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House of Commons

Wednesday 20 November 2013

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Wales

The Secretary of State was asked—

Energy Infrastructure

1. Bob Blackman (Harrow East) (Con): What discussions he has had on new investment in energy infrastructure in Wales. [901093]

The Parliamentary Under-Secretary of State for Wales (Stephen Crabb): Wales is already attracting significant investment in new energy infrastructure. From Hitachi’s investment in new nuclear to promising marine energy projects such as the Skerries tidal stream array, Wales is proving that it can play a leading role in meeting our country’s energy needs.

Bob Blackman: It is good news that Wales is getting energy infrastructure, but what will my hon. Friend do to ensure that businesses and consumers can access it?

Stephen Crabb: I thank my hon. Friend for that question. This country needs more than £100 billion of new energy infrastructure investment in the next eight years. We at the Wales Office are determined that Welsh businesses should be at the forefront of those opportunities in Wales, which is why my right hon. Friend the Secretary of State will host an energy summit to explore with Welsh businesses the opportunities that this new investment will afford.

Hywel Williams (Arfon) (PC): Will the Minister assure the House that when an assessment is made of competing means of transmission, full consideration will be given to the full costs, including those to tourism and outdoor pursuit industries?

Stephen Crabb: I recognise the important point made by the hon. Gentleman and I followed the debate secured by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) yesterday evening on that very issue. It is clearly important that the distribution transmission companies take a view of all the costs involved, but there is concern that when we make these transmission projects more expensive—through, for example, underground cabling—the cost is ultimately borne by households who pay energy bills.

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Roger Williams (Brecon and Radnorshire) (LD): Anaerobic digestion is an important player in energy production in Wales. There appears to have been a problem in the feed-in tariff order scheme for anaerobic digestion of less than 500 kW, which could affect investment in the technology. Will the Minister work with the ministerial team in the Department of Energy and Climate Change to rectify this problem?

Stephen Crabb: I thank my hon. Friend for that question. We are very aware of the issue. A discussion is taking place with officials and colleagues at DECC. They are in contact with the trade body for the developers of such projects, and I hope a solution will be found soon.

Energy Costs

2. Huw Irranca-Davies (Ogmore) (Lab): What assessment he has made of the effect of recent increases in the cost of energy bills on living standards in Wales. [901094]

The Parliamentary Under-Secretary of State for Wales (Stephen Crabb): The recent price increases announced by the big six are unwelcome, especially at this time, which is why we are legislating to force energy companies to put people on the lowest tariff that meets their preference. We are also helping to keep bills lower by increasing competition in the market and opening up the marketplace for new independent suppliers to challenge the dominance of the big six.

Huw Irranca-Davies: Last week a friend of mine who works with elderly residents in Ogmore visited four elderly residents in one day. All four would not put on their heating because they were frightened of the effect on them of rising fuel prices. They sat in the cold. Yesterday, it snowed in Ogmore. Is not this the time to call for a freeze on prices so that elderly people are not afraid that they will freeze in their homes?

Stephen Crabb: As I said, the increases in bills are unwelcome at this time and we all know from our communities the pressures that puts on vulnerable households, but I would say to the hon. Gentleman that, on the slogan of a price freeze for energy, the Leader of the Opposition knows full well that that is not deliverable. We know from Labour’s track record in government that it was intensely relaxed about gas prices doubling, electricity prices going up by more than 50% and increasing fuel tax 12 times. It was too relaxed and complacent.

Robert Halfon (Harlow) (Con): Does my hon. Friend agree that one of the biggest impacts on the cost of energy is the high cost of petrol and diesel, and that the fuel duty freeze will mean that petrol and fuel duty will be 13p cheaper in tax terms and will help the cost of living enormously in Wales and across the country?

Stephen Crabb: My hon. Friend is exactly right. It is of particular benefit in rural Welsh areas, where average incomes are lower. By the end of this Parliament, average fuel prices will not be 13p per litre lower; they will be more than 20p per litre lower than under the previous Government’s plan.

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13. [901106] Jessica Morden (Newport East) (Lab): A report by the CAB last week showed that over the past three years energy bills have increased eight times more than earnings. Does the Secretary of State not share the concern that Wales has the highest energy bills of anywhere in the UK? If he does, why does he not tackle that far more urgently?

Stephen Crabb: Wales has some of the highest energy prices, but regional variations are partly due to higher transmission costs—an important component of an energy bill. That brings us back to the earlier question about wanting more expensive transmission projects in Wales, not cheaper ones. We are very aware of the pressure on households in Wales because of the energy prices increase, and we are not complacent about that.

Mr Mark Williams (Ceredigion) (LD): A particular concern in rural areas such as Ceredigion is the crippling price of domestic oil. What work will my hon. Friend do, including with the Department of Energy and Climate Change, to support oil syndicates and oil clubs and encourage bulk purchasing to reduce price?

Stephen Crabb: The collective purchasing power of communities and groups of buyers of oil might have a role in bringing down prices for consumers in rural areas. We are seeing that with switching as well. My colleagues at the Department of Energy and Climate Change are encouraging community groups to come together to strike collective switching agreements with companies to help bring down prices.

Mr Peter Hain (Neath) (Lab): With sky-high energy bills in Wales, which are higher than anywhere else, and a Tory-aligned think-tank saying that people are maxed out on personal debt—there are about 250,000 of them in Wales—does the Minister agree with the planning Minister, the hon. Member for Grantham and Stamford (Nick Boles), that his party is the party of the rich and that its members are seen as aliens and heartless extremists?

Stephen Crabb: The right hon. Gentleman is a member of a party about which one of his colleagues said it was “intensely relaxed” about people becoming filthy rich. It was intensely relaxed about many families on low incomes being pushed into greater household debt. We do not take that approach; we are trying to bring down household debt.

Guto Bebb (Aberconwy) (Con): Does the Minister agree that the Labour party claims to be concerned about the cost of living in Wales, yet on the one cost it can control, the council tax, it has failed miserably to support Welsh constituents?

Stephen Crabb: My hon. Friend is absolutely right. If Opposition Members were genuinely concerned about tackling the cost of living in Wales they would be hammering on the door of their Labour colleagues in the Welsh Government in Cardiff and demanding that they freeze council tax bills, as we have for households in England.

Nia Griffith (Llanelli) (Lab): Wales has seen the sharpest increase in the number of people falling behind with their energy fuel bills—up 24% from 68,000 two years

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ago to an alarming 85,000 households now in arrears. With SSE’s massive 8% price hike kicking in last Friday, will the Minister explain why he thinks it is not possible to deliver an energy freeze and to break up the six big energy companies to deliver a fairer system for the people of Wales?

Stephen Crabb: The uncompetitive big six were of course created by the previous Labour Government. We are opening up the marketplace to seven new independent suppliers, challenging the dominance of the big six and increasing competition in the marketplace, which will deliver lower bills for households in Wales.

SMEs

3. Mr Henry Bellingham (North West Norfolk) (Con): What plans he has to encourage growth in the small and medium-sized enterprise sector in Wales. [901095]

The Secretary of State for Wales (Mr David Jones): Small and medium-sized enterprises are vital to the economy in Wales and, indeed, the UK as a whole. That is why we have launched the Business is Great campaign, focusing on how we can further support these thriving businesses.

Mr Bellingham: I agree with the Secretary of State that small businesses in the Principality and across the country are the lifeblood of the economy. Considerable moves have been made already on the tax front and in lifting burdensome regulations. What more can he do, working with the Welsh Government, further to enhance wealth creation and the job-generating power of small businesses?

Mr Jones: My hon. Friend is absolutely right that SMEs are the backbone of the Welsh economy, and we are keen to do all we can to encourage them. That is why we have initiated the StartUp loans scheme, which has already lent about £50 million to more than 9,000 new businesses. With effect from this October, working with the Welsh Government, we have announced the scheme’s roll-out to Wales, so that any Welsh entrepreneur with a good idea can come forward and apply for a loan.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): The Secretary of State will know that SMEs in Dwyfor Meirionnydd are doing their best to thrive in the face of coalition austerity, as he visited the first ever Meirionnydd day the week before last. I thank him for attending it. However, the economic situation outside London is far different from down here, so why not make the National Insurance Contributions Bill, which is currently going through the House, apply everywhere outside London and south-east England, thereby mirroring a move in the Government’s emergency Budget of 2010?

Mr Jones: I did, indeed, enjoy my visit to the Meirionnydd day that the right hon. Gentleman held, and I was very impressed by the positive attitude of SMEs from his constituency. He will know that the national insurance contributions employment allowance will benefit 35,000 businesses across Wales by a total of £50 million,

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with 20,000 of those businesses being taken out employer national insurance contributions altogether, which I would have thought his constituents welcomed.

Mr Llwyd: Welsh exports were down by just under £1 billion over the past 12 months, which is the biggest fall in any UK nation or English region. What discussions is the Secretary of State having with the Chancellor to ensure that the Welsh producing economy, which is comprised mainly of SMEs, is not paying the price for a growing service and finance economy centred on London and the south-east?

Mr Jones: We are anxious to ensure that as many SMEs as possible export. That is a good reason for Welsh SMEs to utilise the services of UK Trade & Investment. UKTI has global reach and is available to every business, including those in Wales. I encourage the right hon. Gentleman to encourage his constituents to seek the services it offers.

Alun Cairns (Vale of Glamorgan) (Con): The extension of the StartUp loans scheme to Wales is fantastic news for budding entrepreneurs across the nation. Will the Secretary of State join me in calling on the enterprise agencies, such as Business in Focus, which serves the Vale of Glamorgan, to co-ordinate their activities in a campaign to get more people to start their own businesses?

Mr Jones: Indeed; we need more entrepreneurs in Wales to set up their own businesses. The roll-out of the StartUp loans scheme to Wales is extremely good news. It was done in co-operation with the Welsh Government and I was pleased to see their entirely positive attitude to it.

Geraint Davies (Swansea West) (Lab/Co-op): Swansea accepts that Hull, coming out of the shadows, not Swansea, continuing to shine, was named the UK city of culture for 2017. Does the Secretary of State agree that to maximise the growth of SMEs, we need to keep the momentum of the bid going, maximise the opportunity of the Dylan Thomas centenary and confirm Swansea as the city of culture of Wales?

Mr Jones: I agree entirely with the hon. Gentleman. While I congratulate Hull, I was bitterly disappointed that Swansea did not get the accolade of city of culture. Nevertheless, Swansea’s bid was an extremely good one and the networks that were built up can form a good platform for future enterprises. I agree that the Dylan Thomas centenary is a massive opportunity for Swansea.

M4 Motorway

4. Bill Wiggin (North Herefordshire) (Con): What assessment he has made of the potential effect on the Welsh economy of upgrading the M4 motorway. [901096]

6. Andrew Selous (South West Bedfordshire) (Con): What assessment he has made of the potential effect on Wales of upgrading the M4 motorway. [901098]

The Secretary of State for Wales (Mr David Jones): Upgrading the M4 is a key priority for the Government and for businesses in Wales. That is why we are enabling

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the Welsh Government to use their existing limited borrowing powers to begin work on upgrading the motorway as soon as possible.

Bill Wiggin: Will my right hon. Friend assure the House that he will continue to persuade his colleagues in the Welsh Government to work hard to ensure that there are improvements to the M4 around Newport?

Mr Jones: My hon. Friend is entirely right. That infrastructure improvement has long been called for, particularly by the CBI. An upgrade is grossly overdue. We have given the Welsh Assembly Government the borrowing powers that they need. We hope and expect that they will proceed with the upgrade as quickly as possible.

Andrew Selous: Is it the case that although funding to upgrade the M4 around Newport may not have been available in the past, the Government’s recent agreement to increase the borrowing powers of the Welsh Government means that the upgrade can now go ahead?

Mr Jones: Yes, indeed. The Welsh Government have already started the consultation process. I repeat that this is a massively important infrastructure improvement and we expect them to proceed with it as quickly as possible.

Kevin Brennan (Cardiff West) (Lab): One of my earliest memories is cramming into the back of my dad’s Ford Anglia in 1966 with my two sisters and my brother, and crossing the original M4 Severn crossing. Forty-seven years later, it costs £6.20 for a car, £12.40 for a van and £18.60 for a heavy goods vehicle. The second Severn crossing was built 17 years ago. Is it not time that we improved the Welsh economy by getting rid of those burdensome tolls?

Mr Jones: I agree with the hon. Gentleman that the tolls are a major impediment to businesses in south Wales. Having said that, these are important pieces of infrastructure that assist the south Wales economy immensely. As he will know, the franchise ends in 2017-18. At that time, we will look at ways to reduce the cost of crossing the Severn.

8. [901100] David T. C. Davies (Monmouth) (Con): Businesses and commuters have given a warm welcome to the announcement about the M4 relief road that was made by the Prime Minister and his deputy. Given that, what does the Secretary of State make of the headline in the South Wales Evening Post on Monday, which suggested that the Liberal Democrats in Wales oppose that vital piece of infrastructure?

Mr Jones: Having spoken to certain other Liberal Democrats, I can say that they are entirely in favour of the proposal. Both the Prime Minister and the Deputy Prime and Minister are united in wanting to see the road upgraded.

Borrowing Powers (Welsh Government)

5. Susan Elan Jones (Clwyd South) (Lab): When he plans to bring forward legislative proposals to give the Welsh Government borrowing powers. [901097]

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The Secretary of State for Wales (Mr David Jones): Our detailed response to the Silk Commission’s recommendations, which we published on Monday, confirmed that we will include proposals in a draft Wales Bill to give the Welsh Government borrowing powers. We will publish the draft Bill, for pre-legislative scrutiny, in the current parliamentary Session.

Susan Elan Jones: I welcome the fact that, after a year’s wait, we finally have a statement from the Secretary of State, but I would like to press him further, as he speaks of details. When will we know the basis on which the Welsh capital borrowing limits will be calculated? There is a precedent in the Scotland Act. Why will he not just say that he will follow that?

Mr Jones: I make no apologies for ensuring that the proposal was properly scrutinised. The package we announced is good for Wales and I am glad that it was welcomed by the Welsh Government, who will have new borrowing powers. The borrowing limit that will apply to those powers will be commensurate with the Welsh Government’s access to independent streams of funding to repay the borrowing they incur. The details will be placed on the face of the draft Bill when it is published.

Michael Fabricant (Lichfield) (Con): If the National Assembly for Wales is going to have borrowing powers, and if it is going to smell like a Parliament and look like a Parliament, is it not time that it became the National Parliament of Wales?

Mr Jones: I am not entirely sure how a Parliament smells.

Mr Speaker: Order. Noisy and discordant conversations are taking place in the Chamber. I am sure I am not alone in wanting to hear the Secretary of State’s answer to the hon. Member for Lichfield (Michael Fabricant).

Mr Jones: We have no plans to change the name of the Welsh Assembly.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): In Monday’s statement, the Secretary of State closely tied in borrowing powers with the income tax sharing arrangement between the UK and the Welsh Government. Will he confirm that the proposed sunset clause on the referendum has been dropped?

Mr Jones: We have no proposals to put a sunset clause in the Bill.

Living Wage

7. Mr David Hanson (Delyn) (Lab): What steps the Government are taking to increase the number of people in Wales who earn a living wage. [901099]

11. Chris Ruane (Vale of Clwyd) (Lab): What steps the Government are taking to increase the number of people in Wales who earn a living wage. [901103]

The Parliamentary Under-Secretary of State for Wales (Stephen Crabb): We support strong minimum wage legislation and rigorous enforcement as a way of protecting

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people on the lowest incomes. Decisions on wage rates above the minimum wage are for employers and employees to agree together.

Mr Hanson: According to a Barclays bank survey in my constituency, in the past year those earning £100,000 or more saw their spending power rise by 4.4%, while those on less than £15,000 saw their spending power fall by 5.6%. Does the Minister think that that has anything to do with Government policy? Will he work towards a minimum wage to help the 700,000 people in Wales who currently earn less than the living wage?

Stephen Crabb: I gently point out to the right hon. Gentleman that the vast majority of the decline in real wage values in his constituency and throughout Wales occurred in the last three years of the Labour Government. We are working incredibly hard to bring new jobs and investment to constituencies such as the right hon. Gentleman’s. If he is saying that those jobs are not welcome unless they pay more than £7.60 an hour, he needs to make that clear, but it would be a significant barrier to inward investment.

Chris Ruane: Welsh wages have fallen in 40 of the 41 months since the Government came to power in 2010. By the next election, Welsh workers will be £6,000 worse off than they were in 2010. What is the Minister doing to help Welsh workers improve their living standards?

Stephen Crabb: The best way to achieve better living standards for people in the hon. Gentleman’s constituency and throughout Wales is to tackle our problems head on, to take the responsible decisions and to do everything we can to encourage businesses to create jobs. That is why unemployment is falling in his constituency when it increased so rapidly under last five years of the Labour Government.

Jonathan Evans (Cardiff North) (Con): Surely the best way to raise living standards in Wales is to bear down on economic inactivity in Wales. Will my hon. Friend share with the House what has happened to economic inactivity since the 2010 election?

Stephen Crabb: My hon. Friend is quite right: economic inactivity and worklessness have been a curse on Wales for too long. Under the last Labour Government, economic inactivity rates averaged around 21%; under this Government they are down to around 21%. [Interruption.] We are not complacent: we want to go further with improving the situation.

14. [901107] Ann Clwyd (Cynon Valley) (Lab): In some parts of Cynon Valley, over half the children are living in poverty. Why?

Stephen Crabb: I am grateful to the right hon. Lady for that question. I visited her constituency and I am well aware of the deep-seated, long-entrenched problems there. I have been to the jobcentre in Aberdare and seen how hard the excellent team are working to tackle long-term unemployment, but there are no quick fixes. What we are doing, with the Work programme and our other efforts through the Department for Work and Pensions, is trying to bear down on worklessness and get more people into jobs.

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Taxation (Economy)

9. Karl McCartney (Lincoln) (Con): What assessment he has made of the potential effect on the Welsh economy of varying the current level of taxation in Wales. [901101]

The Secretary of State for Wales (Mr David Jones): The power to vary tax is an important way of driving economic growth and ensuring that Governments are accountable for the way they spend money. We will devolve certain taxes to the Welsh Assembly and Welsh Government and provide for a referendum, so that people in Wales can decide whether some of their income tax should be devolved, as in Scotland.

Karl McCartney: I thank my right hon. Friend for that answer. Could he explain what role devolving stamp duty land tax will play in stimulating the housing market in Wales, including in rural places such as Llanbedr Pont Steffan? Does he agree that the expansion of the Help to Buy scheme—

Mr Speaker: Order. Unfortunately the question has got nothing to do with the current level of taxation in Wales. [Interruption.] Come on, finish it off.

Karl McCartney Will the scheme help not only aspiring home owners in Wales, but my constituents in Lincoln?

Mr Jones: Devolution of stamp duty land tax should be an important tool in the armoury of the Welsh Assembly Government when addressing the issue of borrowing, but one would hope that they would seek to maximise the tax take by being inventive and adopting lower rates.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): What substantive planning is the Secretary of State doing for the Welsh economy to take full advantage of the benefits that Scottish independence will bring to these islands in the coming years? Surely tax-varying powers are the minimum requirement in Wales, so that it, too, will benefit in the way that Scotland will benefit in the years to come.

Mr Jones: The hon. Gentleman will understand that that is not an eventuality that I expect, and neither does the First Minister of Wales, who I am glad to see is in Scotland today, making the case for the UK being better together.

Owen Smith (Pontypridd) (Lab): On Monday, we heard in this House the Secretary of State commit his party to cutting a penny off income tax for taxpayers in Wales, including millionaires. I am sure he did not pluck that figure out of thin air; I am sure he consulted the Treasury. Will he therefore tell us what the precise cost to the Welsh budget will be of his proposed tax cut?

Mr Jones: The point I made was that a cut of one penny in the pound would do a tremendous amount to stimulate the Welsh economy. Let me repeat what I said to the hon. Gentleman on Monday. We in the Conservative party are ambitious for the people of Wales. We want to

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see the Welsh economy growing; he wants a Welsh economy reliant on handouts. That is the difference between our parties.

Owen Smith: No, the difference is that I want some answers. I assume from the Secretary of State’s answer that he did not consult the Chancellor and does not know how much the proposal will cost the Welsh budget, so let me help him out. The static effect is £200 million, or the equivalent of 5,000 teachers in Wales, so will he tell us which services he would propose cutting to pay for that tax pledge?

Mr Jones: The hon. Gentleman clearly does not get it. The issue of whether income tax should be devolved will be in the hands of the Welsh people. It will be up to the Welsh Assembly Government to make the decision to trigger that referendum. For our part, we want them to trigger that referendum, to call it, to elect for a lower rate of tax and to give Wales the competitive edge that so far it lacks under the Labour Welsh Assembly Government.

New Prison (North Wales)

10. Stephen Mosley (City of Chester) (Con): What assessment he has made of the potential economic effect of the proposed new prison in north Wales. [901102]

The Parliamentary Under-Secretary of State for Wales (Stephen Crabb): Our £250 million investment in a new prison in north Wales will be a significant driver for growth in the local economy and provide around 1,000 jobs. The prison is expected to contribute £23 million a year to the regional economy.

Stephen Mosley: Will the Minister join me in welcoming the fact that the prison will allow prisoners from north Wales and Cheshire to live closer to their families and maintain vital links with them, thus helping rehabilitation?

Stephen Crabb: My hon. Friend is exactly right. Aside from the important economic benefits to Wales of the new prison, importantly it will help families stay in closer touch with prisoners, which has been proven time and again to be a vital factor in whether people reduce their offending behaviour when they are out of prison.

Mr Speaker: I call Mr Crispin Blunt.

Hon. Members: Hear, hear.

Mr Crispin Blunt (Reigate) (Con) Good ideas have many parents, and I am sitting alongside two of them in the case of the prison in Wrexham. I urge my hon. Friend the Minister to make sure that, as a new large prison, it contains units that can deal with all the different types of offenders who will need to be addressed to produce the best rehabilitative effect, and that there are proper work facilities for prisoners under that regime.

Stephen Crabb: I thank my hon. Friend. Last week, I saw a great example of a large and diverse prison—Parc prison in Bridgend—which shows just how effectively different categories of prisoners can be brought together and offending behaviour can be tackled. We have exactly the same aspiration for the new prison in north Wales.

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Prime Minister

The Prime Minister was asked—

Engagements

Q1. [901145] Steve Brine (Winchester) (Con): If he will list his official engagements for Wednesday 20 November.

The Prime Minister (Mr David Cameron): I am sure the whole House will wish to join me in paying tribute to Warrant Officer Ian Fisher of 3rd Battalion the Mercian Regiment, who was killed on operations in Afghanistan on Tuesday 5 November. It is clear from the tributes paid that he was a professional and well respected soldier who made a huge contribution to the Army over many years on a number of operational tours. Our thoughts and our condolences should be with his family and his friends.

This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.

Steve Brine: I am sure every Member will want to associate themselves with the Prime Minister’s tribute—a reminder that in this season of remembrance we will in faith always remember their service to our country.

MPs from across the House will have grave concerns about the nightmare unfolding at the Co-operative bank. Does the Prime Minister share my sense of disbelief that a person such as Reverend Flowers, responsible as he was for such large sums of our constituents’ money, was ever appointed to the position of chairman? What can my right hon. Friend now do to find out how on earth that happened?

The Prime Minister: My hon. Friend makes an important point. Constituencies across the House will have people who hold Co-op bonds who are very worried about what will happen to their investment. Let me be clear that the first priority is to safeguard this bank—and to make sure that it is safeguarded without using taxpayers’ money. That must be the priority. My right hon. Friend the Chancellor will be discussing with the regulators what is the appropriate form of inquiry to get to the bottom of what went wrong, but there are clearly a lot of questions that have to be answered. Why was Reverend Flowers judged suitable to be chairman of a bank, and why were alarm bells not rung earlier, particularly by those who knew? In the coming days, it will be important for anyone who has information to stand up and provide it to the authorities.

Edward Miliband (Doncaster North) (Lab): I join the Prime Minister in paying tribute to Warrant Officer Ian Fisher of 3rd Battalion the Mercian Regiment. He died serving his country, and all our thoughts are with his family and friends.

Can the Prime Minister tell us how his campaign to save the Chipping Norton children’s centre is going?

The Prime Minister: I support children’s centres across the whole of the country. The fact is that, in spite of very difficult decisions that have to be made right across the country, the number of children’s centres has reduced by around 1%. Like all Members of Parliament, I fight very hard for services in my constituency.

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Edward Miliband: The Conservatives are going round saying that children’s centres are safe and there is no threat to them. Things are so bad that the Prime Minister has even signed a petition in his own area to save his local children’s centre. Can he clarify: is the petition addressed to his local Tory council, or is he taking it right to the top?

The Prime Minister: More people are using children’s centres than ever before in our country. The right hon. Gentleman does not want to give the figures, but there are 3,000 children’s centres. This Government can hold their head up high, because we are increasing the amount of money that is going to local councils for children’s centres. That is what is happening under this Government.

Edward Miliband: We all wish the right hon. Gentleman luck in his fight as a local Member of Parliament. Imagine what he could achieve if he were Prime Minister of the country!

I think that we have established the Prime Minister’s double standards in Oxfordshire. Let us take another example. In Tory Essex—[Interruption.] I know that the Tories do not care about children’s centres, but they should hush down a bit and listen. In Tory Essex, they propose to close 11 centres and downgrade 37, whose opening hours will fall from 50 a week to as few as five. So there will be fewer centres, fewer staff and fewer hours. How is that doing what the Prime Minister promised to do before the election, which was to protect and improve Sure Start?

The Prime Minister: Let me tell the right hon. Gentleman what is happening to child care under this Government. For the first time ever, there are 15 hours a week of child care for every three and four-year-old in the country. That never happened under Labour. For the first time, under this Government, there are free child care hours for every disadvantaged two-year-old in the country. That never happened under Labour. Also, to come, there will be tax-free child care under this Government. That never happened under Labour. And the child tax credit has been upgraded by £420 under this Government. That is what is happening, but let me be clear: there is one policy that we will not adopt, and that is Labour’s policy of funding more hours through its bank levy. I will tell you why: Labour has already spent the bank levy 10 times over. The youth jobs guarantee, VAT cuts, more capital spending—Mr Speaker, that is not a policy; it is a night out with Reverend Flowers.

Edward Miliband: Let us talk about the people the Prime Minister associates with—[Interruption.]

Mr Speaker: Order. Let the House calm down. I am concerned, as always, about Back Benchers, and Back Benchers who want to speak should be accommodated, so calm down and let us move on.

Edward Miliband: The Prime Minister obviously wants to talk about who he associates with. He has taken nearly £5 million from Michael Spencer, whose company was found to be rigging LIBOR; he has a party chairman who operated a company under a false name and was investigated for fraud; he has taken millions from tax exiles and tax avoiders; his party has never paid back the money from Asil Nadir—and they are just the

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people I can talk about in this House. Did not the planning Minister have it right yesterday, when he said

“the single biggest problem the Conservative party faces is being seen as the party of the rich”?

The Prime Minister: How extraordinary that, today of all days, the right hon. Gentleman wants to talk about the people he associates with and takes money from, because what we can now see is that this bank, driven into the wall by this chairman, has been giving soft loans to the Labour party, facilities to the Labour party, donations to the Labour party, has trooped in and out of Downing street under Labour, and is still advising the leader of the Labour party—and yet now we know that Labour knew about his past all along. Why did Labour do nothing to bring to the attention of the authorities this man who has broken a bank?

Edward Miliband: I think we can take it from that answer that the Prime Minister does not want to talk about his planning Minister. Where is the planning Minister? Where is he today? Only last January, the Prime Minister was praising him to the rafters, saying that he was leading the debate. I think that the House should hear more from him. This is what he says about the Tory party: that it stands for people who

“work for private equity”

and

“make a ton of money.”

He is right, isn’t he?

The Prime Minister: We have finally found a public inquiry that the right hon. Gentleman does not want. He comes to the House and asks for inquiry after inquiry into the culture and practices of this and that, but when it comes to the Co-op bank, he is absolutely frightened of it.

This is also an interesting week in which to talk about people on the Front Bench. This week, the right hon. Gentleman referred to his own shadow Chancellor as a “nightmare”. I am sorry; I hate to say “I told you so”, but I have been saying that for three years. However, that is not the most interesting thing in this fascinating exchange of e-mails. Labour’s head of strategy—yes, they do actually have one—replied to the shadow Chancellor:

“When did built to last become a part of our thing?”

I agree. Their policies are not built to last; they are built to self-destruct in about five seconds.

Edward Miliband: What the Prime Minister has shown comprehensively today is that he has no answers on the cost of living crisis facing families up and down the country. That is the truth and his close friend the planning Minister is right. [Interruption.]

Mr Speaker: Order. The House must calm down. Questions will be heard, however long it takes; it is very simple.

Edward Miliband: The Prime Minister’s close friend the planning Minister is right. He says this: there are many people who “don’t like” the Tory party and “don’t trust” its motives, and he says that the Prime Minister is not the man to reach them. What he is really saying is that this Prime Minister is a loser.

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The Prime Minister: What this proves is the right hon. Gentleman cannot ask about the economy because it is growing, he cannot ask about the deficit because it is falling, he cannot ask about the number of people in work because that is rising, and he cannot even ask about banking because he is mired in his own banking scandal. [Interruption.] What we have learned in the last fortnight is that he is too—[Interruption.]

Mr Speaker: Order. The Prime Minister’s answer must, and will, be heard.

The Prime Minister: What we have learned in the last fortnight is that the right hon. Gentleman is too weak to stand up to his paymasters in the trade unions, too weak to stand up to his bankers and too weak to stand up to his shadow Chancellor. We all know that it would be a nightmare, and that is why we are dedicated to making sure the British people do not have to live through it.

Q2. [901146] Jackie Doyle-Price (Thurrock) (Con): My right hon. Friend will recall visiting the London Gateway port in Thurrock, which is now open for business, but is he as appalled as I am to hear that Unite is picketing the potential clients of that port and encouraging its sister unions to boycott any ship that docks there? Is that not more evidence that Unite’s bully-boy tactics cost jobs, not save them?

The Prime Minister: My hon. Friend is absolutely right. I have visited the London Gateway port and it is one of the most compelling things I have seen in recent years about Britain’s industrial renaissance. It is an extraordinary investment that is going to be of huge benefit, bringing about 12,000 direct and indirect jobs. She is absolutely right about the dangers of union intimidation and bully-boy tactics. That is why it is important that we have a review and, frankly, it is important that both Unite and the Labour party take part in that review.

Mr Nigel Dodds (Belfast North) (DUP): I am sure the Prime Minister will agree that the victims of terrorism deserve not just words of sympathy but our full support and help and must be at the core of any process dealing with the past in Northern Ireland. Given the very worrying statement by the Attorney-General for Northern Ireland overnight, made on his own account and his own behalf and without consultation, does the Prime Minister agree there can be no question of an amnesty for any terrorist atrocities and crimes and that all victims of terrorism deserve truth and justice?

The Prime Minister: First, let me agree with what the right hon. Gentleman has said, which is that the words of the Northern Ireland Attorney-General are very much his own words and not made at the behest of anybody else. I can reassure the right hon. Gentleman that the Government have no plans to legislate for an amnesty for crimes that were committed during the troubles. As he knows, Richard Haass is currently consulting all the Northern Ireland parties on issues from the past as well as parades and flags, and I think that is the right forum in which to discuss these issues.

Q3. [901147] Sir Tony Baldry (Banbury) (Con): General Synod is meeting today and hopefully will find a way to enable women as soon as possible to be consecrated as bishops in the Church of England. If this is successful,

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will my right hon. Friend and the Government support amendments to the Bishops Act to ensure that women bishops can be admitted to the House of Lords as soon as possible rather than new women bishops having to queue up behind every existing diocesan bishop before we can see women bishops in Parliament?

The Prime Minister: My hon. Friend follows these matters closely and asks an extremely important question. I strongly support women bishops and hope the Church of England takes this key step to ensure its place as a modern Church in touch with our society. On the problem he raises—there is, of course, a seniority rule for bishops entering the House of Lords—the Government are ready to work with the Church to see how we can get women bishops into the House of Lords as soon as possible.

Q4. [901148] Katy Clark (North Ayrshire and Arran) (Lab): Does the PM believe that the proposal from the Conservative Free Enterprise Group, supported by 42 of his own MPs, to put VAT on food and children’s clothes shows the true face of the party he leads?

The Prime Minister: I do not support that policy.

Mr Adrian Sanders (Torbay) (LD): I recently joined the Plough and Share credit union in my constituency. Credit unions can help to ensure that a lot of people do not have to go to payday lenders. What more can the Government do to support credit unions and encourage anybody with a few pounds to spare to put them into a credit union and take trade away from awful payday lenders?

The Prime Minister: I am grateful to my hon. Friend for raising this issue. The Government strongly support credit unions and think them a big part of the answer to the problems of payday lending. We have invested £38 million in credit unions and want to see them expand. Also, for the first time, we are properly regulating payday lending through the new regulator and are prepared to consider all the steps that can be taken to sort out this problem.

Q5. [901149] Alex Cunningham (Stockton North) (Lab): Today is universal children’s day, and the Prime Minister will be aware that Save the Children has highlighted the importance of early years in children’s development. Does he accept that the closure of three Sure Start centres a week is undermining the life chances of countless needy children?

The Prime Minister: I would challenge the hon. Gentleman’s figures. Whereas the pot of money for children’s centres was £2.3 billion in 2012-13, it is going up to £2.5 billion in 2014-15; there are 3,000 children’s centres open; and as I said, only about 1% have closed, so I think the Government have an excellent record on this front.

Q6. [901150] Mr David Burrowes (Enfield, Southgate) (Con): Now that the changes to Enfield’s A and E and maternity services have been given the green light—not by politicians and bureaucrats, as happened under the previous Government, but by local GPs—will the

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Prime Minister confirm that Enfield is getting increased primary care funding and that Chase Farm hospital is getting 24/7 access to urgent care?

The Prime Minister: First, let me pay tribute to my hon. Friend, who I know has worked hard on this difficult issue for his constituents. I understand that the Barnet, Enfield and Haringey strategy has been approved, and once it has been implemented Chase Farm hospital will provide a service giving access to GPs 24 hours a day, seven days a week. Enfield is also getting an increase in primary care funding. That is part of our plan of not cutting but expanding our NHS.

Karl Turner (Kingston upon Hull East) (Lab): Will the Prime Minister join me in congratulating the good people of Hull on winning the city of culture 2017?

The Prime Minister: I am absolutely delighted to join the hon. Gentleman, and everyone in Hull and around the country, in celebrating this great award of the city of culture to Hull. It is a very exciting opportunity for Hull. We will be able to celebrate the birthplace of Wilberforce and the fact that Andrew Motion lectured there and Philip Larkin was the librarian. Slightly more incongruously, Peter Mandelson is the high sheriff—but every city has its burden to bear. And of course Hull has a fantastic record on popular music. I remember some years ago that great Housemartins album, “London 0 Hull 4”—so named because they said they were the fourth-best band in Hull. I am sure it will be a huge success for Hull and for Humberside more generally.

Q7. [901152] Mary Macleod (Brentford and Isleworth) (Con): My constituency registered 600 new business start-ups last year, putting it among the top-10 places in the UK for new business growth. In preparation for small business Saturday on 7 December, will my right hon. Friend meet me to discuss a review of business rates to encourage future growth, especially in London, where rateable values are very high and therefore rates are excessive?

The Prime Minister: I am very happy to discuss this issue with my hon. Friend, who always stands up for business and enterprise. She refers to the number of start-ups. It is a real success story for our country, with an extra 400,000 businesses now operating. The Minister for Skills and Enterprise, my hon. Friend the Member for West Suffolk (Matthew Hancock), will shortly be telling the House about the 10,000th StartUp loan—a Government scheme that has got off the ground extremely quickly. Of course, there are concerns about business rates, and I am happy to discuss those with her, but may I take this opportunity to encourage all colleagues to take part in small business Saturday? It is a brilliant initiative that worked well in the United States and which will allow everyone to demonstrate how much they care about small businesses on our high streets.

Sarah Champion (Rotherham) (Lab): Does the Prime Minister agree with his planning Minister that when modern Britain looks at the Conservative party it sees an old-fashioned monolith?

The Prime Minister: We have had some interesting interventions from Front Benchers past and present. I hope I can break records by explaining that a tweet has

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just come in from Tony McNulty—we remember him—the former Labour Security Minister, saying this:

“Public desperate for PM in waiting who speaks for them—not Leader of Opposition indulging in partisan Westminster Village knockabout.”

So I would stay up with the tweets if you want to get on the right side of this one.

Q8. [901153] Dr Matthew Offord (Hendon) (Con): I refer the House to the Register of Members’ Financial Interests because I have recently returned from a delegation to Israel—[Interruption.]

Mr Speaker: Order. I want to hear the words of Dr Offord, and at the moment I cannot hear them.

Dr Offord: I will repeat my declaration, Mr Speaker. I refer the House to the Register of Members’ Financial Interests as I have recently returned from a delegation to Israel and the Palestinian Authority with Conservative Friends of Israel. On the Israeli streets and in the corridors of power, Iran remains the No. 1 issue of concern. Earlier this week, French President Hollande visited Israel to discuss this matter with Israeli counterparts and appears to have clearly understood Israel’s legitimate concerns. When will our Prime Minister be visiting Israel, our close democratic ally in the region, to discuss the Iranian nuclear issue and other regional concerns?

The Prime Minister: I thank my hon. Friend for his question. I know that many people in his constituency care deeply about this issue and about the future of Israel. I will never forget the visit that I made as Leader of the Opposition, and I look forward to visiting, I hope, next year. I completely understand—

Sir Bob Russell (Colchester) (LD): What about the Palestinians?

The Prime Minister: Of course. When I went to Israel, I visited not only occupied east Jerusalem but other places in Palestine as well, as is proper. I do understand the very real concern that Israelis have about the potential Iranian nuclear weapon. That is why I spoke to President Rouhani of Iran last night to make it clear that we want a good outcome to these talks, but it has got to be an outcome that takes Iran further away from a nuclear weapon rather than one that retains the status quo.

Mr Peter Hain (Neath) (Lab): While agreeing with the right hon. Member for Belfast North (Mr Dodds) that there should be no question of an amnesty, surely there is some merit in the proposal from the Northern Ireland Attorney-General that rather than incurring enormous expenditure pursuing crimes committed during the troubles decades ago—where the evidence is difficult, if not impossible, to establish—the justified grievances of victims, including widows of police officers and prison officers, should be addressed in other ways so that Northern Ireland can move on from its hideous past.

The Prime Minister: I have great respect for the right hon. Gentleman’s views on this issue. He served in Northern Ireland and knows how important these issues are. I would make two points. First of all, I do think it is important to allow Richard Haass to do his work about parades, about flags and about dealing with the past.

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Clearly, the dealing with the past part is the most difficult of the three and the most difficult to unlock. The second point I would make is that we are all democrats who believe in the rule of law and believe in the independence of the police and prosecuting authorities, who should, if they are able to, be able to bring cases, and it is rather dangerous to think that you can put some sort of block on that. But of course we are all interested in ways in which people can reconcile and come to terms with the bloody past so that they can build a viable future and a shared future for Northern Ireland.

Q9. [901154] Mr David Ruffley (Bury St Edmunds) (Con): The people and the businesses of Suffolk are driving economic growth in the east of England, but they are increasingly fearful that the proposed A14 road toll will put Suffolk at a serious competitive disadvantage compared with other counties. Will my right hon. Friend seriously reconsider the current road toll proposal?

The Prime Minister: I will, and I know the Chancellor and the Transport Secretary will, listen carefully to the representations made by Suffolk MPs. I think we have all received representations. The important point is that we want new roads to be built, and we all know there are shortages in terms of the capital expenditure that we can bring forward. That is why the idea of having tolling for some new roads and new schemes is properly worth looking at, but we will listen carefully to colleagues and people in Suffolk, and businesses in Suffolk too.

Mr Tom Harris (Glasgow South) (Lab): Bereaved parents coming to terms with their loss have no right to paid employment leave, which forces many of them to go back to work far too soon after the death of a child. Will the Prime Minister commit to amending the Employment Rights Act 1996 so as at last to give British parents the legal right and the time to grieve?

The Prime Minister: The hon. Gentleman raises an important issue, and I am happy to look at that, having suffered that experience myself. As a Member of Parliament, it is possible to take a little bit of time to stand back and come to terms with what has happened, because colleagues and the people who help us are ready to step in and do what they can. He has raised an important point; let me look at it and get back to him.

Nuclear Deterrence

Q10. [901155] Dr Julian Lewis (New Forest East) (Con): If he will rule out the removal of continuous at-sea nuclear deterrence for as long as he is in office.

The Prime Minister: As I told my hon. Friend when he last asked about this issue, if we want a proper, functioning deterrent, we need to have the best. That means a permanent, at-sea, submarine-based posture, and that is what a Conservative-only Government after the next election will deliver.

Dr Lewis: May I reassure my right hon. Friend that that excellent answer will remain on my website for as long as it takes for the pledge to be fulfilled? I notice that he used the words “Conservative-only Government”.

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Will he reassure the House that never again will Liberal Democrats be allowed to obstruct or delay the signing of the main gate contracts, and will he undertake to sign those contracts at the earliest possible opportunity?

The Prime Minister: I would say a couple of things to my hon. Friend. First, investment in our nuclear deterrent has not ceased. Actually, we are taking all the necessary steps to make that main gate decision possible. Also, we have had the alternative study, which I do not think came up with a convincing answer. I have to say, however, that I do not feel that I would satisfy him even if I gave him a nuclear submarine to park off the coast of his New Forest constituency. [Laughter.]

Mr Speaker: I rather fear that that is true, having known the hon. Member for New Forest East (Dr Lewis) for over 30 years.

Engagements

Mr Michael Meacher (Oldham West and Royton) (Lab): Is the Prime Minister aware that, according to The Economist, Britain is now 159th lowest in the world in terms of business investment, just behind Mali, Paraguay and Guatemala? Will he therefore please tell the House when, under his esteemed leadership and that of his Chancellor, Britain can expect to catch up with Mali?

The Prime Minister: I can only conclude that the right hon. Gentleman, too, has been on a night out on the town with Rev. Flowers and that the mind-altering substances have taken effect. The fact is that in the first six months of this year, Britain has received more inward investment than any other country anywhere in the world.

Q11. [901156] Mr Stephen O’Brien (Eddisbury) (Con): Had my right hon. Friend and the Government taken the advice of the Opposition, what would have been the impact on the cost of fuel and what would have been the consequences for families?

The Prime Minister: My hon. Friend makes an important point. Let us look at the cuts and freezes on fuel duty that we have made. Fuel duty would be 13p a litre higher under Labour’s plans than under our plans. To use a simple word, it would be a “nightmare”.

Bill Esterson (Sefton Central) (Lab): The Prime Minister’s own Education Department has said that it has closed 578 children’s centres. How is that protecting Sure Start?

The Prime Minister: I gave the hon. Gentleman the figures, but I am afraid that he was unable to think on his feet and alter his question. The fact is that there are 3,000 such centres open, and only around 1% have closed.

Q12. [901157] Neil Parish (Tiverton and Honiton) (Con): Aston Manor brewery in my constituency has invested £10 million and created lots of jobs in Tiverton. The OECD has upgraded its forecast for Britain while downgrading global forecasts. Does my right hon. Friend agree that reducing debt is the way to get the economy moving, rather than incurring more debt, as the party opposite would do?

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The Prime Minister: I am grateful to my hon. Friend for that question. The OECD forecast that came out this week shows a massive increase in the forecast for UK growth over the next couple of years. Of course, the Opposition do not want to talk about the economy. They told us that we were going to lose 1 million jobs, but we gained 1 million jobs. They told us growth would be choked off, but growth is growing in Britain. That is what is happening. The nightmare of the shadow Chancellor wants to talk about everything else. When it comes to debt, let me just remind him of this important point, which is directly relevant to the issue of debt. The former Mayor, Ken Livingstone, said this:

“Gordon Brown was borrowing £20 billion a year at the height of the boom in the first decade of this century in order to avoid having to increase taxes, because he wanted to increase public spending. It was an act of cowardice.”

That is, if you like, the “daymare”. [Interruption.] We are also hearing ranting from the nightmare.

Teresa Pearce (Erith and Thamesmead) (Lab): The housing—[Interruption.]

Mr Speaker: Order. The hon. Lady has a right to put her question and to be heard when she does so, and that is what is going to happen.

Teresa Pearce: Thank you, Mr Speaker. The housing association that is landlord to some of the poorest people in my constituency recently voted its chief executive a non-contractual redundancy pay-off of £397,000. Will the Prime Minister join me in condemning the board’s action and asking for it to be repaid and invested in much-needed tenant services?

The Prime Minister: I am very happy to look at the case the hon. Lady mentions, because some of these pay-offs really are completely unacceptable, and we need to make sure that local authorities properly take responsibility for stopping such high pay-offs. In terms of other parts of the economy, we are making sure that if people are re-employed, having taken these pay-offs, they have to pay back the money. I think that is vitally important, and perhaps it might apply in this case too.

Mr James Arbuthnot (North East Hampshire) (Con): Does my right hon. Friend agree that a key element of the success of the plan for the Reserves would be if he joined with the Leader of the Opposition in inspiring employers to recognise that its success—because there is no plan B—is in the national interest?

The Prime Minister: I completely agree with my right hon. Friend. This is an important programme for the future of the country. Of course I understand hon. and right hon. Members’ concerns about this, but if we pass the amendment in the name of my hon. Friend the Member for Basildon and Billericay (Mr Baron), that would simply stop us investing in and improving our Reserves, rather than changing the overall stance.

I have noticed that Labour put out a statement today, saying,

“We are not calling for the reforms to be reversed. We are not saying the reforms should be shelved.”

In that case, if they vote against the Government, one can only assume that it is naked opportunism.

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Mrs Mary Glindon (North Tyneside) (Lab): Can the Prime Minister explain to the House why he wanted to delete his pledge of no cuts to public services from the Conservative party website?

The Prime Minister: What we promised is that we would not cut the NHS, and we have not cut the NHS. We made it absolutely clear before the last election we

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would have to take difficult decisions, but it is because of those difficult decisions that the deficit is coming down, employment is growing, there are 1 million more people in work and our economy is doing better. If we followed the advice of the party opposite, we would have more spending, more borrowing, more debt—all of the things that got this country into the mess in the first place.

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Point of Order

12.34 pm

Mr Michael Meacher (Oldham West and Royton) (Lab): On a point of order, Mr Speaker. As you will have heard and as everyone else in the House heard, I asked a perfectly reasonable question that was based on clear documentary evidence, as I indicated. Is it parliamentary for the Prime Minister to respond by accusing another right hon. Member of sounding as if he has been taking mind-altering substances? Is that—[Interruption.]

Mr Speaker: Order. The right hon. Gentleman will complete his point of order. The Prime Minister has indicated a readiness to respond, and that is how we will proceed. A bit of patience is all that is required.

Mr Meacher: I want to ask, Mr Speaker, whether it is parliamentary to use such an unjustifiable, rude and offensive phrase about another hon. Member.

The Prime Minister: I completely respect the right hon. Gentleman and the important question he asked, which I tried to answer with the point about inward investment into Britain. I made a light-hearted remark—if it caused any offence, I will happily withdraw it. I think it is very important that we can have a little bit of light-hearted banter, and a sense of humour on all sides.

Several hon. Members rose—

Mr Speaker: I was looking for the hon. Member for Bromley and Chislehurst (Robert Neill) and I am pleased to have found him. We will just wait for a moment so that an attentive House can hear him.

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Gibraltar

12.36 pm

Robert Neill (Bromley and Chislehurst) (Con) (Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the unauthorised incursion of a Spanish naval vessel into British territorial waters at the entrance to Gibraltar harbour on 19 November 2013.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds): On 19 and 20 November 2013, RV Ramon Margalef, a Spanish Government research vessel made an unlawful incursion into British Gibraltar territorial waters that lasted 22 hours in total. During that time, the vessel undertook significant survey activity. Vessels of the Royal Navy Gibraltar Squadron challenged the vessel with radio warnings and continued to shadow the vessel until it departed. The Ramon Margalef was joined in British Gibraltar territorial waters by three vessels of the Spanish Guardia Civil, which attempted to act as escorts to this vessel. The Guardia Civil vessels were also challenged and shadowed by the Royal Navy until they left Gibraltar waters.

Yesterday evening, the Foreign Office summoned the Spanish ambassador to the UK in order to underline the British Government’s serious concerns regarding this provocative and unlawful incursion by a Spanish state research vessel. During the meeting, the ambassador was again reminded of our continued concerns regarding border delays, which continue on a near-daily basis, and our desire to move relations on to a more positive track through ad hoc talks, as proposed by the Foreign Secretary in April 2012.

Yesterday’s incursion occurred despite repeated diplomatic protests to Spain in recent months, and comes only two weeks after a dangerous manoeuvre by Guardia Civil vessels put lives at risk and resulted in a minor collision. According to the United Nations convention on the law of the sea, the waters around Gibraltar are indisputably British territorial waters, under United Kingdom sovereignty, in which only the United Kingdom has the right to exercise jurisdiction. We remain confident of UK sovereignty over the whole of Gibraltar, including British Gibraltar territorial waters.

The British Government strongly condemn this provocative incursion and urge the Spanish Government to ensure that it is not repeated. We stand ready to do whatever is required to protect Gibraltar’s sovereignty, economy and security. We believe that it is in the interests of Spain, Gibraltar and Britain to avoid incidents such as this, which damage the prospects for establishing dialogue and co-operation. The UK wants to maintain our strong bilateral relationship with Spain, which stretches across a range of areas and delivers support for UK and Gibraltarian interests. However, the Spanish Government are wrong if they believe that they can advance Spain’s position on sovereignty by increasing pressure on Gibraltar, whether at the border, through unlawful incursions or by other actions, such as complaints and posturing in the EU.

Robert Neill: I am grateful to the Minister for his response. Does he agree that this is just the latest incident in an escalating and cynical campaign of harassment of the people of Gibraltar by the Government

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in Madrid for their own domestic reasons? Will he conclude that it is now the time not only to make strong diplomatic representations, but to take specific legal action against Spain through the international courts for the clearest possible breach of international law? Furthermore, does he think that we should discuss with Her Majesty’s Government in Gibraltar the possibility of reinforcing the naval presence that supports our forces in Gibraltar by means of a larger, deeper depth patrol boat or of an ocean-going tug that will be able to remove offending vessels from British territorial waters in a way that our current admirable patrol boats are not able to do?

Mark Simmonds: I thank my hon. Friend for articulating the concern of many people both inside and outside this House, across the United Kingdom and in Gibraltar. It may be helpful if I give the House the most up-to-date information and the facts. It was not a Spanish naval vessel that went into British territorial waters, but a Spanish-owned oceanographic vessel. It did not get to the entrance of Gibraltar harbour, but was about 250 metres from it. It needs to be reiterated that an escalation of this matter is in nobody’s interest. A political solution to the dispute is required. Of course nothing is taken off the table. We constantly review the naval presence in and around Gibraltar, and we are certainly doing so now. We are keen to return to the ad hoc talks, from which the current Spanish Government withdrew in 2011, involving both the British and Spanish Governments and also the Government of Gibraltar.

Mr Gareth Thomas (Harrow West) (Lab/Co-op): I congratulate the hon. Member for Bromley and Chislehurst (Robert Neill) on securing this urgent question. I rise now to underline the deep concern on the Labour Benches that further Spanish ships entered British Gibraltar territorial waters yesterday without authorisation and stayed for more than 20 hours. Spain is our ally in NATO and on the world stage and is often our ally in the European Council, so its actions on Gibraltar are even more reprehensible in that context. The Spanish Government should be in no doubt that both sides of the House share the anger about yesterday’s events.

Will the Minister tell the House when he or other Ministers became aware of the Spanish ship’s incursion into our waters yesterday, and whether any effort was made during the 20 or more hours the ship was in our waters to contact officials or Ministers in the Spanish Government to demand that the ship be ordered to withdraw?

I welcome the decision by Ministers yesterday to again summon the Spanish ambassador. Is the Minister or the Foreign Secretary planning further calls to their Spanish Government counterparts to underline the seriousness with which this latest action is viewed? Gibraltar cannot and should not be used by Spain’s Government to score cheap political points.

The Chief Minister of Gibraltar is quoted as saying that he has discussed the possibility of more senior assets of the Royal Navy being put at the disposal of the commander of British forces in Gibraltar. Will the Minister give us more information on those discussions and tell us whether he has had, or intends to have, further talks with the European Commission on the ongoing delays at the border?

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Finally, the Minister made brief reference to the Spanish Government having pulled out of the trilateral forum in 2011. Does he see any sign of the Spanish accepting the need to return once again to the use of that sensible diplomatic channel for discussions?

Mark Simmonds: The hon. Gentleman asked a series of questions. I first became aware of this incursion yesterday morning. The House will not be surprised to learn that there were contacts between the British Government and the Spanish Government to encourage the Spanish Government to ensure that the vessel was removed from British Gibraltar territorial waters. I can give the hon. Gentleman an assurance that, as far as I am aware—this was the situation when I came to the House to answer the urgent question—the vessel had not returned to British Gibraltar territorial waters as was its intention yesterday, so those contacts have had some impact. The discussions about whether the naval presence in and around Gibraltar is correct are ongoing and the hon. Gentleman will not be surprised that I will not go into the detail at this stage. We are also in constant contact with the Government of Gibraltar to ensure that the information being provided is available to the Governments of both the UK and Gibraltar.

Let me also address the point that the hon. Gentleman made about the European Commission and its role in trying to settle this political dispute. He will be aware that the Commission visited the border on 25 September and will not be surprised to hear that there were few delays during that visit. The Commission has committed to monitoring the situation and possibly to returning in six months’ time. We continue to provide evidence to the Commission about what we believe is the unlawful Spanish activity. We also urge the Spanish to implement the recommendations made by the Commission to the Spanish Government about how they can improve ease of access across the border. Those recommendations are to optimise physical space on the Spanish side, including increasing the number of vehicle lanes; to carry out more targeted checks, particularly as they relate to the significant problem of tobacco smuggling; and to develop a mechanism to exchange information with the United Kingdom specifically to target tobacco smuggling.

Sir Menzies Campbell (North East Fife) (LD): I commend my hon. Friend for his measured and carefully considered answer to the question. He will be well aware that the purpose of provocation is to provoke—that is, to provoke a reaction that justifies the initial action of provocation. I hope therefore that his policy will be to ensure that the United Kingdom does not fall into that trap. May I go back to the question of NATO, however? Under article 5 of the north Atlantic treaty, all members of NATO are obliged to regard an attack on one as an attack on all. Under those circumstances, is not the NATO route perhaps one of the most effective diplomatic routes that could be followed in this case to bring some sense to the attitude of the Spanish Government?

Mark Simmonds: My right hon. and learned Friend makes an important point. Of course, we have strong and positive relations with Spain in a range of areas. Approximately 1 million UK citizens live in Spain and approximately 14 million UK citizens visit Spain each and every year. He is absolutely right to focus on the

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importance of not responding aggressively to this provocation and to re-emphasise and reiterate the necessity to de-escalate what is a political dispute. My right hon. and learned Friend’s point about NATO is absolutely right, although the UK Government do not consider this a military attack. At no time has the Spanish navy come into British Gibraltar territorial waters.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): The Minister says that a political solution is needed, but surely he would accept that we have a political solution. Gibraltar is British, the people of Gibraltar wish to remain British and that is that. Will he make it absolutely clear to the Spanish Government that this constant harassment is unacceptable, that if the Spanish navy is involved in such incursions we will retaliate with our naval vessels and that the harassment at the border must stop? It is no good going on saying that we are friends. Friendship consists of friendship; it does not consist of immoderate and intolerable harassment by the Spanish Government.

Mark Simmonds: The right hon. Gentleman can be assured that we express our concern and distaste in the strongest possible terms about both the incursions into British territorial waters and the border disputes we were talking about a moment ago. I assure the right hon. Gentleman that our position on the sovereignty of Gibraltar is clear and unchanged. We will protect the right of the people of Gibraltar to determine their political future. The UK will never enter into arrangements under which the people of Gibraltar will pass under the sovereignty of another state against their wishes. Furthermore, the UK will not enter into any process of sovereignty negotiations with which Gibraltar is not content.

Mr Henry Bellingham (North West Norfolk) (Con): When my hon. Friend next sees his Spanish counterpart, will he remind him that Spain possesses two enclaves on the coast of north Africa, and will he tell him that we will respect Spain’s sovereignty over its overseas territories if it does the same in respect of Gibraltar?

Mark Simmonds: My hon. Friend makes a powerful point in an extremely relevant way, and I have no doubt that the Spanish ambassador and others in Spain will have noted his comments.

Mr Peter Hain (Neath) (Lab): I agree with the Minister’s measured response, but I put it to him that the problem is that there is no agreement between Spain, Britain and Gibraltar that resolves these problems. May I advise him to look again at the agreement that I signed as Europe Minister with the Spanish Government, but which was subsequently reneged on at a higher level? It was supported by the Conservative former Foreign Secretary, Lord Howe, and by Lord Garel-Jones. It guaranteed Gibraltarians British citizenship and their rights, including the right to political self-determination, but acknowledged the historical Spanish interest. If we move down that road, we might resolve these problems.

Mark Simmonds: The right hon. Gentleman makes a very fair point, and that is why, while we are making sure that we deter, as far as possible, any further incursion

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into those waters and are trying to put in place mechanisms to resolve the challenges and the significant unacceptable delays at the border, the focus is on returning to the talks—both the ad hoc talks that the Foreign Secretary proposed in April 2012 and, hopefully, the tripartite talks that were under way before the current Spanish Government came to power, in which there was detailed discussion of the operation of the border and other matters between the Spanish, British and Gibraltarian Governments. In the long term, that has to be the way forward.

David T. C. Davies (Monmouth) (Con): Given the Spanish Government’s sudden enthusiasm for rigorous border controls, will the UK Government consider setting up a special line at Heathrow airport for planes coming from Spain, and a line dedicated to Spanish passport holders, so that we can show the same rigour with regard to their entry to the United Kingdom as they are showing in allowing our citizens to enter Spain from Gibraltar?

Mark Simmonds: My hon. Friend makes a passionate point, but he will no doubt be aware that the majority of people who are inconvenienced by the significant delays at the Spanish-Gibraltar border are Spanish citizens trying to get into Gibraltar; many of them work there. We have to try to make sure that the Spanish implement what the European Commission set out in its correspondence with Spain, which I outlined earlier, to ensure that any citizen of any country wishing to travel across the border between Spain and Gibraltar can do so in an expeditious manner.

Mr Nigel Dodds (Belfast North) (DUP): Given the escalation in the violations of British Gibraltar’s waters by Spanish vessels and the increase in illegal road checks, instead of calling in the Spanish ambassador for possibly the fourth, fifth or sixth time, is it not time for the Prime Minister to get involved directly, at Head of Government level, to pursue the NATO route alluded to by the right hon. and learned Member for North East Fife (Sir Menzies Campbell)? Is it not time to spell out the consequences for Spain—it would be helpful if the Minister could do that today—if this action continues?

Mark Simmonds: I can assure the right hon. Gentleman that there is constant contact between the UK and Spanish Governments. We certainly call in the Spanish ambassador, as we did yesterday and have done on previous occasions, when we feel that behaviour is unacceptable, but I can give the right hon. Gentleman an assurance that over the summer the Prime Minister, the Deputy Prime Minister, the Foreign Secretary and the Minister for Europe all spoke to their respective counterparts in Spain to try to de-escalate the challenges that we are talking about. That will continue unless the Spanish change their behaviour.

Bob Stewart (Beckenham) (Con): Spain is a NATO ally, so perhaps the Spanish will understand that we may express our disquiet by stopping our naval vessels going to places such as Rota to re-provision, and may instead re-provision them in Gibraltar, or perhaps by sending an infantry company to Gibraltar on roulement more often, to express our extreme worries about what is happening to our people in Gibraltar.

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Mark Simmonds: I am grateful to my hon. Friend for his remarks. I assure him that the Royal Navy challenges all unlawful incursions by vessels, and indeed puts out radio warnings about the monitoring of all offending state vessels until they leave our waters, but it is clear that we need to de-escalate this, not go in the other direction.

Kate Hoey (Vauxhall) (Lab): The Minister should not hold his breath waiting for the European Commission to do anything more on the problems at the border. As a huge morale boost for Gibraltarians, perhaps he or the Foreign Secretary will get on a plane in the next couple of days, and go to Gibraltar, and make it very clear publicly that they will do whatever is needed to protect Gibraltarians from Spanish bullying.

Mark Simmonds: I am grateful to the hon. Lady for that suggestion. I cannot speak on behalf of the Foreign Secretary, but I can certainly give her an unequivocal assurance that the United Kingdom Government, including the Foreign Office, stand shoulder to shoulder with the Government and the people of Gibraltar to make sure that they can keep their links with the United Kingdom. We will work together to do everything that we can to reduce and mitigate this unacceptable behaviour, both on the part of Spanish oceanographic vessels and as regards the border delays.

Geoffrey Clifton-Brown (The Cotswolds) (Con): Will my hon. Friend remind his Spanish counterpart that in 1967 almost 100% of Gibraltarian people voted to remain under the sovereignty of the United Kingdom? In the most recent poll, in 2002, 98.5% of the people voted to reject joint sovereignty with Spain. Will he tell our Spanish counterparts that this harassment by the Spanish Government is totally unacceptable and violates all UN charters?

Mark Simmonds: I can give my hon. Friend the assurance that of course we will continue to make the strongest possible representations to the Spanish Government. It is relevant, in response to his question, to highlight that Gibraltar’s constitution reflects the principle that the people have the right of self-determination. The realisation of that right must be promoted and respected in conformity with the provisions of the charter of the United Nations that are applicable under international treaties. Certainly, we will not go down the route that the previous Government took in 2002.

Mr David Winnick (Walsall North) (Lab): I agree with the Minister that everything should be done to de-escalate the crisis, and we should recognise that Spain is a long-term ally of ours, but is the Minister aware that those of us who supported Spanish democrats during the very long years of Franco’s brutal dictatorship much regret the pressure that Spain is putting on the people of Gibraltar, who have made it clear, as has been stated time and again today, that they want the status quo to remain?

Mark Simmonds: The hon. Gentleman makes a powerful point. Bullying and intimidation, wherever they occur, are unacceptable, but that certainly appears to be what is happening in relation to Gibraltar. I can give him, as I have given others, an assurance that the British Government

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will continue to make the strongest possible representations to ensure, hopefully, that the situation is de-escalated, and that the Spanish Government change their behaviour.

Robert Halfon (Harlow) (Con): Does my hon. Friend agree that the behaviour of the Spanish Government has got worse and worse, and that rather than behaving like the democratic European country that it is supposed to be, Spain’s intimidation tactics put it more in line with Iran than Europe? Does he agree that if this carries on, we should send the Spanish ambassador packing from this country?

Mark Simmonds: I am not sure that the comparison that my hon. Friend makes is fair or accurate. As I mentioned, the Spanish ambassador was called in yesterday, and we clearly set out, in no uncertain terms, the strength of feeling in both the United Kingdom and Gibraltar about Spain’s actions. Ultimately, as I have said, we have to return to the ad hoc talks suggested by my right hon. Friend the Foreign Secretary. Interestingly enough, the Spanish Government have publicly said that they will return to those talks, but have not yet specified the exact date when that will happen.

Chris Bryant (Rhondda) (Lab): With massive corruption allegations swirling around the Spanish Government, I am sure there is nothing Señor Margallo would like more than for our Government to take up the suggestions of the hon. Member for Monmouth (David T. C. Davies), my hon. Friend the Member for Vauxhall (Kate Hoey) or the hon. Member for Harlow (Robert Halfon). The Spanish Government would love to escalate the situation. They would love to wipe all those stories off the Spanish newspapers’ front pages so that they could have a good old-fashioned Francoist row with Britain. May I urge the Minister, if he ever gets anywhere close to his sabre, just to leave it alone?

Mark Simmonds: I am grateful to the hon. Gentleman for those remarks. He is right that we need to be calm, but we need also to be firm, to make sure that the Spanish understand that the behaviour, both at the border and in the territorial waters, is not acceptable. He is also right to highlight the domestic political problems that Spain and the Spanish Government have. In addition, there are clearly some issues that relate specifically to tobacco smuggling across the Spanish-Gibraltar border. The Spanish Government, the Gibraltarian Government and the United Kingdom need to work together to resolve those.

Mr Tobias Ellwood (Bournemouth East) (Con): I am left wondering whether there has been a breach of article 5 of the NATO treaty. I served in the Army in Gibraltar in 1995 as aide-de-camp to the Governor. Three-hour waits at the border were commonplace then, caused by overweight Spanish security guards taking far too long to do their inspections. When my hon. Friend met the ambassador yesterday, did he give him a copy of the treaty of Utrecht signed by the Spanish in 1713, which makes it very clear that Gibraltar is not part of Spain?

Mark Simmonds: My hon. Friend makes a powerful point. I do not think the ambassador was given a copy of the treaty of Utrecht; I am sure he is very much aware of its contents. But he was told in no uncertain terms about the unacceptability of the oceanographic

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vessel entering British Gibraltar territorial waters and staying there for the length of time that it did. He was also made well aware of the strength of feeling that exists in both Gibraltar and the United Kingdom about the unacceptable delays at the border, which are potentially hindering the economy in Gibraltar, and hindering free access and movement for Gibraltarians and for Spanish people as well.

Thomas Docherty (Dunfermline and West Fife) (Lab): By my count, this is the fourth time that the Foreign Office has summoned the ambassador and his representatives for a stern ticking-off. On each occasion the Spanish have escalated the dispute by trying to ruin Gibraltar economically with these absurd border checks. Does there not come a point where even the Minister would accept that this strategy is not working and that we need real action from this Government?

Mark Simmonds: The United Kingdom is standing shoulder to shoulder with the Government and the people of Gibraltar. The Spanish activity, both the incursion into territorial waters and the border delays, are unacceptable. The British Government have made this clear in the strongest possible terms. The Prime Minister wrote to the EU Commission President to ask the EU Commission to get involved, which it has now done. We continue to provide evidence to the EU Commission, we continue to press the EU Commission to make sure that its recommendations to the UK, Gibraltar and Spain are implemented in full, and we will continue to do everything we can through diplomatic and political means to resolve what is a political dispute to the satisfaction of Gibraltarians and everybody in the United Kingdom.

Neil Parish (Tiverton and Honiton) (Con): Partido Popular in Spain and the Government are extremely unpopular, so these activities are just a diversion. The trouble is that the people of Gibraltar are the ones who suffer every time the border is closed. We need to stop these things constantly being escalated. In the end, it is the democratic right of the people of Gibraltar to remain British, which they emphasise all the time. We must do more as a Government to make sure the borders are open.

Mark Simmonds: My hon. Friend makes an extremely important point about the necessity to improve access across the border, which is why we will try to do everything we can to ensure that the EU Commission’s recommendations are implemented in full. We also fully expect Spain to act on the Commission’s recommendations. The Commission is still clearly concerned by the situation and is committed to remaining engaged and following up in the way that I outlined. Interestingly, it has reserved the right to reconsider its position and has explicitly offered the possibility of a further visit to the border. If the Commission is to do that, I suggest that it does so without giving the Spanish notice so that it can see how people are suffering.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The right of self-determination of Gibraltar must surely be respected above all, and we should stand with Gibraltar and put some backbone into the European

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Commission to rein in Madrid. Although Gibraltar is not in the UK, it is a British overseas territory in special social union with us, but regardless even of that, international law must be respected. As Spain is a democracy, in the EU and in NATO, should it not start behaving accordingly, and certainly not fire shots at a young man on jet skis in Gibraltar harbour? Finally, is there any hope of making the European Commission rein in Spain much sooner than in six months?

Mark Simmonds: The hon. Gentleman is right about the incident that happened a little while ago with the jet ski. He will be aware of the strong protestations that we made at the time. To clarify the position, our policy on Gibraltar is crystal clear. The people of Gibraltar have repeatedly and overwhelmingly expressed their wish to remain under British sovereignty and we will respect their wishes. This is entirely consistent with the purposes of the principles of multilateral organisations such as the United Nations, which determine the principle of self-determination.

David Morris (Morecambe and Lunesdale) (Con): Is my hon. Friend aware that a possible political solution is already going through the House? My Gibraltar (Maritime Protection) Bill seeks to enshrine and update the treaty of Utrecht to ensure that Gibraltar’s waters have a stipulation of three miles in UK law. I know I have the backing of Members on both sides of the House, and that the Bill will have its Second Reading on 28 February next year. Will the Government give it priority and speed it through to ensure that the behaviour that we have seen over the past few weeks from the Spaniards does not continue and will not happen again?

Mark Simmonds: I am grateful to my hon. Friend. I am aware of the private Member’s Bill to which he refers. My understanding is that it is not required, because under international law the three-mile limit in British Gibraltar territorial waters is already in place. Indeed, my understanding is that it may be possible to extend that to 12 miles, but we have not chosen to do so. The three-mile limit is already enshrined in international legislative structures.

Martin Horwood (Cheltenham) (LD): Gibraltar’s Member of the European Parliament, Sir Graham Watson, has emphasised that the authorities would be quite within their rights to board and impound Spanish vessels, should there be a further incursion. Does the Minister agree that the Royal Navy has so far shown admirable restraint, emphasising Britain’s unwillingness to escalate the crisis on our side?

Mark Simmonds: The hon. Gentleman is right. The simplistic answer to his question is yes, but we will ensure that the Spanish and those vessels that make any incursion into British Gibraltar territorial waters are under no illusion about the fact that they are not welcome, and that those are British waters and do not belong to Spain.

Mr Philip Hollobone (Kettering) (Con): The Spanish Government seem to regard the dressing-down of their ambassador about as seriously as a miscreant youth regards an antisocial behaviour order. What is required for miscreant youths who have an ASBO is a firm

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deterrent, so what is the Minister saying to the Spanish Government about what will happen, should an incursion happen again?

Mark Simmonds: We have made it very clear that these incursions are unacceptable. We continue to ensure that the Royal Navy will take tough action, but we are also making sure that our differences with Spain regarding these territorial waters should be resolved by diplomatic and political means, not through naval confrontation. My hon. Friend may be disappointed with this, but we do not believe that gunboat diplomacy and tit-for-tat escalation is in anyone’s interests.

Chris Heaton-Harris (Daventry) (Con): Last night Gibraltar marked its debut as a UEFA member by holding Slovakia to a goalless draw. Does the Minister, like me, look forward to a qualifying fixture in a future tournament for which the Spanish football team will have to cross the border into Gibraltar?

Mark Simmonds: I join my hon. Friend in congratulating the Gibraltarian football team on last night’s result. To be absolutely clear, the incursions by Spanish vessels are a violation of sovereignty but not a threat to sovereignty.

Heather Wheeler (South Derbyshire) (Con): My constituency is completely land-locked and in the centre of the country, but I have been amazed by the number of e-mails and contacts pouring in from constituents fed up to the back teeth with this. I appreciate that the Minister has given us some soft and warm words about de-escalation and the need to resolve this diplomatically, but I have a feeling that the people of South Derbyshire would like the Royal Navy to send some bigger ships there as soon as possible.

Mark Simmonds: I understand my hon. Friend’s concern and that of her constituents, and she will not be surprised to hear that they are not unique in holding those views. There is genuine anger about both what has happened at the border and the incursion into British Gibraltar territorial waters. Obviously, as I said in my initial remarks, we constantly review whether the Royal Navy’s deployment in Gibraltar is adequate. She will be under no illusions about the fact that we are now reviewing that, but ultimately this has to be resolved through diplomatic and political mechanisms. It is in no one’s interest to escalate this conflict. We hope that implementation of the European Commission’s recommendations, as set out in its letter to the Spanish Government, and maintaining the firm stance that incursions into the waters are completely and utterly unacceptable will change behaviour.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Will my hon. Friend join me in paying tribute to Gibraltar for its 300 years of gallantry, fortitude and loyalty to the British Crown? Is he willing to meet me and some of my constituents who have been campaigning for that great naval port to be granted the George Cross? Finally, if he ends up having to send the military to Gibraltar, will he ensure that he sends the Royal Marines to support the Royal Gibraltar Regiment? After all, it was they who secured it in the first place.

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Mark Simmonds: I am well aware of my hon. Friend’s determination and his passion for the links between the United Kingdom and Gibraltar, which most Members of the House, if not all, share. He is absolutely right to highlight the 300 years of history. I can sum up those historical links in one neat phrase: their history is our history. He is also passionate about his campaign for Gibraltar to be given the George Cross. He will be well aware of the extremely high bar that exists for achieving the George Cross on a collective basis—it has been received only by Malta and by the Royal Ulster Constabulary. There is a process for that, and I know that he and those who support his campaign are already engaged in it.

Ian Paisley (North Antrim) (DUP): I am sure that it will have struck the Minister from the questions asked today that the weight of opinion in this House is in favour of action. On that basis, will he take the opportunity when he next speaks to the ambassador to reflect on that weight of opinion and make it abundantly clear that we will take this no longer?

Mark Simmonds: The hon. Gentleman makes a powerful point. It is certainly true that the strength of feeling across the House about the unacceptability of Spain’s behaviour towards Gibraltar sends an extremely powerful message to the Spanish Government and others in Spain who wish to make life difficult for the people of Gibraltar. I can give him an assurance that we will continue to make that case in very strong terms on behalf of hon. Members.

Glyn Davies (Montgomeryshire) (Con): Many Members have contributed to this urgent question, and it is clear that there is cross-party support for the considered clarity that my hon. Friend the Minister has shown. Will he reassure us that the British voice, whatever form it takes, in other institutions, such as the United Nations, NATO and the European Union, will reflect just as clearly the fact that Gibraltar is British and will remain British?

Mark Simmonds: I can give my hon. Friend the assurance that in bilateral meetings and on the multilateral stage we will continue to make those points extremely strongly and forcefully.

Bill Wiggin (North Herefordshire) (Con): It appears that the Spanish and the Argentines egg each other on over our disputes. What is the Foreign Office doing to encourage Spain’s other allies to dissuade it from putting its seamen’s lives at risk?

Mark Simmonds: That is part of the effort we are putting into providing evidence to the European Commission so that it can play a responsible role in changing Spanish behaviour. My hon. Friend raises an interesting point about talk of co-operation between Spain and Argentina. Despite the threat from the Spanish Foreign Minister, there has been no visible co-operation between Spain and Argentina at the UN General Assembly in 2013. Let me be absolutely clear that the people of both the Falkland Islands and Gibraltar have expressed a democratic wish to remain British.

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Start-up Loans

1.16 pm

The Minister for Skills and Enterprise (Matthew Hancock): With permission, Mr Speaker, I wish to make a statement on start-up loans. Since the great recession of 2008, concern has been raised repeatedly across the House about access to finance, particularly for the smallest companies. The contraction in support for small and medium-sized business lending following the financial crisis led to a sharp drop in the growth of lending to, and support for, small businesses. All Members will recognise the constraints facing aspiring entrepreneurs across the country trying to access finance.

Those problems were a consequence of an overreliance on bank finance compared with our international competitors, a hollowing-out of business lending units in the big banks and too much concentration in our banking system, followed by the biggest banking bust ever faced in this country and the biggest bank failure in the world in 2008.

A calamity of that scale cannot be addressed by a single policy, so since 2010 we have engaged on a comprehensive programme of bank reform: splitting retail and investment banking; requiring greater capital; introducing a tax on leverage; introducing much stronger requirements to check that the people running banks are fit and proper persons, so that we do not get the likes of Fred Goodwin and the Rev. Paul Flowers sitting atop our banks in future; and introducing criminal charges for those who behave negligently in charge of big banks.

Those changes are part of a wider drive to change the culture of banking so that our banks serve the economy, rather than the other way around, but alone they are not enough. To help companies access finance, we have introduced the British business bank, doubled the seed enterprise investment scheme, expanded the enterprise finance guarantee, and last year we introduced start-up loans of up to £25,000 per founder—although, more typically it is around £6,000—to help budding entrepreneurs access the seed capital to make their idea a reality.

For too long Britain has been a home of great ideas that are then commercialised and developed elsewhere. We want British business men and women to take brilliant British ideas and turn them into blossoming British businesses. The first start-up loan was made in September 2012, and since then growth has exceeded expectations. Over a third of loans go to black and minority ethnic entrepreneurs and over a third go to people previously unemployed. In June this year the Prime Minister announced that start-up loans would no longer be restricted to young people, so the age cap has been removed altogether. We are now seeing strong growth in the number of people over 30 being helped to realise their full entrepreneurial potential through the programme’s mentoring and financial support.

In August we introduced specialised support to finance ex-military service personnel who want to start their own business within the start-up loans scheme. I am pleased to announce that today we have made the 100,000th start-up loan—[Interruption.] Today we have made the 10,000th start-up loan.

Mr Allen Martin, a Royal Navy engineer from Truro, is the 10,000th loan recipient for the programme. Allen joined the Royal Navy in 1991 as an engineer and

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mechanic, working with helicopters, search and rescue, and commando forces. He served for 22 years, in Bosnia, Kosovo, Iraq and Afghanistan. Having been medically discharged, Allen knew what he wanted to do—start his own business—so he applied for a start-up loan and founded Eclipse Property Cornwall, which will manage properties on behalf of landlords, renting them out and offering full or part-time management. Allen Martin has benefited from the extension of start-up loans to all ages and the specialised support of our ex-service personnel.

Given the success of this targeted approach within the full age range, we are now going even further. I can tell the House that we are committing a total of £151 million to the scheme this year and next, with the goal of backing 30,000 new businesses by 2015. From 1 January, the Start-Up Loans Company will specifically target priority groups: entrepreneurs over the age of 50, young people not in education, employment or training, and new mothers who are ready to return to the workplace and are seeking the ability to manage their own time and commitments on their own terms.

Age UK estimates that one in five of those over 50 now work for themselves—a growing trend accounting for 70% of the businesses started in the past five years, compared with 28% of those started by young people. With the added support of mentors who understand modern media and marketing, new retail platforms and communication channels, start-up loans can help to bring even more of those in this age group to success. That is why we are tasking Start-Up Loans to find the specialist providers who will make the loans a perfect fit for the older entrepreneur.

On NEETs, I know that Members throughout the House have seen just how valuable and popular these loans are in tackling youth unemployment. Working with the new enterprise allowance, start-up loans give specialist support to those who have been away from the workplace for a long time and need strong and committed mentors with an understanding of what it is to start from a very low base. The Prince’s Trust has already demonstrated just how effective that approach can be, and much more can be done to create a targeted offer that creates the right conditions for these businesses to survive and thrive within the safe environment of start-up loans.

Finally, new mothers are also turning increasingly to self-employment. According to Mumpreneur UK, self-employment for women is rising at three times the rate for men. So far, 37% of start-up loans have gone to women. We want to do more to increase that figure, so we will introduce specialised support for mothers seeking to start businesses who are juggling child care and seeking flexible ways to turn a business idea into reality.

With record new business creation, 400,000 new businesses, record jobs and a record 4.9 million companies in the UK, Britain is once again becoming an entrepreneurial beacon of the world. Our future prosperity rests on the entrepreneurial aspirations of the British people. This Government will not rest in our drive to support those who want to work hard and get on, and I commend this statement to the House.

1.22 pm

Toby Perkins (Chesterfield) (Lab): I thank the Minister for his statement. Given that I first saw it when I arrived at the House, I also thank him for not saying anything

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surprising during it. I want to place on record the thanks of the whole House for the work that has been done by James Caan and the Start-Up Loans Company to support people to set up their own businesses. I also record our congratulations to Allen Martin, the 10,000th recipient of a start-up loan.

I understand that Allen is one of the very first ex-servicemen to benefit from a start-up loan. It was immense good fortune—I am sure the Prime Minister, as a public relations professional, will have appreciated his luck—that the 10,000th recipient of a loan should happen to be a Royal Naval veteran who gave 22 years’ service to our country, is over the age of 30 and lives far away from London. Sadly, he is not all that typical of the people who are benefiting from the scheme. However, atypical as he may be, he is a great role model to inspire future business leaders.

Small businesses are the lifeblood of our economy, so the £50 million that has been lent to 10,000 new entrepreneurs is an important symbol of the enterprise spirit that runs deep through the proud history of our great island people. The Minister was right to broaden his remarks to address the broader context of the scheme. As we examine the performance of start-up loans in the context of the broader picture for small businesses and the support available, we will see that James Caan is right to say there is still much work to be done.

Does this scheme have a default target and, if so, how is it performing against it? A key lesson from the start-up loans programme is that access to finance schemes is only as good as the infrastructure that supports them and that the schemes rely on a wider system of business support, mentoring and signposting—the very fabric of support that is so lacking in many parts of the country in the absence of Business Link, the abolition of the regional development agencies and the impoverishment of local government.

That is borne out by the statistics that we are welcoming today. In every recession, there has been an increase in business start-ups. People faced with a flat job market and low demand for their skills will often seek to create their own job by setting up a firm. Desperation is not a bad motive for launching a firm—I have done it myself—but it is noticeable that far and away the most loans have been given where businesses support networks are strongest, namely London: 15% of the population lives in London, yet 36% of the start-up loans have been delivered there.

Does the Minister recognise the links between an integrated business support network and successful start-ups? If so, does he regret the destruction of Business Link and the failure to replace it with anything meaningful to provide support, not just to start-ups, but to developing small firms around the country?

Just as with the regeneration money from the Growing Places fund that went much more to London and the south-east, just 5% of the loans under discussion are going to areas such as the north-east, which has seen huge job losses and which we would have thought would be ripe for skilled workers looking to set up their own firms. What is the Minister doing to create a one nation business support network for those areas receiving the least of the start-up loans money? Although we absolutely recognise and welcome the scheme’s success in attracting people from black and minority ethnic

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backgrounds and the number of women who have benefited from it, it is important that that geographical aspect is recognised.

Is the Minister aware that James Caan has said that support and mentoring is a more important part of the success of this programme than the loan? Is the Minister therefore embarrassed that recent research has shown that people using the Government’s Mentorsme website are four times more likely to offer themselves as experts than as businesses needing mentoring? Does he think that a scheme with four times as many experts as recipients of that expertise sounds like a success?

Will the Minister promise that the success of this worthwhile scheme will not blind him to the fact that there is a crisis in business support in many areas of this country and that businesses that would have had a chance of success will fail because of a lack of signposting and mentoring?

The Minister spoke about commercialised British ideas going overseas, but this type of scheme, important though it is, is not likely to make a difference, because it seems to be targeting a very different part of the market.

The Government’s failure to support small firms with access to finance cannot be camouflaged by this worthwhile scheme. Given that the Government have overseen a £14 billion reduction in lending to small business, will the Minister, at the same time as he celebrates his £50 million scheme, recognise that total lending from it is less than 1% of the shortfall in net lending that British business has experienced? [Interruption.]

Mr Speaker: Order. May I gently say to the hon. Gentleman that I think he is approaching his last sentence?

Toby Perkins: You are very wise, once again, Mr Speaker, to notice that.

Will the Minister make a statement on the real access to finance crisis that he has done so little about? Will he recognise the need for radical change to the banks through the Labour party’s proposed network of local banks and support for challenger banks, which will lead to the desperately needed improvement in the position of small firms seeking access to finance?

Matthew Hancock: Mr James Caan, who runs the start-up loans scheme on our behalf and to whom I pay tribute, is absolutely right to say how important mentoring is—and I think we have just seen why. What a pity that the Labour party cannot be enthusiastic about and supportive of a scheme that has done so much: 37% of start-up loans go to BME entrepreneurs and more than a third to the unemployed. We are aiming for 30,000 and the pace of delivery is accelerating.

I will turn to the specific questions asked. I entirely agree with the hon. Gentleman’s point about business growth in hubs, which is why the development of Tech City UK and of start-up hubs around the country—in Manchester, Cambridge, Edinburgh and almost every city—is welcome and I hope it will get cross-party support.

The hon. Gentleman said that we need to ensure that this scheme is part of a package, but I am not sure whether he was listening to the statement. The whole point is that the scheme is precisely part of a plan to start improving access and helping people right at the

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start of their business careers, and to then expand the enterprise investment scheme, enhance the guarantees available, establish the business bank and, most importantly, turn around the banks. I think that a little more support from the Labour party for turning around the mess it created would be more appropriate.

Several hon. Members rose—

Mr Speaker: Order. I am conscious of the level of interest, but also of the pressure on parliamentary time. Depending on the length of questions and answers, it may or may not be possible to accommodate everybody, but we will begin with Mr John Redwood.

Mr John Redwood (Wokingham) (Con): As we wish to spread the news to constituents, what is the typical interest rate for loans and the average duration of them?

Matthew Hancock: The interest is typically 6% and the average duration is up to five years, but those matters are of course also dependent on the proposition that is made. So far, in the year and a bit that the scheme has been going, the amount paid back has been pretty strong.

Mr George Mudie (Leeds East) (Lab): The Minister berated my hon. Friend the Member for Chesterfield (Toby Perkins) for not looking at the wider picture, but he will be aware that of the outstanding loans from British banks in August, more than 30% were loans to other banks and more than 40% were loans to consumers linked to house buying, while only just over 1% were loans to small businesses. After three years of having scheme after scheme, how can he persuade this House to take Government policies in this area seriously?

Matthew Hancock: That is precisely why we need programmes such as this one, which I hope the hon. Gentleman supports. It is important for us all to realise just how difficult it is to recover from the scale of the banking crisis under the previous Government. Many measures are of course needed, and this very important one is helping thousands of people to start their own businesses and realise their dreams.

Mr Brian Binley (Northampton South) (Con): I congratulate Mr Martin and wish him well. I started two small businesses that now employ almost 300 people, having gone into a sub-branch of Lloyds bank and come out with a facility of £60,000 in 1989. That would not happen now, so my concern is about whether information is getting through properly at the coal face. Will the Minister tell us whether that is happening, and will he continue to monitor that matter to ensure that the people he rightly says are in need of loans can receive them?

Matthew Hancock: Absolutely. The development and acceleration of the scheme includes an acceleration in people being able to get hard cash. In many cases, the turnaround time from application to delivery of the cash is about two weeks and, given that speed kills in relation to starting a new business, that is an important part of the process.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): A Welsh Government-sponsored report by Conservative member Professor Dylan Jones-Evans recently recommended

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the establishment of a publicly-backed Welsh development bank, very much based on a model proposed by my party, Plaid Cymru. Will the Minister enter into negotiations with the Welsh Government, give them a nudge and offer Treasury support for that concept to ensure that Welsh businesses get the access to finance that they deserve?

Matthew Hancock: I can do better than that. In collaboration with the Welsh Government, the roll-out of start-up loans in Wales commenced on 15 October, and I would encourage anybody in Wales to get involved.

Anne Marie Morris (Newton Abbot) (Con): I commend the Minister for all the help he has given to small businesses since he took up his post. I am particularly pleased that he has recognised the diversity of groups wanting to start businesses. With regard to the over-50s in particular, how will he get information out—not to the banks, but to local authorities, local enterprise partnerships and other places in which people who are not used to computers will look for such help?

Matthew Hancock: The Business is Great website is an important part of that. I commend my hon. Friend’s work in supporting small businesses, in pushing for improvements for them and in getting out personally to demonstrate what is available. There is a broad communications campaign about the scheme—yes, online, but also offline—and I take every opportunity to tell people what is available.

Bill Esterson (Sefton Central) (Lab): Will the Minister confirm that the advice that goes with the funding, which is crucial, is specific to individual businesses and the markets in which they operate? Will he also confirm that funding and advice for existing businesses is equally important, because without that second element, start-up loans will ultimately lose much of their effectiveness?

Matthew Hancock: Yes. Those are extremely important points. The growth accelerator programme offers support for small and growing businesses and is itself expanding rapidly. The start-up loan programme is not only about access to finance for those starting businesses, but about mentoring. The number of businesses sponsored by each mentor is small, so that mentors have the opportunity to spend time and put effort into ensuring that such ideas get the best possible chance.

Julian Smith (Skipton and Ripon) (Con): Many of the people who have so far benefited from the programme are truly inspirational. The Minister may be interested to know about a perfume called Pink Addiction—I have tried it—which was created by Nabila Ismail. She was so positive about the scheme that the only thing she asked for was specialist mentoring wherever possible, a point which has been mentioned.

Matthew Hancock: I pay tribute to Pink Addiction. My hon. Friend has put a huge amount of effort into supporting start-ups and small businesses. I am sure that being mentored by him would be one of the best ways in which someone could grow their business.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): The Minister told the House that there will be £151 million for the scheme this year and next year, but

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will he clarify whether that is new or additional funding, or is he simply announcing something that has already been announced? If it is new or additional funding, will he ensure that businesses in Scotland can benefit from the project either directly or with additional funding through a Barnett consequential to the Scottish Government?

Matthew Hancock: The £151 million is available over the next two years. Further details will be set out in the autumn statement. We are working with the Administration in Scotland to ensure that the scheme can be rolled out across Scotland as well.

Andrew Griffiths (Burton) (Con): May I congratulate the Minister on a scheme that has helped to deliver the lowest unemployment level in my constituency since August 2008? I particularly congratulate him on the 4,500 disabled people who have been able to access a scheme that is hugely important in allowing them to reach their true potential. Will he assure me that he will continue to promote that objective?

Matthew Hancock: Yes. My hon. Friend makes an important point. It is vital that the scheme should allow everybody the opportunity to reach their potential through starting a business, and he put that very eloquently.

Jessica Lee (Erewash) (Con): I congratulate my hon. Friend on the success so far of the start-up loans scheme, which I will continue to promote locally. Does he agree that the support of local business organisations, such as the successful Erewash Partnership in my constituency, is vital, in that they provide mentoring support and networking opportunities to help businesses to flourish?

Matthew Hancock: I pay tribute to the Erewash Partnership. Such local business support groups, as well as LEPs, the chambers of commerce, the Federation of Small Businesses, the Forum of Private Business, the CBI and the Institute of Directors, play a part in making sure that businesses get to know what is available and are given support. We work in partnership with many of those organisations, which have done a great deal to make such a success of the scheme.

Mr Stewart Jackson (Peterborough) (Con): I believe it is a moral imperative for the Government to offer a route from welfare dependency and poverty to self-employment and prosperity, and on that basis I strongly welcome the scheme. Will the Minister undertake to look at the work done by third sector and voluntary groups, such as the Cambridgeshire Community Foundation and the Peterborough-based Cross Keys Homes, in helping tenants and those not usually involved in the business world to avail themselves of the scheme and access funding for micro-businesses and SMEs?

Matthew Hancock: Yes, I will do that. The fact that more than a third of the loans have gone to people who are unemployed is one of the scheme’s great strengths. Along with the new enterprise allowance, the scheme is helping us to reduce unemployment for people who do not want to go into an ordinary 9 to 5 job, and instead want to grow their own business.