“Another 26 per cent argued ‘there is no need to insist for a solution’, the best option is to have two separate states on the island. Eighteen per cent support the formation of a new Cypriot state”

with another 19% in support of a similar notion. Clearly, almost 87% want progress.

There has been some progress in recent months, with the newly elected Turkish President Erdogan making some fairly positive remarks, beneficial to both sides. However, his meeting with Greek Prime Minister Samaras did not go entirely to plan, as relations between the two soured because of their differences on Cyprus. That is to be expected, however; finding a peaceful solution with which to go forward will not be easy, but it is a possibility to be pursued with all eagerness. The Pancyprian Federation of Labour, the Turkish Cypriot Revolutionary Workers Trade Union Federation, Turkish Cypriot teachers and workers unions and the United Cyprus party have called for a

“just and mutually accepted solution”.

As always when there are two opposite opinions, compromises will need to be made if change is to be made possible, and talks should begin as soon as possible.

3.29 pm

Mike Freer (Finchley and Golders Green) (Con): I congratulate my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) on securing the debate. I want to focus on the missing people, but first may I reiterate to my hon. Friend the Minister that the Foreign Office needs to be as vocal about Cyprus as it has been about Ukraine? As the hon. Member for Edmonton (Mr Love) said, Cyprus is a fully fledged ally and a member of the European Union that we are hanging out to dry.

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To focus on the missing, 1,500 people are still unaccounted for—a subject that I have raised many times. They may be missing, but they are not forgotten. That is a message that the House has to send out. The families have a right to know what happened, whether their relatives are dead and, if so, where their graves are to be found. If those people are dead, why can the location of their remains not be disclosed and their remains returned? What about those who were relocated to Turkey? Might they still be alive, or imprisoned? Might they be dead and, if so, where are they buried?

I have expressed concern before about the missing children, such as Christaki Georghiou, the brother of Mrs Hatjoullis, a constituent of mine. He disappeared at the age of five in 1974. Recent newspapers reports suggest that he might still be alive and working in Ankara, but the Turkish authorities refuse to answer letters or to give even a scrap of information. How many other children might have been placed with Turkish families and still be alive in mainland Turkey?

The tragedy of missing persons is a humanitarian problem with implications for human rights and international humanitarian law. The Cypriot Government comply with efforts to identify the missing on both sides, and it is time that Turkey followed suit. The organisations involved in locating and identifying the missing should have full access to the archives of all organisations, both civilian and military. The right of family members to know the fate of their missing relatives, including their whereabouts and the circumstances and causes of their disappearance, is a humanitarian matter. The obligation to carry out an effective investigation into the circumstances is required by international human rights law and international humanitarian law.

When focusing on the humanitarian dimension of missing persons in armed conflicts, it is necessary to bear in mind that the cases of missing persons can sometimes constitute criminal offences, including war. Perhaps that is why Turkey is dragging its feet. The lack of an investigation by Turkey into the fate of those who went missing has condemned relatives to live in a prolonged state of acute anxiety. Time has not lessened that anxiety, and any Member who has seen the relatives of the missing holding vigil outside this place or, for those of us who have visited the green line, in Cyprus know the pain and anxiety that the families still have—it is still vivid to them. The families simply want to know what has happened; they want to be able to grieve and to lay their relatives to rest.

Finally, I join my hon. Friend the Member for Enfield, Southgate and the hon. Member for Edmonton in asking the Foreign Office if it will continue to apply pressure on Turkey to open up all the sites that are now restricted and, on a perhaps easier note for the Minister, to help the missing persons commission to fund the latest equipment that could be used to find the remains of people. Those are two quite simple asks, and I hope that the Minister will comply. I finish by congratulating my hon. Friend the Member for Enfield, Southgate again on securing the debate.

3.34 pm

Mr Gareth Thomas (Harrow West) (Lab/Co-op): I congratulate the hon. Member for Enfield, Southgate (Mr Burrowes), in the usual way, on securing the

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Adjournment debate. It would be wrong of me not to acknowledge his gracious and deserved tribute to our hon. Friend, the late Member for Heywood and Middleton, in particular on this issue, but more generally as well.

The debate is timely, especially given Britain’s long association with Cyprus and the continuing challenge facing the country’s leaders and people and those of us who are friends of Cyprus on how to secure a lasting resolution of the division of the island. Many people of Cypriot extraction, Greek and Turkish alike, live in the UK, with many in my own constituency. They, too, want to see a lasting solution to the island’s divisions, but they certainly want to see a fair and just resolution of the many issues that have prevented a successful settlement to date.

I want to acknowledge the contribution of my hon. Friend the Member for Edmonton (Mr Love) and that of the hon. Member for Finchley and Golders Green (Mike Freer), who echoed in a different way one particularly powerful point made by my hon. Friend, which was about the important joint work on missing persons—the 1,500 people still missing—and especially the missing children, an issue that will have struck many of those reading the record of our proceedings. My hon. Friend asked two questions of the Minister, about funding and about access to areas where missing persons’ remains might be buried. I hope that the Minister will address those two key requests.

The hon. Members for Cities of London and Westminster (Mark Field) and for Strangford (Jim Shannon) made important points about the need for the political leaders with crucial roles in the talks to let the potential of Cyprus’s future inform the negotiations. Clearly, the past cannot be forgotten and the legacy has to be addressed, but the potential for Cyprus’s future, to which the hon. Member for Enfield, Southgate alluded, should surely provide the ongoing motivation for those closely involved in the present negotiations.

Cyprus has been divided since 1974, when Turkey invaded the north. A military coup on the island backed by the Government in Athens was the supposed pretext for the invasion, which saw the island partitioned. Roughly, the northern third was inhabited by Turkish Cypriots and south by Greek Cypriots. There are many estimates about the scale of the upheaval that followed. The United Nations suggested at the time that some 165,000 Greek Cypriots had had to flee or were expelled from the north, with some 45,000 Turkish Cypriots going from the south.

Such figures are heavily contested. Whether one accepts them or thinks that they are higher, they nevertheless hide many individual tragedies arising from the events in 1974. Furthermore, communities that had lived together for hundreds of years were torn apart. A considerable number of people are still missing, which I alluded to earlier; homes invested with incomes and considerable emotion had to be deserted, almost at a moment’s notice; and many cultural and religious sites, including many churches, are unused and inevitably in poor condition as a result. My hon. Friend the Member for Edmonton mentioned parts of Nicosia that have been left almost untouched since then. The still deserted Varosha part of Famagusta stands as the perhaps most permanent challenge to the status quo on the island. Its future will be one of the many issues that needs to be addressed. I will come back to that point.

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The green line is the UN buffer zone, which stretches from Morphou through Nicosia to Famagusta. It is patrolled by UN troops and has only a small number of designated crossing points. It now divides the two parts of Cyprus. There have been a number of serious attempts to secure a lasting resolution to the situation in Cyprus, but to date they have been unsuccessful.

I understand that for the first time, last Friday, the new UN special adviser, the Norwegian diplomat Espen Barth Eide, met separately with the leaders of the two sides, President Nicos Anastasiades and the Turkish Cypriot leader Dervis Eroglu. Plans for a further joint meeting next week are encouraging. It is also encouraging that, despite some recent comments, both President Erdogan and Prime Minister Samaras were able to meet in the margins of the NATO summit on Friday to discuss Cyprus. I hope the Minister will set out what further steps the Government are taking to support the effort to build personal and political trust between the key leaders on Cyprus. In particular, what support is being given to the new UN special adviser?

Trust between political leaders is clearly a first, essential step if a deal is to be achieved, but other opinion formers on both sides of the green line need to feel their voices are being listened to. Will the Minister tell us what steps the Government have put in place or are encouraging to build dialogue between faith leaders and others in civil society, to help engender better relationships? I understand that there have been some encouraging contacts between business leaders in the two parts of Cyprus. Again, it would be good to hear what efforts our Government and others are making to build those relationships further.

It would be useful, too, to make sure that at this point of transition the European Union continues to be heavily involved in the effort to get a lasting settlement. Will the Minister discuss not just the role of the current High Representative but the efforts being made to brief the incoming High Representative, to prioritise the need for her active engagement in resolving the situation?

Other Members have already alluded to the encouraging visit of the US vice-president to Cyprus recently. Again, it will be useful to hear what further discussions the Foreign Office has had with the US to encourage it to maintain its interest and engagement in finding a solution.

Previous efforts to achieve a long-term solution to Cyprus’s political future have been conducted against a very different economic outlook. Cyprus is currently emerging from a difficult time economically—its banks have had to be bailed out—and in the north, too, the economic situation is a long way from ideal. Other Members have already alluded to the potential long-term prospects for the Cypriot economy, partly from the discovery of oil and gas. I understand that the UN has estimated that a long-term settlement could deliver a 3% boost to economic growth on the whole of the island—a far from insignificant potential peace dividend.

There are, inevitably, regional powers with a crucial role to play. Greece and Turkey are the two most obvious, but Israel, too, has a role. Will the Minister update hon. Members on the discussions he or others have had with those three regional powers?

It is to the credit of both President Anastasiades and Premier Eroglu that they have been willing to embark on renewed negotiations. We should continue to be positive about the signing of the joint declaration after

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such lengthy discussions in February and welcome the dialogue between both men personally and between the negotiators.

Previous negotiations have moved the process forward, but serious and significant challenges remain, not least on security, property, compensation and the distribution of powers in a new Government. The challenge the negotiators have to think through is how to build confidence among the peoples of Cyprus, while those difficult issues are being explored. I encourage the Minister to welcome the potential involvement of European parliamentarians and the High Representative and to think through what else can be done to build trust and confidence in the negotiations, among people on the island and in ex-patriot communities. Other commentators have suggested that negotiators from other, successfully resolved conflicts might offer a helpful perspective to those currently negotiating the future in Cyprus; it would be good to hear the Minister’s view on that.

Comments on both sides about the negotiations—both on specific elements and, more generally, on the way they have been conducted—have had a slightly less positive tone of late. I am sure we all recognise that all difficult negotiations have their bumpy moments, but it is important for those of us who want a long-term settlement to continue to encourage the key players and support deeper and wider engagement in the process, to help continue to achieve progress even when there are difficult moments. I look forward to hearing from the Minister about how that wider engagement is being built and, in particular, about how the Foreign Office is supporting the key players in Cyprus in continuing to move the process forward.

3.46 pm

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood): It is a pleasure to serve under your chairmanship, Mr Streeter. I begin as others did by saying how grateful I am to my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) for initiating this timely debate on the future of negotiations to solve the Cyprus problem. I am also grateful for the valuable contributions from hon. Members.

Hon. Members will note that I am here, rather than my right hon. Friend the Minister for Europe. He sends his apologies, but he is in Hungary at the moment. Although this is not my portfolio, Cyprus is a country that I am familiar with, having served there as an officer in the 1990s with the 1st Battalion the Royal Green Jackets. It is an incredible island, and it was a pleasure and honour to serve there and travel the island extensively. I would probably have taken more notes had I known that one day I might be speaking on the subject. I was based in Larnaca and am familiar with Akrotiri, Episkopi, Paphos—the birthplace of Aphrodite—Famagusta and the amazing monastery in Bellapais. Restrictions on travel were severe then, and it was difficult to move backwards and forwards. It is good to see that there have been some advances since the days when I served there and that the key industries that Britain is involved in—tourism and banking, which has been mentioned—are in a good position, as are our strategic role, through which we play an important part, as I shall mention later, and our links with the diasporas in the UK.

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My hon. Friend the Member for Enfield, Southgate has had a long and active interest in promoting the case for a solution, and I thank him for his efforts. I also pay tribute to the British Cypriots of all backgrounds who have done so much to promote ties between the UK and Cyprus. This debate comes as we reflect on the difficult events of 40 years ago. Although it is important to understand the past, as hon. Members have said, it is vital that we look ahead to the new hope for the reunification of Cyprus. A settlement would help Cypriots take full advantage of the economic, political and security opportunities of their region, not least the mineral opportunities mentioned by the Opposition spokesman.

I can assure hon. Members that this Government will continue actively to support the efforts under way to reach a lasting solution. Indeed, our diplomatic activity continues apace. My right hon. Friend the Minister for Europe invited both chief negotiators to London in June. Last Friday, at the NATO summit, my right hon. Friend the Foreign Secretary raised the issue of Cyprus with the Turkish Foreign Minister.

The UK’s efforts are in full support of the UN’s leading role in facilitating the talks. Like others, I warmly welcome the appointment as UN special adviser of Espen Barth Eide, who will bring a wealth of skill and experience to that important position. As my right hon. Friend the Minister for Europe said when they spoke on 28 August, we hope that Mr Eide will soon help the parties to accelerate progress on the substantive negotiations.

The prospects for a lasting solution are promising, even if progress is less apparent or rapid than either community would like. The two communities and, just as importantly, Turkey are showing the right ambition to reach a settlement. The UK and Greece—the two other guarantor powers—are also fully supportive of the UN’s efforts to encourage the parties to work further forward.

I should now like to turn to some of the specific points that have been raised, and I hope that hon. Members will allow me to focus on those raised by my hon. Friend the Member for Enfield, Southgate. If I am unable to do so in the limited time available, I or my right hon. Friend the Minister for Europe will do our best to reply in writing.

I recognise that at a different time more of our colleagues might be here. This is an interesting week in politics and some hon. Members are in different parts of the country. I am sorry that my hon. Friend the Member for Hendon (Dr Offord) is not here and that he is undergoing surgery. We wish him well.

I pay tribute, as my hon. Friend the Member for Enfield, Southgate has done, to the late hon. Member for Heywood and Middleton, Jim Dobbin. This is the first opportunity I have had to do so. He was certainly a man of great principle and integrity, and he will be missed on both sides of the House.

Reference was made to the Committee on Missing Persons. The UK fully supports its work whereby communal teams undertake painstaking and sensitive work. So far, more than 571 individuals have been identified and returned to their families. We recognise the anguish suffered by families of the missing people from both communities, and we encourage parties to help the CMP to accelerate its work, which becomes more challenging as the years pass. Since 2006, we have

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donated more than $220,000, and bilateral EU funding, which comes partly from UK contributions, totalled $15.3 million from 2006 to 2013. We stand ready to consider further requests for funding from the committee if they are forthcoming.

Jim Shannon: In Northern Ireland and in the Republic, we have had specific attempts to try to find people who have disappeared. Has the Minister considered giving help with equipment because advanced equipment is available to find bodies that have been buried for many years and perhaps that could provide an advantage?

Mr Ellwood: I am grateful for that intervention, and I am aware of initiatives in Northern Ireland, having also served there. I am not aware of any such equipment, but I will ask my right hon. Friend the Minister for Europe to write to the hon. Gentleman. It is an interesting thought.

The UK will continue to urge all those in control of such areas, including the Turkish military, to co-operate fully with the committee and allow it to accelerate its vital work.

Sovereign base areas are pivotal to Britain’s strategic interest in the region, as has been said many times on the Floor of the House, and that applies not just recently in relation to the humanitarian aid drops that are taking place in Iraq at the moment. Cyprus is an important staging post and location for our military: the Army, Air Force and Royal Navy. The hon. Member for Harrow West (Mr Thomas) mentioned Operation Tosca, which, sadly, is one of the longest running UN operations and polices the green zone. It is hoped that it can be wrapped up in the near future if the final agreement can be made. I am pleased that Britain has been a long-term contributor to that operation.

My hon. Friend the Member for Enfield, Southgate also mentioned Turkey’s role in the current negotiations. It remains an important part of reaching a solution and I welcome Ankara’s strong support for a settlement. We regularly discuss Cyprus with our Turkish counterparts, including at ministerial level, and we encourage Turkey to maintain its constructive engagement to make this round of talks successful. One example is the visits of the two negotiators to Athens and Ankara, and it would be useful to repeat them in the near future.

Turkey remains committed to supporting international efforts to solve the Cyprus problem. We do not believe that its support has been affected by the recent elections. We are aware of the remarks by President Erdogan on 1 September. The UK continues to support the UN-chaired negotiations to reach a just, lasting and comprehensive settlement on the basis of the relevant Security Council resolutions.

On EU involvement, to which my hon. Friend the Member for Cities of London and Westminster (Mark Field) referred, the EU has an important technical role to play—he is familiar with it—in providing advice on the EU acquis and technical assistance to help to implement

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the settlement. We welcome the work being done under the EU financial aid regulation aimed at bringing Turkish Cypriots closer to EU standards. However, the UN rightly remains the lead in chairing talks and facilitating the process. The EU has said that all parties will have to agree to an upgraded role. We recognise that Cyprus is a member of the EU, but the talks take place between two communities with equal status. The UN has led international efforts since 1964 and both sides will have to agree to any change in modalities.

My hon. Friend the Member for Enfield, Southgate and others referred to Famagusta, which I visited not too long ago. Sadly, it is not the place it used to be, but we fully support UN resolutions 550 and 789, and have also raised the issue with Turkey. We understand that this is important for many Cypriots, which is why so many efforts have been made over decades for a package deal, unfortunately without success. Varosha, as part of Famagusta is known, is best addressed as part of a comprehensive settlement, given the myriad complexities, and we welcome the work of civil society, such as the bi-communal Famagusta initiative, in preparing the way.

Hon. Members also referred to religious freedom. My hon. Friend the Member for Enfield, Southgate noted that some of the challenges faced by religious groups in Cyprus were caused in no small part by the political situation. We recognise the constraints, which my right hon. Friend the Minister for Europe discussed with the Cypriot archbishop in May, and we also discussed such matters with the Turkish Cypriot community. More can be done, but we are pleased that progress has been made in recent years on religious services in both churches and mosques, on mutual understanding and on cultural heritage.

Flights were mentioned. The UK Court of Appeal has confirmed that direct flights from the UK to the northern part of Cyprus would breach obligations under international law. The court found that it is for the Republic of Cyprus to determine which airports are open for international traffic and as a result no airlines are licensed to operate flights from the UK direct to north Cyprus.

In conclusion, this debate has underlined the warmth of the ties between the UK and Cyprus and shown how it is in the UK’s national interest to help the Cypriots to reach a lasting settlement. No one should underestimate the scale of the challenges ahead, but the Government firmly believe that a solution that meets the fundamental concerns of both communities is possible and that there has been no better time to achieve it. The parties have stated their willingness to reach a deal and we urge both sides to seize this opportunity. Cypriots of both communities want to live and prosper together in peace. As they strive for a lasting solution, we will continue our active support in Cyprus, Ankara, Athens, New York, Brussels and beyond. I am grateful to my hon. Friend the Member for Enfield, Southgate for securing this debate and giving us the opportunity to discuss these important issues.

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Superfast Broadband (Urban Areas)

3.59 pm

Mark Field (Cities of London and Westminster) (Con): I am grateful for the opportunity formally to put on the record the frustrations of my constituents and many businesses about the roll-out of superfast broadband in my central London constituency. I know that the hon. Member for Hackney South and Shoreditch (Meg Hillier), whose constituency neighbours mine, has similar concerns.

It may come as a surprise to many that here in central London there is a problem with superfast broadband. The perception is that this is an issue only for the rural parts of the United Kingdom, but there are some fundamental issues that I want to address, and I know that the hon. Lady will want to make a brief, broadly supportive contribution, although she does not know exactly what I will be saying.

The speeds in the centre of London are, in fact, among the slowest in the capital as a whole—some 11.9 megabits per second on average for the City of London as compared with some 20.9 Mbps for the capital as a whole. Ofcom defines superfast broadband as 30 Mbps and has recognised that the gaps in the superfast broadband coverage in Westminster and the City are particularly pronounced.

For clarity, there are three common types of connection. The slowest, and the sort that many colleagues may well have at home, is copper broadband, which uses a phone line. The fastest is the sort used by larger companies, which have a private or a leased line connection, but those are expensive and affordable only to relatively few larger businesses. To put that into figures, copper broadband costs at least £10 a month, whereas a leased line will cost many hundreds of pounds a month to install and run. The other connection option is, of course, superfast broadband, which operates between the copper and leased lines in terms of both price and performance, but is largely affordable for domestic users and small and medium-sized enterprises.

I recognise that the Government have already directly supported the supply of superfast broadband to over 1 million homes and businesses where it would otherwise not have been commercially viable. Many of those residents and businesses are, unsurprisingly, located in rural areas and the current roll-out is expected to provide a £1.5 billion boost to local economies. It is also estimated that the superfast broadband programme will deliver returns of up to £20 for each £1 invested, which would, if that came to pass, represent tremendous value for money.

My constituency—the one we are sitting in today—includes the political, business, cultural and ceremonial heart of the UK, yet a large number of residents and SMEs from right across this patch still do not have the option to connect to superfast broadband. That is somewhat surprising, given the level of investment that the Government have ploughed into improving the UK’s digital infrastructure. Needless to say, that is an integral part of the Government’s long-term economic plan.

Just last month, the Secretary of State for Culture, Media and Sport proudly announced that central and local government are investing some £1.7 billion to extend superfast broadband. Access to that has now

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been extended to some 78% of the UK—88% in London—and it is hoped that that will be extended to some 95% in total by 2017. The Mayor of London has also made it a clear aspiration for every resident and business in London to be able to have access to an affordable high-speed internet connection.

According to the Government’s own body, Broadband Delivery UK, if faster broadband is rolled out, it would be expected to boost the economy by £17 billion annually by 2024. As a consequence, there would be a huge economic opportunity cost to not comprehensively rolling out high-speed broadband in central London. The square mile alone hosts some 13,500 small and medium-sized enterprises. It is often thought that it is only the very big international corporate businesses that are based in the City, but that is not the case, and has never really been. There are many small businesses employing literally a handful of people that are still based in the City of London and which require this most up-to-date global broadband access.

My concern is that there is a failure in how the market currently operates. In urban environments, the approach of network providers seems to be based on a belief that there is insufficient demand to invest further. That means that large swathes of urban areas with important SME users are poorly served and restricted to outmoded copper broadband, which I referred to earlier.

UK telecommunications regulation has successfully created healthy supply-side competition in connectivity for London’s larger corporations, which are prepared to pay many thousands of pounds a month for high bandwidth connections—indeed, many of those are businesses that absolutely need the most state-of-the-art global bandwidth connection. That competition has created a rich network of wholesale fibre-optic cables across the capital, but there is a gap between that wholesale fibre-optic network and the retail network that serves small businesses and residential properties. The policy must now begin to focus on how that rich wholesale fibre core can be extended to London’s small business community and to the residential community here in the centre of London.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): I concur with nearly everything that the hon. Gentleman has said; he has summarised the challenges that are also present in my constituency. Does he not agree that some of the key challenges are the length of time it takes to get connected, unreliability of speeds and the misleading maximum speeds that are often advertised, which is just not delivering for SMEs and many residents?

Mark Field: That concern has certainly been put to me by many of my constituents as well. In today’s debate, I am trying to focus on what the Government might do, given their ambitious programme, which, as I said, has made some real headway in relatively depopulated, rural parts of the UK, but which has left behind, ironically, the sorts of areas that the hon. Lady and I represent.

Mike Freer (Finchley and Golders Green) (Con): In my constituency, we have an area called a “notspot”, in that it is a group of houses at the end of the copper line, and the speed degrades the further away people get

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from the exchange. In terms of asking what the Government can do, does my hon. Friend agree that we need a proper investigation into what the cause is? He is being told that there is a lack of demand, but when I met BT, I was told that BT cannot find the location to put the boxes on the pavement, so we are being misled. Does he agree that the Government need to get a grip on why suppliers cannot supply in London?

Mark Field: I very much agree with that. I confess that when I was doing the research, I assumed that the word “notspot” was a typographical error. I then recognised exactly what was being suggested, which my hon. Friend has rightly pointed out.

Yes, there is a particular problem for London. London is a wonderful capital to live in, but it is an absurdity that, within a few hundred yards or even less of first-rate digital broadband, individuals should find they have difficulties. Of course, we all take for granted that we will have instant access to the internet—I recall going on a holiday only 10 years ago to a distant part of Africa and the frustration one felt about the situation. Of course, we recognise that back in the 1980s and 1990s, these things did take a hell of a long time to get up and running, and all of us as consumers now have expectations that are very different from those of the past. Those expectations will only become greater as time goes by.

It strikes me that only the sort of thinking to which hon. Members have referred will enable London to continue to compete effectively on the global stage and meet the future bandwidth demands of all its citizens. My seat suffers particularly from the technology divide and it is frustrating to receive regular reports from constituents that they are caught between the cheaper, slower, copper broadband and the unaffordable leased lines. Many SMEs, in keeping with current business practice and as a way of making economies in what remains a difficult economic environment, use cloud-based services. Those services need, as an absolute essential, faster and reliable connections and the failure to provide sufficient connectivity is a fundamental issue undermining our global competitiveness.

Even the much politically celebrated success that is Tech City—based, sadly, just outside my constituency, around the Old street roundabout—is having difficulties getting the broadband speeds it needs to continue to thrive and grow. I know that those concerns are shared by the hon. Member for Hackney South and Shoreditch, who has the good fortune to have Tech City in her patch. I know that in the past, she has called for a comprehensive review of superfast broadband provision.

Closer to home here in Westminster, the West End partnership, which brings together public and private sector stakeholders in central London, has identified the poor broadband service as the single biggest threat to London’s international competitiveness. It puts at risk the continued attraction of investors and the continued growth of the digital, media, tech and creative sector, which has provided some quarter of a million jobs in central London alone.

London has the biggest concentration of digital businesses in Europe, with some 23,000 firms and over 390,000 employees, according to a Greater London authority study of two years ago; I suspect that those figures may underestimate the reality today. However,

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economic growth in the sector has not increased relative to other sectors in the past decade. That is likely to relate to the fact that broadband speeds are lower in London than in some of our European rivals and connection is generally of a lower standard than that available to a number of our Asian competitors.

Duncan Hames (Chippenham) (LD): I am trying not to approach this debate with the green eyes of a Wiltshire MP. I think that the hon. Gentleman is right to say that our international competitiveness is a critical consideration. Does he have any insight, through his research, into other approaches that have been taken with more success to achieve really substantive, robust internet connectivity for other urban centres and which it would be worth the Government looking at afresh?

Mark Field: I should like to come on to that, if I may, in what I say in a moment or two.

Clearly, there is much that we can learn. Let us be honest: one of the difficulties that we face is this. It has always been the way in the United Kingdom that when a huge amount of money has been paid to put an infrastructure in place, it is difficult to dismantle it entirely. Pudong district in Shanghai, which was paddy fields only 20 years ago, is now a city of 7 million or 8 million people who live and work there. Clearly, it can have state-of-the-art infrastructure in place, because it had a more recent starting point.

Richard Graham (Gloucester) (Con): My hon. Friend is generous in giving way and is making very powerful points. Does he agree with me on these two things? First, although it is great to see BT’s progress in rolling out broadband, that has been mostly focused on rural areas. Secondly, the blind spots in the urban network that he is referring to can be very frustrating for business growth, and not just in London. The Waterwells business park in Gloucester is a very good example of where growth is frustrated by not having decent broadband.

Mark Field: My hon. Friend’s area does not only have green fields; I expect that there are also green boots in that bit of Gloucestershire. However, as he will rightly point out, many of his voters and constituents live in a relatively urban part of Gloucester, which I do appreciate. There are some fundamental problems, and I am glad that we have had an opportunity to ensure that this is not seen just as a central London issue. It might have come as news to my hon. Friend and to the hon. Member for Chippenham (Duncan Hames) that we have a specific problem here in central London.

Many firms in London require superfast broadband as much as they require electricity or water. More than 98% of the UK’s visual effects firms are in the Soho area of London, bordering Covent Garden, which is cited as being in a broadband notspot—the term mentioned by my hon. Friend the Member for Finchley and Golders Green (Mike Freer). Not all firms, especially start-ups, are able to link into the private Sohonet, which notionally serves that part of W1. Instead, they rely on BT and the other telecommunications companies, which do not yet offer such a comprehensive service.

However, there is good news, and I want to give credit where it is due. Recent developments suggest that a number of the private sector providers are now taking a

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more positive approach. BT, for example, committed only last week to working with the City of London to investigate how new forms of technology can benefit local SMEs. I pay tribute to the hon. Member for Hackney South and Shoreditch. We have worked together to try to ensure that BT works on this, and that is an example of where some cross-party co-operation can work well. Clearly, these issues affect parts beyond a single constituency. That is in addition to BT’s promise of an extra £50 million of investment specifically aimed at expanding coverage further in urban areas. I hope that some of that investment will make its way into my patch.

Progress, of course, can be made through innovative schemes at local level. I should like to highlight the creation by Westminster city council and its arm’s-length management organisation, CityWest Homes, of a new partnership with the private sector called Community Fibre. The aim of the project is to install a fibre-optic telecommunications network in the council’s social housing and associated commercial property stock. That service started as a pilot of only 1,000 or so properties, but has now been extended to cover 22,000 properties in and around the Pimlico district of my constituency.

Until the spring of 2015, businesses have the option of applying for vouchers worth up to £3,000 towards the installation of superfast broadband from a range of providers, through the Government’s SuperConnected Cities programme. However, I understand that, to date, the take-up has been pretty low. I am informed that the Greater London authority has issued only 812 vouchers across London as a whole. The total funding pot for vouchers in London was set at £23.8 million.

If we assumed that all the vouchers were allocated for the maximum amount of £3,000—some, of course, would have been for a smaller sum—the total funding would account for barely 10% of London’s total allocation. There is therefore a compelling case for the Government’s extending the scheme well beyond the spring of 2015, as well as for making the application process more straightforward.

There is clearly a place for Government investment in broadband infrastructure where there is a market failure in supply, but, as responsible policy makers, we should limit the exposure of the taxpayer by first establishing the extent to which the market can address unmet demand. Physically rolling out high-speed broadband networks in urban areas provides a number of challenges for broadband providers. Some 85% of the cost associated with building broadband infrastructure is accounted for by civil engineering. On average, it costs £43 per metre to dig a traditional trench in a footpath.

Of course, digging a trench is particularly expensive in London, for a number of reasons. The large number of heritage and protected status sites leads, of course, to significant bureaucracy and up-front delays. Other reasons are the cost of permits, parking charges and the nature of surface materials, such as York stone, which makes that sort of excavation extremely expensive. The dig rate in London is approximately 25% of the rate of digging seen outside London, as a result of congestion measures such as early finishes and close-down requirements.

To aid the private sector in rolling out superfast broadband in London at minimal cost, I should like to encourage Ministers to work with the Mayor of London

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and local authorities to minimise the cost of providing this vital infrastructure. For example, we might reduce the cost of permit schemes for broadband upgrade works by limiting charges to A and B category roads, and consider allowing for installation via narrow and micro-trenching for broadband deployment only.

I understand that there are ongoing discussions with the Department for Culture, Media and Sport and the Department for Transport on updating the “Reinstatement of Openings in Highways” code of practice to allow such a move. Narrow trenching would cut the costs of trench deployment by about one third, and micro-trenching would reduce it by a further third, so that would be two thirds in total.

It is important that we take a dynamic and innovative approach to dealing with the coverage problem, as laying cable underground may, in the not-too-distant future, become an entirely outdated process. That will be especially true as mobile superfast broadband coverage becomes increasingly available, now that speeds of up to 50 megabits per second are physically possible. That has the advantage that there is no need for a landline and there is the ability to supply a connection flexibly and quickly. Local authorities must be encouraged to co-ordinate with superfast mobile broadband providers, as providing that service is likely to have implications on public works, street furniture and new developments. Ofcom can also keep a close watch on this market as it develops, to ensure that any technological progress provides as much benefit as possible to the end consumer.

It is widely assumed that the demand for bandwidth will continue to grow tenfold every five or six years. The legacy fibre and copper network will still be able to deliver superfast broadband to some customers, but competitive global city economies will in truth require a full fibre-optic network after 2015 in order properly to compete. I should be keen to see the Government encourage greater activity by broadband providers, in co-operation with local authorities, to press quickly ahead with the creation of affordable broadband.

Meg Hillier: I agree with everything that the hon. Gentleman has said about the need to ensure that this issue is a high priority. I could not have put it better myself, so I thank him.

Mark Field: Lovely! I shall just finish my own points by saying this. I say to the coalition Government that we need fully to harness the digital capabilities in the heart of the UK’s cities—I accept that this applies to other urban areas as well—because that is truly where that is most needed.

4.18 pm

The Minister for Culture and the Digital Economy (Mr Edward Vaizey): It is an honour to serve under your chairmanship, Mr Streeter, in this unusual and temporary setting for Westminster Hall debates. I thank my hon. Friend the Member for Cities of London and Westminster (Mark Field) for his excellent speech, which encapsulated all the concerns. I am also grateful for the contributions from the hon. Member for Hackney South and Shoreditch (Meg Hillier) and my hon. Friends the Members for Chippenham (Duncan Hames), for Gloucester (Richard

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Graham) and for Finchley and Golders Green (Mike Freer). It is nice to have contributions from so far afield outside London.

The main focus of the debate is broadband in London, but I know that the issue of broadband is of huge concern to hon. Members all over the country. I am pleased that a similar level of consensus has been established in this debate as has been established in relation to all our efforts to keep Scotland in the Union. May both elements of consensus achieve similar levels of success.

My hon. Friend the Member for Cities of London and Westminster, who secured the debate, talked about how his expectations had changed over the past 10 years since he went to Africa, and I think he hit the nail on the head. Even during the past two or three years since we started the programme, the legitimate expectations of businesses and residents for superfast broadband speeds have grown exponentially, not least because of the entertainment applications that residents are now used to using, such as BBC iPlayer, and because of businesses’ use of technologies such as the cloud.

It is important that we recognise some of the successes of the broadband programme that we have undertaken, as well as the commercial roll-out of broadband. Since I last discussed the subject in the House, we have, under the rural broadband programme, passed more than 1 million homes, and we are now passing 40,000 homes a week across the country. By spring 2015, we will have passed at least 2 million premises.

Of course, broadband is equally important in urban areas, and it is right to raise that issue; people sometimes think that urban broadband will simply take care of itself. In some respects, it has done so with commercial roll-out. We should recognise that BT’s commercial broadband roll-out scheme, which had no Government subsidy, reached some two thirds of premises in the country and was completed two years ahead of schedule. I was pleased that, as a result of discussions with the Government when we were putting together the extension of our rural broadband programme, BT committed another £50 million, as my hon. Friend mentioned, to reach another 400,000 urban premises.

I was pleased at the beginning of last month that Virgin Media announced plans to extend its network in east London to a further 100,000 premises, which will make a significant difference. I am pleased to see Virgin Media investing not only in faster speeds for its existing customers but in extending its footprint. UK Broadband has launched its own superfast wireless service across much of central London, including the Cities of London and Westminster. In my press cuttings today, I came across a company called Optimity from Tech City, which also plans to offer a wi-fi superfast service. We have seen the announcement that CityFibre Holdings will be working with TalkTalk and Sky to bring fibre broadband to many of our key cities across the country, as will companies such as Hyperoptic.

In the debate about broadband, we must not forget the importance of 4G. Thanks to the successful auction that we carried out, we now have the fastest roll-out and take-up of 4G mobile speeds anywhere in the world. In superfast broadband terms, in London the average download speed, as I understand it, is 60 megabits a second and the average upload speed is 59 megabits a second. I understand how important it is for my hon. Friends to make their case, but we must recognise that

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the UK is now a world leader in international rankings. We are the best connected of the top five European economies. In answer to the hon. Member for Chippenham, I do not believe that he will find a better scheme than our rural broadband scheme when it comes to Government support for broadband roll-out.

Meg Hillier: One of the real concerns of small businesses in Shoreditch is that upload speeds are simply not suitable for businesses that deal with a lot of digital data. Will the Minister address that if he has a moment?

Mr Vaizey: As my hon. Friend the Member for Cities of London and Westminster said, it is important to distinguish between business and residential broadband. Businesses that want certain speeds must recognise that they have to get a service that is more expensive than residential broadband. That does not mean, however, that we should not focus on ensuring that commercial providers provide good broadband speeds for residential use as well as for commercial use.

To pick up on what my hon. Friend said in his speech, it is important to look at deregulation. He outlined the huge cost of laying fibre in a city environment. That is why we have introduced legislation to permit the installation of broadband street cabinets and new overhead lines without the need for prior approval from planning authorities. That measure will last for five years. We have also introduced changes to streamline the planning process to support the deployment of mobile infrastructure and encourage the 4G take-up that I mentioned earlier.

In some urban areas, commercial investment in residential broadband has not happened for reasons to do with the original network, the anomalies in coverage and the potential expense of resolving those problems. Nevertheless, we have 88% superfast coverage in London, and London stands against any of the major cities in the world in terms of broadband availability. There are clearly vast amounts of fibre in the City of London, but that has been designed for commercial use. As my hon. Friend said, the challenge is to extend more coverage to the residential sites.

We are initiating dialogue. The chief executive of BDUK, Chris Townsend, will talk to the Mayor’s connectivity summit later this month, and all suppliers have been invited to discuss this important matter. We must support commercial deployment wherever possible. We can subsidise the supply side only where the case for public intervention is absolutely clear, to avoid chilling the appetite for commercial investment. We must satisfy state aid provisions. We have engaged with the European Commission on those matters, and we have agreed with the Commission that our focus must now be on stimulating the market to invest in and supply services to close gaps in urban broadband supply.

My hon. Friend mentioned the SuperConnected Cities programme, which is at the heart of our approach, particularly the broadband connection vouchers of up to £3,000 each. The sheer richness of the market is demonstrated by the fact that 530 suppliers are registered for the scheme and another 100 have applied to take part. We have also issued almost 2,500 vouchers. There has been a learning curve, and we have streamlined the system, making the application process much simpler. We have also removed the requirement to look for competing quotes.

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Under the same scheme, we are rolling out wi-fi in public buildings across the country. For example, 12 major museums and galleries in London, covering 30 million visitors, will have wi-fi. For your interest, Mr Streeter, should you wish to visit, there is now wi-fi in the National Gallery—where they will now allow you to take photographs, and even selfies—the Natural History museum and the Imperial War museum. Wi-fi will soon come to the Tate, the National Portrait Gallery and the British Museum.

I turn to the concerns in Tech City, which the hon. Member for Hackney South and Shoreditch mentioned in her intervention. The voucher scheme has benefited firms in the Shoreditch cluster and, as my hon. Friend the Member for Cities of London and Westminster mentioned, the scheme already supports more than 600 businesses across London. I have asked BT to sit down with the chief executive of Tech City UK, Gerard Grech, to look at the problems. I have to say frankly that at the moment some of the evidence is simply anecdotal. We need a much clearer picture from Tech City and the hon. Lady’s constituents about where the gaps lie. The important thing is to bring people to the table, to analyse where the problem is and to encourage commercial providers to meet demand. Clearly, they will invest where they believe there is demand and where they know there is a genuine need for the service.

To pull back to the bigger picture, the overall broadband scheme is very much on track. We remain committed to achieving superfast broadband coverage for 95% of UK premises by 2017. We remain committed to universal access to standard broadband of 2 megabits per second.

I will pick up on a few other points. In terms of advertised speeds, which the hon. Member for Hackney South and Shoreditch mentioned, Ofcom and the Advertising Standards Authority have worked to ensure that when broadband providers sell a service, they make it clear what the average speed, rather than the highest speed, is likely to be. I absolutely understand the hon. Lady’s frustration about the length of time that it takes to get a connection. Commercial providers must improve their customer service to ensure that people can get a connection as quickly as possible.

My door is always open, and I frequently have meetings with colleagues. Wherever a notspot causes frustration in the constituency of a colleague, such as my hon. Friend the Member for Gloucester, I remain ready and willing to meet them. I urge colleagues to engage with BT, because the company will come to the table, although it will not always provide the solution that a colleague wants. It is important to keep raising such issues and not to think that we will simply push the matter under the carpet.

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Money Transfer Organisations

4.30 pm

Rushanara Ali (Bethnal Green and Bow) (Lab): It is a pleasure to serve under your chairmanship, Mr Streeter.

I am extremely grateful and delighted that we have a chance to debate the important issue of international finance and money transfer organisations. The new Minister’s predecessor, the right hon. Member for Loughborough (Nicky Morgan), was extremely supportive in responding to and working with officials and many Opposition Members to try to get a lasting solution to the challenge faced by money transfer businesses, which need banking facilities to ensure that remittances can be sent to developing countries, particularly to support family members and economic and humanitarian development. I hope that the Minister will update us on the progress that her Department and other Departments have made on trying to come up with a workable and effective solution that will ensure that the sector gets the support it needs and that there is greater transparency on the actions of banks and on how they enable remittance to flow safely.

In June 2013, Barclays bank announced its decision to close accounts held by community-based money transfer businesses. A number of the affected businesses were in my constituency, which is how I got involved with the campaign to build support in Parliament and across the country. I am grateful to some 50 hon. Members on both sides of the House who joined the campaign, who spoke in community meetings with Ministers and who supported me and others in setting up the “Save Remittance Giving” campaign, which has commanded the support of some 122,000 people who signed the petition to highlight the concern about the ending of banking facilities for the many UK money transfer businesses that were trying to get help and support to people in developing countries. We were fortunate in having the support of not only parliamentarians but people from community groups—particularly in the British Somali community but also in the British Asian community and many other diaspora groups and ethnic minority communities—and, more broadly, from the media and non-governmental organisations such as Oxfam and, of course, the Overseas Development Institute, both of which lent their expertise and are examples of how important remittance is in complementing development aid efforts.

The flow of remittance from the UK to people in developing countries accounts for more than £15 billion each year, and the vast majority of those transactions are made by people to poorer family members and to remote places across the world in the form of food, medical aid and assistance. The transactions can help to build schools, hospitals and roads. Many hon. Members on both sides of the House have visited countries, working with their constituents, to see some of those projects happen because the British ethnic minority and diaspora communities have contributed directly to develop their countries. That is particularly the case in countries that have come out of conflict and are trying to rebuild. Somaliland, which is the beacon of a region that is trying to rebuild after a conflict that affected the region’s fate for so long, is one such example. Many of my constituents who are originally from Somaliland have

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worked tirelessly to raise money and find appropriate ways to get remittance into Somaliland and beyond, particularly during the east African famine crisis, to support people and help rebuild their country.

The stakes are incredibly high, not only for development and developing countries but for us. If we do not have legitimate ways to ensure that ordinary people can get support to their family members and the societies that they have come from, so making their contribution to rebuilding those countries, we will miss out on an important opportunity to ensure that remittance can play a significant role not only in the past but in the future.

Governments across the world have faced pressure to reduce their aid budgets, and our Government have faced that pressure from certain sections of the media. I am glad that the aid budget has not been reduced, and I hope that on Friday the International Development (Official Development Assistance Target) Bill, which would legislate for a development aid target of 0.7%, takes a step closer to being enshrined in law. Successive Governments across the world have faced pressure on their development assistance budgets, and we all know that, combined across the world, remittance eclipses the world’s combined budget for overseas development assistance. This is not about small amounts of money going to individuals, although that is important; it is about the collective effort that citizens make to support family members and fellow citizens across the world, particularly in the poorest countries.

Last year, following the campaign, following the efforts of communities across the country and following the media attention, we encouraged Ministers in the Treasury and in the Department for International Development, working closely with officials, to find a long-term solution to the problem, so that money transfer businesses can be given the bank facilities that they need. Without access to clearing banks, it is virtually impossible to give assistance, particularly to countries without a proper banking system.

I am grateful to the Minister for continuing the effort to try to establish a process through the action group on cross-border remittances. As the framework set out, the process needs to be robust, effective and safe. Will she provide an update on that process? I thank her for keeping us updated. My understanding is that the safer corridor pilot will be implemented in September and that, subject to the effectiveness of that pilot, further action may be taken to roll out the facility to other countries in which the problem has arisen.

We need to act quickly because if citizens are left to their own devices to get help to their families in places such as Somaliland, Somalia and elsewhere—countries that have no banking system and no proper provision, and about which there are terrorism and security concerns—without the support of safe routes through money transfer companies, they are more at risk of having their money hijacked, which is not only dangerous and damaging for those affected but can have major ramifications for our security. There is a clear economic and humanitarian dimension, but there is also a security dimension.

In the wider context, many parts of the world are undergoing humanitarian emergencies. Families want to get help to loved ones in post-conflict and conflict-affected states, whether they are in Afghanistan, Somalia or

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beyond, so we must ensure that there is a way for them to do so. We must also ensure that non-governmental organisations can get assistance in countries where remittance facilities are not available. For example, Mo Farah, double Olympic winner, joined our campaign because his country is affected but also because the Mo Farah Foundation is in exactly that position. Aid agencies have a vested interest in ensuring that facilities that work are set up.

I hope that the Minister will use this opportunity to answer our questions. First, although the pilot is welcome, there is an urgency to the situation of money transfer businesses that have been operating successfully but that now face the prospect of banking facilities being made unavailable to them. That has already happened to some of them. There is a gap before a new facility is introduced, and they are unable to access banking facilities in the meantime, so their businesses could go bust. Therefore, no such businesses could be left operating in some countries. Essentially, we face the possibility that a facility that can have a powerful and positive effect will be made available too late. Will the Minister update us on whether she has had any success in her Department working with the Foreign and Commonwealth Office to ensure that the banks that have withdrawn or threatened to withdraw provide a further period of reprieve until the pilot is tested and can be rolled out and until the final programme is in good shape and lessons have been learned?

I am grateful that the World Bank has been drawn into the discussion and is a member of the group. It has an important role to play in co-ordinating efforts and getting the US Treasury involved. What role has the World Bank and the Minister’s Department played in discussions with the US regulators and US Treasury? Decisions made in the US on banking regulation have had a knock-on effect on our banks and their choice to withdraw banking facilities. It is critical to ensure that the UK and US Governments work together. Both countries, as well as other western countries, can benefit from a lasting solution, from the humanitarian, economic and security perspectives.

Our final questions are about the advice and guidance published by the Minister as soon as she took up her new ministerial position. It may be too soon to say, but how confident does she feel that the banking sector will see the guidance as addressing its concerns and that its confidence will be improved and increased, so that it can start to provide banking facilities to remittance businesses? Is an impact assessment process built in to see whether the guidance is having the desired effect of building confidence in the banking sector? I know from the feedback I have had that some money service businesses do not see any change. Can the Minister give any examples of banks that have come back and said, “Given this guidance”—I understand that it is legally binding—“we are in a position to provide banking facilities to MSBs that pass those tests.”? Are there any such examples, and are her officials working to establish that?

On the effort to build a commercial environment in which small and community-led businesses can operate, given that they have extensive and trusted community networks in the UK and the countries where they operate, how can we work with the grain of those networks, so that money flows transparently and in an

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appropriate and safe way that reinforces the kinds of safeguard needed by both the remitter and our Government and so that the money is not at risk of ending up in the wrong hands?

The debate has gone on for about 15 months now, since the day when Barclays decided to withdraw banking facilities from a number of money transfer businesses in my constituency and throughout the country. The sector creates 3,500 jobs, which are at risk, and it has been quietly doing important work to get help and support to millions of people in some of the poorest places in the world.

I believe that we have a once-in-a-lifetime opportunity to work together rather than saying, “The banks have decided that they will get big fines from the US regulators.” The MSBs predominantly have had nothing to do with that. The US regulators fined HSBC and other banks for their activities, and the banks have responded by trying to crack a nut with a sledgehammer, punishing the vast majority of MSBs, which are law-abiding. Many MSBs provide assistance to security services where necessary, by supporting them to tackle money laundering and terrorism, and work responsibly with our Government and agencies. It is vital to ensure that the sector is strong and can support people in developing countries.

This is also a once-in-a-lifetime opportunity to ensure that the pilot involving World Bank officials, Treasury officials and others, if it is effective, provides a tool to get money safely into post-conflict countries without banking systems. If the pilot is successful in Somalia, it might be applicable to Afghanistan and many other countries where money flows are happening, but we are not clear how, and where they could be fuelling terrorism and other activities that are extremely dangerous not only for those countries but for us. In that context, I hope that the Minister will seize this big opportunity for her, through her role and her brief, to develop a tool that could save millions of lives and improve security in our country.

4.47 pm

The Economic Secretary to the Treasury (Andrea Leadsom): It is a great pleasure to serve under your chairmanship, Mr Streeter. I say first of all to the hon. Member for Bethnal Green and Bow (Rushanara Ali) that I completely understand how vital money service businesses are to the humanitarian effort. I assure her that the Government and I have been extremely focused on creating safe remittances for UK residents to post money to relatives and friends in developing countries. We are very much aware of that. We are particularly aware that annually, such remittances from the UK amount to more than £15 billion. It is a vital lifeline for many, and I assure her that we understand that. In the specific case of Somalia, remittances support 3.4 million people and account for approximately half of Somalia’s gross national income.

That is why, since I came into my new ministerial role earlier this year, I have made sure that the UK Government do everything that we can to ensure that remittances continue to flow through accessible and secure channels from the UK to all regions of the world. I am grateful to the hon. Lady and other hon. Members—I mention

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particularly my hon. Friend the Member for Ealing Central and Acton (Angie Bray)—who have explained their personal concerns and those of their constituents.

As many people will know, the context for this debate is growing concern among banks globally about money laundering and terrorist financing, and of course the real possibility of banks facing potentially crippling enforcement action for failing to protect properly against those risks. The money service business sector has been particularly affected by this trend, but it is not the only one.

Tackling organised crime and terrorism is quite rightly a priority for the UK and our international partners around the world, including the US. The Prime Minister took the lead in driving forward this agenda during our presidency of the G8 last year, and we are doing the same through the G20 this year. Our banks and regulators have a real responsibility to ensure that they are not supporting activities that could pose a threat to British citizens and undermine the progress that developing countries are making. I know that hon. Members will entirely agree that it is vital that, in ensuring remittances are safe, we do not encourage money laundering, financial crime and support for terrorism.

The right approach to tackling those threats should effectively deter, detect and deal with those who seek to use the financial system, including money remitters and banks, to launder money or fund terrorism; at the same time, it must support and protect legitimate businesses and the critical lifelines for countries such as Somalia. I wish to assure hon. Members today that the UK Government are fully committed to achieving that aim.

I also want to take the opportunity to provide an update on the state of the remittance market in the UK, and to set out the steps that the Government have taken, and are taking, to support it. First, the UK Government have been closely monitoring the UK remittance market, and we have been working with banks and businesses such as Dahabshiil and other MSBs to help them to understand and manage these risks, and to mitigate the impact on remittances to Somalia and elsewhere.

At this time it remains possible for Somali families in the UK, charities and others to continue to send money to Somalia. However, we recognise that the situation remains fragile. Since my predecessor—my right hon. Friend the Education Secretary—last addressed hon. Members, action to deal with this issue has remained an urgent priority for the Government, and for me personally.

4.52 pm

Sitting suspended for a Division in the House.

4.59 pm

On resuming

Andrea Leadsom: The action group on cross border remittances, led by Sir Brian Pomeroy, has made real progress on all fronts and regular updates on the work of the group have been published on gov.uk. As a result of the work of the group, which includes representatives from Government, regulators, law enforcement, banks and remittance firms, the following actions have been taken.

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First, new guidance has been developed for MSBs and those banking MSBs, providing a legal safe harbour for regulated firms; that is to say that in the event of a prosecution, the firm or individual concerned could provide a defence by saying that they had followed the Treasury-approved guidance. Secondly, the National Crime Agency has worked collaboratively with banks and MSBs to share information about the risks and enable a better understanding of those and how they can be mitigated. Thirdly, Her Majesty’s Revenue and Customs has continued to strengthen its supervision of the remittances sector, including by taking an increasingly risk-based and intelligence-led approach to supervision, providing better support for firms to help them comply with their legal and regulatory requirements, and particularly by doubling the number of inspections of firms to 1,200 per year.

The progress of the Somalia-focused working group, led by the Department for International Development and the World Bank, is of particular interest to many. Through the safer corridor pilot, a series of co-ordinated interventions have been identified and are being developed to improve the transparency of remittance payments at each stage of the transaction chain from the UK to Somalia. The pilot is in the design and consultation phase and is expected to be tested in early 2015. We will continue to consult community representatives to make sure that proposals for the safer corridor are designed in a way that works for the Somali diaspora in the UK. I thank community representatives very much for their engagement with this whole process; they have certainly been willing and keen to help ensure that we find a resolution.

Over the past few months, the UK Government have worked particularly closely with the Somali community on the issue of remittances. Community representatives, the Government and money remitters have prepared a fact sheet, to ensure that those remitting funds to Somalia have clear information about how they can do so. Over the summer, a number of community events took place across the country. I particularly thank the hon. Lady and my hon. Friend the Member for Ealing Central and Acton for kindly hosting some of those community events. I was pleased that Treasury officials, as well as officials from DFID, HMRC and the National Crime Agency, were able to attend, listen to community concerns and share information on the action the Government have taken. I understand the events were well received, with the Somali diaspora appreciating the opportunity to convey their concerns.

I am sure that hon. Members present will want to know that we have been engaging closely with the banking industry, both through the British Bankers Association and directly with those banks involved in this issue. I have personally rung and written to a number of UK banks, asking them to provide support for the safer corridor pilot.

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Of course, I recognise that the real threat of United States enforcement action is contributing to the de-risking activity that we are seeing. Treasury officials are working closely with their US Treasury counterparts and have established a US-UK bilateral banking group for the largest US and UK banks, to discuss the challenges they are facing in this area. In fact, the second meeting of this group is taking place today, with the issue of de-risking the highest priority on the agenda, and yesterday the Treasury hosted a meeting with US and UK banks and MSBs with the US Treasury to discuss that in particular.

The hon. Lady asked a couple of specific questions about the urgency of working with the Financial Conduct Authority to retain banking facilities. I reassure her that the Government have considered a wide range of options that could support the continued flow of remittances at current levels, prior to the safer corridor pilot’s being fully operational. We continue to encourage and facilitate engagement between relevant industry participants, to help banks engage with MSBs that are raising standards now, as well as through the longer-term solutions provided by the safer corridor pilot.

The hon. Lady also asked what engagement we have with the US on this point, and I think that I have just answered her. It is understandable that US regulators are very concerned about this issue, and that banks in the UK that provide banking services to MSBs are also concerned, but it is true to say—I have made the point to the UK banks—that fines levied by the US on UK banks have been for systematic failures in respect of anti-money laundering, counter-terrorism and financing programmes, rather than being cases where banks have made reasonable efforts to manage their risks.

Quite apart from the efforts by Her Majesty’s Treasury and the banks here in the UK to talk to US regulators, I have also found it encouraging to see public messages from US authorities, including in recent speeches, expressing confidence that banks do have the ability to manage higher-risk customer relationships, such as those with MSBs. Good steps are being taken and there is some reassurance there.

In conclusion, I reassure hon. Members and the Somali community that the UK Government are committed to working with the firms affected, and with regulators here and in the US, to promote and facilitate short and longer-term solutions that will enable remittances to continue to flow while protecting the financial system and our countries from organised criminal and terrorist activity.

Question put and agreed to.

5.5 pm

Sitting adjourned.