Christopher Pincher (Tamworth) (Con):
I echo the Prime Minister’s tribute to the victims of Sousse, including my constituent, Sue Davey, who, with her partner, Scott Chalkley, lost their lives last week. Will my right hon. Friend provide special and personal commendation to the individual brave Tunisians, from those who tried to
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warn against the attack on the beach, to the building workers who tried to stop the terrorist, to the doctors and nurses in the hospitals who treated the injured, because, as we know but must always be reminded, it was not done in their name?
The Prime Minister: I also pay tribute to Sue and Scott, as my hon. Friend has done. He is right to commend the local Tunisians, whether doctors and nurses, people who turned those sun loungers into stretchers, or people who confronted the terrorist. They are a credit to themselves and a credit to their nation.
Rushanara Ali (Bethnal Green and Bow) (Lab): Our thoughts and prayers are with the victims and their families. This appalling act of terror against defenceless holidaymakers highlights the need for us to fight extremism both at home and abroad. These terrorists seek to drive a wedge between the majority of the world’s Muslims, who have no truck with what they represent, and everyone else. We must all work harder to make sure that they do not succeed. What steps will the Prime Minister take to make sure that any international response includes action to help stabilise and rebuild post-conflict states such as Libya and others to prevent them from continuing to be a breeding ground for, and exporters, of violent extremism? Will he reconsider my call earlier this year for an inquiry?
The Prime Minister: I very much agree with the hon. Lady, particularly on rebuilding broken states affected by conflict. As the Secretary-General of the United Nations has said, a missile can kill a terrorist, but it is good government and governance that kill terrorism.
Bob Stewart (Beckenham) (Con): Does the Prime Minister agree that no security service in the world, including the Tunisian security services, will be able to identify someone who secretly radicalises himself, trains himself quietly and then operates largely independently?
The Prime Minister: My hon. Friend is absolutely right, but that reinforces the point that, because we are not necessarily dealing with a network, anybody who has information and is worried about someone who is going wrong—who is getting radicalised and is either visiting extremist preachers or looking at extremism online—needs to act. Otherwise, it could end the way it has in the past few days.
Jeremy Corbyn (Islington North) (Lab): Obviously, what happened is appalling, tragic and terrible and has to be condemned in every way, and we should support those people in Tunisia who are doing their best to build a free, democratic and secular society with less unemployment and more youth engagement.
I want to take the Prime Minister back to the point made by the Chair of the Foreign Affairs Committee about the situation in Libya. Does not he think that the destruction of so much of Government and society in Libya has caused, and provided an opportunity for, the problem to get worse?
The Prime Minister:
If the hon. Gentleman is asking whether I regret the action we took to stop Colonel Gaddafi massacring his own people in Benghazi, then no, I do not. The cause of terrorism is people choosing
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to take up terror. At the same time, should we try to build these countries and governance? Yes, of course we should, but we should never forget where responsibility lies.
Nadhim Zahawi (Stratford-on-Avon) (Con): A powerful antidote to the ISIL poison would be if young British Muslims could see Arab Sunnis who are playing host in Iraq and Syria rejecting ISIL and ejecting it from their midst. Will my right hon. Friend redouble his efforts to find a political solution to reject ISIL and eject it from Iraq and Syria?
The Prime Minister: My hon. Friend is absolutely right. We need to build an Iraq where its Prime Minister is clearly working for Sunnis as well as Shi’as and Kurds, but we also need Sunni Muslims in Iraq to rise up and reject ISIL. Without that, it will always be more difficult to take that cancer out of the country.
Derek Twigg (Halton) (Lab): May I press the Prime Minister on a question I asked him a couple of weeks ago about the Sunnis and Sunni tribes in Iraq? The fact is that the Iraqi Government are not reaching out to them or arming them. Without that, we are not going to see the Sunni tribes and the Sunnis taking on ISIL. What is the Prime Minister, along with European partners, doing to ensure we put pressure on the Iraqi Government to do that and ensure that the Sunnis are involved?
The Prime Minister: The hon. Gentleman asks absolutely the right question. I have personally raised this issue with President Abadi, including at the G7 summit in southern Germany, and will continue to do so. We have to encourage him to be brave in reaching out from his Shi’a base. We should also work with Sunni regimes in the area that themselves can work with the Sunni tribes to encourage them to accept the offer of an inclusive Iraqi Government and to reject ISIL.
Philip Davies (Shipley) (Con): Every year the EU is a smaller and smaller part of the world’s economy, its currency is a basket case, it is undemocratic and its free movement of people makes it easier for terrorists and other criminals to enter the UK from other parts of the EU. Rather than faffing about with a renegotiation when we know the Prime Minister is going to get next to nothing but dress it up as a great triumph, may I suggest that he would be better employed negotiating the terms of Britain’s withdrawal from the European Union?
The Prime Minister: I sometimes wish that my hon. Friend would not speak in riddles, but be clear about what he really wants. I hope to prove him wrong by bringing home a substantial package that will make a difference and address the concerns of the British people, but in the end they will be the judge.
Mr George Howarth (Knowsley) (Lab): I welcome the Prime Minister’s statement and his words of condolence for the families who have so tragically lost family members. I also welcome his recognition of the need for a counter-narrative to violent extremism, but will he accept that there are many pathways into violent extremism and that any counter-narrative must be based on a proper understanding of those various pathways? Will he undertake to set up an audit of what we know both in the intelligence and security services and through open sources, so that any counter-narrative can be more firmly based?
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The Prime Minister: The right hon. Gentleman makes an important point. The Home Office has now set up an organisation to better identity and understand not just violent extremists, but the various extremist groups and organisations out there. I accept and agree that we have to look at pathways into extremism, but we cannot ignore the fact that young people who have been to good schools, have strong family backgrounds and are not suffering material deprivation have none the less chosen a violent extremist path. That says to me that, while we must of course go on attacking deprivation, making sure we are a more inclusive country and tackling inequalities at home, what we are really looking for is the cause of the ideological linkages that people are making, and it is those we need to go after.
Mr Speaker: Order. A single, short sentence question could now represent a parliamentary triumph. I call Mr Bernard Jenkin.
Mr Bernard Jenkin (Harwich and North Essex) (Con): Will the Prime Minister explain how a mere promise of treaty change can be made legally binding?
The Prime Minister: In very much the same way, when Ireland had a treaty change and a protocol addressing that treaty change, the referendum took place in Ireland before all the other countries’ Parliaments had passed the treaty change, so this has happened on previous occasions across the European Union.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab): I want to join the Prime Minister, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) and Members from across the House in paying our condolences to the families of the people caught up in the barbaric attack on the holiday resort in Tunisia.
I want very quickly to mention to two issues. The first is about recognising as Muslims those in the Daesh group. These people are not Muslims; they are what is known as Khawarijite. This has gone on in Islam for a long time—they were responsible for killing two of our Khalifas at the start of the religion—and it is continuing. Where I agree with the Prime Minister is that we have to take responsibility for our young people not being edged along in Islam towards them, because these people are not Muslims. We must take responsibility for dealing with that across the whole community—the Muslim community and all other communities and institutions as well.
The Prime Minister: The hon. Gentleman speaks with great knowledge about this, and I have admired what he has said about this over the years. He is right that these people are bastardising and perverting a religion, but we cannot ignore the fact that they are self-identifying as Muslims. That makes it even more important that we reject what they are saying and prove to young people, including young Muslims, that they have nothing to do with what the true religion is about.
Paul Maynard (Blackpool North and Cleveleys) (Con):
I am sure the Prime Minister can imagine the sadness in Blackpool given that two of my constituents sadly died
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in this attack, having wanted nothing more than to go on a summer holiday. Does he share my view that one thing that could be done is for the EU to restart urgently its initiative with all of the nations on the southern Mediterranean coast, which seemed to die away with the Arab spring and the crisis in the eurozone? We need to start again on that.
The Prime Minister: My hon. Friend is right. Money is being spent in countries such as Tunisia, but I suspect it is not enough and that it is not focused on enough things that make a real difference to the Tunisian economy and the Tunisian people.
Diana Johnson (Kingston upon Hull North) (Lab): I welcome the Prime Minister’s statement, and I ask that we all join in sending our condolences to the family of my constituent Claire Windass, who tragically lost her life on Friday in Tunisia. Her family have issued a statement saying that Claire
“was a warm, kind-hearted woman who made friends easily and was loved by everyone who knew her. She will be deeply missed.”
The family have called for privacy, but will the Prime Minister assure me that lessons have been learned from families who have very tragically been in similar circumstances in the past about the kind of effective support that will best meet their needs and requirements over the weeks and months to come?
The Prime Minister: Let me join the hon. Lady in paying tribute to Claire Windass and mourning her loss. Lessons have been learned from previous tragedies. That is why it is so important that the Under-Secretary, my hon. Friend the Member for Bournemouth East, who lost a relative in the Bali bombing, is involved. As a country, we have developed better ways of making sure families are kept in touch with developments. There is still more to be done, but lessons will be learned and we will be as sensitive as we can.
Peter Aldous (Waveney) (Con): My constituent Stuart Cullen lost his life on Friday. Can my right hon. Friend assure me that he and the others who died, and their families, will never, ever be forgotten?
The Prime Minister: I can certainly give that assurance to my hon. Friend. With him, I mourn the loss of his constituent Stuart Cullen. It is very important that we speak with families in the coming days and weeks to think of the best way to have a fitting memorial to their suffering and to what this has meant: one of the largest losses of life in a terrorist incident that Britain has suffered in many years.
Margaret Greenwood (Wirral West) (Lab): I add my condolences to everybody affected by this tragedy. What discussions are the Government having with travel insurance companies to ensure that all those who are in Tunisia and who wish to come home may do so free of charge?
The Prime Minister:
The hon. Lady raises an important point. My understanding is that the companies have offered travel back to the United Kingdom. A lot of planes have been laid on. We believe that system is working. Where it is not working, we are getting on to the company concerned and trying to make sure the problem is fixed. On the issue of where people have
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been injured or returning the bodies of those who tragically have been killed, we are stepping in directly with transport via the RAF to try to help.
Mr David Nuttall (Bury North) (Con): Will the Prime Minister please pass on my thanks to his fellow European Union leaders? Every time one of them refuses to agree to one of his very modest requests in the renegotiation process, they make the task of those of us who argue this country would be better off outside the EU just that very little bit easier.
The Prime Minister: I do not want to disappoint my hon. Friend too much, but actually the reception I have had from my fellow European Prime Ministers and Presidents has been rather more positive than he suggests.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): My thoughts and prayers are with those caught up in the horrific events in Tunisia, including those from Cardiff. What consideration has the Prime Minister given to reviewing and, if necessary, upgrading our support and training security forces in other countries where British civilians and interests may be under threat from Daesh? Will he put those considerations at the heart of the upcoming strategic defence and security review?
The Prime Minister: The hon. Gentleman makes a very important point. The SDSR should be about these issues, as well as the more traditional issues of protecting and defending Britain herself. We are a country where our people work, travel and live in all sorts of different countries. Making sure we work with those countries to enhance their security is an important part of what we do.
Jake Berry (Rossendale and Darwen) (Con): Naomi and Carol Wearing, two of my constituents from Darwen, were injured in the attacks last Friday. Naomi was reportedly injured by the use of a hand grenade during the attack. They have now returned to the UK and are being treated in Blackburn hospital. I would be grateful if my right hon. Friend assured me that Blackburn hospital and all our other NHS hospitals will receive all the support they need, including the use of extended counselling for victims.
The Prime Minister: Let me join my hon. Friend in paying tribute to his constituents who were caught up in this terrible attack. I am sure assistance will be made available for counselling. What happened was a deeply traumatic event that will affect people for many months and years to come.
Graham Stringer (Blackley and Broughton) (Lab): Earlier this year, the Prime Minister said he wanted proper, full-on treaty change. How can we take his negotiations seriously when he has dropped this reasonable demand in the first round of negotiations?
The Prime Minister: I have not dropped this demand at all.
Mr Steve Baker (Wycombe) (Con):
With my constituent John Metcalf recovering from his wounds in Tunisia, together with his uninjured girlfriend, Jo Coles, may I
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strongly associate myself with my right hon. Friend’s remarks? May I also strongly welcome the direction of travel he has set out for European reform? How have our European friends justified political integration for non-eurozone member states, to achieve free trade?
The Prime Minister: Different European countries have different views about integration—some sign up absolutely to the idea of ever closer union and want every country to take every step pretty much at the same time—but there is a growing awareness in Europe that actually we can have a Europe with different forms of membership. As I said, some countries are in the euro and some are out, and some are in Schengen and some are out, and when we sit round the table discussing issues such as Libyan security, some countries will be leading members of NATO and some will be neutral and not members of NATO. I think we should be relaxed about this flexibility and encourage it still further.
Ian Paisley (North Antrim) (DUP): This atrocity awakens and provokes many hideous memories of atrocities of mass murder in my own country—Ballykelly, La Mon, Warrenpoint or any of the other countless atrocities that have taken place. I therefore welcome the Prime Minister’s statement, the grief he has publicly put on record and the fact that on Friday we will be able, as a nation, to pay tribute with a minute of respect. How much of the aid currently given to Tunisia is being directed towards the education of people there away from fundamentalist beliefs?
The Prime Minister: Not enough. The aid and assistance has been much more focused on building up Tunisian democracy and the institutions of this fledgling democracy. Given the scale of the threat, however, we will have to look again at these partnership programmes, and obviously education should be part of that, bearing in mind the danger of radicalisation, which the Tunisians are looking at themselves. In addition, these countries often have parts that are quite wealthy and successful and parts that are falling behind, and we need to address that challenge, too.
Michael Fabricant (Lichfield) (Con): My right hon. Friend has already said that the threat here remains “severe”. He and my constituents will have read the report in The Times this morning that Scorpion automatic weapons might have been imported into the UK. What can he say to reassure the people of this country?
The Prime Minister: I will not comment on a specific report, but my hon. Friend is right that the threat level in Britain is “severe”. It is set independently by the joint terrorism analysis centre, and “severe” means that an attack is highly likely. He also makes the important point that we should continue to do everything we can to keep the trade in weapons, including replica weapons, out of Britain. A lot of action has been taken, and the National Crime Agency is doing very good work, but we need to keep up the pressure.
Heidi Alexander (Lewisham East) (Lab): I am ashamed to think that this summer many of us will swim in a sea where people have drowned simply because they were fleeing war, violence and poverty. Is the reason the UK is failing to take its fair share of refugees that the Government find human suffering easier to bear if it is made someone else’s problem?
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The Prime Minister: I just do not agree with the hon. Lady. Britain is fulfilling its moral obligations by picking up people in the Mediterranean—4,000 so far, I think—rescued by the Royal Navy, and is one of the only rich countries in the world to have kept its promise on its aid budget, which is being used to help those countries. Do I think it right, however, to be part of a relocation scheme for people who have already arrived in the EU? No, I do not, because it would add to the business models of the smugglers. The idea that we can only take a moral, upright position if we take part in a European scheme that I believe is misguided is just wrong.
Richard Drax (South Dorset) (Con): I am delighted to report that my constituent, Macauley Arnold, his girlfriend and her family were on that fateful beach and at the time of the shooting were offered shelter by a local Tunisian in his house. Does my right hon. Friend agree that this shows the innate kindness and courage of the Tunisian people?
The Prime Minister: I absolutely agree with my hon. Friend. There are many examples of this sort of courage and kindness, and it is good to see them; these people are a credit to the Tunisian nation.
Andrew Gwynne (Denton and Reddish) (Lab): I associate myself with the comments of the Prime Minister and the Leader of the Opposition on the terrible events in Tunisia. On the issue of migration at the European Council, did the Prime Minister take the opportunity to discuss with other European leaders the situation at Calais, and does he think that the EU proposals for relocation systems will help or hinder the efforts there?
The Prime Minister: The short answer is that they will not make any short-term impact, but they might, in my view, make it worse in the long term by encouraging more people to make the journey. I did have a brief discussion with François Hollande about the situation in Calais, and my right hon. Friend the Home Secretary is meeting the French Interior Minister later this week. There is more we are going to do—in spending money, providing fencing and other actions such as sniffer dog teams and the like—to try to help the French and work together with them to reduce the problems in Calais.
Bob Blackman (Harrow East) (Con): As part of our Prevent strategy, we rightly ban hate preachers from coming to the UK. Sadly, their message and their perverted ideology is beamed directly to our young people by social media, but also by satellite directed and communicated to certain mosques. What further action can my right hon. Friend take to prevent this from happening?
The Prime Minister: My hon. Friend makes an important point. We can ban the preachers, but we must also look at their use of media—not just social media, but some individual television channels—and make sure that where messages endorse extremism and violence, we have a way of stopping them. This is a very important issue.
Mr David Hanson (Delyn) (Lab):
On the day before this terrible incident, a neo-Nazi was convicted of a machete attack on a random individual in a supermarket in Mold in my constituency—in broad daylight on the
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streets of north Wales. He had been radicalised by internet content, which is equally as bad as internet radicalisation that leads to the Islamic attacks such as happened this week. I welcome what the Prime Minister said, but will he genuinely look, with the internet providers, at how we can stop that type of information being brought into people’s bedrooms from where lone wolves can use it to warp their approach to life?
The Prime Minister: I will certainly do that. We have acted together with the Internet Watch Foundation to take down many pages of extremism. The right hon. Gentleman makes an important point. The arguments about violent and non-violent extremism also apply to the extreme right. This House would never condone the idea that we should tolerate the National Front but go after Combat 18. We would never do that when it comes to fascism, so we should not do it when it comes to Islamist fascism either.
Conor Burns (Bournemouth West) (Con): The right hon. and learned Member for Camberwell and Peckham (Ms Harman) rightly highlighted the appalling treatment of gay people and women by those who subscribe to this evil belief. Is there not something powerfully symbolic, particularly to young Muslim women, in the fact that it is a female Home Secretary who, in the aftermath of this attack, is standing in solidarity with them in Tunisia today?
The Prime Minister: My hon. Friend makes an important point. Indeed, the role of women was an important one in Tunisian democracy, moving the country towards the democratic future that we hope it will continue.
Geraint Davies (Swansea West) (Lab/Co-op): I give my best wishes to Matthew James, a gas engineer in Swansea who took three bullets in protecting his fiancée; he is now recovering in Cardiff hospital. In talking in Swansea to both Shi’ite and Sunni imams from Bangladesh, Pakistan and Iraq, I have found that they are as one in saying that the Daesh are impostors, gangsters, murderers and blasphemers. Will the Prime Minister work side by side with the mainstream Muslim community and give them the resources they need to combat radicalisation, rather than saying that it is their fault and their problem? It is our problem, and we must solve it together.
The Prime Minister: I think that the hon. Gentleman is absolutely right in how he puts it. They have a role to play, and we should help them play it. One of the challenges has sometimes been the relevance of the mosque to young Muslims when it can sometimes seem less relevant to their lives. That is why we need to address the whole issue of ensuring that imams have good English when they are dealing with potentially alienated and radicalised young British people.
Mr Peter Bone (Wellingborough) (Con): Today, the Prime Minister has said that he will put the common market at the heart of our EU membership. I am sure that the British people—and myself—will be shoulder to shoulder with him on that. Why do the British media say that he cannot do this, when I know that he will not accept anything less than fundamental reform and a common market?
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The Prime Minister: I thank my hon. Friend for his support; I want to continue this ever closer union between us for as long as possible.
Jonathan Ashworth (Leicester South) (Lab): In Leicester, we all hope and pray for the safe return of Ray and Angela Fisher. I am grateful for the commitments that the Prime Minister has made with respect to the embassy and Foreign Office staff. Does the Prime Minister agree that Daesh thrives on divisions in the region, whether those involve Kurds or Arabs, Sunni or Shi’a? What is he doing to build an effective united front against Daesh?
The Prime Minister: I join the hon. Gentleman in wishing his constituents well. On building a united front, there is now an enormous international coalition that includes many Arab and Gulf countries. We need to keep that coalition together because all of us bring different things. Some of those countries, as Sunni Arab states, will bring the ability to talk to Sunni Muslims in Iraq and bring them away from Daesh and towards a belief in an integrated Iraqi Government.
Mr Speaker: Order. I am afraid that we have no time for questions with preambles, but if colleagues are willing to imitate the admirable example of the hon. Member for Harwich and North Essex (Mr Jenkin)—the hon. Gentleman is beaming at his recognition—I shall do my best to accommodate them.
Henry Smith (Crawley) (Con): Following last Friday’s terrorist attacks in Tunisia, my constituents John and Janet Stocker are still unaccounted for. May I have assurances from my right hon. Friend that all NHS records that may be required by the Tunisian authorities to identify victims will be made available?
The Prime Minister: I can certainly give my hon. Friend that assurance. Victim identification specialists and police officers are out in Sousse working with the Tunisian authorities on exactly that sort of issue.
Tom Pursglove (Corby) (Con): In the midst of this tragedy, will the Prime Minister join me in commending all those who went about their business this weekend—particularly those who went to support our armed forces events?
The Prime Minister: I certainly will. I was delighted to join the Armed Forces Day parade in Guildford. There was an enormous turnout. People who might have read about potential plans to disrupt it were not being put off—and that is the British way.
Steve Brine (Winchester) (Con): I welcome the Foreign Office’s sensible and measured advice, which my right hon. Friend has explained a bit further this afternoon. What conversations has he had with the Tunisian authorities about the domestic security response that people travelling to the coastal region can expect? Many people will be making decisions in the next few days and will really want to know more.
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The Prime Minister: I assure my hon. Friend that we are talking to the Tunisian authorities right now; the Home Secretary is in Tunisia talking to her opposite number, to make sure that our offer of help with security is taken on board. I think it very important that it is.
Jeremy Lefroy (Stafford) (Con): Does my right hon. Friend agree that the bravery of UK and Tunisian citizens alongside each other is a sign that terror cannot win if Governments show a similar resolve both to fight it together and to provide the hope of which he has spoken?
The Prime Minister: My hon. Friend is absolutely right. This will take resolve, patience and determination among Governments and people.
Dr Sarah Wollaston (Totnes) (Con): Does the Prime Minister agree that, just as we need to do all we can to disrupt vile propaganda from ISIL on social media, it is time for our mainstream broadcast and print media to review their editorial policies and stop publishing stills from snuff videos and blasting us with the faces of smirking terrorists? Instead, let us see the faces of those Tunisians who stood arm in arm to protect innocent tourists.
The Prime Minister: My hon. Friend makes an important point. The media have to exercise their own view about social responsibility and what they should and should not publish. I really hope that the BBC can look again at calling the organisation “Islamic State”. It is not Islamic and it is not a state. It is a terrorist organisation. Call it ISIL, call it Daesh, but do not give it the dignity that it is asking for.
Rehman Chishti (Gillingham and Rainham) (Con): As somebody from the Muslim faith, whose father and grandfather were imams and whose uncle is an imam, I see British and Islamic values going hand in hand. Does the Prime Minister agree that each and every one of us has a duty to challenge non-violent extremism wherever it occurs in our society and community?
The Prime Minister: My hon. Friend speaks with great knowledge on this issue. The short answer is yes— Members of Parliament can all play a role in shifting the debate on this vital issue.
Jason McCartney (Colne Valley) (Con): I join the Prime Minister in praising our brave Royal Air Force for the role that it is playing in the skies over northern Iraq. Meanwhile, on the ground, the brave Kurdish peshmerga forces are taking on Daesh. Does he agree that now is the time for the peshmerga forces to be properly armed and to receive the funding from Baghdad that was promised?
The Prime Minister: I will look into the funding from Baghdad. All that I can say is that we are helping the Kurdish forces with ammunition, training and support.
Mr David Burrowes (Enfield, Southgate) (Con): Although I welcome the extension of the resettlement programme for Syrian refugees, are we not open to the criticism that it is too little, too late, particularly when compared with the more generous resettlement and refugee programmes that other countries have for those fleeing persecution?
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The Prime Minister: If one takes a five to 10-year view of the number of people we have given asylum to, we are consistently in the top five European countries. On that basis, I think we can say that we play our part.
Andrew Rosindell (Romford) (Con): Does the Prime Minister agree that it is fundamental that we retake complete sovereignty over control of our British borders if we are to prevent this evil ideology from creeping further on to our shores?
The Prime Minister: It is important to have strong border control, but the situation in Calais demonstrates the importance, in the age of ferries, the Eurotunnel and all the rest of it, of working with our partners to deliver the security that we need.
David Rutley (Macclesfield) (Con): What steps are being taken to ensure that intelligence is properly shared by national security organisations in middle eastern countries that should be allied in tackling terrorist atrocities?
The Prime Minister: We are sharing intelligence. Obviously, we have different relations with different countries, but the more we can build up trust, the more we are able to do that.
Chris Philp (Croydon South) (Con): In relation to safety here at home, does the Prime Minister agree that when the security services identify people who are threats and who are here illegally, we should deport them as a matter of priority?
The Prime Minister: I absolutely agree. One reason why we want to alter the arrangements in the Human Rights Act is that they can sometimes get in the way of doing that.
David Morris (Morecambe and Lunesdale) (Con): I share the Prime Minister’s sentiments about the families who have been bereaved.
Given the people trafficking in the region, the people coming across the water and the terrorism that exists there, will the Prime Minister consider beefing up the resources that are given to Gibraltar to help combat terrorism and to move people around when necessary?
The Prime Minister: I will certainly look at that point. Enormous pressure is being put on places such as Malta, and if there are issues in Gibraltar, I will look at them.
Alec Shelbrooke (Elmet and Rothwell) (Con): My constituent Miss Richardson was due to travel this Wednesday to the beach resort where this heartbreaking massacre took place. Her tour operator, Low Cost Holidays Ltd, has agreed to waive the seven-day cancellation fee but is still applying administration charges for alternative bookings. What can the Government can do to encourage tour operators to act with compassion in relation to alternative bookings?
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The Prime Minister: We have encouraged the tour operators to treat people properly. To be fair to them, they have offered people cancellations without penalties and their money back. I will ask the Foreign Office team to take up the specific points that my hon. Friend has made.
Stuart Andrew (Pudsey) (Con): I would like to add my tribute to Bruce Wilkinson, who lost his life on Friday. His daughter is a constituent of mine. The dignity of that family is a credit to Mr Wilkinson and is in stark contrast to the depravity of those who committed this crime. Will my right hon. Friend ensure that the bereavement support will go on for many months? The effects of losing somebody in such circumstances often last many years. I join the hon. Member for Moray (Angus Robertson) in saying that we need to change what we call these terrorists—they are not an Islamic state.
The Prime Minister: Let me join in the tributes to Bruce Wilkinson and the way that his family have handled this terrible tragedy. My hon. Friend’s point about Islamic State is well made. He spoke about making sure that we continue with the help and counselling. Part of that will be in how we commemorate and remember these dreadful events. We are just coming up to the anniversary of 7/7, which is a reminder of how important it is that we mark these things properly, because relatives go on mourning for years and decades into the future.
Mr Speaker: I have not forgotten the voice of Kettering, whose patience is now rewarded.
Mr Philip Hollobone (Kettering) (Con): With regard to the desperate and growing wave of human misery that is taking to the Mediterranean in leaky boats from the north African shore, what advice have Her Majesty’s Government and the European Union taken from the Australian Government about the successful way to tackle large-scale, organised, seaborne human trafficking?
The Prime Minister: We have looked at what the Australians have done, and we have also looked at what the Spanish did in respect of migration from west Africa to the Canary islands. In one year they received 36,000 migrants, but just a few years later that was down to zero. They broke the business model of the smugglers and found a way of returning people to the African states and working with those states. That, I think, is the model that we need to adopt. It is obviously more complicated in this case, but that is the long-term answer.
Mr Speaker: I am most grateful to the Prime Minister, to the Leader of the Opposition, and to the 70 Back Benchers who contributed in the 70 Back-Bench minutes.
Stewart McDonald (Glasgow South) (SNP): On a point of order, Mr Speaker.
Mr Speaker: Points of order come after statements. We are saving the hon. Gentleman up, if I can put it that way.
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Greece
5.15 pm
The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): Let me report to the House on the latest developments in the financial crisis in Greece, how they might affect British citizens, and how we will protect our economic security at this uncertain time.
The developments over the weekend have been well reported. Greece’s financial assistance programme is due to expire tomorrow. After tense negotiations last week between the Greek Government and their eurozone partners, it looked likely that a deal to extend that programme would be agreed. On Friday, however, the Greek Prime Minister suddenly announced that there would be a referendum on 5 July on the terms of the programme extension, and that he would recommend that the Greek people vote no. On Saturday, the eurozone Finance Ministers confirmed that, as a result of that unexpected move, negotiations were at an end and the programme would expire. Yesterday, the European Central Bank said that without a programme, it could not extend the emergency liquidity assistance that is the life support of the Greek banking system, and last night, clearly under pressure, the Greek Government announced that banks would not open today and that capital controls would be introduced.
There is considerable uncertainty about what happens next. Over the past 48 hours I have spoken to fellow Finance Ministers, the chair of the Eurogroup and the head of the International Monetary Fund. At lunchtime, as we have just heard, the Prime Minister chaired a meeting attended by the Governor of the Bank of England, myself, the Foreign Secretary and others to co-ordinate our response. Britain’s attitude to the developing Greek crisis is clear: we hope for the best, but we prepare for the worst.
Let me address some immediate issues that will concern people. First, our view on the overall state of the relationship between Greece and its fellow eurozone members is this: whether or not Greece should ever have joined the euro, it is now part of that single currency, and an exit will be traumatic. It was the Greek Government’s decision to hold a referendum that was the immediate trigger for the events over the weekend and the bank closures today. We should plan on the assumption that the referendum will effectively be a choice for the Greek people about whether their country now leaves the euro. That is a matter for the Greek people to decide, and we respect their democratic right to decide their country’s future. We also respect the right of the eurozone to set conditions of membership. The remorseless logic of integration is one of the reasons we did not join the euro and do not want to join in the future.
Secondly, I turn to the impact of the current events on the stability of the financial system in the United Kingdom and throughout Europe. Related to that is the position of the Greek banks here in the United Kingdom. The Greek crisis has, in one form or another, been with us for five years. It is one of the biggest external economic risks to the British economy, and the situation today shows that those risks remain. No one should underestimate the impact that a Greek exit from the
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euro would have on the European economy, or the knock-on effects on us. That is why I have consistently argued that the best way to protect ourselves from those risks is to put our own house in order.
Of course, markets anticipate some of the risks. Private sector exposure to Greek banks and the Greek economy is far lower than it was, say, three years ago, so the financial market reaction today has been relatively contained. Stock prices on European exchanges have fallen by between 2% and 5%, and Greek bond deals have increased by about 400 basis points to more than 14%, but bond spreads in other eurozone economies have remained broadly steady. The eurozone authorities have made clear that they stand ready to do whatever is necessary to ensure the financial stability of the euro area, and we welcome that commitment to the currency. Equally, the British Government and the Bank of England stand ready to ensure our financial stability in the United Kingdom.
The four largest Greek banks, Alpha Bank, Eurobank, National Bank of Greece and Piraeus, all have branches here. Their UK balance sheets are small: between them, their deposits total less than £225 million. Resolution and supervision of those branches is the responsibility of the Greek and EU authorities. Protection of depositors is solely the responsibly of the Greek authorities. All four branches are open today.
There is one Greek bank with a subsidiary in the UK—Alpha Bank. It is a standalone entity that is separate from its parent bank. It is small, with assets of slightly more than half a billion pounds, it is regulated by the Bank of England, and customers can be assured that their deposits are covered by the UK’s Financial Services Compensation Scheme.
Thirdly, there are 40,000 British residents in Greece, including 6,000 receiving payments from the Department for Work and Pensions and about 300 receiving public sector pension payments. The Greek Government have announced a bank holiday in Greece lasting at least until after the conclusion of the referendum on 5 July, and restrictions on withdrawals from ATMs. Withdrawals will be limited to €60 per day per account for Greek accounts. The Greek bank accounts of British residents are subject to those restrictions. Their UK bank accounts are not affected.
International payments into Greece are exempt from the restrictions that the Greek authorities have placed on the banking system. That means that UK Government payments, including state pension and public service pension payments, should be permitted, and I can confirm that those payments will continue to be made in the usual way. However, the situation remains fast-moving and uncertain, and we will keep it under constant review. I recognise that people may be concerned. I have asked the Department for Work and Pensions and public service pensions administrators to attempt to contact people who draw a British state or public sector pension from a Greek bank account. Those people will be helped to switch their payments to a non-Greek bank account if they wish.
Fourthly, there are an average of 150,000 British tourists a week in Greece in July. For the time being the Greek Government have announced that, as usual, tourists will be able to withdraw up to €600 on cards that have been issued outside Greece. However, the Finance Ministry could impose limits in the future, and the availability of
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ATMs that are stocked with cash may get increasingly patchy. I remind people that credit and debit cards are of course accepted only at the discretion of the business being paid.
I can confirm that as a result of the limited and potentially unreliable banking services, the Foreign Office is updating its travel advice as I speak. We recommend that travellers should take sufficient euros in cash to cover the duration of their stay, emergencies, unforeseen circumstances and unexpected delays. Obviously travellers should be careful and take sensible precautions against theft. The full advice is available on gov.uk, and travellers should check it regularly.
Finally, we are taking steps to help firms doing business with Greece. There are restrictions on the settlement of payments being transferred out of the Greek banking system. The Department for Business, Innovation and Skills is today publishing guidance for businesses that may be affected. In addition, I can announce that Her Majesty’s Revenue and Customs’ time to pay service will be available to help give breathing space to businesses experiencing cash flow difficulties as a result of events in Greece.
So let me be clear: British pensioners are being paid as normal, British businesses trading with Greece will be supported, and British holidaymakers will receive the advice and help they need in a rapidly changing situation. I want people to know that Britain is prepared.
To conclude, it is vital that the Government and people of Greece now act to resolve the current uncertainty and ensure economic and financial stability across Europe. Five years ago we came into office in the first flush of the Greek crisis. At the time Britain, too, was dangerously exposed—on the brink. Since then, with the British people, we have worked hard to repair our economy and ensure that we can deal with risks from abroad like the current one. If ever we needed a reminder of why we must continue working through our plan to deliver economic security at home, we have it today, and I will take further steps to secure our country’s future in the Budget next week.
5.24 pm
Chris Leslie (Nottingham East) (Lab/Co-op): These are serious times for Greece and the eurozone, and there are risks for Europe and the UK if an urgent resolution cannot be found. Given that the Greek banks are now closed, can I ask the Chancellor about the immediate implications for the UK economy and British citizens? Our exporters, pension funds and the 1 million British visitors to Greece need to know that the UK Government have a thorough contingency plan.
Regarding the impact on British citizens in Greece, how will holidaymakers travelling there this summer be able to obtain full information and updates about the best way to proceed, given the constantly changing situation? The Chancellor touched on that in his statement, but will he tell us what discussions British officials have had with the Greek authorities and banks to ensure that UK citizens will continue to be able to withdraw sufficient funds from the system, especially if the cash machines in Greece are depleted of banknotes? Will he also give us his assessment of the number of British citizens with deposits in Greek banks? They will be anxious today
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about whether they can get their money. Are the British embassy in Athens and our network of consular staff adequately equipped to cope with all eventualities? Do they have the resources to deal with inquiries from British citizens and companies in need of assistance?
Turning to the impact on our economy and our financial system, there have been varying reports of the exposure of the British banking system to the Greek economy. What discussions have the Treasury and the Bank of England had with financial institutions here and in the EU about the implications for our financial system? In particular, will the Chancellor give us more details of the conversations he has had personally with the Greek and other eurozone Ministers? What has he been doing to urge them to find a solution?
I understand that the Prime Minister has today chaired a Greece contingency committee. Will the Chancellor explain the day-to-day structure for monitoring emerging risks to the UK position? Which institutions are leading on each aspect of events, and how are the Government co-ordinating our preparedness for any interventions that are needed? What assessment have they made of the number of British firms and the volume of exports potentially affected by the situation in Greece and, in particular, of the exposure to export finance risk of firms awaiting payment?
Although non-eurozone countries are not directly involved in the negotiations with the Greek Government, the International Monetary Fund has of course provided £37 billion of support so far, about £1.7 billion of which has come from UK taxpayers. If there are wider ramifications for the eurozone economies in the months ahead, there will clearly be further risks for UK business and trade and for our economy. As the Chancellor knows, British business is highly dependent on a healthy and sustainable European economy, but our trade deficit with the EU has worsened in recent times. Does he agree that those vulnerabilities make it all the more urgent that we prioritise measures to boost economic productivity here in the UK as part of our defence against external economic turbulence? Our exporters need support and assistance, and I urge him to include measures in next week’s Budget to boost productivity and take account of their heightened susceptibility to such turbulence.
Given the gravity of the problems facing Greece and the wider repercussions for us and for the European economy, I believe that the Chancellor should pause and reflect that it undermines his position to make bogus comparisons between Greece and Britain. Nobody will take those comparisons seriously. The crisis in Greece has been building up for many years now, and billions in bail-outs have already been provided from eurozone economies. There has been considerable hardship for the Greek people, who still face economic distress. Does he agree that it is imperative for the institutions to continue to seek opportunities for a negotiated settlement with the Greek authorities during the week ahead, and for the Greek Government to accept their part in charting a course towards a long-term resolution and deal with economic reform and governance questions that cannot be ignored? This is surely a time for all concerned to pursue a responsible approach and avoid a disorganised and chaotic outcome that would be devastating for Greece and have severe implications for the wider European economy.
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Mr Osborne: Let me deal with the specific points that the hon. Gentleman has raised. Our advice to the many British people who are planning to go on holiday to Greece is very clear. They should continue to check the travel advice on the Government website. As I have just explained, that advice has been changed, and we are advising people to take more euros with them than they might have been expecting to take.
The hon. Gentleman makes a point about our conversations with the Greek authorities. Clearly they have tried to, in some sense, protect tourists from their capital controls, because if people have access to a foreign bank account, they can withdraw up to €600 from the ATMs. But of course one has to think through a situation where the ATMs potentially start to run out of money, particularly in certain locations. That is why we are advising people to take more cash with them but also to be aware of the safety issues involved in that.
On the question about British citizens who have deposits in Greek banks, I hope I made it clear in my statement that deposits in branches of Greek banks, and indeed, in that sense, also the host bank, are not covered by the UK’s compensation scheme, but the deposits in the subsidiary are in the UK. If people are not entirely sure what their situation is, they should check with their bank, but that has been spelled out for them. On the support for the British embassy and our consular teams in Greece, the Foreign Secretary is here, we have discussed this and the Foreign Office has put in place contingency plans to step up the support it can provide on the ground should the situation deteriorate.
On the exposure of our banking system, it is less than 1% of the common tier 1 capital of the UK banks. As I said in my statement, it is fair to say that as a country and as a banking system we have dramatically reduced our exposure to Greece, as has pretty much every other bank in Europe. In terms of how this is co-ordinated across government, the Bank of England leads on financial stability issues, the Foreign Office covers the consular issues, and the Treasury is covering the financial stability issues and working with the Department for Work and Pensions on payments, but we are meeting regularly. We had the meeting today and we also had a meeting last week, which the Governor also attended. On businesses affected, advice is available on the Department for Business, Innovation and Skills website, and, as I say, HMRC’s time to pay scheme can help with cash flow. Only 0.6% of the UK’s exports of goods and services go to Greece, so it is a small amount, but of course there could be a considerable impact on individual firms.
The IMF was created after the second world war to provide support for economies that have been struggling. We took steps in the last Parliament to increase the capital available to the IMF—I might point out that the Opposition divided the House on that issue, but it was a sensible step to take. The IMF has precautionary balances, and let us be clear that no one has ever lost money lending to the IMF and providing support to the IMF. Of course the IMF is very important in this situation, not least because of the rigour that it brings, which is one of the reasons why quite a few members of the eurozone are absolutely insistent that the IMF is around the table.
The final point I would make is this: of course we would like a peaceful—if that is the right word—or less traumatic resolution of this crisis, but things have taken
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a turn for the worse because of the decision to hold this referendum and because the Greek Prime Minister said he was going to recommend a no vote. I would therefore suggest that at the moment, in the next few days, the ball is largely in the Greek Government’s court. Of course if things change, there is a very big role for the eurozone to play in helping to achieve a negotiated settlement.
The observation I would make is that five years ago we were much less well prepared to deal with shocks from abroad: we had a very high budget deficit, one of the highest in the world; and our banks were not as well capitalised as they should have been. We are in a stronger position as a result of the difficult decisions we have taken over the past five years and if the hon. Gentleman is willing to support the further decisions that we are going to take in the Budget next week, I look forward to his saying so next Wednesday.
John Redwood (Wokingham) (Con): The European Central Bank has lent €89 billion so far to the Greek banking system, and that money is now at risk. Will the Chancellor confirm that, thanks to our prudent approach, UK taxpayers would not make any contribution to the recapitalisation of the ECB if that money has now been lost?
Mr Osborne: My right hon. Friend is right to point out that in effect what has happened over the past few years is that the private exposures to Greece have been converted into eurozone public exposures and, of course, into IMF exposure. That is part of what has happened. One key decision that we took in the previous Parliament was to get the UK out of these eurozone bail-outs. The previous Government had signed us up to those bail-outs, but the Prime Minister got us out of them and, as a result, dramatically reduced the UK’s direct exposure. But, as I have said, we are part of the financial system of Europe and we will be affected if there is a Greek exit.
Mr Dennis Skinner (Bolsover) (Lab): Instead of comparing Greece with Britain, would it not make more sense to compare Greece with Ukraine? Both are debtor nations, yet Ukraine is allowed to continue to borrow money from the IMF and Greece is not. Why is that, and did the right hon. Gentleman discuss that matter?
Mr Osborne: It is fair to say that the IMF has provided considerable support to both Ukraine and Greece. Indeed, the combined support that has been provided by the eurozone and the IMF is considerably greater to Greece. The discussion was the extension of the current programme, and of a potential new programme. Those negotiations were under way, but the creditors in this case were demanding certain conditions. That is what happens when a country is part of the euro, which is why I do not recommend our joining it.
Mr Speaker: I call Mr—sorry. The right hon. and learned Gentleman took me by surprise. I call Mr Kenneth Clarke.
Mr Kenneth Clarke (Rushcliffe) (Con): I am always quietly inconspicuous in this Chamber, Mr Speaker.
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Will my right hon. Friend confirm that the IMF has always made advances to countries in financial crises conditional on a programme of reform aimed at minimising the effect on creditors and, above all, on restoring a competitive and effective economy to prepare for a healthier future? It would be quite irresponsible for the IMF or the European Central Bank to abandon that approach at the moment. The best outcome would be for the Greeks to vote yes in the referendum. The one thing my right hon. Friend has not touched on is the great hardship that could be caused to the Greek people if they vote no and their economy goes into total collapse. Are there any discussions going on about the way in which the friends of Greece can mitigate those consequence for the ordinary Greek population? There is no quarrel in this House with Greece or the ordinary people of Greece who are not responsible for the mismanagement by their Government.
Mr Osborne: My right hon. and learned Friend is right to remind us that the people of Greece have paid a very high price for the mismanagement of their economy by previous Greek politicians and Greek Governments. Of course it is now a matter for the Greek people to decide their future, and we should respect that. I made it clear in my statement that most people now consider this referendum as one on whether Greece leaves the euro. Of course there are considerable consequences of taking that step, but I do not think we should be telling the people of Greece how to vote. It is for the people of Greece to make that decision, but they should be aware of the consequences. That is the broad approach that we shall take. The discussion of what would happen if Greece were to leave the euro should probably happen at a later date, but there will clearly be issues over the support that the family of western nations can provide to that country.
Stewart Hosie (Dundee East) (SNP): I thank the Chancellor for his statement and for early sight of it. I welcome what he said about private sector exposures to Greece being substantially lower than they were some years ago. Exposure to the banks is around £5.3 billion, down from £9 billion some years before. That would tell us that the risk of direct contamination is relatively low, but as we have seen today there is a risk to the banking sector across the EU, and the fall in bank stocks throughout Europe is witness to that. I welcome what the Chancellor said about the Government and the central bank being ready to ensure the financial stability of the UK, but it might be helpful if he said a little more about confidence today.
In terms of other exposure, we have rather modest exports to Greece, worth about £2.82 billion, or 1.2% of EU exports and 0.5% of UK global exports. That figure is modest but nevertheless important to the people whose jobs depend on those exports. Will the Chancellor say a little more about that? Perhaps export promotion could be stepped up to help find new markets for businesses that might find the Greek export market more difficult; or, as the hon. Member for Nottingham East (Chris Leslie) mentioned, export credit guarantees and other short-term cash flow help, should they be required, could be used.
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Finally, notwithstanding what the Chancellor said about negotiations being at an end, will he confirm that the IMF has some leeway in when it declares that a repayment has been missed, in that the IMF’s managing director has up to 30 days to notify the board if a country does not make a repayment deadline? Does that not provide some flexibility to ensure that a deal can be reached and provide a strong incentive for discussions continuing beyond Tuesday, notwithstanding the forthcoming Greek referendum?
Mr Osborne: I thank the hon. Gentleman for his questions. I should say that this afternoon we have been in touch with the devolved Administrations in the United Kingdom to ensure that they are aware of the plans and to work with them on any issues faced by them and by citizens and businesses in Scotland, Wales and Northern Ireland.
The Bank of England and the Prudential Regulation Authority are, of course, monitoring extremely closely the situation with the four Greek branches in the UK and the subsidiary, although, as I have said, the subsidiary is protected by our compensation scheme and supervised by the Bank of England. There is, of course, advice available to businesses with export links to Greece, but there are capital controls in place so there are restrictions on the settlement of payments being transferred out of the Greek banking system. Businesses should be aware of that. Cash flow problems can be addressed by contacting HMRC.
As for the IMF, I do not want to prejudge the decisions of the managing director or the board. We will just have to wait and see what unfolds in the coming days. It is fair to say that the space for substantive negotiations before the referendum is pretty limited. Of course, we shall see what the outcome of the referendum is. I would merely observe that many of the senior figures in the eurozone have said that if Greece were to vote yes, negotiations would begin to try to find a satisfactory outcome for the Greek financial situation.
Mrs Anne Main (St Albans) (Con): Greece, a small country of 5 million people, swept in with Syriza a Government promising to abolish austerity. Does my right hon. Friend think that there are any lessons to learn for a country much nearer to home with a population of about 5 million people that swept in a Government promising to abolish austerity?
Mr Osborne: The public will draw their own conclusions about that. Different countries are obviously different, but western democracies need to ensure that their welfare systems are affordable, their economies are competitive and their businesses can export and create jobs. That is a challenge for every single western democracy.
Mr David Winnick (Walsall North) (Lab): In view of the intense hardship and suffering that millions of ordinary Greeks have already endured, why on earth should they agree to the further humiliation that is before them? In such circumstances, is it not clear that the Greeks should decide for themselves, as the Greek Government have rightly stated? It will be interesting to see whether they will agree to such humiliation being inflicted on them by voting against the Government’s recommendation.
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Mr Osborne: I do not think anyone would presume to tell the Greek nation of all nations how to conduct a democracy. That is why I made it very clear in my statement that we respect the right of the Greek people to make decisions about their own future in an open and democratic way, and we do not presume to give them advice on that, but of course they need to be aware of all the consequences.
Mr Christopher Chope (Christchurch) (Con): Does my right hon. Friend agree that if the Greek people wish to regain their sovereignty and once again become masters of their own economic destiny, they should be arguing to leave the eurozone and set up the drachma once again?
Mr Osborne: As I have already said, it is for the Greek people to make this decision, but my hon. Friend’s broader observations about the constraints of being in the euro are one of the reasons why he and I agree that Britain was right not to join and should not join in the future.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab): It is tempting to score domestic political points about the current plight of the Greek people, but does the Chancellor accept that the coming days will be very frightening and distressing for them and also for British people with friends and family in Greece? Will he assure the House that whatever the outcome of the referendum, Greece remains part of the family of nations and we will do what we can to mitigate the plight of the Greek people?
Mr Osborne: I said precisely that a few moments ago. We respect the decisions that the Greek people have to take. We also understand the real economic hardship that has been experienced by the Greek people because of the mistakes that previous Greek Governments have made, and the Greek people have borne the brunt of that. Whatever the outcome of the referendum and whatever the next few months hold for Greece, it is a very important part of the European family of nations. Greece has been an important ally of the United Kingdom for very many years and we will continue to stand alongside the Greek people during this difficult time.
Mr Jonathan Djanogly (Huntingdon) (Con): If the ECB and/or the IMF failed to provide necessary liquidity, does my right hon. Friend think this could leave an opening for Russia? If that is the case, what are his security concerns?
Mr Osborne: It is not a great secret that we have not been entirely enamoured of the foreign policy pursued by the Syriza Government, but that has not affected these decisions.
Mr Douglas Carswell (Clacton) (UKIP): The Chancellor has consistently called for more euro integration. He has lauded the remorseless logic of monetary union and called for fiscal, banking and economic integration. Only last month he called the euro a success. Does he still want Greece and others to wade further into this monetary mire? Might it not be right for the Government to support other member states having the currency freedom that we in this country enjoy?
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Mr Osborne: Just as I do not particularly like other nations telling the British nation how to conduct its own affairs, I do not think we should go around lecturing others. They have chosen to form a currency; we chose not to join it. The point I have made is that there is a remorseless logic to being part of the eurozone that leads to greater political, fiscal, financial and economic integration. That is why I do not want to be part of it. I have also made the point that that integration, although necessary to secure the stability of the euro, has an impact on the UK as a large non-euro member. That is one of the issues that should be addressed in the renegotiation. We would not be having a renegotiation if we had not had a Conservative Government elected and able to put this issue to the British people in a referendum, and quite a lot of us in this House worked to achieve that Conservative Government.
Richard Fuller (Bedford) (Con): What assessment has my right hon. Friend made of the financial risks based on Greece’s decision spreading to the sovereign debt of other eurozone countries? Can he assure the House that the Bank of England has done whatever it can do to ensure that if financial risk does spread, British companies and British banks are secure?
Mr Osborne: As I have said, Britain is much better placed than it was a few years ago; our banking system is much better capitalised. Of course, the eurozone and the European Central Bank have previously taken steps to try to contain the contagion, for example by setting up the outright monetary transactions programme and the European stability mechanism—in other words, various bail-out mechanisms that came into operation during Spain’s financial problems a couple of years ago—but I was very clear in my statement that a Greek exit from the euro would have an impact on Europe’s financial system and knock-on effects for the UK. I do not think that anyone should underestimate the challenge of establishing that a country could leave the euro. Those are all issues that we need to be alert to in the months ahead.
Mike Gapes (Ilford South) (Lab/Co-op): Does the Chancellor accept that glib comparisons between Greece and other countries do not take account of the fact that even before the global financial crisis Greece’s debt-to-GDP ratio was 100%? It rose to 170% by 2011, which was much worse than in Spain, Italy or this country. Therefore, should he not concentrate on the specific problems of the previous Governments in Greece who created the situation and the dysfunctional coalition between the far left and the far right, which seems unable to make sensible decisions?
Mr Osborne: I was making the observation that the UK is far better prepared than it was five years ago, when we had a budget deficit of over 10% and an undercapitalised banking system—something I was well aware of, because the Greek crisis had its first big flare-up a few days before I became Chancellor of the Exchequer. We are in a better position, but I do not pretend that the UK will be immune from the impact of the financial problems in the eurozone.
Lucy Frazer (South East Cambridgeshire) (Con):
I welcome the extensive efforts that the Chancellor has outlined for protecting the British public. One of the
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measures he mentioned was that UK Government payments would still be made, including state pensions. If that money is being sent to Greek banks, is he taking steps to confirm that it will be ring-fenced so that, in the event of the insolvency of any Greek banks, it will not be lost to British citizens?
Mr Osborne: My hon. Friend raises one of the challenges we face. There are around 6,000 people in Greece who receive British pensions or British public sector pensions, and around 2,500 of them have Greek bank accounts into which the payments are made. We cannot protect people’s Greek bank accounts in such a situation—that is for the Greek authorities to do—which is why we are contacting the individuals concerned and saying that if they wish to have the payments made into British or non-Greek bank accounts, we will make that switch as soon as we can. We are ready to do that immediately.
George Kerevan (East Lothian) (SNP): I put it to the Chancellor that there is another way in which the Greek crisis could impact on the UK economy: a Greek exit, or even simple market turbulence, could lead to a precipitant and lasting fall in the value of the euro, which would have an impact on British farm incomes because they are denominated in sterling. Will he speak with fellow Ministers to ensure that British farmers in that situation will be compensated?
Mr Osborne: It has long been the practice—it has certainly been my practice and, to be fair, also that of my immediate predecessors—not to comment on the value of the currency, and I do not intend to do so today.
Paul Scully (Sutton and Cheam) (Con): The events in Greece are a stark reminder of the uncertainty that remains in the global economy. Can my right hon. Friend reassure my constituents that the Government’s long-term economic plan factors in and faces up to that uncertainty, rather than trying to ignore it?
Mr Osborne: I can give that reassurance to the residents of Sutton and Cheam, and indeed of the rest of the UK. This country’s budget deficit remains too large. We have taken important steps to strengthen our banking system, and now we must ensure that it remains competitive and healthy, which is why we are taking steps to exit from Government shareholdings. Of course, in the Budget and in the spending review this autumn we will take further steps to deal with our budget deficit and run a surplus in normal times so that we are better prepared for whatever shocks the world throws at us.
Catherine West (Hornsey and Wood Green) (Lab): Will the Chancellor confirm that a solution to the Greek financial crisis depends on a long-term political negotiation to keep Greece in the EU, that our Government have an active role to play in that, and that failure to agree a political settlement will undermine any future argument we might wish to pursue for the integrity of the European Union as a whole?
Mr Osborne:
It is fair to say that Greece’s membership of the European Union, as opposed to membership of the eurozone, was an important step in that country’s
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transition from fascist dictatorship to democracy and in entrenching that democracy, and I think that view is broadly held by the Greek people, whatever their views about the current financial situation or their membership of the euro. I repeat that whatever happens we stand alongside Greece as an important member of the family of European nations.
Mr Stewart Jackson (Peterborough) (Con): Almost 20 years ago a number of us predicted the disastrous consequences that would be visited on small countries as a result of monetary convergence and the single currency, and so it has come to pass this week with Greece, which it seems is being smashed on the altar of German monetary policy. With that in mind, will the Chancellor give the House an undertaking that proposals for further future financial convergence—a single EU-wide corporation tax rate, which would damage the British economy—will never see the light of day?
Mr Osborne: I will tell my hon. Friend what I have to say about that: we are not going to sign up to some European corporation tax rate.
John McDonnell (Hayes and Harlington) (Lab): Is it not ironic that the institutions that turned a blind eye to Greece’s economic situation when it joined the euro and then did nothing about profiteering through speculative lending to the Greeks throughout the period afterwards are the same organisations that are now withdrawing liquidity before the result of the referendum and therefore before the Greek people have made their decision? We are not members of the eurozone, but we are supporters of the International Monetary Fund. Therefore, was the Chancellor consulted about the timing of the withdrawal of liquidity in advance of the referendum and, if so, what view did he express?
Mr Osborne: The decision to which the hon. Gentleman refers was taken yesterday by the European Central Bank, and it was a decision not to expand the amount of liquidity assistance provided; it did not cancel the existing liquidity assistance. We are not in the eurozone, of course, so we are not part of the European Central Bank, but there have been close discussions and the European Central Bank is keeping the Bank of England directly informed about the decisions it is making.
Simon Hoare (North Dorset) (Con): My right hon. Friend will remember the back story to the Don Pacifico incident. What advice will he, the Foreign Secretary and the Foreign Office be providing to British citizens residing in Greece or visiting Greece during the holiday season about their physical safety and security, because, whatever the result of the referendum, there could be periods of intense unrest across the country?
Mr Osborne:
I will not attempt to say the Latin phrase that Palmerston used at the time of the Don Pacifico affair, but I will say that we of course stand ready to help British holidaymakers. The best thing that they can do is ensure that they are well prepared, and the best thing that we can do is ensure that the advice they need is provided. Greece is clearly one of the most popular holiday destinations; at the moment 150,000 British citizens go there every week in July. That is why we have changed the travel advice and said clearly that
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people should take with them the euros they need for their holiday, or at least not assume that getting cash out of an ATM will be straightforward. They need to think through those issues, which is why we are providing that advice.
Ian Paisley (North Antrim) (DUP): Advising constituents to carry with them large amounts of cash obviously poses significant questions about security. What advice and guidance can the Chancellor ensure has been given to the Greek authorities to protect British people who are carrying large amounts of cash?
Mr Osborne: Of course, Greece has an effective police force. The advice we are giving to people is just the commonsensical advice that they should look after their possessions when they are on holiday, and of course people do that. It is all part of the full travel advice that is on the website.
Mr Speaker: Order. There is still a lot of interest but very little time. I will try to take a few more questions on this statement, but I give notice to colleagues that it will almost certainly not be possible to accommodate everybody. There are swings and roundabouts in these things, as Members know.
Mr John Baron (Basildon and Billericay) (Con): Greece reminds us all that one can defy economic logic for only so long. Given that eurozone growth rates are well below global growth rates—in the economic slow lane—and that unemployment rates are that much higher, largely caused by the drive towards economic and political union, what cast-iron safeguards are we negotiating to ensure that we retain our sovereignty such that we do not get drawn into this ever-closer union?
Mr Osborne: As my hon. Friend well knows—the Prime Minister was explaining this at the Dispatch Box just an hour or so ago—one of the issues we are seeking to address in our renegotiation is Britain’s involvement in ever-closer union, which is not something that the British people are very comfortable with. I would make the broader observation, which relates both to the UK and to members of the eurozone, that we have to make the European continent, ourselves included, a competitive place to do business. We have to have businesses that can export around the world. We have to be able to make sure that jobs are being created in the European Union. A very important strand of what we are seeking to change in our relationship with the European Union is to make the EU more competitive for all its citizens, Greek as well as British.
Caroline Lucas (Brighton, Pavilion) (Green): Since implementing austerity measures in return for loans has shrunk the Greek economy by a quarter and massively increased its debt-to-GDP ratio, as well as caused untold suffering, will the Chancellor consider increasing calls for the organisation of a European conference, similar to the London conference of 1953 for Germany, to agree a package of debt cancellation and restructuring, which is likely to be a far more effective way of addressing both the economic and the social crisis unfolding in Greece?
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Mr Osborne: I make the broad observation that ultimately countries have to live within their means; we see what happens if they do not. On the Greek debt situation and the burden of Greek debt, eurozone members were in discussions about the terms of debt repayments and the like, but those negotiations were broken off on Saturday because of the unexpected announcement by the Greek Prime Minister on Friday.
Mr Bernard Jenkin (Harwich and North Essex) (Con): Does not the eurozone states effectively endorsing a plan for fiscal and banking union, as proposed by the five eurozone Presidents, regardless of the treaty that the Prime Minister vetoed in December 2012, underline the urgency for the Chancellor to deliver on the dilemma that he outlined in a speech on 15 January 2014, when he said:
“The…Treaties are not fit for purpose.”
“If we cannot protect the collective interests of non-eurozone member states then they”—
“will have to choose between joining the euro, which the UK will not do, or leaving the EU.”
Can he explain why those words have been taken down from the Downing Street website?
Mr Osborne: I have absolutely no idea; I thought it was one of the better speeches I gave over the past five years. My hon. Friend will be glad to know that I repeated exactly those arguments, including the phrase about the challenge of Britain having to choose, in the Mansion House speech that I gave just a couple of weeks ago. That is certainly up on the Treasury website.
Helen Goodman (Bishop Auckland) (Lab): A further collapse in the Greek economy would obviously be extremely bad for the Greek people and for our exporters, particularly in pharmaceuticals. Even the Financial Times this morning described the creditors programme as “economically counter-productive”, and we have learned that the US Treasury Secretary urged the creditors to take a more compromising stance. Did the Chancellor follow the American lead, and will he do so as the days go by?
Mr Osborne: I do not want to go into the private discussions we had, but we said very publicly that both sides needed to reach a compromise. We did not say that this was exclusively a challenge to the Greek Government; we said that the eurozone also needed to work towards a compromise. I think it is fair to reflect on the fact that the reason we are having this statement and the reason there are capital controls and the like is the unilateral decision by the Greek Government on Friday. We respect the vote in the Greek Parliament, and of course we will respect the decision of the Greek people, but that was the change in the dynamic that happened over the past three days.
Marcus Fysh (Yeovil) (Con): In order to recover, Greece needs bigger debt relief than is currently on the table and massive pro-market structural reform and support. Neither the EU, the international institutions, nor Syriza currently offer those things. This problem presents serious ongoing economic and strategic risks for us in Europe and beyond. What are our Government doing to ensure that Greece gets what it needs?
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Mr Osborne: I agree with my hon. Friend that the Greek economy needs to be more competitive. Clearly—I think this is the universal observation—the Greek economy needs important structural reforms. Ultimately, those have to be delivered by the Greek Parliament and by Greek Governments. Of course, we are happy to provide assistance. Indeed, over the past five years we have provided advice and assistance to the Greek Treasury and others about how to undertake those reforms. There is now the more immediate issue of the referendum.
Nick Thomas-Symonds (Torfaen) (Lab): Many of my constituents who will be visiting Greece over the next few weeks will have heard the Chancellor’s advice about carrying a sufficient number of euros with them for the duration of their holiday. Given that this is a fast-moving situation, and that many people may be concerned about the safety implications of carrying large amounts of cash, will he undertake to monitor access to money in Greece on a daily basis to ensure that the Foreign Office advice on the website is as up to date as possible?
Mr Osborne: The hon. Gentleman asks a perfectly fair question. We have thought about this quite carefully. Clearly, it is a very uncertain situation. As things stand, the Greek Government have gone to considerable lengths to try to make sure that tourists can continue to access cash through ATMs and that the payments that they make with credit cards and the like are accepted by Greek businesses. It is an uncertain situation that is changing rapidly, and of course people could be on holiday when it does change, so we are suggesting to them that they be prepared. That advice will be updated whenever it needs to change; we keep it under constant review.
James Cleverly (Braintree) (Con): I welcome the mitigations that my right hon. Friend has put in place to protect British citizens and the British economy, but I cannot see an outcome to the current Greek situation that will not have a detrimental effect on the British economy. Will he therefore assure this House that as part of the long-term economic plan he will include a commitment to expand and extend our trading relationships globally, particularly to fast-growth Commonwealth economies, to help spread our risk?
Mr Osborne: My hon. Friend makes a very important point. Britain is overly dependent on its exports to the rest of the EU. About 50% of our exports go to the EU. We have been working very hard to expand our exports to fast-growing economies in Asia, Latin America and Africa. Although, in general, UK export performance has been quite disappointing in recent years, that is principally because of the weakness of the European economy. Our export performance to many of these emerging economies has been very much better, and we want to build on that—particularly, of course, our links with the Commonwealth countries.
Stewart McDonald (Glasgow South) (SNP): I offer the Chancellor this analysis: the class divide is with us in this debate. On the one hand, the rich people in Greece are moving their money out of the country, with the IMF lobbying on their behalf for further public sector cuts and against tax rises for the rich, while poor and working-class people in Greece are forced to live with access to only €60 of cash a day. So here’s the question: whose side is the Chancellor on?
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Mr Osborne: I am not very impressed with anti-austerity crusaders who promise the earth and cannot deliver.
Craig Mackinlay (South Thanet) (Con): The slide of the Greek economy has been long, slow and increasingly painful as it has lurched from one bail-out crisis to the next. The fundamental failure is, of course, the euro at its heart and I do not feel that a new deal now will do anything to solve that. Might a no vote next week be the best outcome, and will my right hon. Friend offer practical support to Greece when it inevitably and sensibly reinstates its own currency?
Mr Osborne: I completely respect my hon. Friend’s opinion, but it is better from my position to say that it is for the Greek people to decide in that referendum. Of course, whatever the outcome, my hon. Friend is absolutely right to say that we are there as a friend of Greece to help it at this troubled time whatever course it chooses to take.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): Successive Greek Governments must take responsibility for failing to deliver a sufficiently competitive Greek economy, but does the Chancellor agree that Greece’s creditors need to look at their own behaviour, too? The bail-out five years ago has fundamentally left Greece less able to pay its debts than beforehand. Surely the IMF and the European Commission must learn those lessons, too.
Mr Osborne: I think that the European Union in general has not taken sufficient trouble to make the European economy more competitive, less regulatory and a place where enterprise can flourish and private sector jobs can be created. That is one of the principal arguments we are having at the moment in European Councils.
David T. C. Davies (Monmouth) (Con): Does not this unfolding catastrophe demonstrate very clearly what happens to nations when they cannot balance their own books and rely on borrowed cash? Does my right hon. Friend agree that we need to learn the lesson from this, pay down our deficit and not take any notice of Opposition Members who have done their best to put us in the same situation that Greece is in now?
Mr Osborne: I agree with my hon. Friend that countries need to pay their way in the world. Britain had a budget deficit of more than 10% when the Conservative Prime Minister came to office five years ago. As a result of the action we have taken—universally opposed by the forces opposite—we have made the UK much more secure to deal with these sorts of shocks, but the job is not finished and I am sure my hon. Friend will be in his place on Budget day as we set out the steps we are going to take to finish it.
Wes Streeting (Ilford North) (Lab):
Given the seriousness of the situation and the impact that a Greek exit from the euro would have not just on the eurozone economies but on ours, too, is not the Chancellor slightly embarrassed by the unnecessarily partisan tone he is taking in some of his replies? Will he say a bit more about the protections
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he is considering in order the limit the exposure of British businesses and people with interests, including family interests, in Greece?
Mr Osborne: I would not regard it as partisan to point out that we need to reduce our budget deficit, make sure our banking system is properly capitalised and have a more competitive economy. If the hon. Gentleman takes that as a partisan comment, that is more of a reflection on his party than on mine.
Peter Heaton-Jones (North Devon) (Con): Many of my constituents in North Devon have raised with me time and again their opposition to the notion of the United Kingdom ever joining the eurozone. Does my right hon. Friend agree that the current chaos in Greece absolutely justifies their opposition, and will he once again take this opportunity to reassure my constituents that under this Government we will never join the euro?
Mr Osborne: I can absolutely give that assurance to my hon. Friend and his constituents in North Devon: we are never going to join the euro. Because of all the conditions that come with membership, we do not think it would be in the economic interests of the United Kingdom. We have consistently held that position. I pay tribute to the person I used to work for and who has now left the House, William Hague, who stood out against the consensus in the late 1990s and helped keep Britain out of the euro.
Nick Smith (Blaenau Gwent) (Lab): The Chancellor has said that UK citizens with deposits in Greek banks are not covered by our UK compensation scheme. How many UK citizens are affected by that and how does he plan to help them?
Mr Osborne: As I said in my statement, there are four branches of Greek banks in the UK. They have total deposits of about £200 million, which is, of course, a significant sum of money, but it is not that large compared with many other banking deposits, and the number of account holders is relatively low. I have made it very clear today that those account holders are not covered by the UK deposit protection scheme. I should also say that most of those individuals are not British citizens.
Damian Green (Ashford) (Con): My right hon. Friend rightly points out that Britain’s increasing economic stability is necessary, not least to withstand economic shocks from elsewhere, such as that under discussion. Does he think that any further measures are necessary to protect British financial institutions that may be holding Greek debt, which will clearly be of decreasing value?
Mr Osborne: UK banking exposure to Greece is dramatically less than it was in 2012, when there were very real concerns about a Greek exit from the euro. That is also the case with regard to the exposure of French and German banks to Greece, which, of course, has a knock-on effect on the UK. As I have said, less than 1% of the core tier 1 capital of the UK banks is in Greek debt, and I think they are well prepared for whatever eventualities unfold.
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Derek Twigg (Halton) (Lab): We all hope for a resolution in Greece, but clearly it cannot be right to force more cuts and austerity on the Greek people and increase the pain they have already suffered. The Chancellor said in his statement that
“we hope for the best, but we prepare for the worst.”
Could he tell us what “the worst” is for the UK?
Mr Osborne: Clearly, we are a large economy that is probably the most interconnected and open of the major economies of the world. We have a very large financial sector, so we are exposed to financial turbulence wherever it occurs in the world, which is all the more reason why we need a proper system of regulation and we have now put the Bank of England in charge of regulation. We also need properly capitalised banks—under that new system of regulation, our banks have been recapitalised—and we need to make sure that we are not carrying a very large budget deficit. We have halved the budget deficit and we will take further steps next week to reduce and eliminate that budget deficit. We are prepared for whatever the world throws at us.
Mr Peter Bone (Wellingborough) (Con): Does the Chancellor agree that, on occasion, we have to tell friends things that they do not want to hear? In that regard, would it not be better to tell our friends in the eurozone that, certainly in the medium and long term, a Greece exit from the euro and the return of its national currency, which it could then devalue, would be the right thing to do?
Mr Osborne: Of course, there are occasions when we have to tell our friends things they do not want to hear, but it is also a good rule in life to pick our moment and I am not sure that this is the right moment.
Mr Speaker: Order. I am keen to accommodate the remaining interest, but only on the assumption that we can wrap this up by 6.30, so I appeal for extreme brevity, to be exemplified by the hon. Member for Denton and Reddish (Andrew Gwynne).
Andrew Gwynne (Denton and Reddish) (Lab): The Chancellor said in his statement that eurozone authorities
“stand ready to do whatever is necessary to ensure the financial stability of the euro area”.
That may well be tested to the full in the coming weeks. Given that the lesson of the exchange rate mechanism is that pressure will undoubtedly be mounting on other European currencies and economies, what contingencies does he have in place to make sure there is no domino effect?
Mr Osborne:
As I say, the primary responsibility lies with the eurozone and the European Central Bank, and they have put in place better mechanisms than they had three or four years ago. The European Central Bank has its outright monetary transactions mechanism, we have the European stability mechanism—in other words, bail-out funds—and the European Central Bank is also taking a supervisory role, so they are better prepared. However, I was very clear in my statement that however well prepared they are, a Greek exit from the euro would be a substantial financial shock, which would have an impact on the European financial system and
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on us. That is why we have taken steps to make sure our banking system is better prepared than it was seven or eight years ago.
Chris Heaton-Harris (Daventry) (Con): There are no provisions in European treaties for a country to leave the euro, let alone to leave the euro and stay within the EU, so should Greece leave the eurozone, will not European treaties need swift and significant amendment?
Mr Osborne: As is often the case, my hon. Friend has gone to one of the interesting points in this whole issue. The best thing to do at the moment is to see how things unfold in the next few weeks, but it is fair to say that there is not an easy and clear mechanism for Greece to leave the euro.
Mike Kane (Wythenshawe and Sale East) (Lab): In the tone of the questions asked by the right hon. and learned Member for Rushcliffe (Mr Clarke) and my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), Greece is, in its own right, a strong bilateral partner to the UK, independently of the eurozone or the EU. I would like to hear more detail of the counsel we have given Greece. More importantly, should not the message be that we stand in solidarity with the Greek people in their time of trouble, whether or not their Government accept that counsel?
Mr Osborne: The hon. Gentleman is right to say that Britain has been a long-standing friend of Greece and the Greek people. There is huge affection in Britain for the country and its people, as evidenced by the fact that so many people choose to spend their holidays there. There is such solidarity and friendship with Greece, but Greece has to make its own decisions.
On our contacts with the Government—I was asked about them earlier—I have of course spoken over the past few months with the Greek Finance Minister and our Prime Minister spoke to the Greek Prime Minister just a week or two ago.
David Mowat (Warrington South) (Con): One aspect of all this is the amount of money that the IMF might be about to lose. That money was subscribed by some of the poorest countries in the world, including countries poorer than Greece. Does the Chancellor agree that it would be quite wrong for places such as India to take a hit for any of this? Has he had any discussions to that effect with the IMF?
Mr Osborne: As I said earlier, the IMF has preferred creditor status and it has precautionary balances—in other words, it can withstand losses—and no one has ever lost money by providing support to the IMF, so we should bear that in mind as we have these discussions.
James Morris (Halesowen and Rowley Regis) (Con): Notwithstanding the steps the Chancellor has taken to contain the immediate crisis, does he agree that the broader lesson for Europe is that unless countries are determined to reform their welfare system, tackle public sector pensions and improve competitiveness, we may see other such crises in southern Europe?
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Mr Osborne: Over the past five years, we in this country have of course taken steps to reform our welfare system to make sure it is affordable and to reform our public sector pensions so that we can go on providing assistance to our population and help the most vulnerable in our population. The broader point is that the people who suffer when an economy fails and a Government spend more money than they have are the poorest people in the country, not the richest.
Mr Philip Hollobone (Kettering) (Con): Given their own predicament, how supportive have the Greeks been to the Prime Minister in his efforts to renegotiate Britain’s terms of membership of the EU?
Mr Osborne: To be fair to the Greeks, they have been quite preoccupied, but they have certainly not, to my knowledge, expressed any great opposition.
Mike Wood (Dudley South) (Con): Would it not be devastating to the credibility of the eurozone if European institutions were seen to favour political considerations in relation to keeping Greece within the single currency ahead of basic economics?
Mr Osborne: I have always felt that good politics flows from good economics. Ultimately, what we all want to see are more jobs and investment in Greece and an economic policy that allows that to happen.
Chris Philp (Croydon South) (Con): The Chancellor has already assured the House that, thanks to the Government’s actions, UK banks are strong enough to withstand any Greek crisis. Are any European financial institutions of concern to the Chancellor, and do UK pension funds and insurance companies have any alarming exposures?
Mr Osborne: Across the British financial system, there has been a very marked reduction in our exposure to the Greek economy and banking system over the past couple of years, so we are much less exposed to the direct consequences of financial problems in Greece than we would have been a few years ago. More broadly, that is also the case across the European economy. The biggest risk that we faced a few years ago was our exposure to economies and banking systems in other eurozone countries that had relationships with Greek banks, but they too have reduced their exposures.
Luke Hall (Thornbury and Yate) (Con): We all urge the people of Greece to reach a resolution to the current situation. Does the situation not perfectly demonstrate why Britain needs a credible economic plan that keeps our economy secure when there is uncertainty abroad, as well as when there is stability?
Mr Osborne: My hon. Friend is absolutely right. The situation illustrates why you need a credible economic plan, why you need to make sure that your country is protected from shocks happening around the world and, in short, why you should fix the roof when the sun is shining.
Kevin Foster (Torbay) (Con):
The situation in Greece demonstrates that one cannot mix a single currency with numerous and in some cases reckless fiscal policies.
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We discussed that point during the Scottish referendum last year. Will my right hon. Friend reassure my constituents that the necessary steps are being taken to protect UK interests whatever the outcome of the forthcoming referendum?
Mr Osborne: I can assure my hon. Friend that we are taking such steps, and we are working closely with the Governor of the Bank of England. My hon. Friend’s broader observation about credible fiscal policy, whether in the United Kingdom or in the broader European economy, is well made.
Bob Blackman (Harrow East) (Con): One of the options that the Greek Government appear to be pursuing is that of a Russian bail-out. What assessment has my right hon. Friend made of the impact of such a scheme on banks in London and the eurozone in particular?
Mr Osborne: As I said earlier, I do not think that anyone has been particularly enamoured with Syriza’s foreign policy, but what has been clear over the past few weeks is that it really needs to resolve the issue it faces with the eurozone.
David Morris (Morecambe and Lunesdale) (Con): As the Government’s self-employment ambassador, I have had texts from a lot of people during this statement. They are worried about late payments by businesses in Greece and, more to the point, draconian steps that may be taken by Her Majesty’s Revenue and Customs. Will the Chancellor reiterate the steps that could help such small enterprises to flourish by being paid more quickly?
Mr Osborne:
I very much commend my hon. Friend for the work he does. Let me reiterate that HMRC is ready to operate the time to pay scheme to help both the self-employed and small businesses—and, indeed, larger firms—who have problems because there have some kind of financial transaction with a Greek company and have been caught up in the Greek Government’s
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capital controls. There is advice on the Department for Business, Innovation and Skills website, and they can get bespoke advice by phoning the helpline.
Nadhim Zahawi (Stratford-on-Avon) (Con): It is worth placing on the record my constituents’ gratitude to the Chancellor for taking us out of the eurozone bail-out mechanism. London serves as a centre for the Greek shipping industry. What assessment has the Chancellor made of the impact on that industry of the crisis in Greece?
Mr Osborne: Frankly, a lot of that industry is pretty international these days, and I suspect quite a lot of those involved in it have foreign bank accounts as well as Greek bank accounts. It is a very important industry, and it is one of the industries that can help the Greek economy if that economy is competitive. One of the big issues in Greece has of course been the competitiveness of the Greek ports in particular.
More broadly, I thank my hon. Friend for his support of the action we took during the last Parliament. More properly, I should credit the Prime Minister, who secured exit from the eurozone bail-outs at an important European summit.
Alan Mak (Havant) (Con): Our economic and financial security and the protection of household budgets are of paramount importance to my constituents. Can the Chancellor reassure the House and my constituents that every step is being taken to urge a resolution abroad, and to protect taxpayers and savers here at home?
Mr Osborne: I can reassure my hon. Friend that we are taking steps not just to protect the UK from whatever the Greek crisis throws at us but, more broadly, to ensure our economic stability here at home. That will be an important part of the Budget that I will present to the House next week.
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Points of Order
Mr Speaker: Ah, points of order. A joyous experience for all concerned. We will take Mr Salmond first.
Alex Salmond (Gordon) (SNP): On a point of order, Mr Speaker. Earlier this afternoon, the Prime Minister was quite revealing—perhaps unintentionally—about his strategy in European negotiations, but a number of Members, not just myself, felt inhibited from asking him about Europe when we had colleagues across the Chamber asking about their constituents who were dead or missing in Tunisia. Under those circumstances, can you facilitate an early specific and perhaps more appropriate opportunity to question the Prime Minister precisely on European negotiations?
Mr Speaker: The record shows that the Prime Minister has regularly come to the House to update it on his policies in respect of the European Union. It is not for me specifically to facilitate such an occasion. However, I say two things to the right hon. Gentleman. First, the Prime Minister is here weekly at Prime Minister’s questions, and that might be a suitable opportunity for people from a range of parties to question him on that matter if they so wish. Secondly, if the right hon. Gentleman is keen to have a debate on foreign affairs or a debate specifically on Britain’s relations with the European Union and feels that he could grace us with his presence on the occasion of business questions, I promise that my eyesight will not fail me. I will see the right hon. Gentleman and feel my usual insatiable desire to hear him.
Kit Malthouse (North West Hampshire) (Con) rose—
Angela Rayner (Ashton-under-Lyne) (Lab) rose—
Mr Speaker: I saw the hon. Lady first. I am saving the hon. Gentleman up. It would be a pity a waste him at too early a stage of our proceedings.
Angela Rayner: On a point of order, Mr Speaker. As many Members know, I am new to this place, and I hope you can give me your wisdom and experience. This place is a little bit like Hogwarts to me: it has a lot of trapdoors, corridors and conventions. I believe that one of the conventions of the House is that, if a Minister or any other Member visits our constituency, they should at least inform us that they are coming. The Secretary of State for Health, who has been in this House a lot longer than I have, visited my constituency on Friday. I did not find out about it other than through the organisation that he visited. I just wonder whether you can give me some guidance on that, Mr Speaker.
Mr Speaker: I am very grateful to the hon. Lady for her point of order and the courteous terms with which she phrased it. Yes, the short answer is that there is a long-standing convention that Members notify each other in advance of what might be called public visits to each others’ constituencies. That is certainly, therefore, an obligation incumbent upon Ministers, a fact reflected in the content of the “Ministerial Code”. The hon. Lady has, at a very early stage in her career, discovered an important way to register her grievance with Government Front Benchers. She has done it through her point of order, the contents of which I feel sure will be winging its way to relevant Ministers almost before I have sat down.
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Kit Malthouse: On a point of order, Mr Speaker. I, too, am new to this House and it struck me, at my desk this morning, that I may have erred. Earlier this month, I participated in an Opposition debate on housing. I did not, and should have, drawn the attention of the House to the fact that I have a modest investment in a specialist housing provider in the north of England. I apologise to you and to the House for this oversight, and I am grateful to you for the chance to correct it.
Mr Speaker: The hon. Gentleman has corrected the record. Each Member is responsible for what he or she says by way of declaration, but in general terms—I thank the hon. Gentleman for putting the record straight and for his courtesy—it is probably better, particularly in the climate of our times, to err on the side of over-declaration rather than under-declaration. I thank him for what he has said, and the House will do so.
Mr Gregory Campbell (East Londonderry) (DUP): On a point of order, Mr Speaker. Last Wednesday, during Prime Minister’s questions, a number of incidents, which I understand are the subject of police investigation, occurred in Central Lobby. It was drawn to my attention shortly after those incidents that in attendance of some of those events was an abstentionist Member of this House, the hon. Member for Mid Ulster (Francie Molloy). He obtains significant sums for not attending this House, but he was present in Central Lobby and has given interviews subsequent to the incidents. I seek your advice on whether that Member will be subjected to any input by the police in the course of their investigations.
Mr Speaker: I react with caution to the point of order from the hon. Gentleman, to whom I am grateful for giving me advance notice of his intention to raise it. Certainly, Sinn Féin Members—it is to such a Member, clearly, that he is referring—have access to Central Lobby, just as any member of the public visiting the House enjoys such access. It is, of course, incumbent on all Members—those who have sworn in and those who have not—to ensure that the visitors they accompany behave appropriately and respect the rules on access. It is also, of course—this should go without saying—incumbent on Members themselves to demonstrate such respect. I cannot go beyond that relatively general statement, as I not familiar with the detail that the hon. Gentleman might have in mind, but I hope that that is a useful rubric.
If there are no further points of order and the House’s appetite has now been satisfied, we can now move on to the presentation of Bills.
Bills Presented
Local Area Referendum (Disposal of School Playing Fields)
Presentation and First Reading (Standing Order No. 57)
Tom Pursglove, supported by Mr Peter Bone, Bob Blackman, Kate Hoey, Byron Davies, Ms Gisela Stuart, Simon Hart, David Morris, Stephen McPartland and William Wragg, presented a Bill to make provision for a scheme for the triggering and holding of a local area referendum to approve a proposed sale of or including school playing fields by a local education authority or state-funded school; and for connected purposes.
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Bill read the First time; to be read a Second time on Friday 22 January, and to be printed (Bill 27).
Child Victims of Human Trafficking (Central Government Responsibility)
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Tom Pursglove, Mr Philip Hollobone, Philip Davies, Mr Stewart Jackson, Mr Graham Brady, William Wragg and Mr Christopher Chope, presented a Bill to make provision for the transfer of duties in relation to child victims of human trafficking from local authorities to central government.
Bill read the First time; to be read a Second time on Friday 29 January, and to be printed (Bill 28).
Ovarian Cancer (Information)
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Tom Pursglove, Mr Philip Hollobone, Philip Davies, Mr Stewart Jackson, Mr Graham Brady, William Wragg and Mr Christopher Chope, presented a Bill to require for the NHS to provide information about ovarian cancer symptoms when informing women about the results of cervical smear tests; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 5 February, and to be printed (Bill 29).
EU Membership (Audit of Costs and Benefits)
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Tom Pursglove, Mr Philip Hollobone, Philip Davies, Mr Stewart Jackson, Mr Graham Brady, William Wragg, Mr David Nuttall, Mr Christopher Chope, Craig Mackinlay and Mr Steve Baker, presented a Bill to require an independent audit of the benefits and costs of UK membership of the European Union.
Bill read the First time; to be read a Second time on Friday 23 October, and to be printed (Bill 30).
Department of Energy and Climate Change (Abolition)
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Tom Pursglove, Mr Philip Hollobone, Philip Davies, Mr Graham Brady, Mr David Nuttall and Mr Christopher Chope, presented a Bill to make provision for the abolition of the Department of Energy and Climate Change and for its functions to be absorbed into the Department for Business, Innovation and Skills.
Bill read the First time; to be read a Second time on Friday 30 October, and to be printed (Bill 31).
BBC Privatisation
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Mr Philip Hollobone, Philip Davies, Mr Christopher Chope and Scott Mann, presented a Bill to make provision for the privatisation
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of the British Broadcasting Corporation by providing shares in the Corporation to all licence fee payers.
Bill read the First time; to be read a Second time on Friday 26 February, and to be printed (Bill 32).
Prime Minister (Temporary Appointment)
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Tom Pursglove, Mr Philip Hollobone, Philip Davies and William Wragg, presented a Bill to make provision for appointment of a Prime Minister in the event that a Prime Minister is temporarily or permanently incapacitated.
Bill read the First time; to be read a Second time on Friday 4 March, and to be printed (Bill 33).
Foreign National Offenders (Exclusion from the UK)
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Tom Pursglove, Mr Philip Hollobone, Philip Davies, Mr Stewart Jackson, Mr Graham Brady, William Wragg, Mr David Nuttall, Mr Christopher Chope and Craig Mackinlay, presented a Bill to make provision to exclude from the UK foreign nationals found guilty of a criminal offence committed in the UK.
Bill read the First time; to be read a Second time on Friday 11 March, and to be printed (Bill 34).
Mr Speaker: The hon. Member for Wellingborough (Mr Bone) is destined to be a very busy bee.
Railways
Presentation and First Reading (Standing Order No. 57)
Caroline Lucas, supported by Jeremy Corbyn, Ian Lavery, Kelvin Hopkins, John McDonnell and Hywel Williams, presented a Bill to require the Secretary of State to assume control of passenger rail franchises when they come up for renewal; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 22 January, and to be printed (Bill 35).
Public Services (Ownership and User Involvement)
Presentation and First Reading (Standing Order No. 57)
Caroline Lucas, supported by Ms Margaret Ritchie, Jeremy Corbyn, John McDonnell and Louise Haigh, presented a Bill to promote public ownership of public services; to introduce a presumption in favour of service provision by public sector and not-for-profit entities; and to put in place mechanisms to increase the accountability, transparency and public control of public services, including those operated by private companies.
Bill read the First time; to be read a Second time on Friday 22 January, and to be printed (Bill 36).
29 Jun 2015 : Column 1231
Scotland Bill
[2nd Allocated Day]
Further considered in Committee