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House of Commons
Tuesday 15 March 2011
The House met at half-past Two o’clock
Prayers
[Mr Speaker in the Chair]
Oral Answers to Questions
Foreign and Commonwealth Office
The Secretary of State was asked—
Sri Lanka
1. Joan Ruddock (Lewisham, Deptford) (Lab): What recent reports he has received on the establishment of high-security zones in Sri Lanka. [46093]
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt): The number of high-security zones established over recent years has begun to be reduced, but a number still remain, particularly in the north of the country. These zones prevent the return of people to their land. We welcome the reduction in the number of zones, but we are looking for more progress as time goes on.
Joan Ruddock: I am most grateful to the Minister for that reply. Tamils in my constituency are deeply concerned by reports that as many as 60,000 people have been removed from their homes to make way for the military. Does he agree that peace will be possible in Sri Lanka only if the religious, cultural and human rights of Tamils are respected and the “Sinhalisation” of Tamil areas is rejected?
Alistair Burt: I certainly agree with the right hon. Lady about the need to return more people to their land. I was in Jaffna very recently, where I was able to see the damage that had been done over the years of conflict and to speak to some of those who were being resettled. The issue of land rights is very complex, and we have asked the Sri Lankan Government to consider the experience of others as they seek to try to resolve these issues over a lengthy period.
Mr Lee Scott (Ilford North) (Con): Will the Minister look into reports of atrocities taking place in the north of Sri Lanka, including intimidation, murder, rape and other such crimes?
Alistair Burt:
Yes. While I was there, reference was made to an upsurge in crime in December and January; a number of murders had been committed. We raised that with the authorities. Precisely what had sparked it was unclear, but there was no doubt that the atmosphere had been very tense over that period. It is very important that Jaffna returns to something like what it was, and
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that Tamil people feel part of a renewed Sri Lanka. We look to the Government to make good their promises about reconciliation for the future.
Siobhain McDonagh (Mitcham and Morden) (Lab): The sad experience of everyone from the Tamil community and those supporting them over the past few years has been that the Government of Sri Lanka are slow to act unless some threat is attached to a requirement for better behaviour. Is there anything that the Minister might do in order to put some sanction behind the words in trying to get the proper things done?
Alistair Burt: I do not think that the right approach is necessarily one of threats, but the Sri Lankan Government are aware of our continuing concern about the speed with which the country is returning to the proper spirit of reconciliation set out by the Government and, for example, whether the lessons learned in the reconciliation commission will properly engage those from outside in an independent manner. Until these things are done, the concerns of Tamils everywhere will not necessarily be settled. Both sides need to be engaged and involved in the process of reconciliation, but we ask the Sri Lankan Government to live up to their public commitments.
Simon Hughes (Bermondsey and Old Southwark) (LD): Do British and other diplomats, United Nations officials and international non-governmental organisations have free access across the whole of Sri Lanka, and, if not, what will our Government do to try to make sure that that is possible?
Alistair Burt: The short answer is no, they do not. Where there is not free access to rehabilitation camps, for example, the British Government make it very clear that that must be provided, with proper access for NGOs and for others who wish to see them. Progress has been made in this respect. More NGOs have access than in the past, but it is not complete, and the right hon. Gentleman is absolutely right to raise the matter.
UK-Caribbean Relations
2. Mr David Lammy (Tottenham) (Lab): What recent assessment he has made of the state of relations between the UK and the countries of the Caribbean; and if he will make a statement. [46094]
The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne): The Government are committed to maintaining and furthering the excellent relationship that we have with the Caribbean. I visited Barbados, Trinidad and Tobago and Jamaica in January, and the Secretary of State for International Development recently announced a 50% increase in DFID’s bilateral aid funding for the Caribbean.
Mr Lammy: I am sorry to drag the Minister back to the UK. He will recognise that there is concern in the Caribbean that Britain is ceding its relationship with the Caribbean to the United States, and that many young people, particularly where there is growing unemployment, are turning to things such as basketball instead of cricket. Will he say more about air passenger duty, which is imposing high fares on travel to the Caribbean?
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Mr Browne: I had the honour of meeting, among others, Sir Garfield Sobers during my trip. I offer the West Indian cricket team best wishes in the world cup, although I obviously hope that England win. On the right hon. Gentleman’s specific point, any announcement on tax will be made in the Budget next week.
Eritrea
3. Chris Heaton-Harris (Daventry) (Con): What recent assessment he has made of the political situation in Eritrea; and if he will make a statement. [46095]
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham): We are concerned about the denial of basic rights to Eritrean people, particularly the severe restrictions on political, religious and media freedoms. We welcome the progress towards a resolution of Eritrea’s border dispute with Djibouti, but are concerned by its support for opposition groups in Somalia, for which the UN Security Council has imposed strong sanctions.
Chris Heaton-Harris: The Minister well knows that I have a constituent who has been detained without charge in Eritrea and is currently being denied consular access. His wife is very concerned about his whereabouts. I have been told that nobody has seen him for nearly two and a half months. What more can the Government do to help my constituent and his wife?
Mr Bellingham: I share my hon. Friend’s concerns. By denying consular access to four Britons, Eritrea is in gross breach of a Vienna convention. I have summoned the Eritrean ambassador on two occasions and our ambassador in Asmara has made repeated representations to the Foreign Ministry and the Office of the President. So far, there has been no response to our efforts. The Foreign Secretary has instructed all posts worldwide to raise the issue as a matter of priority. We will continue to press for consular access to the men at the highest level.
Mr John Spellar (Warley) (Lab): I am sure the Minister recognises that stability in Eritrea and across the horn of Africa is vital in the battle against piracy, but there is an immediate crisis. Since the previous Foreign Office questions, a tanker carrying £100 million of oil has been captured by pirates, several seafarers have been murdered, and mother ships are sailing far into the Indian ocean. Last month, The Times reported that the terrorist organisation al-Shabaab has cut a deal with the pirates for a 20% share of future ransoms. What is the Minister going to do about it?
Mr Bellingham: The shadow Minister makes an important point. This is a growing challenge and threat, as is suggested by the facts that he outlines. It is essential that we have tough action at sea, and the UK is leading the international response. We also need a renewed effort to secure detention and prison facilities in neighbouring countries. I therefore urge all countries in the region to play their part in combating this evil.
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Terrorist Organisations
4. Graham Evans (Weaver Vale) (Con): What recent reports he has received on the involvement of the Government of Iran with bodies acting as proxies for terrorist organisations; and if he will make a statement. [46096]
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): The latest evidence that Iran continues to supply the Taliban with weaponry is at odds with Iran’s claim to the international community and its own people that it supports stability and security in Afghanistan. That behaviour is completely unacceptable. We continue to condemn Iranian support for groups such as Hamas and Hezbollah, which pursue an ideology of violence that directly undermines the prospects for peace in the region.
Graham Evans: Iran has been a prolific sponsor of terror in Afghanistan against coalition troops. Last week it was reported that 48 mid-range rockets that were intercepted in Afghanistan had been supplied to the Taliban by Iran. What steps are the Government taking to combat shipments of weapons and funds from Iran to terror hot spots around the world?
Mr Hague: There was indeed a shipment of 122 mm rockets and a large amount of ammunition. The fact that it was intercepted and seized by NATO in Nimruz shows that effective measures are being taken. Of course, we cannot be sure how effective those measures are. We assess that Iran is the most significant provider of weapons, training and funding to Hezbollah, as well as supporting the Taliban as this case shows. We have made it clear to the authorities in Tehran that this is completely unacceptable. We will continue to push for full implementation of the UN resolutions that call for the disarmament of these armed groups and prohibit weapons transfers.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): On 10 March, Iran’s supreme leader, Ayatollah Ali Khamenei, said:
“The fake Zionist government is a cancerous tumour”.
What steps are being taken to deal with Iran’s influence on terrorism in Lebanon and Gaza?
Mr Hague: I outlined the steps that are being taken in response to the previous question. The hon. Lady draws attention to another outrageous and unacceptable statement by the Iranian leadership, which is part of a long line of such statements about the state of Israel and other nations in the region. We continue to deliver our protests and to take the practical action I have outlined.
Sir Peter Tapsell (Louth and Horncastle) (Con): In the context of the very important question of Iran, may I tell my right hon. Friend that in my memory, since the days of Ernest Bevin, I have never known a Foreign Secretary surrounded simultaneously by so many difficult problems? I want to tell him how much I admire the coolness and efficiency with which he is dealing with them.
Mr Hague: My hon. Friend is always respected as one of the wisest Members of the House. The fact that his recollections go back as far as Ernest Bevin is an inspiration to us, and the conclusion he draws is an inspiration to me.
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Egypt
5. Rushanara Ali (Bethnal Green and Bow) (Lab): What recent reports he has received on the progress of negotiations between the Government and opposition parties in Egypt; and if he will make a statement. [46097]
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): We welcome the new Prime Minister and his Government in Egypt. Recent Cabinet changes are a promising step towards the reform that many Egyptians have been calling for. We will continue to urge the interim Government, as the Under-Secretary of State, my hon. Friend the Member for North East Bedfordshire (Alistair Burt), did during his recent visit, to build trust with opposition groups and involve them in dialogue as the Government develop their reform plans and the timetable for elections.
Rushanara Ali: Following last week’s debate on UN Women, which recognised the importance of women playing a full part in post-conflict political processes, what is the Foreign Secretary doing to ensure that women are fully involved in the post-Mubarak political and constitutional process as Egypt moves towards what we all hope will be free and fair elections?
Mr Hague: We are looking to assist in Egypt with the development of civil society, political parties and electoral processes, through technical advice and by building links between organisations in Egypt and the UK. That will of course include a great deal of reference to, and experience of, the involvement of women in civil society and politics in this country. That is one way in which we can have a positive influence on Egypt. We cannot dictate how it constructs a democratic political system, but we can be a major influence on it.
Joseph Johnson (Orpington) (Con): What is the position of the UK Government on the legitimacy of Saturday’s constitutional referendum, given that many opposition leaders including Mohamed el-Baradei and Amr Moussa have called on their supporters to vote no to changes that they regard as something of a charade?
Mr Hague: These things are of course to be decided in Egypt itself. There has been a tremendous chain of events, which led to the revolution in Egypt. The clear aspiration of the people of Egypt is to have not only good economic development but an open and democratic political system. That will mean the holding of elections, and in the view of the interim Government it means the holding of the referendum as well. It is not for us to determine the outcome of that referendum or what questions are put in it, but it is for us to urge that it is properly and fairly conducted. We would certainly encourage the Egyptian authorities to allow international observers to observe the referendum and the subsequent elections.
Mark Durkan (Foyle) (SDLP): In the UK Government’s diplomatic contribution to current considerations in Egypt and to its future governance, will they have regard to the rights and interests of all minorities there, including Christians?
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Mr Hague: Yes, absolutely. The hon. Gentleman raises a vital point. It is extremely important that the development of a democracy and of a more open political system is not accompanied by increased discrimination and the harassment of minorities in Egypt. Although we must respect the fact that we will not be able to ordain what happens in an Egyptian democracy, we can be a positive influence on it, and that is one of the factors that we must try to influence.
Middle East
6. Rachel Reeves (Leeds West) (Lab): What recent assessment he has made of the UK’s involvement in the middle east peace process; and if he will make a statement. [46098]
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): The United Kingdom will continue to press for progress on the middle east peace process. The situation across the middle east demands that, and I discussed progress with President Abbas last week. We want to see a resumption of negotiations based on clear parameters supported by the international community: 1967 borders with equivalent land swaps, appropriate security arrangements, Jerusalem as the capital of both states and a just solution for refugees.
Rachel Reeves: In February, the Israeli Government removed two checkpoints from the Nablus area. Last week, a man was stopped outside Nablus with a bag of explosives, and this weekend an Israeli family were murdered. Will the right hon. Gentleman welcome the removal of checkpoints but acknowledge the security risks that such decisions entail when abused by those who do not want peace?
Mr Hague: Yes, absolutely—the hon. Lady is quite right to draw attention to that. Of course, it is good when the security environment improves, but what happened in the Israeli settlement near Nablus at the weekend was absolutely unacceptable. I issued a statement at the time saying:
“The friends and relatives of the family killed in Itamar have my deepest sympathies. This was an act of incomprehensible cruelty and brutality which I utterly condemn.”
Bob Blackman (Harrow East) (Con): Does my right hon. Friend agree that the atrocity at Itamar makes it even harder for Prime Minister Netanyahu to advance the middle east peace process with the Palestinians, and that Members on both sides of the House should utterly condemn such atrocities?
Mr Hague: I will go part of the way with my hon. Friend. We should condemn that atrocity across the House, as I think all parties do, but we must not let any of the recent events in the middle east allow us to draw the conclusion that it has become impossibly harder to pursue the middle east peace process. Indeed, the wider turn of events in the middle east recently, as well as such acts of great barbarity, underline the need to get on with the peace process, and to give even greater urgency to the search for a two-state solution. I hope that that lesson is drawn by Israeli and Palestinian leaders from the wider events in Egypt and other nations.
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Stephen Twigg (Liverpool, West Derby) (Lab/Co-op): May I join the Secretary of State in condemning the appalling murder of the Fogel family last Friday, and associate the Opposition Front Bench with what he said on the implications for the middle east peace process?
Does the Foreign Secretary agree that lasting peace requires reconciliation between citizens as well as agreements between their Governments? Will he therefore join me in praising the brilliant work of OneVoice Palestine and OneVoice Israel—brave local citizens who are making the case in parallel for a two-state solution?
Mr Hague: The hon. Gentleman underlines what I said—that the condemnation of the killings at the weekend is shared across the House—and he makes the powerful point that peace in the middle east will be built on contact between citizens and civil society as well as on the decisions of political leaders. I certainly join him in congratulating those organisations on their work. We also urge Israeli and Palestinian leaders to make the most of that work and to seize the opportunities in the coming weeks to advance the peace process.
Andrew Percy (Brigg and Goole) (Con): No doubt the Palestinian Authority has made some genuine progress towards its road map obligations, but has the Foreign Secretary had a chance to assess the role of the Palestinians in inciting the sort of attacks that we saw last weekend?
Mr Hague: I am sure that it is not the Palestinian Authority who incite attacks of that kind, which my hon. Friend might see if he looks at what Prime Minister Salam Fayyad has done to build the attributes of a Palestinian state on the west bank. The last thing he wants is incidents of that kind. Of course, we do not know who incited those events, but I feel confident that it was not the Prime Minister and the President of the Palestinian Authority.
Council of Ministers
7. Toby Perkins (Chesterfield) (Lab): What recent discussions he has had with his Hungarian counterpart on priorities for the Hungarian presidency of the Council of Ministers of the EU. [46099]
The Minister for Europe (Mr David Lidington): My right hon. Friend the Foreign Secretary held a bilateral meeting with Foreign Minister Janos Martonyi on 7 December in London. I speak regularly to the Hungarian Europe Minister, Eniko Gyori, at meetings of both the General Affairs Council and the Foreign Affairs Council, and most recently by telephone on 20 January, when we discussed energy policy and innovation priorities.
Toby Perkins: In February, the UK announced more job losses than any other country in the EU. In that context, what conversations has the Minister had with other EU Ministers to assist the UK Government in developing a plan for jobs and growth to replace their current strategies, which undermine both?
Mr Lidington:
We have taken the lead at many meetings of EU Ministers in arguing that Europe should indeed give the highest priority to growth and global competitiveness, which means more work to complete the single market,
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to increase free trade with other parts of the world, and to cut the cost and complexity of the regulations that Europe imposes on European businesses.
Miss Anne McIntosh (Thirsk and Malton) (Con): Just as the Czech spring presaged the rebirth of democracy and liberty in what were known as the eastern European countries, can we hope that the European Union, particularly the Hungarian presidency, can shine a light on those undergoing similar revolutions now in the middle east and adjoining countries?
Mr Lidington: We very much hope so. My right hon. Friends the Foreign Secretary and the Prime Minister have been playing a leading part in those discussions at European level. We think it is time for the EU to carry out an urgent and comprehensive overhaul of its partnership policies with regard to the southern Mediterranean counties. We need to link those much more closely to economic and political reform in that region.
Keith Vaz (Leicester East) (Lab): One of the priorities of the presidency must surely be the securing of the EU border. Has the Minister had any discussions with the Hungarian Foreign Minister about the deployment by Frontex of a rapid border intervention team—RABIT —on the border between Greece and Turkey? He will know that 90% of illegal immigration comes through that border, and we need to ensure that the RABIT force is protected and extended, in order to give Greece as much support as possible.
Mr Lidington: The right hon. Gentleman makes an important point. There are real problems on the Greco-Turkish border that affect migration into the whole of the EU. This is a matter to which my right hon. Friend the Home Secretary and my hon. Friend the Minister for Immigration are giving a high priority in their conversations with their European counterparts.
Economic Prospects (EU)
8. Mr David Ruffley (Bury St Edmunds) (Con): What recent discussions he has had in the General Affairs Council on economic prospects for the EU; and if he will make a statement. [46100]
The Minister for Europe (Mr David Lidington): I regularly take part in such discussions and emphasise our view that growth and global competitiveness should be the EU’s first priority.
Mr Ruffley: Will the Minister confirm that if the UK was ever to be pressured to join the European stability bail-out mechanism, it would require a treaty change, and that therefore a referendum would be given to the British people on that subject?
Mr Lidington: Membership of the proposed permanent European stability mechanism is open only to those countries that are members of the euro and have that as their currency. For the UK to join the euro, which would be necessary to take part in the ESM, there would have to be a referendum, provided that the European Union Bill becomes law.
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Kelvin Hopkins (Luton North) (Lab): It is clear that some members of the eurozone are unlikely to be able to sustain membership in the long term, but it is unlikely that member states of the eurozone would suggest such a thing. However, Britain would be well placed to suggest that those countries should be given the chance to leave the eurozone and recreate their national currencies.
Mr Lidington: It is up to the elected Governments of individual countries to decide how to respond to the hon. Gentleman’s challenge. However, it is very much in the UK’s national interest that the eurozone finds a way to overcome its present problems and achieve financial stability and economic growth.
Mrs Anne Main (St Albans) (Con): The previous Minister for Europe gave away £7 billion of our rebate. Was he sold a pup, or is the current Minister for Europe able to claw something back from that spendthrift way of spending our money?
Mr Lidington: I think that the previous Minister for Europe was sold a pup, although he was not helped by the fact that at the time his Chancellor and Prime Minister were not talking to each other, even about the figures that they used in those negotiations. I can assure my hon. Friend that in the negotiations on the new multi-annual financial framework, the Government will defend the British rebate, which we believe remains completely justified.
Mr Wayne David (Caerphilly) (Lab): Given the importance of the eurozone to Britain, what are the Government doing to ensure that Britain is not excluded from decision-making processes that will have a direct impact on our economy?
Mr Lidington: We are ensuring that we engage fully on a bilateral basis with those of our partners who are members of the eurozone and with the European institutions. We also remain in regular contact with EU member states that are not part of the eurozone. I find, from talking to eurozone and non-eurozone members alike, that there is a common acceptance of and support for the participation of the UK and other non-eurozone members in discussions and decisions about the single market and the direction of European economic policy. There is no wish to relegate us to a side room.
Libya
9. David Tredinnick (Bosworth) (Con): What recent steps he has taken in response to the political situation in Libya; and if he will make a statement. [46101] 11. Glyn Davies (Montgomeryshire) (Con): What recent steps he has taken in response to the political situation in Libya; and if he will make a statement. [46103]
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague):
The UK is at the forefront of the international effort to isolate the Gaddafi regime, deprive it of money and ensure that anyone responsible for abuses is held to account. We have taken swift action in the United Nations Security Council and the UN Human Rights Council. At the European Council on
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Friday, EU leaders called on Gaddafi to relinquish power. They agreed to examine all necessary options to protect the civilian population. I have just returned from the G8 meeting of Foreign Ministers in Paris, where we agreed on the need for urgent consideration in the United Nations Security Council of a wide range of additional measures to protect the Libyan population from attack.
David Tredinnick: With a view to Benghazi, does my right hon. Friend recall the fate of the Marsh Arabs in Iraq who were encouraged to revolt and then left to their fate when Saddam Hussein butchered them? What is my right hon. Friend going to do if compliance with the no-fly zone proves to be impossible. Is he happy at the thought that Benghazi will be left to its own devices?
Mr Hague: Yes, we are very conscious of what has happened on previous occasions. The Gaddafi regime has shown its willingness to strike back without compunction at its own civilian population and its ability to take back territory from people who have rebelled against his oppressive regime. That is why, as my right hon. Friend the Prime Minister said yesterday, time is of the essence. That is why we have urged colleagues in the G8 and elsewhere to agree to further urgent considerations at the United Nations Security Council. Anything we do must, of course, have a clear legal base and widespread international support, so my hon. Friend must consider things in that light.
Glyn Davies: Does my right hon. Friend have confidence in the sanctions currently in force against Libya? What discussions is he having with allies about how to strengthen those sanctions against Gaddafi and his regime?
Mr Hague: We have widened the restrictive measures against individuals close to Gaddafi. We have added the Libyan central bank and the Libyan investment authority to the EU asset freezing list. In so doing, the UK has increased the total of frozen Libyan assets in this country from £2 billion to £12 billion. Clearly, these things have an impact on the regime. We would now like further sanctions to be debated and agreed at the UN in New York, but I obviously do not want to advertise too much in advance what they might be.
Caroline Lucas (Brighton, Pavilion) (Green): What other non-violent measures is the Secretary of State considering to put more pressure on Libya? I am thinking of things such as a UN-run escrow account for Libyan oil revenues or electronic jamming of all the regime’s communications.
Mr Hague: There is certainly scope to take other non-violent means and the hon. Lady has provided some examples of it. I believe it is important to discuss them with our international partners before announcing them in any detail or giving notice of their coming into effect, but she is quite right to draw attention to the potential for further measures.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab): The Foreign Secretary has rightly said that Libya is in breach of United Nations Security Council resolution 1970. He went on to state this morning that
“not every nation sees eye-to-eye on issues such as a no-fly zone”.
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Will the right hon. Gentleman confirm whether specific proposals for a no-fly zone were tabled for discussion at the NATO Defence Ministers meeting last Thursday, at the European Council last Friday or, indeed, at the G8 Foreign Ministers meeting today?
Mr Hague: When it comes to specific proposals, NATO is responsible for contingency planning and it is conducting it for specific plans for a no-fly zone. The other meetings were more at the level of political discussion of what is desirable. There are differences of view among many countries about this issue. What was agreed by G8 Foreign Ministers this morning was that we welcomed the recent declaration by the Arab League calling for a number of measures to protect and support the Libyan population. Clearly, what was called for by the Arab League included reference to a no-fly zone.
Mr Alexander: Yesterday the Prime Minister told the House, in response to a question from the Leader of the Opposition about arming the rebels:
“We should not exclude various possibilities, and there is an argument to be made, but there are important legal, practical and other issues that would have to be resolved, including the UN arms embargo.”—[Official Report, 14 March 2011; Vol. 525, c. 30.]
Can the Foreign Secretary update the House on the Government’s position on each of those issues, given the deteriorating situation of the anti-Gaddafi forces on the ground?
Mr Hague: My right hon. Friend the Prime Minister was quite right. The arms embargo agreed in United Nations resolution 1970 covers the whole country—that is, as it is understood by the members of the Security Council and by the vast majority of legal experts. The rebels and the Gaddafi regime are therefore in the same position as regards the arms embargo. One way of changing that would be to produce a new resolution, which would again require the agreement of the United Nations Security Council.
In the G8 this morning, we agreed to welcome urgent consideration in the United Nations of
“a wide range of measures to ensure the protection of the Libyan population”
“increase the pressure, including through economic measures, for Mr Qadhafi to leave.”
That now requires additional work at the United Nations headquarters in New York.
Libya
10. Caroline Dinenage (Gosport) (Con): What recent discussions he has had with his international counterparts on support for and participation in the enforcement of a no-fly zone over Libya. [46102]
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague):
We are working closely with partners, including the United Nations, the European Union and NATO, to develop contingency plans to allow the international community to respond quickly and effectively to the developing situation on the ground in Libya. The plans cover a range of options, including the possible establishment of a no-fly zone. As I have
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said, G8 Foreign Ministers have welcomed the recent declaration by the Arab League calling for measures to support and protect the Libyan population.
Caroline Dinenage: Given that the Arab League and the Gulf Co-operation Council recently endorsed the idea of a no-fly zone, would it not be prudent to allow them to take the lead while the United Kingdom adopts the same policy as the United States of strategic patience?
Mr Hague: Patience must, of course, be tempered by recognition of the fact that the situation is urgent and that events in Libya are moving rapidly on the ground, or at least have done so in recent days. As for my hon. Friend’s important point about participation and the Arab states and the GCC taking the lead, one of the vital elements in any no-fly zone or other operations to protect and support the Libyan civilian population would be the active participation of Arab states.
Mr Bob Ainsworth (Coventry North East) (Lab): Does the Foreign Secretary agree that there are many reasons for the American President’s caution? He is worried about the west being seen to lead, his forces are stretched, and he is enormously worried about the potential for difficulties in the Gulf and the Arabian peninsula. If we share his analysis, why do we not share his caution?
Mr Hague: The United States has agreed with us on the contingency planning in NATO, and also about the very serious nature of what is happening in Libya and the need for Gaddafi to go. The things for which we have argued are the same things for which the United States has been arguing.
As the right hon. Gentleman says, there are currently many other demands on military and diplomatic resources, but I think he will agree that if Libya were left as a pariah state, particularly after recent events—with Gaddafi running amok, exacting reprisals on his own people and estranged from the rest of the world as a potential source of terrorism in the future—that would pose a danger to the national interest of this country and, I would argue, that of the United States as well.
Richard Ottaway (Croydon South) (Con): The Foreign Secretary has confirmed what the Prime Minister said yesterday: that a no-fly zone will not be imposed unless there is a clear legal basis for it. Will he confirm that that is a reference to a United Nations chapter VII resolution?
Mr Hague: The clearest legal base for any such operation is obviously a chapter VII resolution of the United Nations Security Council. Lawyers can provide my hon. Friend, and all of us, with extensive arguments about the various circumstances in which nations are allowed to take action, which can of course include self-defence but can also include overwhelming humanitarian need. This is not a completely open-and-shut argument, but the clearest basis is a chapter VII resolution.
Mr Denis MacShane (Rotherham) (Lab):
But can the Foreign Secretary confirm that, actually, UN law is whatever communists in Beijing say it is? There is a whiff of Bosnia of 15, 16, 17 years ago about all this. We do not want the Foreign Secretary to talk about
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discussions at the UN, empty EU statements and NATO meetings that result in nothing; we want him to discover his mojo and take a lead in putting policies in place before Benghazi falls.
Mr Speaker: We thank the right hon. Gentleman. I call the Foreign Secretary.
Mr Hague: I will make a point of hoping never to discover what motivates the right hon. Gentleman, and never to partake of any of it. [Interruption.] Labour Members are agreeing with me.
I do not accept that UN law is made in Beijing. It is important to have a clear legal base for actions we take internationally, as well as widespread international support and demonstrable need, and since the British Government, along with the French Government, have been absolutely in the forefront of ensuring that all the international sanctions and measures so far have been taken, the right hon. Gentleman is not in much of a position to criticise.
Libya
12. Stephen Gilbert (St Austell and Newquay) (LD): What assessment he has made of the adequacy of consular services provided to UK nationals during the recent events in Libya; and if he will make a statement. [46104]
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt): In what has been the most complex FCO-led evacuation since Kuwait, some 600 British nationals were safely brought out of Libya, and we are all grateful for the immense amount of hard work done by those both in this country, and particularly in Libya, to look after our constituents. However, there are always lessons to be learned, and the Foreign Secretary has asked for a review of our evacuation practices in order to make sure that the practice overall is as good as the very best examples of it.
Stephen Gilbert: I am grateful to the Minister for his answer. Given that article 20 of the treaty on the functioning of the European Union allows British nationals to receive consular assistance from any EU member state, what discussions is he having with other EU states to ensure effective and co-ordinated EU responses to such crises in future?
Alistair Burt: There was co-operation and consultation between all European partners right from the beginning. We often shared each other’s planes. The United Kingdom was able to bring out 819 foreign nationals of 43 different countries by way of the work we did. The hon. Gentleman is absolutely right that it is essential in such circumstances that there is a lot of co-operation, and we will continue to make sure our practices provide for that at all times.
Valerie Vaz (Walsall South) (Lab): The son of a constituent of mine is teaching in Riyadh. What extra consular services and what contingency plans are in place should the situation in Riyadh change?
Alistair Burt:
The hon. Lady rightly draws attention to the fact that at present we should be looking at contingency plans right across the middle east and the Gulf, just in case. I can assure her that that work is going on. We all wish to see a stable middle east and
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north African region, but all the contingency plans are being reworked to make sure they are as effective as possible, and that applies as much to Saudi as it would to Bahrain, Yemen and all other points east.
Middle East
13. Mr John Baron (Basildon and Billericay) (Con): What recent steps he has taken to promote political reform in the countries of the middle east; and if he will make a statement. [46105]
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): Britain is ready to support the countries of the middle east in putting in place the building blocks for more open, plural and free societies. As part of our long-term approach, on 8 February in Tunis I announced the launch of the Arab partnership to support the reforms the countries of the region need for a stable and prosperous future. But reform must be home-grown; it cannot be imposed by outsiders, and leadership must come from within the countries concerned.
Mr Baron: I thank the Foreign Secretary for that answer, but I suggest that the provision of independent and accurate information has never been more important than in these uncertain times. Will the Government therefore revisit their decision that is forcing cuts on the BBC World Service, and particularly the BBC Arabic service? It is extremely short-sighted given that service’s excellent reputation in the region.
Mr Hague: My hon. Friend will be pleased to know that the BBC World Service, and in particular the Arabic service, will continue to play a very valuable role in the region: it will continue its 24-hour television channel, and its radio services will continue through FM relays as well as through shortwave services in the region. Those are a continuing and important part of the BBC World Service. Indeed, in the light of recent events, the BBC has already revisited some of its recent decisions that would have affected Arab nations.
Ann Clwyd (Cynon Valley) (Lab): I took part in a special United Nations conference on the plight of Palestinian prisoners last week, and the descriptions of the conditions in which they are held in Israeli prisons and detention centres were appalling. We were told of torture, inhumane treatment and so on. Some 200 to 300 young people under the age of 18 are held in those conditions. What will the Foreign Secretary do to prevail on the Israelis to adhere to the conventions to which they have signed up?
Mr Hague: Of course we believe that there should be the proper treatment of prisoners throughout the world, including in Israel and anywhere else in the middle east. We have taken up concerns about such issues in the past. If the right hon. Lady would like to give me more details of what she found in that particular case, I will of course look to take them up with the Israeli authorities.
Middle East
14. Jeremy Lefroy (Stafford) (Con): What recent assessment he made of the political situation in the middle east; and if he will make a statement. [46106]
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The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt): The question asks about our assessment of the political situation in the middle east and I am tempted to say simply, “It is extremely tricky.” Perhaps I might add that the unprecedented events of recent weeks have created profound political undertones and at the moment it is not possible to say just what the outcomes of these great events will be.
Jeremy Lefroy: I thank the Minister for his reply. The Egypt-Israel peace treaty is a successful model of a land-for-peace agreement, and Egypt has played a crucial role throughout the middle east peace process. What steps are the Government taking to ensure that that agreement continues to be a cornerstone of the process?
Alistair Burt: We were all reassured when one of the first statements made by Egypt’s military council was that it accepted and will adhere to its international agreements. I think everyone understood that it was referring specifically to the peace agreement with Israel, and I hope that that will provide people with confidence. When I was in Egypt last week, I saw the relationship between the military and the politicians, and it is to be hoped that there will be a process towards democratic elections and government, and that that peace treaty will be adhered to by a future Government.
Mike Gapes (Ilford South) (Lab/Co-op): Will the Minister give us the Government’s security assessment of the situation in Bahrain and the potential for a Shi’a-Sunni conflict both there and in Saudi Arabia?
Alistair Burt: Obviously, we watch events in Bahrain with mounting concern. The sense is that the Bahraini Government should continue to give an opportunity for legitimate protest and that the dialogue should continue with opposition parties. It is incumbent on both the opposition and the Government to keep that process of reform going. On intervention from the GCC at the request of Bahrain, it is essential that that is consistent with the spirit of reform, and not repression.
Topical Questions
T1. [46118] Barbara Keeley (Worsley and Eccles South) (Lab): If he will make a statement on his departmental responsibilities.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): Last night, I met the Foreign Minister of Japan, Mr Matsumoto, and again conveyed the condolences of the British people after Friday’s earthquake and tsunami. He expressed the thanks and appreciation of his country for the support that we have sent, particularly in the form of search and rescue teams. We also discussed the need to co-operate closely on ascertaining the whereabouts of British nationals in Japan.
Barbara Keeley:
I am sure that every Member of this House would wish to be associated with the condolences that the Foreign Secretary just mentioned. The Tibetan Government-in-exile are debating the Dalai Lama’s
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retirement as their political leader. Will the Foreign Secretary update the House on what support the British Government would give to a newly elected political leader of the Tibetan people in the just cause of gaining greater autonomy for Tibet, given that he has outlined this Government’s support for newly elected leaders in north Africa?
Mr Hague: This Government continue the policy adopted by the previous Government on the status of Tibet. We await further details on what has been announced by the Dalai Lama in respect of an elected leader in the future. We will have to see the details of that before we respond to it in any greater detail.
T4. [46121] Robert Halfon (Harlow) (Con): My right hon. Friend made some welcome remarks about the tragic murder of the Fogel family on the west bank. Is he aware that the Palestinian Government recently gave $2,000 to the family of a terrorist who attacked an Israeli soldier? What steps can he take to stop the incitement of terrorism by the Palestinians?
Mr Hague: I join my hon. Friend in deploring any incitement of terrorism by anyone on any side of the disputes in the middle east. We are not aware as Ministers of the particular instance to which he refers, but if he would like to get in touch with us with the details we will, of course, look into it.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab): May I associate myself and my colleagues with the Foreign Secretary’s expression of sympathy towards the people of Japan at this terrible time? The right hon. Gentleman told the House on 14 February that the British Government had
“received a request from the Egyptian Government to freeze the assets of several former Egyptian officials.”—[Official Report, 14 February 2011; Vol. 523, c. 715.]
Will he tell the House whether he has acted on that request from the Egyptian authorities and gone ahead and frozen the assets of all those former officials?
Mr Hague: We have acted on that request with our European Union partners. One difficulty with pursuing this to the necessary point of freezing the actual assets is the lack of information that has been supplied by the Egyptian authorities. We have urged progress within the European Union so that this is done on an EU basis, and that means that the decisive action remains to be taken. The UK has been at the forefront of the arguments in the EU to take action.
T5. [46122] Amber Rudd (Hastings and Rye) (Con): Political violence by Mugabe’s militias in Zimbabwe is rising again. Does the Secretary of State share my concern that the court ruling last week removing the Movement for Democratic Change Speaker and four of its MPs risks derailing the fragile journey to political reform? Will he raise this as a matter of urgency with President Zuma of South Africa and other leaders in the region?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Henry Bellingham):
I certainly share my hon. Friend’s concerns about the arrest and detention of those MDC MPs. It is a disgrace
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that they remain in custody. However, our ambassador in Harare attended the hearing this morning for Elton Mangoma, who has now been released on bail. I agree with my hon. Friend that it is essential that President Zuma carries on his good work with the Southern African Development Community to create a robust road map to credible elections.
T2. [46119] Steve McCabe (Birmingham, Selly Oak) (Lab): Do the Government find it acceptable that residents of Camp Ashraf—opponents of the Iranian regime—are subjected to a 24-hour campaign of abuse and torture, including bombardment by 210 loudspeakers? What on earth are we doing about it?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt): We are aware of both the intrusion of loudspeakers and occasional suggestions that the residents of Camp Ashraf are denied medical assistance. The UK meets representatives of the Iraqi Government’s Camp Ashraf committee, the UN regularly visits the camp and we make every effort to urge the Iraqi authorities to ensure that the residents of Camp Ashraf are treated in accordance with international humanitarian standards.
T7. [46124] Mr Peter Bone (Wellingborough) (Con): The coalition agreement, on page 19, calls for the Government
“to limit the application of the Working Time Directive in the United Kingdom.”
Tomorrow, this House will be asked to agree a stability mechanism for the eurozone, a decision over which we have a veto. Will the Foreign Secretary withhold agreement on the stability mechanism until we have reform of the working time directive?
The Minister for Europe (Mr David Lidington): My right hon. Friends the Secretaries of State for Health and for Business, Innovation and Skills are engaged in drawing up Government proposals to address the problem identified by my hon. Friend. The appropriate time to do that is likely to be when the Commission comes forward with new proposals on the working time directive during the next 12 months.
T3. [46120] Caroline Lucas (Brighton, Pavilion) (Green): Libya’s rapid plunge towards civil war is further evidence, if it were needed, of the irresponsibility of selling arms to regimes that seek to quell dissent through force. Will the Government now work to ensure that the UN arms embargo to Libya is extended to all regimes that engage in repression?
Mr Hague: It is an immediate priority to ensure that that arms embargo is properly observed. It is necessary to review how we give export licences to various countries around the middle east in the future, and we will conduct that review.
T9. [46126] Roger Williams (Brecon and Radnorshire) (LD): Brazil has one of the most rapidly growing of all global economies. Unfortunately, a visit by the Deputy Prime Minister and another Foreign Office Minister had to be postponed. When are there plans to meet the new President of that very important country?
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The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne): I have not yet had the opportunity to visit Brazil, although I was due to travel with the Deputy Prime Minister. My hon. Friend makes a very accurate point about the growing significance of Brazil and I am delighted to announce that the Foreign Secretary intends to visit shortly.
T6. [46123] Helen Goodman (Bishop Auckland) (Lab): Yesterday in the House the Prime Minister said that he wanted to establish dialogue with the opposition in Libya. Unfortunately, over the past five days, my constituent Dr Burwaiss, who has contacts in the national liberation council in Benghazi, has had extreme difficulty, despite his and my efforts, in finding out where and to whom information should be sent. Can this now be corrected?
Alistair Burt: I thank the hon. Lady for her question; we have spoken about this over the weekend. The ambassador to Libya, Richard Northern, is working on all available contacts, including the relatives of the gentleman whom the hon. Lady has mentioned. We will make sure not only that contact is made as best as possible but that information is passed back to her constituent.
Martin Horwood (Cheltenham) (LD): Does the Secretary of State agree that the act of inviting in troops from militarily superior neighbours has evil precedents in the crushing of human rights in 20th-century Europe? If so, as a good historian, will he share that view with the Bahraini and Saudi Governments?
Mr Hague: We are extremely concerned about the escalation of the situation in Bahrain, particularly the decision of the Government of Bahrain to declare a state of emergency. We call on all parties to exercise maximum restraint and to avoid violence. The Government of Bahrain should respect the right to peaceful protest, respond to the legitimate concerns of the Bahraini people and persist with their attempts to draw others into a dialogue on reform. The intervention by GCC partners at the request of the Bahraini Government should also be consistent with that, supporting reform and not repression, allowing a swift return to peaceful conditions and creating an environment in which dialogue can take place.
T8. [46125] Rachel Reeves (Leeds West) (Lab): Last Thursday, I joined students from Swallow Hill community college and Abbey Grange school from my constituency on a visit to Auschwitz. Will the Foreign Secretary join me in commending the Holocaust Educational Trust’s work and will he confirm what funding the Government will commit to supporting the Auschwitz-Birkenau Foundation to ensure that future generations can see what happens when racism and hatred go unchecked?
Mr Lidington: I am grateful to the hon. Lady for raising this point. The Government are determined to preserve the memory of the holocaust to educate future generations and we support the long-term preservation of Auschwitz-Birkenau as a site of remembrance and reflection. We are currently finalising the details of exactly how we will support the foundation and I assure her that an announcement will be made very soon.
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Mr Douglas Carswell (Clacton) (Con): Does my right hon. Friend believe that the appetite for democracy is universal? If so, what moral support and encouragement will he offer those in Iran who seek to live freely as we do?
Mr Hague: I agree with my hon. Friend. We believe that human rights, including democratic rights, are universal. It is particularly pertinent to raise the situation in Iran because the two principal leaders of the opposition forces in Iran, Mr Mousavi and Mr Karroubi, have been detained with their wives—they have disappeared with their wives. I am glad that my hon. Friend raised this matter because it is important, amidst the current turbulence in the middle east, not to forget what is happening in Iran and to remember that a country that has preached support for protest in other nations does not hesitate brutally to suppress protest within its own borders.
T10. [46127] Ian Austin (Dudley North) (Lab): Hamas terrorists fired long-range rockets into apartments in Beersheba just a few weeks ago. With Hamas’s leader calling for jihad, not negotiation, and with Iran supplying weapons to Hamas, Hezbollah and the Taliban, what more can the Secretary of State do to curtail terrorist attacks against our forces in Afghanistan and our allies in the middle east?
Mr Hague: I listed earlier some of the things we are doing. Clearly, we are intercepting some of the shipments of arms that have been involved. That is how we know about the rockets that were being shipped to the Taliban and about the ammunition involved. I set out some of the other actions, including diplomatic actions, that we are taking. We have stepped up our efforts in that regard, but the hon. Gentleman is quite right to ask us to do still more.
Andrew Rosindell (Romford) (Con): When the Foreign Secretary next meets Secretary of State Clinton, will he clarify with her the American Government’s position on the Falkland Islands? Do they support British sovereignty or not?
Mr Hague: I last met Secretary Clinton last night in Paris. That was not part of our discussion, because clearly we were discussing the situation in Libya, but I can assure my hon. Friend that we do not have any difficulty with the United States Government on that issue.
Angus Robertson (Moray) (SNP): The European Union’s 27 Energy Ministers are meeting today to discuss nuclear safety in the wake of the horrific developments in Japan. As a minimum, will the UK Government support Germany, France and Spain in their support of a proposal by the Austrian Energy Minister, Niki Berlakovich, that there should be stress tests in all nuclear power stations across the European Union, including those in the UK?
Mr Lidington: There is a range of possible options that European Energy Ministers will discuss today. The important principle is that politicians should be guided by scientific evidence about the best steps available to ensure that nuclear safety is maintained.
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Duncan Hames (Chippenham) (LD): Air strikes against his own people, the use of mercenaries, the imprisonment of foreign journalists—what does the Foreign Secretary believe would be the impact on human rights elsewhere in the world were Gaddafi’s tactics seen to be successful?
Mr Hague: My hon. Friend makes a powerful point, and a parallel point to the one that the Prime Minister made here yesterday. If Gaddafi succeeded in suppressing the desire for a freer and more open country in Libya, there are tyrants elsewhere who would draw the wrong lesson from it. That is why we are at the forefront of all the activity that I described during our Question Time today, but I stress alongside that that whatever we do must be legal and have international support.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): Will the Foreign Secretary raise at the next European Council meeting the case of my constituent, David Petrie, who is one of a group of English language lecturers in Italy who have been fighting for a European right to equal pay for 25 years? After six victories in the European Court, they thought they were going to get justice, only to find that the Berlusconi Government have changed the law.
Mr Lidington: We regard the treatment of the lettori as completely unacceptable, and through both our embassy in Rome and ministerial contacts we are pursuing the matter energetically with the Italian authorities.
Dr Julian Lewis (New Forest East) (Con): If Britain decides to take part in an unanticipated military commitment to engage in a no-fly zone in Libya, will the extra cost be added to or will it be taken from the existing defence budget?
Mr Hague: My right hon. Friend the Prime Minister and the Chancellor will no doubt make a judgment about that, if it arises.
John Cryer (Leyton and Wanstead) (Lab): Further to the question from my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), my understanding is that a list was provided by the Egyptian authorities of people connected to the Mubarak regime. Is the information on that list inadequate, or are other members of the EU dragging their feet?
Mr Hague: Both of those, to some degree. Certainly, the information on the list was inadequate. This is a matter that is handled by the Treasury. It is important that the House has an update on it, but both of those factors are present.
Margot James (Stourbridge) (Con): During last night’s Adjournment debate on the future of the BBC Hindi service, the House was pleased to hear that discussions are taking place between the Foreign Office and the Department for International Development that could lead to World Service expenditure being considered as official development assistance. Does my right hon. Friend agree that everything possible should be done to protect this very important part of British soft diplomacy?
Mr Hague:
It is possible for some of the expenditure of the BBC World Service to be classified in the way that my hon. Friend describes. In the Foreign Office we
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have done everything we can to give financial support, including transitional support, to the BBC World Service. She will be aware of the fact that in three years it will be funded by the BBC licence fee, and that transfer of funding will give new opportunities for the future. But every part of the public sector must contribute to improving its efficiency and saving money; there is no getting away from that.
Mr Russell Brown (Dumfries and Galloway) (Lab):
None of us can imagine the plight that tens of thousands of people are experiencing in Japan at this time, and they include UK citizens. My constituent’s son, his wife and their seven-month-old child are stuck in the north of Sendai city. They are in a hotel where a bus turned up this morning and took away a number of European nationals who were fit and healthy, including Irish nationals. However, the only advice being given by our
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Foreign Office is, regrettably, just that—advice. It is not assisting with transport. Can something more be done?
Mr Jeremy Browne: The British Government have put in a hugely comprehensive response to help British nationals in Japan. We have supplemented what is already a large embassy with an additional 45 staff from across Asia and elsewhere in the world. We are trying to do everything possible to help British nationals in what is a chaotic and difficult situation, but if the hon. Gentleman gives me the details of the case that he has just raised, I will ensure that I give it my personal attention.
Mr Speaker: Order. I am sorry that some colleagues are disappointed: the demand today is huge and the supply limited.
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Points of Order
3.35 pm
Mr Iain Wright (Hartlepool) (Lab): On a point of order, Mr Speaker. In business questions last week, my hon. Friend the Member for Gateshead (Ian Mearns)—whom I am pleased to see in his place today—asked about the 563 parliamentary questions to the Department for Education that are currently unanswered. In written responses to me, the Department has stated that only 10% of named day questions and 20% of letters from hon. Members have been answered on time, with some going as far back as November. On top of Building Schools for the Future and school sport partnerships, that shows a Department in a shambolic and chaotic state, whether through incompetence or laziness. It is not good enough. A schoolchild who had done only 10% of their homework would get detention. What can you do, Mr Speaker, to keep Ministers back after school for failing to do their homework, which—on a serious note—is preventing hon. Members from holding the Government to account for their education policy and acting on behalf of their constituents?
Mr Speaker: I am grateful to the hon. Gentleman for his point of order and for notice of it. I sympathise with the concern that he has expressed. I understand that other hon. Members have been affected in the same way. I deprecate late replies, but Ministers are responsible for their answers. Oral questions to the Department for Education will be taken next Monday. I suggest that the hon. Gentleman and others with similar experiences and views seek advice from the Table Office on how to pursue this matter. The Deputy Leader of the House is in his place and will have heard the concern expressed. This is a serious matter, and I hope that something will indeed be done to address the concern that the hon. Gentleman and others regularly raise.
Mr John Spellar (Warley) (Lab): On a point of order, Mr Speaker. Have you had any notification that either the Secretary of State for Communities and Local Government or the Secretary of State for Health wants to make a statement about the crisis in Southern Cross Healthcare, whose share price has collapsed to one hundredth of its peak? Southern Cross Healthcare has 750 care homes across the country, with 31,000 elderly and vulnerable residents. They and their relatives need urgent reassurance and action from Ministers.
Mr Speaker: The short answer to the right hon. Gentleman is that I have received no indication that any Minister wants to make a statement on the subject. He has put his concerns about the matter on the record explicitly. I will not call him an old hand, because he will take offence, but he is a wily operator, and I have a feeling that he will use the opportunities open to him in the House to pursue this matter for as long as he judges necessary.
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Financial Services (Regulation of Derivatives)
Motion for leave to bring in a Bill (Standing Order No. 23 )
3.38 pm
Steve Baker (Wycombe) (Con): I beg to move,
That leave be given to bring in a Bill to require certain financial institutions to prepare parallel accounts on the basis of the lower of historic cost and mark to market for their exposure to derivatives; and for connected purposes.
I rise not as an expert in derivatives or derivative accounting, but as someone who has wrestled with the problems of the banking system in the company of experts, both academic and practical. I am persuaded that a parallel, more conservative accounting regime for derivatives would mitigate some of the worst risks in the financial system.
Even though banks are governed by overarching EU and Basel rules, it is for British regulators to approve the day-to-day activities of British banks. This is a profoundly important role. My Bill is a moderate proposal that seeks to improve accounting transparency to enable that role, because, as Mervyn King has said,
“banks are global in life but national in death”.
The Bill could be enacted within the current international regulatory framework.
To explain why this measure is profoundly important, I would like to share with Members an analogy of the banking system. Naturally, it will short-circuit some of the details, but even though it remains necessarily complex. Let us imagine that we discover a little-known territory within the EU on which to establish a colony. Let us call it Ruritania and allow its currency to be pounds. We will establish our fledgling colony with four people: a depositor, Alice, who arrives with £103; a builder, Bob—naturally—an entrepreneur, Matilda; and a banker, Mallory, with a colourful recent past in Iceland and Ireland. Interest rates are 0.5%. Mallory establishes a bank and persuades the other three inhabitants of the importance of a healthy banking system, so Ruritania’s constitution contains a limited guarantee from future taxpayers of £10 in favour of the bank. Under central European banking authority devolved rules, Ruritania classifies that guarantee as core tier 1 bank capital, meaning that there is no actual capital, just a taxpayer guarantee.
Alice, seeking to keep her money safe, deposits it in a demand account at the bank. Matilda, the entrepreneur, wants to start a business and approaches Mallory for a loan. The bank retains a supposedly prudent reserve of £3 from Alice’s deposit and lends to Matilda, at 7% interest, the remaining £100 of cash deposited by Alice. Matilda then employs Bob, who wants his year’s wages up front. She hands over the £100 to Bob, which he deposits in the bank. Let us set aside for the moment the fact that the bank just doubled the money supply of Ruritania, as that issue is dealt with in the Financial Services (Regulation of Deposits and Lending) Bill, introduced by my hon. Friend the Member for Clacton (Mr Carswell), which I was glad to support. The banker now has two liabilities: a deposit of £103 from Alice and a deposit of £100 from Bob. Offsetting those, he has two assets: a 25-year loan of £100 and cash of £103. So far, so simple.
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Mallory wants a Ferrari today, which he can buy for £20. His compensation contract is 20% of profits, which is not unusual in banking. He therefore seeks to record an instant £100 profit for his bank, and he knows just how to do that under EU bank accounting rules. He phones an insurer active in the credit derivatives market—let us call it GIA—which agrees to write a derivative known as a credit default swap for a fee of 1% per annum. It is a guarantee of 95% of the loan.
The bank quickly establishes a new company, a special purpose vehicle, which buys the future loan cash flows of £275. The credit derivative is written directly with that new company, the SPV. The SPV finances its purchases by issuing two bonds: a 95% senior bond, rated triple A by two august rating agencies because GIA is so rated; and a 5% junior or equity tranche. The bank buys the two bonds with the £100 cash. The funds then flow back from the SPV to the bank to settle that purchase. That kind of circular flow of cash is commonly used. The result is that the equity tranche of £5 is a deduction from the bank’s £10 tier 1 capital. Members will recall that that capital is a future taxpayers’ pledge, not hard cash.
Under mark-to-market rules, Mallory, by holding the bond on his trading book, records an instant but unrealised profit of £105. After replenishing his tier 1 capital with £5, he shows that £100 clear profit. That profit has been recorded, even though the bank has not received any income from the loan, and that loan might never be repaid. Mallory the banker is not concerned about that, however; he has his Ferrari. Any shareholders are not concerned either, as the bank also declares an £80 dividend.
The banker and his shareholders have taken £100 of the £103 total money supply of Ruritania, declared it as profit and spent it abroad. Mallory likes mark-to-market accounting and seeks to grow his bank by making further investments. He cannot sell the bond on the open market, so he borrows against it through an arrangement with a central bank, known as a repo. He receives £205 in cash from the central bank, and the central bank has a mortgage on his bond.
Mallory uses the balance as collateral for further bets, such as derivatives with other banks and low-priced Irish bank-issued bonds, in the hope of more fast profits. Unfortunately, his bank becomes insolvent when Matilda misses a loan payment, and it cannot refinance the central bank’s funding, so the central bank takes ownership of the bond—Mallory’s bank’s one decent asset. Depositors ask for their funds, but the bank cannot pay. That could be the crisis of 2014.
On our Ruritanian bank’s liquidation, we find that two depositors have claims for £203, but there is only £6 in cash; all the rest had been pledged as collateral and the bank’s assets cannot be sold. There happens to have been another freakishly unlikely collapse. Stakeholders had not realised that the bank’s one decent asset had been repo’d with the central bank, because it remained on Mallory’s bank’s balance sheet right up to foreclosure. Mallory, of course, lives happily ever after.
Financial derivatives and certain other “synthetic” investments are governed by mark to market. Banks record a profit or loss in respect of each derivative by
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comparing the price of the asset or liability in today’s market with the value of the position on the last balance sheet date. What is wrong with that? Marking to market enables banks to record unrealised increases in value as profits, but that is not the case with loans. The arbitrage between the different accounting regimes for loans and for derivatives therefore incentivises banks to transact business in derivatives. The fundamental driving force behind the phenomenal growth of the credit derivatives market has been profit acceleration using that accounting arbitrage.
Regulators need to be aware of those exposures in order to help avert any future threats. That requires the publication of accounts with derivatives and other investments recorded at the lower of historic cost and their mark-to-market value. If my Bill becomes law, the ability to declare future hoped-for income as profit today and the rest of the absurd activity that I have described would be restrained.
If we want banks to refocus on stimulating the real economy, we need to change those incentives. I therefore ask the House to support this Bill and, in so doing, to correct one of the most damaging and misunderstood weaknesses of the current British banking system.
That Steve Baker, Mr Douglas Carswell, Andrea Leadsom and Chris Heaton-Harris present the Bill.
Steve Baker accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 10 June and to be printed (Bill 162).
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): On a point of order, Mr Speaker. The House will have heard earlier the point of order from the hon. Member for Hartlepool (Mr Wright) about the delay in responses to hon. Members’ questions from the Department for Education. The whole House should be concerned when there has been a delay, and you, Sir, have made clear your views on the issue.
I have now investigated the matter, and it seems as though there is a specific problem within the Department for Education in that there has been a technical failure in the IT system that it uses to track parliamentary questions. The problem has now been identified and fixed, and officials are working towards providing outstanding responses as quickly as possible. The hon. Member for Gateshead (Ian Mearns) will today have received a letter explaining the delay in those terms. I hope, Mr Speaker, that normal service will be resumed as soon as possible, and I know that the Department would wish to apologise to any Member of the House who has been inconvenienced by the delay caused by these circumstances.
Mr Speaker: I thank the Deputy Leader of the House for what he has said. The situation is clearly both regrettable and unsatisfactory, and it is much to be hoped that it can be avoided in future. However, the speed with which he has investigated the matter will, I think, be appreciated by all right hon. and hon. Members.
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Scotland Bill
Further considered in Committee
[Mr Lindsay Hoyle in the Chair]
‘(1) The Scotland Act 1998 is amended as follows.
(a) in subsection (2) “Two members” is substituted for “One member”; and at the end there is inserted “save for those identified in paragraph 1(a) to (c) of Schedule 1, each of which shall return one member,”;
(b) subsection (3) is omitted.
(3) In section 5, subsections (1) and (3) to (9) are omitted.
(4) Sections 6, 7, 8 and 10 are omitted.
(5) In section 11, subsection (2) is substituted by—
“(2) A person is not entitled to vote as an elector in more than one constituency at a general election, and may cast no more than two votes at a poll for the return of constituency members.”.
(a) in subsection (2), paragraphs (e) and (f) are omitted;
(b) subsection (3) is omitted;
(c) after subsection (4) the following subsection is inserted—
“(4A) The provision to be made under subsection (1) must include provision for—
(a) each elector to cast one or two votes of equal value, with no more than one vote to be given to any one candidate, in constituencies returning two members;
(b) the two candidates with the most valid votes to be elected in such constituencies.”.
(a) for paragraph 1 there is substituted—
(c) the Western Isles [Na h-Eileanan An Iar], and
(d) the parliamentary constituencies in Scotland at the time of an ordinary or extraordinary general election for the Scottish Parliament, except the constituencies of Orkney and Shetland and Na h-Eileanan An Iar”;
(b) paragraphs 3 to 14 are omitted.’.—(Mr Donohoe.)
Brought up, read the First time, and motion made ( 14 March), That the clause be read a Second time.
The Chairman of Ways and Means (Mr Lindsay Hoyle): I remind the Committee that with this we are discussing new clause 2—Regional members of the Scottish Parliament —
‘(1) The Scotland Act 1998 is amended as follows.
(2) In section 81, after subsection (2), there is inserted—
“(2A) No provision shall be made under subsection (2) for any allowances for representative work in any constituency or region by a regional member in a registered political party or a group of such regional members; and no allowances may be made for
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offices or staff or related expenses incurred by such members other than in connection with or at the Parliament’s place of meeting or in connection with a committee meeting.
(2B) Any allowances paid to regional members in a registered political party shall be founded on the assumption that they are representatives of that party from the relevant region and not from any single constituency.”.
(3) In Schedule 3, after paragraph 2 , there is inserted—
2A The standing orders shall include provision for withdrawing from a regional member in a registered political party any or all of his rights and privileges as a member, including any allowances, if he is found to have purported to act, or has held himself out, as a constituency member for any single constituency or for a group of constituencies other than the region from which he was elected.”’.
3.51 pm
Mr Brian H. Donohoe (Central Ayrshire) (Lab): Let me continue where we left off yesterday in discussing new clauses 1 and 2, particularly the question of first past the post being the fairer system—
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Will the hon. Gentleman give way?
Mr Donohoe: I will give way when I have developed my argument one stage further than when I left off. An important aspect of this is that first past the post is the system that is best understood by the electorate—indeed, I would argue, it is almost the only system that is understood by the electorate.
Mr MacNeil: I think that if the hon. Gentleman looks at yesterday’s Hansard, he will find that we finished where I left off. At 10 pm last night, I was about to ask him what he had against the good people of the Western Isles in wanting to give them only one Member, with every other constituency getting two.
Mr Donohoe: I have always thought that the Member who looks after sheep should be able to count. If he could count, he would know that there are not that many people in the electorate of the Western Isles. In those circumstances, I thought it only fair that there should be just the one Member. As I said previously, there would be one Member for Orkney and one Member for Shetland. That would mean that there would be 118 Members of the Scottish Parliament, all elected on the basis of first past the post. If the hon. Gentleman tells me that I have got the figures wrong, perhaps I need to go back to school to do a bit of arithmetic, but I can tell him that I was one of the brightest children in the school at arithmetic; indeed, I got 100% on many occasions.
However, perhaps one area where I was not very strong was dates, because earlier in the debate I said to the hon. Gentleman that the Scottish elections were on 3 May whereas—he should have corrected me—they are on 5 May.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op): Is it the case that the school my hon. Friend attended was so good that it was approved?
Mr Donohoe: It was so good that it was known as Irvine Royal Academy. Anyway, we will move on very quickly from that point.
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Mr Alan Reid (Argyll and Bute) (LD) rose—
Mr Donohoe: I am sure I can give way to the hon. Gentleman as well.
Mr Reid: According to Hansard, just before the hon. Gentleman sat down last night, he said that there would be 119 Members of the Scottish Parliament. He just said that there would be 118. My understanding is that all 59 constituencies, apart from the Western Isles, would have two Members, and that the Western Isles would get one. I think that that makes 117.
Mr Donohoe: I think that we are wandering into maths rather than arithmetic, but the hon. Gentleman is absolutely right. Of course, that would be a saving to the public purse, which is very important. Perhaps one could call it a Freudian slip. I have come to the conclusion that he is right and that the number should indeed be 117, and not 119 as I suggested.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op) rose—
Mr Donohoe: I do not think I am going to be allowed to move on swiftly.
Mark Lazarowicz: Surely with the passage of the Parliamentary Voting System and Constituencies Bill, which will reduce the number of parliamentary constituencies, the correct figure would in fact be 103.
Mr Donohoe: If the hon. Gentleman intervenes again to give me some understanding of that point, I might be able to accede to it.
The Parliamentary Under-Secretary of State for Scotland (David Mundell) rose—
Mr Donohoe: Oh, there we are. The Minister is now popping up.
David Mundell: Perhaps I might help the hon. Gentleman. My calculation is that there would be 101 Members. After the passage of the Parliamentary Voting System and Constituencies Bill, there will be 52 constituencies in Scotland. If each had two Members, there would be 104. However, there are three constituencies that he feels should have only one Member, although my reading of new clause 1 is that people would still have two votes. There would therefore be 101 Members in the new Scottish Parliament. Does he think that that would be sufficient to conduct the Parliament’s business?
Mr Donohoe: The Minister has made my point very well in relation to making savings, which is the next point that I want to make progress on, if I may.
Mr Mike Weir (Angus) (SNP): Will the hon. Gentleman give way?
Mr Donohoe: Of course I give way to the hon. Gentleman.
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Mr Weir: Will the hon. Gentleman clarify whether he is talking about Westminster Parliament constituencies or Scottish Parliament constituencies, because the numbers are different? There are 59 Scottish Parliament constituencies, but once the Parliamentary Voting System and Constituencies Bill has been passed there will be only 52 Scottish constituencies for the Westminster Parliament.
Mr Donohoe: That is common sense, if I may say so. When I made the calculation to put together my submission to Calman, we did not have this nonsense of reducing the number of MPs in this place. That idea is patently stupid in Scotland. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), who is present, will know that the area he represents will become even more enormous under these calculations than it is. Perhaps the Independent Parliamentary Standards Authority should visit him to check out what his expenses should be in those circumstances. However, I digress somewhat.
I shall return to the issue of savings and first past the post. It is clear from this debate that there is a case to be made for this idea. It is clear from the number of public representatives on the London assembly that there can be adequate government for a population double the size of Scotland’s with some 30 members. Given the responsibilities in London, one would presume that it was possible to run the Scottish Government with the numbers that I propose.
Mr MacNeil: The hon. Gentleman wants to reduce the number of parliamentary representatives from Scotland. Will he lead by example and suggest that Scotland no longer needs to send any MPs to Westminster, because Scotland should be independent and all powers pertaining to Scotland should be moved from Westminster back to Scotland?
Mr Donohoe: The first people who could go in these circumstances are, of course, the nats. That would be very useful. I am surprised that only four of their six Members are here today. However, looking at the Labour Benches, perhaps I should not argue that point too forcefully.
To return to my serious argument, first past the post is the most sensible system on the basis of turnout. If we look at the turnout at elections—today I had the good fortune of having the Library do so—we see that there is no doubt that we, as a group, need to reconnect with the public. It is highly probable that we will go below 50% turnout at this year’s Scottish elections. In the 2007 election, the turnout was just above 52%. In the election to the Westminster Parliament last year, the figure was just under 64%. On that basis, we should consider the matter seriously.
4 pm
Just 100 years ago, when elections in this country were taken very seriously, the turnout in the UK election was 86.8%, and even in Scotland it was 84.7%. I know that that was in 1910, but it was the complete opposite of what is going on today. I argue, and will argue till the coos come hame, that unless and until we reconnect with the public, the downward trend will continue. If turnout goes below 50%, as is highly probable, what mandate will there be?
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Mr Greg Knight (East Yorkshire) (Con): Is the hon. Gentleman therefore arguing in favour of a system rather like the Australians have, in which people are fined if they do not exercise their right to vote?
Mr Donohoe: I am grateful for the intervention, but I disagree with the idea of compulsory voting and fines. I have been to Australia to examine the system, and it just does not work as it should, so I would not advocate it. In Africa, however, people queue for weeks before an election to cast their vote, and we should have some of that attitude in this country. I do not think we will ever get it unless we reconnect with the public, and certainly not if we continue to have list Members north of the border.
That brings me neatly to new clause 2. If there is to be no change to the voting system, we have to consider the role of the list Members in the Scottish Parliament. We must seriously consider withdrawing the funding that is currently available to them, which allows them to come into constituencies to cherry-pick and cause mayhem.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): Does my hon. Friend share my concern, which has been a consistent concern in Scotland, that at various times list Members appear to have promoted themselves as constituency Members? Does he agree that that must be tackled as a matter of priority? Does he further understand that in the spirit of the Scottish Parliament rules, it was anticipated that regional list Members would notify constituency Members whenever they took up casework? In my almost 12 years as an MSP, it was very rare—
The Chairman: Order. I know that this debate is very important, but may we have shorter interventions?
Mr Donohoe: There is no one in the House who knows the system north of the border better than my hon. Friend, because she was an MSP, and still is until, I think, the 24th of this month.
Mr Donohoe: I was two out again. I am not doing so well in that sense.
Graeme Morrice (Livingston) (Lab): Following on from the point made by my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), is my hon. Friend the Member for Central Ayrshire (Mr Donohoe) aware of the recent case in which a regional list MSP for Central Scotland was claiming to be almost a constituency MSP for Airdrie and Shotts, to the extent that he had surgery posters with “Airdrie and Shotts” on them? The regional area that he covers is, of course, much larger. I suspect that it was done for electoral reasons, with his being the SNP candidate for the Airdrie and Shotts Scottish parliamentary constituency.
Mr Donohoe: Of course I agree with my hon. Friend, and I shall return to that point.
Fiona O'Donnell (East Lothian) (Lab): I can tell my hon. Friend that I barely slept last night waiting to make this intervention. Will he at least acknowledge that the current system came about as a result of a consultative process—the Scottish Constitutional Convention—which the Committee should respect?
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Mr Donohoe: My hon. Friend may not have slept last night, but what does she think of the fact that I have had to come back here to continue this debate? I will come back to her point later.
Mark Lazarowicz: I disagree with much of what my hon. Friend said yesterday and today, but I concede his point on the role of list MSPs. One list MSP in my area just produced her annual report. By some amazing coincidence, almost every single example of her local work over the last year happens to be from the constituency where she is standing as a constituency candidate.
Mr Donohoe: On the basis of conversations with other hon. Members, there is universal agreement that something is fundamentally wrong with that aspect of list Members. Even a previous Presiding Officer has made that point on numerous occasions in the Scottish Parliament. That is a pertinent issue and it must be given serious consideration, which is why I have proposed new clause 2, which would withdraw funding. Withdrawing the funding available to added list Members would lead to significant savings for the Scottish Parliament. If my arithmetic is correct, there are 56 added list MSPs, given that 73 MSPs are elected for constituencies—I believe my figures are right on this occasion.
Mr Mark Field (Cities of London and Westminster) (Con): Does the hon. Gentleman share my concern that, fundamentally, list Members are representatives only of their parties? In new clauses 1 and 2, he is seeking to reconnect MSPs with constituents. Under the first-past-the-post system, MSPs must recognise that they represent each and every one of their constituents, including—and in many ways more importantly—those who did not vote for them, which is in stark contrast to list Members.
Mr Donohoe: I agree entirely with the hon. Gentleman, who is my MP, as he knows. I came into Parliament thinking that I was a Labour MP, but over the years I have come to understand that I represent not just Labour voters but 100% of my constituents, including those who vote and those who do not vote. I have always taken that view. The hon. Gentleman makes a good intervention, and I am grateful for it, but I do not know what it has to do with the subject in hand.
If one accepts that list Members are not to make representations on behalf of individual constituents, the question is why do they advertise constituency surgeries? On one occasion, such a Member, who will remain nameless, advertised a surgery in my constituency. I was not very pleased, so I decided to look through all the files in my office—some 2,500 files—for some awkward cases. I decided I would phone those awkward cases and tell them that this individual was having a surgery in Irvine, and that they should attend because he made such a good MSP. Seventeen people trooped to his surgery, and he never did a surgery in Irvine again. That is the practical way to overcome the problem of added list Members in the Scottish Parliament. If anyone wants a wee bit of encouragement to do likewise, I am more than happy to oblige.
Mr MacNeil: I was wondering whether the awkward cases had already been sent to the hon. Gentleman.
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Mr Donohoe: No, I already had the awkward cases and knew all about them. Every single Member in this place—even those who came in last year—will be well aware of the cases that they would like to palm off. It might be that we could find a role for those list Members and send them all over the UK to take up these awkward cases. I might be one of those who would advocate that—but not today, because we are here to debate new clauses 1 and 2.
My final point concerns what happens when a list Member dies in office. Of course, that is unfair on the individual, although they would no longer worry about it; but there is also an unfairness in the system, as we have seen—believe it or not—in Ayrshire: a Member of the Scottish Parliament resigned and a member of the constituency party was put in their place, but that Labour member was not elected and a Tory took their place. Had it been a list Member who resigned, however, under the list system the next person on the list would have been appointed as a Member of the Scottish Parliament.
Cathy Jamieson: To clarify, does my hon. Friend agree that it makes no sense that everything else in the Scottish Parliament is done by proportionality and d’Hondt? This is the one area where that does not seem to apply.
Mr Donohoe: That is a discussion for another day, but it is a very pertinent point—and one that a lot of people do not understand. A lot of people do not understand this crazy list system. As I have said, if a constituency Member resigns, a by-election is triggered, and whatever happens the democratic process takes place. However, if a list Member dies, retires or resigns, they are replaced by somebody on the list, which is absolutely outrageous. The Labour party is concerned to have a gender balance, but this system destroys that possibility.
Thomas Docherty (Dunfermline and West Fife) (Lab): My hon. Friend is making a compelling and fascinating case. He might be aware that when the Minister moved to Westminster, his replacement was simply appointed by the Tory apparatchiks without any democratic mandate.
Mr Donohoe: I am sure that the Minister can speak for himself and tell us why he thinks that this aspect of the list system is fair. I shall wait to see whether he has a contribution to make on that point.
Mr Mark Field: The same point applies to the London assembly, and it is slightly more serious even than he has pointed out. Certain roles, such as being a member of the London assembly, disbar a person from holding a dual mandate in Parliament. As the hon. Gentleman rightly says, however, for list members of the London assembly, that change can take place without any difficulty, but for a first-past-the-post elected member—one of the 14 of the 25 in that category—there needs to be a separate election. I agree that it is a fundamental stupidity of the system that needs urgent reform, but it is not exclusively an issue for the Scottish Parliament.
Mr Donohoe:
I am extremely grateful to my Member of Parliament for raising that point. Of course it is a serious point and it has to be addressed, because it
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causes dissent and demonstrates that the list system in Scotland does not—and will not—work, and is not seen as fair.
Fiona O'Donnell: I thank my hon. Friend for being so generous in giving way. I know that he would never be partisan, but surely he can see the benefit for the thousands of people in the highlands and islands region who vote for Labour candidates, and who, thanks to the system, have three excellent candidates in Peter Peacock, Rhoda Grant and David Stewart.
Mr Donohoe: Well, I got one out of three, so I did not do too badly. I bet that if I asked the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) to name his seven list Members—or even the 24 in my constituency—he would be lucky to name three of them. But I will give way, if he is going to reel them off. [Interruption.] He has it on his website! That is a bit of a cheat, would you not say, Mr Hoyle? Anyway, I am coming to the end of my contribution, you will be glad to know.
4.15 pm
Stewart Hosie (Dundee East) (SNP): I am sorry that I was not in my place for the start of the hon. Gentleman’s contribution, but I have been following most of it. I am unhappy about Members of the Scottish Parliament being named when they are not here to defend themselves. As for the three people mentioned by the hon. Member for East Lothian (Fiona O'Donnell), will the hon. Gentleman tell us whether one, two or all three of them as list members also intend to stand in the first-past-the-post election? If so, that would pose a very interesting question.
Mr Donohoe: The hon. Gentleman raises a pertinent point—one that my individual constituency voted on and came to a unanimous decision. I stress that this is on the basis of a vote only in my own constituency, but not a single person in the constituency party was in support of any added list members also standing for a particular constituency. I mentioned that earlier when I spoke about a person who came fourth in the first-past-the post election in my constituency finding herself in Parliament. That does not make sense, and I doubt whether the hon. Gentleman would say that it made sense.
Let me conclude. This is an important subject for the chattering classes, but it is not very important to the great bulk of people in Scotland—or, for that matter, anywhere in the United Kingdom. One thing is certain: electoral systems do not put food in bairns’ stomachs or jobs into the homes of people who most need them in order to put that food in bairns’ stomachs. I suggest that it is therefore more important for us to argue against and probe Ministers daily on the state of the economy. However, we are where we are; and we are debating what we are. That is why I thought it right to table these two new clauses for debate.
I want fairness: it is something I came into politics for. I have always believed in fairness and I believe there is no doubt, as conceded in this debate, that there is no accountability for these list members. My two new clauses thus have considerable merit, but I shall listen carefully to how the debate continues.
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Mr Reid: It will come as no surprise to the hon. Member for Central Ayrshire (Mr Donohoe) that I will not support his new clause. He ended by talking about fairness, but that goes to the hub of the debate. What is unfair about his system is that it would gerrymander the voting system in favour of one party—his own, the Labour party. It is an extremely unfair system. That is what the debate should be about, but the hon. Gentleman did not touch on that anywhere in his contribution.
Thomas Docherty: I am fascinated by the hon. Gentleman’s new-found passion for stopping gerrymandering. Will he remind us why he voted last week to give the Isle of Wight two seats?
Mr Reid: The Parliamentary Voting System and Constituencies Bill was—
Thomas Docherty: Gerrymandering.
Mr Reid: It was a product of the coalition agreement. I was in favour of the first part of the Bill; I did not like the second part, but we made a coalition agreement. The Liberal Democrats liked part 1; Conservative colleagues liked part 2, but not part 1: that is what compromise and coalition is all about.
The hon. Member for Central Ayrshire also said that people did not consider the voting system to be important. People may not be aware of the intricacies of the voting system, but the people of Scotland overwhelmingly voted in the referendum for a proportional voting system, so that is important to them. It was endorsed by the Constitutional Convention, of which the hon. Gentleman was a member, and then, as I say, by the people of Scotland in a referendum.
Sheila Gilmore (Edinburgh East) (Lab): Does the hon. Gentleman agree that there is a particular problem with the party list system? Many advocates of proportional representation argue that it will make people more accountable. The experience of the system in Scotland, however, has been that some people can bounce backwards and forwards from being constituency MSPs to being top of their party list—and back again, or not—so the public has little chance of dislodging them unless the party does. Might there not be a better list system than the party list system?
Mr Reid: That is a fair point. I am fully in favour of proportional representation, but every electoral system can be improved. One way of improving this system would be to move from closed to open lists, which would give the electorate a choice. Another reform is also possible: if cherry-picking of constituencies by regional list Members is considered to be a problem, we can adopt the system in Wales whereby no one can stand both for a constituency and on the regional list. That would remove the problem of cherry-picking at a stroke, because there would be no advantage for a regional list Member in cherry-picking a particular constituency.
Fiona O’Donnell: Does the hon. Gentleman agree that we have already seen improvements, such as the removal from the list of the vanity party that was “Alex Salmond for First Minister”?
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Mr Reid: That was certainly an important reform of the electoral system.
Mr Reid: If the SNP wants to call itself Alex Salmond for First Minister, it is perfectly entitled to do so. What it cannot do is confuse the electorate by having two names. One minute it is called the Scottish National party; the next minute it is called Alex Salmond for First Minister. If only SNP members would make up their minds on what they want their party to be called.
Mr Weir: What the hon. Gentleman is saying is very interesting. I seem to recall that his party registered the name “Ming Campbell’s Liberal Democrats”, but, surprisingly, did not use it at the general election.
Mr Reid: I think that the law was changed.
I understand that the hon. Member for Central Ayrshire chairs the all-party parliamentary group for the promotion of first past the post. He has continually extolled the virtues of the first-past-the-post system, but that is not my understanding of what his new clause actually means. I think that it would be more accurately described as promoting “first two past the post”.
Mr MacNeil: Does the hon. Gentleman agree that at least the alternative vote gives true believers in first past the post an opportunity to practise it? They can use their votes only once if they want. They can write “1”, or “X”, and not use any subsequent numbers. It is possible to use first past the post under an AV system, but the reverse is not the case.
Mr Reid: The hon. Gentleman has made a good point.
Mr Donohoe: I am going to have to accuse the hon. Member for Argyll and Bute (Mr Reid) of cherry-picking. He has read only part of my new clause. His problem can be solved by paragraph (b) of the new section (4A) proposed in subsection (6), which requires provision for
“the two candidates with the most valid votes to be elected in such constituencies.”
Mr Reid: Exactly. The two candidates with the most votes are the first two past the post. That is not first past the post. I think that the hon. Gentleman is signalling “two” to me. I will assume that that is what his gesture means, Mr Hoyle.
The Chairman of Ways and Means (Mr Lindsay Hoyle): I think that the hon. Member for Central Ayrshire (Mr Donohoe) was signalling “first two past the post” and nothing more. I am reassured, am I not, Mr Donohoe? Yes.
Mr Reid: Thank you for that clarification, Mr Hoyle.
In these constituencies two Members will be elected—the two who receive the most votes. That is not first past the post; it is first two past the post. I do not think that the hon. Member for Central Ayrshire understands his own new clause.
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Graeme Morrice: My understanding of the system is that there are two candidates, and therefore two votes. Of course that is based on first past the post. It is not dissimilar to the system that applies to local government elections in England when there are several candidates for several seats within a multi-member ward and electors have several Xs to put on a ballot paper.
Mr Reid: That is correct. However, two Members are elected: the first two. That is not first past the post.
The hon. Member for Central Ayrshire criticised the system for election to the Scottish Parliament in which the person who finished second in the constituency might still be elected on the list, but the same would apply under the strange system that he has come up with in the new clause.
Graeme Morrice: The hon. Gentleman has got this wrong. There would be two candidates—there could be two Labour candidates standing, or two Lib Dem, Tory or Scottish National party candidates—and the electors would have two votes. I would vote twice, and put down two crosses for two Labour candidates. There is not a second candidate, therefore; there are two firsts, and the electors have two votes—the two crosses.
Mr Reid: Yes, but some people might not vote for party tickets. This system is used in English local government elections, and it is very uncommon for the first two candidates to get exactly the same number of votes. One will finish first, and another will finish second, and sometimes where there is a close result candidates from different parties get elected.
Mr Donohoe: Even under the first-two-past-the-post system, it is highly possible that if a party candidate is unpopular for any reason, the electorate will choose one candidate from one party and another from a different party.
Mr Reid: Yes, that is possible, but there would still be two people elected, and the hon. Gentleman objected to having more than one person representing a constituency. He expressed objections about regional list Members holding surgeries in his constituency, but under the system he proposes there will be two people representing every constituency, so there are the same possibilities for disagreements and people duplicating casework. I find it illogical that the hon. Gentleman extols the virtues of first past the post, but proposes a different system.
The first-past-the-post or the first-two-past-the-post system could be very unfair. In the last Scottish Parliament election, the SNP got the most votes, and it rightly got the most seats. Let us consider what would have happened if we had adopted first past the post, however. In the constituency section, the SNP got 33% of the vote and Labour got 32%, but Labour won more than half the first-past-the-post seats—37 out of the 73 seats. Therefore, if we had purely been using a first-past-the-post system, even though the SNP was the clear winner of the election, the next morning we would have found we had a Labour Government with an overall majority, having more than half the seats.
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Mr Reid: The hon. Gentleman takes the words out of my mouth: it would have been disgraceful gerrymandering if the first-past-the-post system had been adopted in that election, because in an election where the people voted for the SNP there would have been a Labour Government—and not just a minority Labour Government, but one with an overall majority. What is unfair about first past the post and first two past the post is that what counts is not the number of votes a party gets, but how they are distributed.
Mark Lazarowicz: Does the hon. Gentleman accept that if we do the electoral calculations, it is clear that had the AV system been in operation for the Scottish Parliament, the Labour majority would have been even higher?
Mr Reid: There is no way of predicting what would have happened, because we do not know how people would have used their later preferences. The hon. Gentleman’s analysis is of interest, but I do not think we can make any such assumption.
Fiona O'Donnell: Does the hon. Gentleman agree that, once again, the constitutional cuckoo, the SNP, has benefited from a system drawn up by the Scottish Constitutional Convention, with which it did not even engage?
Mr Reid: I was certainly disappointed that the SNP did not engage, but it benefited from a system that had widespread support throughout Scotland and was endorsed by the Scottish people in a referendum.
Mr MacNeil: I am listening closely to the hon. Gentleman’s arguments, and it is clearly game set and match against first past the post. In response to the point of the hon. Member for East Lothian (Fiona O'Donnell), does it not make the SNP victory all the better given that we won by a set of rules we did not even design?
4.30 pm
Mr Reid: The SNP won because the election was fought on a fair set of rules—I hope that the hon. Gentleman will give the Liberal Democrats credit for participating in the Constitutional Convention and arguing and negotiating with the Labour party to get a proportional system. If his party had not gone off in a huff and had instead taken part in the Constitutional Convention, we might have got an even better system. He should be thanking the Liberal Democrats for the efforts we made.
The hon. Member for Central Ayrshire was arguing that one of the flaws with the current system relates to the number of MSPs who can turn up at health board meetings in Ayrshire and Arran—he cited a figure of 24. We have had arithmetical disputes before, but I calculate that 26 MSPs could attend. I have good news for him because the Boundary Commission has drawn up the new boundaries for the next elections and only 19 MSPs will be able to turn up to those meetings. However, he does have a point, and if he looks at the Arbuthnott report, he will find where a solution lies.
Sir John Arbuthnott’s report was set up by the previous Government to examine the problems of non-coterminosity. He proposed that we should make the regional list
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boundaries natural boundaries, rather than have the current unnatural boundaries. So, for example, the whole of Ayrshire would be covered by one regional list. There was a lot to be said for Sir John’s report. I did not agree with every part of the detail, but it was a pity that the previous Government did not take it more seriously. Importantly, the Arbuthnott commission said that when the overall result is proportional, it is less important that individual constituencies and individual regional lists all have the same number of electors than it is in a first-past-the-post system. As the final result will be proportional, it is less important for each constituency and list to be the same size. It would, thus, be better if the regional list boundaries for Scottish Parliament elections were drawn up first and constituencies were then fitted within the regional lists. That would allow us to get regional lists that are much closer to natural boundaries than the current system does.
Mr Donohoe: Will the hon. Gentleman concede that the biggest problem, in a party sense, of not having coterminous boundaries is that there is no accountability in respect of the list members, and that cannot be overcome on the basis of what he has just proposed?
Mr Reid: If the boundaries for the lists were natural ones, we would have much more accountability. For example, Ayrshire could be put with Dumfries and Galloway to form one regional list and we could, thus, have a much more natural boundary in south-west Scotland than we have at the moment.
Mr Davidson: I am listening with interest to what the hon. Gentleman is saying. He is arguing that if we have natural boundaries for the regional seats, it does not matter what size the individual constituencies are because we would have fairness overall. Such an approach would be very much to the benefit of the party, as it is a very party-focused means of coming to an arrangement. The parties would be doing okay, but we could have an enormous discrepancy in the “share” that any individual voter has of an MSP. I could be in a seat where there are 100,000 electors, whereas Orkney has just 14,000 electors, and clearly it would be expected that the person with only 14,000 people to represent would provide a much better service.
Mr Reid: That is a fair point. I would not propose having constituencies with anywhere near as many as 100,000 electors. Off the top of my head, I recall that the average Scottish Parliament constituency has about 55,000 electors, so the figure used would be close to that. Having individual constituencies that represent natural communities would make the work of the individual MSP much easier, because they would be representing a natural community, rather than a constituency that crosses a council or health authority boundary.
My preference would be to have the Parliament elected by the single transferable vote system in multi-Member constituencies—the same system that we use for local government. All MSPs would then be equal and we would not have the problem of conflict between constituency and regional list Members. I also outlined earlier how we could improve the present system. The important thing, however, is that we must have a
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proportional system in the Scottish Parliament. That is the only fair way for the whole of Scotland to be represented in the Parliament. It is what the Constitutional Convention agreed and what the Scottish people voted for in the referendum, so I urge the Committee to reject this backward-looking new clause and not to overturn the settled will of the Scottish people.
Pete Wishart (Perth and North Perthshire) (SNP): I do not think that anybody in this House can doubt the tenacity of the hon. Member for Central Ayrshire (Mr Donohoe) on this issue. In the course of the past 12 years or so, he has been absolutely consistent in his contempt for list Members of the Scottish Parliament and the whole concept of proportional representation. I am sure that what he says about there being a large constituency for his views is true and I certainly saw a lot of people nodding along with his speech. I want to explore the issue today to try to see what level of support there is for his views, particularly in the Labour party.
The amendment was tabled in the name of the hon. Member for Central Ayrshire and in the names of five of his hon. Friends—a substantial and significant amount of Scottish Labour Members. An awful lot of Scottish Labour Members support the notion that this House should dictate the membership and voting arrangements for the Scottish Parliament. He also says that there is more support in the Labour movement more widely. If that is the case, it alarms and shocks me and we should hear more about it. If a substantial minority—
Fiona O'Donnell: Will the hon. Gentleman give way?
Pete Wishart: I will give way to the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) first.
Mark Lazarowicz: I think that my hon. Friend the Member for East Lothian (Fiona O'Donnell) and I are going to make the same point. Arguments can be made—I hope to make them in a moment—against the exposition laid out by my hon. Friend the Member for Central Ayrshire (Mr Donohoe), but if the hon. Member for Perth and North Perthshire (Pete Wishart) is going to start playing the numbers game—we have had enough mathematics and arithmetic in the past hour or so—five out of 41 means just under one eighth of the Scottish Labour MPs, or less than 12.5%. Let us not overdo that argument.
Pete Wishart: I am grateful for that intervention, but it still seems an awful lot—almost an eighth, and there are six signatories. It also seems to me that the numbers are growing. I saw the heads nodding in agreement with the hon. Member for Central Ayrshire and I suggest and suspect that he has growing support. If he remains tenacious on this issue, his view might prevail in the Labour party. That is the direction in which things are going and that is what we are beginning to see.
Pete Wishart: I think that we have heard this point; is it on the same issue?