed forces concerns whether there is a need for manned aerial vehicles in particular to sustain the operational awareness that is necessary above modern battle spaces. We in the Ministry of Defence are acutely aware of that, and work is going on in that regard, as it is in the United States, and we are in close contact with the United States in relation to that. In particular, the hon. Lady will know that the Defence Secretary challenged the US air force about allegedly living in the past in that regard. I do not make the same criticism of the RAF.

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Andrew Mackinlay (Thurrock) (Lab): Will the Secretary of State tell the House of Commons what procedures exist whereby complaints of serious misconduct by British nationals or British military/security firms operating in Iraq and Afghanistan are investigated, and whether there is a deficiency in our law that does not give extraterritorial extent to our police and investigatory authorities about the wrongdoing of individuals who are employed by the Ministry of Defence, the Foreign Office or the Department for International Development?

Des Browne: With respect, I do not understand my hon. Friend’s concern in relation to this. For those whom we deploy into operational theatre, we retain the right to investigate any allegations that are made against them. We do that through the military police force.

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Point of Order

3.32 pm

Mr. Bernard Jenkin (North Essex) (Con): On a point of order, Mr. Speaker. In your experience, can you recall a time when a British Prime Minister has attended a NATO summit and not returned to the House to make a statement?

Mr. Speaker: Order. The hon. Gentleman asks me to remember some incident. That is not a point of order.

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Orders of the Day

Finance Bill

(Clauses Nos. 3, 5, 6, 15, 21, 49, 90 and 117 and new Clauses amending section 74 of the Finance Act 2003.)

Considered in Committee.

[Sir Alan Haselhurst in the Chair]



Clause 5

Small companies’ rates and fractions for financial year 2008 etc

Mr. Mark Hoban (Fareham) (Con): I beg to move amendment No. 1, page 2, line 36, leave out ‘21%’ and insert ‘20%’.

The Chairman of Ways and Means (Sir Alan Haselhurst): With this it will be convenient to discuss the following amendments: No. 7, line 37, at end insert—

‘(1A) Subsection (1)(a) shall come into force on a day which the Treasury may by order appoint.

(1B) No order may be made under subsection (1A) until—

(a) the Treasury has compiled and laid before the House of Commons a report containing an assessment of the impact on the competitiveness of small companies as a result of changes to the small companies rate of corporation tax, and

(b) the report has been approved by a resolution of the House of Commons.’.

No. 2, in page 3, line 1, leave out ‘7/400ths’ and insert ‘1/40th’.

Mr. Hoban: Amendments Nos. 1 and 2 would reduce the small companies rate of corporation tax to 20 per cent. and make the appropriate change to the fraction. At a time when small companies are under pressure, facing higher costs and a more uncertain economy, it is beyond belief that the Government feel that the answer to their problems is to increase the small companies rate of corporation tax.

As in the case of the 10p rate, which we will debate later, the author of the tax increase is not the current Chancellor of the Exchequer, but his predecessor—the Prime Minister. As Chancellor during last year’s Budget, he announced that he would increase the small companies rate from 19 per cent. to 22 per cent. in three successive Finance Bills. That has sent out a confused and confusing message to the small business community, which has had a decade of instability in respect of the small companies rate of tax.

The Committee should remember that the rate is now on an upward curve, having fallen from 24 per cent. in 1996-97 to 19 per cent. in 2002-03. There will have been six changes to the small companies rate of corporation tax between 1996-97 and 2009-10; that is before we take into account the starting rate of 10 per cent., which was
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introduced in 2000-01 and which the Prime Minister, when Chancellor, reduced to zero in 2002-03. In 2004-05, he overlaid it with a 19 per cent. tax rate on distributions to shareholders. He scrapped it completely in 2006-07. For small businesses seeking to navigate their way around the rate of corporation tax, there has been a significant amount of change. At this time, businesses want stability, predictability and certainty, rather than the only certainty that they have had in the past decade—that the rate will continually change.

It is not surprising that the verdict of business organisations and small businesses has been hostile. In its Budget submission for this year, the Federation of Small Businesses pulled no punches. It said that

It goes on to say that

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