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House of Commons

Tuesday 15 March 2016

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Business, Innovation and Skills

The Secretary of State was asked—

SMEs: Competitiveness

1. Rishi Sunak (Richmond (Yorks)) (Con): What steps he is taking to help small and medium-sized businesses become more competitive. [904085]

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): Britain is one of the top 10 places in the world in which to start and run a business. We are boosting skills, boosting productivity, raising the quantity and quality of apprenticeships in England, cutting tax and regulations and building stronger trading links with emerging markets.

Rishi Sunak: My rural North Yorkshire constituency is home to many businesses with strong local roots but global aspirations. May I ask the Secretary of State what his Government are doing to help small and medium-sized companies become exporters?

Sajid Javid: My hon. Friend is a distinguished entrepreneur and speaks with a great deal of experience, and I take what he says very seriously. I can reassure him that my Department is first in leading cross-Whitehall work on exports. UK Trade & Investment is one of those entities that connects UK businesses to export opportunities around the world. Indeed, the UK export hub is continuing to travel across the country, meeting first-time exporters face to face. It has already visited Yorkshire, and, indeed, it is in Yorkshire today.

Chris Leslie (Nottingham East) (Lab/Co-op): How on earth are small and medium-sized businesses going to be competitive if, in 100 days’ time, they find that their access to those level playing field markets will be firmly thrown away and that that door will be shut in their face? What will the Secretary of State do to be much more vocal in highlighting the phenomenal risk to our businesses if we end up losing access to some of those important markets?

Sajid Javid: The hon. Gentleman is right to raise that issue. There are many risks with that decision. It is my personal belief that the uncertainty that could be created will be bad for business and bad for jobs and growth. However, there is a lot that the Government have done and will continue to do to support businesses. For example, they have cut the corporation tax rate, which I hope that he welcomes.

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Mr David Nuttall (Bury North) (Con): I have yet to speak to a businessman from a small or medium-sized enterprise who has said that what they want is more regulation, either from this place or the European Union. Does not my right hon. Friend agree that the thing that would most help small and medium-sized enterprises become more competitive both in this country and around the world is for this country to leave the European Union?

Sajid Javid: I think that my hon. Friend is right to raise the issue of red tape regulation, as it can strangle businesses. That is why we are proud that, in the previous Government, we made a £10 billion cut in red tape for businesses and we are committed to make a further £10 billion cut, which I know that he welcomes.

Rachael Maskell (York Central) (Lab/Co-op): Small and medium-sized enterprises in York are struggling to be competitive. With the cuts to local authorities, business rates are soaring 11%, and that is on top of the additional costs that SMEs are paying. I will, if I may, ask a question on behalf of Frank Wood, chair of York Retail Forum, who says, “Do you want the high street without any shops?”

Sajid Javid: I think that what Frank would want is a high street full of customers. That means making sure that our economy remains strong. Our economy grew faster than any other G7 country last year, and that was because of our long-term plan, of which we will hear more tomorrow from the Chancellor.

Geoffrey Clifton-Brown (The Cotswolds) (Con): Is it not vital that my right hon. Friend’s target of 100,000 new businesses exporting by 2020 is met by lighting that spark in small and medium-sized businesses to export for the first time and, above all, to keep exporting?

Sajid Javid: My hon. Friend is absolutely right. Not enough British businesses export. More than double the number of businesses export in Germany compared with that in the UK, so we can do more and that is at the heart of the Government’s strategy.

Hannah Bardell (Livingston) (SNP): I am sure that the Minister will agree that a big part of helping small and medium-sized businesses become more competitive is ensuring that there is access to a skilled workforce. In National Apprenticeship Week, the Young Women’s Trust has shown that some employment sectors are hardly welcoming any young women. Fewer than 2% of construction apprentices and 4% of engineering apprentices are female. Will the Minister tell me what his Department is doing to encourage more young women into apprenticeships?

Sajid Javid: The hon. Lady raises an important issue. We want all people, and that means more and more women, to benefit from our apprenticeship programmes in England, Scotland and elsewhere. In the past few years, we have tripled the number of women in England who take up apprenticeships in engineering, and that is something that Scotland can look at as well to see how we achieved that. I also think that trying to get more women to think about these subjects should start at a much earlier age. We should not point the finger just at

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colleges and others; we should start at a much earlier age to try to encourage women to look at lots of different careers.

Hannah Bardell: The Minister will be aware, I am sure, of the great work that the Scottish Government and our Education Minister, Cabinet Secretary Angela Constance, have been doing, but I would suggest that he also needs to work very specifically on the issue of pay for women apprentices. Their male counterparts can be paid as much as 21% more an hour, so what steps are the Minister and his Government taking to ensure that good apprenticeships offer fair and equitable pay for all?

Sajid Javid: I am sure the hon. Lady will welcome the fact that under this Government the gender pay gap has fallen to its lowest since records began. Of course there is still much more to do, and at the heart of that is the fact that we will always require a strong economy, so I hope she will support tomorrow’s Budget.


2. Callum McCaig (Aberdeen South) (SNP): What steps he is taking to help businesses increase their exports. [904086]

Sajid Javid: We are mobilising the whole of Government to improve the UK’s export performance. A refocused UKTI will be at the centre of a co-ordinated approach and relevant Departments will share their expertise to get British businesses exporting.

Callum McCaig: I thank the Secretary of State for that answer, but the reality is that the UK export story is one of declining market share in the global market. Does the Secretary of State agree with the assessment of the British Chambers of Commerce, and will he accept its calls for urgent and practical support for UK businesses to export?

Sajid Javid: What I do accept is that more needs to be done to get British businesses exporting. That includes the work of UKTI, but it also means that all Government Departments have a role to play. For example, UKTI works with the Great British Food Unit, an operation started by DEFRA. So I think a lot of Government can get behind exports by working more closely together.

Richard Fuller (Bedford) (Con): If the UK left the single market, my understanding is that the highest tariff that could be applied on UK manufactured goods would be the World Trade Organisation’s simple average most-favoured nation applied tariff, which for non-agricultural products is 4.19%. Can my right hon. Friend write to me to confirm that is correct, and to provide a factual context for the so-called risks of leaving the European Union? Can he also write to me to confirm that that number is lower than the annual fluctuation in the euro/sterling exchange rate for each of the last three years?

Sajid Javid: In answer to my hon. Friend’s first question, of course I can check that tariff and write to him. He raises an important point about trade, and he has clearly raised the issue of tariffs, but he will be aware that there are lots of non-tariff barriers as well, particularly for services. It is important to look at those too.

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Alex Cunningham (Stockton North) (Lab): The Secretary of State’s word will do little for the 40 skilled staff of the Metabrasive steel foundry in Stillington in my constituency, which will close in May. So will he listen to the Materials Processing Institute and back its proposals for a materials catapult, which will provide productivity and innovation benefits for the production of metals, ceramics and other materials and promote our competitiveness and exports?

Sajid Javid: I am sorry to hear that that firm in the hon. Gentleman’s constituency may close. We should do everything we can to try and protect jobs like that, and certainly research has an important role to play. We are looking very carefully at that proposal and he will hear more shortly.

Amanda Milling (Cannock Chase) (Con): Spartan Global Services in Cannock exports refurbished computers to businesses across the globe. Can my right hon. Friend outline what is being done to reduce barriers to exporting, and to encourage more businesses like Spartan to take up the opportunities that exports offer?

Sajid Javid: My hon. Friend has raised this issue before, and I know that many companies in her constituency could do a lot more if we had fewer barriers. One suggestion is that we should get on with the Transatlantic Trade and Investment Partnership deal between the EU and the US. That would be the world’s largest free trade agreement. It would be worth some £400 to each household, and it would certainly help companies like the one in her constituency export more to one of the world’s largest markets.

Ms Margaret Ritchie (South Down) (SDLP): Will the Secretary of State have immediate discussions with his Cabinet colleague in the Department for Environment, Food and Rural Affairs regarding the need to ensure the export of pork from both Britain and Northern Ireland to Taiwan, which has been awaited since August 2015?

Sajid Javid: That is a very important issue. Food and drink is our biggest manufacturing industry, but a lot more can be done in terms of exports. I know that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs has taken this very seriously, and I will particularly look into the issue the hon. Lady has raised about Taiwan.

Mr Nigel Evans (Ribble Valley) (Con): We have a massive trade deficit with the European Union but the balance is positive with the rest of the world. We have just celebrated Commonwealth Day. A relatively small amount of our trade is with the Commonwealth. As my right hon. Friend is refocusing his Department, will he embark on project Commonwealth so that we can export far more of our goods to our cousins abroad?

Sajid Javid: My hon. Friend is right about trying to do more with the Commonwealth. The links are strong and there has been a focus for many years on some countries, such as India. We have seen a big increase in exports and tourism, but there is always more we can do, so it is right to raise the issue.

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19. [904106] Steven Paterson (Stirling) (SNP): The deficit in trade goods was £123 billion in 2014 and manufacturing now accounts for only 8% of jobs in our economy. The SNP Scottish Government have boosted exports by 36% since 2007, and recently launched the manufacturing strategy for Scotland. What are the Minister and the UK Government doing to support manufacturing? [Interruption.]

Mr Speaker: A most extraordinary noise has just radiated around the Chamber. Is it a singing tie? That is very irregular. [Interruption.] No, it was not the Minister.

Sajid Javid: If I heard the hon. Gentleman correctly, he suggested that the SNP should get the credit for the rise in exports in Scotland. Scottish businesses have worked very hard to achieve that and I do not think anyone would credit the SNP with that. Where Government policy is important is in making sure that we have a stable, strong economy, and that is down to the economic plan that comes from Westminster.

Mr Speaker: I call Alison McGovern.

Alison McGovern (Wirral South) (Lab): I warn the Secretary of State not to be too gleeful about the long-term economic plan—

Mr Speaker: This is question 3.

Small Business: Lending Trends

3. Alison McGovern: What assessment he has made of trends in the level of lending to small businesses by (a) banks and (b) alternative finance institutions in the last five years. [904087]

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): I was about to get a warning. Maybe I will get it in a moment. The stock of bank lending to small businesses fell after the financial crisis but is now recovering, with four consecutive quarters of positive lending. Peer-to-peer business lending is becoming increasingly important as an alternative to bank finance. It has grown from £20 million in 2011 to nearly £1.5 billion in 2015.

Alison McGovern: I am sorry, Mr. Speaker. Given the Secretary of State’s proximity to the Chancellor, perhaps he does not need a warning. Perhaps he has already given a warning about the Budget, as he probably knows that in the north-west we have seen just half the business investment in SMEs that is being seen in London. Clearly, something has gone wrong with the long-term economic plan if we are not seeing rebalancing, so what conversation have the Secretary of State and his Ministers had with the Treasury about its attack on other financial institutions—for example, building societies?

Sajid Javid: The hon. Lady is right to raise the importance of credit throughout every region of the UK for everyone who thinks a vibrant growing economy is important. We talk regularly with the Treasury about these issues—for example, about the work we do through the British Business Bank, which has provided more

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than £2.4 billion of financing over the past four years, helping some 40,000 businesses, many of them in the north-west.

Andrew Bridgen (North West Leicestershire) (Con): When people take the decision to start their own business, it is on the back of a great idea or they have skills which are useful, but for most people turning a great idea or skills into a business requires expert advice. What steps is the Secretary of State taking to ensure that that advice is available to potential entrepreneurs?

Sajid Javid: First, I know my hon. Friend speaks with experience. He is a very successful businessman and no doubt he has talked to many businesses about this. One of the ways we try to help is through the growth hubs. We have made sure that every local enterprise partnership in England has a growth hub and we have increased the financing that goes into that, so locally tailored advice is available to local companies.


4. Stephen Metcalfe (South Basildon and East Thurrock) (Con): What discussions he has had with the Secretary of State for Culture, Media and Sport on improving access to broadband for businesses. [904088]

Mr Speaker: I call Minister Ed Vaizey.

The Minister for Culture and the Digital Economy (Mr Edward Vaizey): Thank you, Mr Speaker, for that lovely introduction. As you have been so kind and welcoming to me, I would like to tell you that 4 million homes now have superfast broadband. I have regular discussions with the Secretary of State for Culture, Media and Sport to maintain and secure the UK’s place as a world leader in broadband.

Mr Speaker: I am glad that the Minister thinks it is lovely simply to have his name announced.

Stephen Metcalfe: Although I welcome the progress the Government are making on rolling out broadband, it is clear that many businesses are not happy with the service that they are receiving from BT. What discussions is my hon. Friend having with BT to ensure that it is delivering for businesses across the country and specifically in Basildon and Thurrock?

Mr Vaizey: I do not want to labour the point, Mr Speaker, but I do not think you understand fully the effect your words have on me—you have absolutely made my day. However, in answer to the question, let me say that the Secretary of State recently announced that we will have a review of business broadband, because we do understand how important broadband is for businesses. Ofcom has also recently published its digital communications review, which will impose minimum quality requirements on Openreach that are much tougher than currently exist.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): The Government claim to champion the critical contribution that small businesses make to our economy, but Ofcom’s latest figures, which the Minister did not mention, show that half of small businesses in business parks cannot get 10 megabits of broadband, a quarter

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cannot get 5 megabits and one in 10 cannot even get 2 megabits. My local chamber of commerce tells me of businesses where staff have to go home if they want to send an email. Responding to me in a debate last week, the Minister said that the Government’s broadband roll-out had been “an unadulterated success”. If that is success, what would failure look like?

Mr Vaizey: Failure—[Interruption.] As usual, my hon. Friends have anticipated my answer: there, on the Labour Benches, is the picture of failure. We have had to write off £50 million from the failed Labour scheme to deliver broadband in South Yorkshire. If a Labour Government had been elected, they would be two years behind us in the roll-out of superfast broadband; they had a target of 2017 to get to 90%—we have already reached it.

Balance of Trade: Services

5. Richard Graham (Gloucester) (Con): What estimate he has made of the UK’s balance of trade in services. [904089]

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): The balance of trade in services has increased from a surplus of £54.3 billion in 2010 to a surplus of £88.7 billion in 2015.

Richard Graham: The Secretary of State’s answer highlights the fact that, while exports in goods are vital, especially to manufacturing cities such as Gloucester, our surplus in services might be more vulnerable if we leave Europe. What assessment has he made of sectors such as insurance and investment managers, whose businesses are passported across Europe, and other service sectors, such as advertisers, accountants, animators, designers and film producers?

Sajid Javid: My hon. Friend speaks with experience: he is a distinguished former pension fund manager—a very important service that the UK industry provides. He is right that the EU’s financial services passport means that financial services firms authorised in the UK can provide their services across the EU, without the need for further authorisations. That is, of course, a significant benefit that they receive. Services represent almost 80% of our economy, and access to the world’s largest single market helps them to create thousands of British jobs.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): The Secretary of State must know that however good the growth in services exported from this country is—and we all applaud it—it must go hand in hand with an increase in manufacturing. Is he not worried that Syngenta—one of our leading agritech companies—will be taken over by ChemChina, backed by the Chinese Government? What will that do for our competitiveness and our supply chains? Why will he not meet a cross-party group of MPs that has begged to meet him?

Sajid Javid: Of course the hon. Gentleman is right about the importance of manufacturing in our economy, which is why it has increased in terms of output, employment and value since 2010. The company

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he mentions, Syngenta, has itself said that there should be no change in its footprint in terms of employment—in fact, we expect that to increase. Also, when it comes to foreign investment in British industry, I see that as a vote of confidence. Since companies such as Jaguar Land Rover have received foreign investment, employment has gone up threefold, and that is great for British manufacturing.

Mr Philip Hollobone (Kettering) (Con): Our strong performance in services is still not enough to offset the difficulties we are having with our trade with the European Union, with which we now have an annual trade deficit of £62 billion. Given that non-EU trade exports have increased by 30% since 2010, is not it clear that the best future for this country is to be outside the European Union, so that we can negotiate free trade agreements with China, India, Brazil, the Commonwealth and the rest of the world?

Sajid Javid: I agree with my hon. Friend that it is clear that trade agreements can lead to more trade with those countries and reduce any other barriers. Through the EU we have access to over 50 trade agreements at the moment, whereas other countries such as the US or China have 14-odd trade agreements. I agree that we need to focus a lot more on trade, but the trade agreements to which we have access today are very valuable in terms of global trade, not just with the EU.

George Kerevan (East Lothian) (SNP): Is the Secretary of State aware that productivity in our flagship service industry—financial services—has fallen behind similar productivity in the United States, in France, and even in Italy? Can he explain that? Is it something to do with the regulations that his Government have imposed on financial services?

Sajid Javid: I am not sure whether it is to do with regulations, because all the other markets that the hon. Gentleman mentions have also had to look at regulations after the financial crisis. However, he rightly highlights a general productivity problem across British industry in all sectors, where we are some 25 points behind with our G7 competitors. That is why we have a productivity plan, working with industry to turn that around.

Consumer Protection

6. Rehman Chishti (Gillingham and Rainham) (Con): What steps he is taking to protect consumers from faulty and unsafe products. [904091]

The Minister for Skills (Nick Boles): Last year we passed the Consumer Rights Act 2015, which established a defined period of 30 days in which consumers can reject faulty goods after purchase, ending the possibility of consumers becoming trapped in a cycle of recurring faults.

Rehman Chishti: My constituent Mr Clive Davison has raised a concern about the delay in having his faulty Hotpoint tumble dryer fixed. There is real concern about this, given the risk of fire with these products. What are the Government doing to ensure that consumers like my constituent receive speedy assistance?

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Nick Boles: I understand that this risk was assessed as low; nevertheless, it is very important that the company deal with it. My hon. Friend’s local trading standards service has informed us that it is satisfied that the company is taking this matter seriously. I am sure that the company will want to pay particular attention to this constituent since his case has been raised in the House of Commons.

Mark Durkan (Foyle) (SDLP): The Minister referred to the Consumer Rights Act. When the Bill that became that Act was going through the House, I tabled a number of amendments to address the issue of unsafe and faulty electrical goods, and the then Minister gave a series of assurances and arguments that now appear to be hollow when we see the campaigning work by Electrical Safety First and by the Daily Mirror. We were told that the issue would be kept under review—is it under review?

Nick Boles: Absolutely. I will make sure that I have a conversation with the hon. Gentleman to understand what continuing concerns he has and to make sure that we address them.

Yvonne Fovargue (Makerfield) (Lab): Today is World Consumer Rights Day. The Consumer Rights Act was trumpeted as bringing a new era of simplified, clearer consumer laws. However, most trading standards services have cut their staff by at least 40% since 2010. How can consumers enforce these new rights, and how can rogue traders be brought to justice, in the light of these cuts?

Nick Boles: I am afraid that it is rather typical of the Opposition to assume that unless there is public money, and public money that is always growing, it is impossible to enforce rights. Trading standards services are merely one of the enforcement mechanisms for consumer rights. Consumers can enforce their own rights, as established by the Consumer Rights Act, and trading standards services are working more efficiently across the country.

Prompt Payment

7. Debbie Abrahams (Oldham East and Saddleworth) (Lab): What steps his Department is taking to help small businesses receive prompt payment from their customers. [904092]

The Minister for Small Business, Industry and Enterprise (Anna Soubry): Of course, we know that for small businesses late payment is a serious problem and continues to be so. That is why we are creating the small business commissioner, whose fundamental guiding principle will be to tackle this problem, because we want to change the culture. It is good to see that some of the larger companies have already changed their late payment policies quite significantly in favour of smaller businesses, in some instances reducing the period to 14 days, especially for micro-businesses. From October, larger companies will be under a duty to report their payment policies.

Debbie Abrahams: We welcome the creation of a small business commissioner as part of the Enterprise Bill, but given that last year’s National Audit Office report showed that four Departments were failing to meet the Government’s payment deadlines, why were public sector contracts not included?

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Anna Soubry: I have particularly asked that we have a full look at how we ensure that in all Government contracts, at all levels, late payment is not a problem and that sub-contractors, in particular, do not breach our very clear rules about late payment and the terms and conditions that it is only right and fair to have in all contracts, particularly Government ones. It is not enough to say it; they should be doing it as well.

Brexit: Exports

8. Ian C. Lucas (Wrexham) (Lab): If he will make an assessment of the potential effect of the UK leaving the EU on exports from its (a) aerospace and (b) automotive sectors. [904093]

The Minister for Small Business, Industry and Enterprise (Anna Soubry): It is absolutely the case that our country will be stronger, safer and better off remaining in the European Union. United Kingdom automotive industry exports to the EU were worth £15 billion in 2014, while aerospace exports to the EU amounted to £5.8 billion. Our membership allows us to continue to attract international investment to the United Kingdom, as well as to work with all the countries in the EU through the various agreements that we have with other countries throughout the world.

Ian C. Lucas: Toyota UK and Airbus UK are two anchor companies heading huge supply chains in north-east Wales that employ tens of thousands of people. Does the Minister agree that it would be absolute madness to throw those anchors away by risking leaving the European Union, and placing jobs in Wales and the rest of the UK at risk?

Anna Soubry: It is a pleasure to agree with the hon. Gentleman, who might now become my hon. Friend on this matter. We are undoubtedly, as I have said, better remaining a member of the European Union, not just for the sake of the larger companies but because, as he rightly identifies, the effects extend all the way through the supply chains, which often encompass the smaller companies. I encourage him to urge the leader of the Labour party to make sure that it puts its full weight behind the “stronger in” campaign. He would be better off doing that than engaging with CND rallies.

Gavin Robinson (Belfast East) (DUP): The right hon. Lady knows that planes have the great ability to cross borders without pesky border controls. I have found her to be a champion for Bombardier and the C Series in my constituency, so will she confirm that she will continue the discussions with UK Trade & Investment and secure sales for the C Series aircraft, irrespective of what happens on 23 June?

Anna Soubry: Of course. It was a great pleasure to come to the hon. Gentleman’s constituency and specifically to see Bombardier’s excellent C Series plane and the construction of its wings. I am delighted to say that I am doing everything I can—indeed, we all are—to make sure that UKTI is properly used by all industries, especially the one that he represents, to increase sales, including those of the C Series plane. It is an excellent plane.

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Kevin Brennan (Cardiff West) (Lab): Since 1995, Europe’s share of commercial aviation manufacturing has risen from 16% to 57% of the world market because of the co-operation between France, Germany, Spain and the United Kingdom. Would the Minister not be better off having a word with some of her own colleagues than worrying about the Labour party, which is united in its support for remaining in the European Union? Does not that statistic provide a practical and potent example, which she can use with her Back Benchers and supporters, of why it is absolutely in the UK’s long-term interest to remain in the European Union?

Anna Soubry: As I have already said, we are indeed stronger, safer and better off in the European Union. I am delighted that the leader of my party, the Prime Minister, is leading the campaign for us to remain in the European Union. If I may say so, I was told only yesterday that the majority of Conservative MPs support the Prime Minister in “stronger in”. However, I will make the point yet again that, unfortunately, the leader of the Labour party is failing in his duty to play a full part. He goes on CND rallies instead of supporting Trident, for example, and instead of getting out there and supporting “stronger in”.

Regional Growth: Midlands

9. Craig Tracey (North Warwickshire) (Con): What steps he has taken to promote regional growth in the Midlands. [904095]

10. Karl McCartney (Lincoln) (Con): What recent steps he has taken to promote regional growth in the Midlands. [904097]

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): I continue to promote the long-term economic plan for the midlands engine, which aims to add an extra £34 billion and 300,000 jobs to the midlands economy by 2030. Just last week, I opened a new factory and also an innovation centre in the midlands.

Craig Tracey: In national apprenticeship week, we can all welcome the creation of over 2.6 million apprenticeships since May 2010, including 500,000 in the midlands and 5,140 in my constituency of North Warwickshire. Will the Secretary of State join me in welcoming a report published today by Universities UK? It shows the potential for new degree apprenticeships to help to meet the needs of employers in my constituency and across the whole country, and to encourage more universities to deliver these important degree apprenticeship courses.

Sajid Javid: Yes, I will. Let me congratulate my hon. Friend on the hard work he has already put in during his short time in his new role. He will know that there has been an increase of 137% in apprenticeship starts in his constituency in the past five years. He is absolutely right to raise the importance of degree apprenticeships, because he knows this is about quality, not just quantity. I welcome the report from Universities UK today on this issue, because we will do everything we can to support more degree apprenticeships.

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Karl McCartney: My constituents in Lincoln, along with the people of Lincolnshire, are grateful for the Government’s investment so far in diverse areas such as our transport infrastructure and apprenticeships, which are delivering clear business benefits. Will my right hon. Friend advise me whether I should be hoping for any further investments, like those that he and I have previously discussed with our right hon. Friend the Chancellor of the Exchequer, in the Budget tomorrow?

Sajid Javid: My hon. Friend is an incredibly powerful advocate for the people of Lincoln. His energy is legendary: he is like the Duracell bunny. Let me congratulate him on the success he has already achieved on behalf of his constituents in securing local investment. Like him, we are all waiting to see what the Budget holds.

Mr Speaker: I think that was intended as a tribute. It will doubtless be communicated by the hon. Gentleman to the good burghers of Lincoln the length and breadth of his constituency.

Laser Pens

11. Oliver Dowden (Hertsmere) (Con): What progress his Department is making on regulating the sale of laser pens. [904098]

The Minister for Small Business, Industry and Enterprise (Anna Soubry): It was a great pleasure to meet my hon. Friend yesterday to discuss his campaign, which I completely and fully support. We had already begun to look at this very important problem to see whether we need to change the legislation. As a result of the meeting, as my hon. Friend knows, I have undertaken to contact trading standards officers, and the primary authority in particular. We need to look at what is in effect the illegal sale of these pens to children. Laser pens have a role but should be bought by those who intend to use them for perfectly proper purposes. The idea of selling them to children seems perverse. We are doing other things, including looking at how we can change some of the EU directives and regulations.

Oliver Dowden: As the Minister knows, I told her about the case of a seven-year-old boy in my constituency who was almost blinded last year by a laser pen he had purchased at a Christmas fair. The problem is that laser pens are very dangerous but are being marketed to children as toys. Will the Minister further update the House on what the Government are doing to stop this form of marketing?

Anna Soubry: I cannot see how that can possibly be legal—actually, I am of the view that it must be illegal—which is why we are contacting trading standards officers and also, of course, the police. I know that my hon. Friend has already contacted his local trading standards officers, who in turn have contacted the police, and an investigation is taking place. As a result, I am confident that the message will be put out so that we can stop the import of laser pens, which is another reason I want to work with the European Union. I cannot see how on earth it can be right that it is legal to sell these pens as toys, because they are clearly not.

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12. Stephen Timms (East Ham) (Lab): What recent assessment his Department has made of trends in apprenticeship completion rates. [904099]

The Minister for Skills (Nick Boles): As we raise the standard of apprenticeships by making them longer and more testing, it is not surprising that there has been a slight drop, to 69%, in success rates. That is why we are ensuring that 20% of the payment to trainee providers is paid only on completion.

Stephen Timms: There has been a drop. The Minister knows my concern that achieving his quantitative apprenticeship target might be done at the expense of quality, and there is a falling completion figure, as he said. There seems to be a particular problem in London in this respect. Does he have any further proposals for improving the position on apprenticeship completions?

Nick Boles: I think that the right hon. Gentleman, who is a very consistent champion not just of apprenticeships but of high-quality apprenticeships, should in some sense actually be encouraged. The steps we are taking—to insist, first, that an apprenticeship must last a minimum of 12 months, and secondly, that the training content of the apprenticeship is relatively rigorous—are flushing out poor-quality training provision, which is having a temporary effect on completion rates. As he knows, we propose to put employers in charge of the money. They will commission the training provision, and they will have a very strong interest in ensuring that as many apprentices as possible complete the programme.

Michael Tomlinson (Mid Dorset and North Poole) (Con): With 19,800 higher apprenticeship starts in the past year—an increase of more than 115%, which includes nearly 3,600 in my constituency—may I congratulate the Government on what they have done so far, and urge the Minister to go further and faster?

Nick Boles: I agree with my hon. Friend, because although that figure is encouraging, it is a tiny percentage of the total number of apprenticeship starts every year. We want more higher apprenticeships and more degree apprenticeships—as championed by the Secretary of State—so that people see that they can start an apprenticeship at any level and go anywhere.

21. [904108] Karin Smyth (Bristol South) (Lab): What assessment has the Minister made of the potential impact of post-19 loans on the take-up and completion of training options?

Nick Boles: We are delighted that we have been able to extend the availability of those loans, which secure the same level of subsidy as general student loans. They are now available not just to people over 24, as before, but to those over 19, and at levels 3 and above for any programme of study. We believe that that is a real opportunity for people to invest in their own skills development and futures.

Mr Gordon Marsden (Blackpool South) (Lab): May I associate myself with the Secretary of State’s advocacy of national apprenticeship week, which of course the

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Labour Government started? It is worrying to learn that the number of people who completed apprenticeships in London last year, compared with the number who started them, is only 50%. Across England, similar statistics show that only 52% of people completed their apprenticeships, which is a drop of 6% on the previous year. The latest number of apprenticeships started in leisure, travel and tourism is down by 40% on 2010, and as the

Financial Times

told us, and as we heard today, only 4% of female apprentices take up engineering. Does the Minister agree that women—50% of the population—and the service sector must be crucial elements for his 3 million apprenticeship target? How will he have the muscle to achieve that, given the 23% cut in apprentice service staffing in the past nine months alone, and with more cuts to come?

Nick Boles: I think the Opposition will find that they are on a hiding to nothing if they try consistently to pick holes in and talk down the apprenticeship programme, which is dramatically successful and dramatically popular. Of course some people will not complete their apprenticeship, because an apprenticeship is not just a training programme; it is a job, and sometimes employers will decide that someone is not suited to continuing in that job. We want standards to go up and we want more numbers. Frankly, it would be good to have a bit of support from the Opposition for a programme that they claim to have invented.

BIS Office: St Paul’s Place, Sheffield

13. Paul Blomfield (Sheffield Central) (Lab): What plans his Department has for the form of the consultation on its decision to close its office in St Paul’s Place, Sheffield. [904100]

The Minister for Universities and Science (Joseph Johnson): The Department for Business, Innovation and Skills is consulting for 90 days with staff and trade unions, including on firm proposals to move policy directorate roles to London, potentially resulting in the closure of the Sheffield office. BIS is also consulting on how it can avoid making redundancies, and no decisions will be taken before the end of the consultation on 2 May.

Paul Blomfield: I thank the Minister for confirming that no decision will be taken on the closure of the office before the end of the 90-day consultation. The chief executive of Sheffield Council has written to the permanent secretary to point out that moving 247 jobs from Sheffield to London will add around £2.5 million to the annual operating costs of the Department, and he has offered to work with him to consider alternatives. Will the Department take up that offer before a final decision is made?

Joseph Johnson: The Department is in consultation with staff, trade unions and local authorities. The savings from those changes will result in £350 million across the spending review period, or 30% to 40% of such budgets. That important saving comes from the consolidation of 80 sites in seven centres of excellence.

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15. Paula Sherriff (Dewsbury) (Lab): What assessment he has made of the adequacy of coverage and quality of broadband provision for SMEs. [904102]

The Minister for Culture and the Digital Economy (Mr Edward Vaizey): I will carry on from where I left off, and explain that broadband for business is going well, and we anticipate that about 80% of businesses will have access to it by the end of 2017. We have passed our 90% target for broadband for the UK as a whole.

Paula Sherriff: I thank the Minister for his response, but my constituent in Upper Denby is struggling to run a business with broadband speeds of no more than 1.8 megabits. He is not due to get superfast broadband until July 2017 at the earliest. Broadband in 2016 is a necessity, not a luxury. Will the Minister make a commitment to escalate the superfast broadband programme, so that businesses in my constituency can operate on a level playing field with their competitors?

Mr Vaizey: The hon. Lady makes an excellent point and I am pleased that her constituency will achieve levels of 96% broadband coverage. The point she makes, which I would like to emphasise to the Opposition spokeswoman, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), is why we have brought forward Labour’s target by two years. We have achieved by the end of 2015 what Labour planned to achieve by the end of 2017.

Cat Smith (Lancaster and Fleetwood) (Lab): Many of my rural and farming constituents are looking to diversify, and are setting up their own businesses and working from home. Frustrated with the wait for BT to deliver superfast broadband, many have been left in the position of digging their own trenches and working with Broadband 4 the Rural North to deliver superfast broadband so that they can run their businesses. What message does the Minister have for my constituents who have been left in this situation?

Mr Vaizey: My message to the hon. Lady, as opposed to her constituents, is that people have to make up their mind. One moment I am being berated because BT has a monopoly and now I am being berated because people are choosing a different provider. Broadband 4 the Rural North is a fantastic community broadband programme. We encourage lots of competition for BT and I am pleased that B4RN is thriving and providing an excellent service to her constituents.

Topical Questions

T1. [904075] Lucy Allan (Telford) (Con): If he will make a statement on his departmental responsibilities.

The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid): It is a busy week for the Department. We are in the middle of British Science Week, which will see millions of people attend thousands of events across the country. Yesterday, I helped to launch National Apprenticeship Week and met some remarkable young people learning the skills needed to do the jobs of tomorrow. Tomorrow,

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of course, is Budget day. We will hear from the Chancellor about our long-term plan to make Britain the best place in the world to start and to grow a business.

Lucy Allan: The Secretary of State will remember the several visits he made to my constituency, so he will be delighted to know that on Thursday this week the Telford International Centre is hosting a national apprenticeships show, including local employers Capgemini, Stadco and Juniper Training. Telford has had a dramatic fall in youth unemployment. Will he join me in congratulating Telford businesses, colleges and the many other people who have helped youngsters to get the first step on their career ladder?

Sajid Javid: I am pleased to see my hon. Friend is wearing an apprenticeship badge today to mark this important week. I recall fondly a number of visits to Telford and meeting local businesses. I join her in warmly congratulating those local businesses, colleges and training providers on the work they have done to boost apprenticeships, which are up 120% over five years in her constituency. That means thousands of young people being helped to achieve their full potential.

Ms Angela Eagle (Wallasey) (Lab): It is National Apprenticeship Week, British Science Week, Global Consumer Day—and the Ides of March. Today, the CBI has released a survey showing that 80% of its members support the case that staying in the EU is best for jobs, growth and investment. They are right, are they not, Secretary of State?

Sajid Javid: The best outcome of the referendum for business, jobs and growth in Britain is that we remain. That provides us with the opportunities we need. The uncertainty of a leave vote would be the enemy of jobs and growth.

Ms Eagle: I thank the right hon. Gentleman for that response. It was not heard brilliantly on parts of his Back Benches. Is his lukewarm response for remaining not now irritating both sides of his divided party and damaging the Government’s case to remain in the EU? When the Prime Minister launched the Conservatives’ “in for Britain” campaign, the Business Secretary conveniently had a prior engagement, announcing that:

“with a heavy heart and no enthusiasm, I will be voting for the UK to remain a member of the European Union.”

He asserted that he would remain a “Brussels basher”, but is he not really increasingly seen in his own party as a Brexit betrayer? With 100 days to go to the EU referendum, does the overwhelming case for remaining in the EU not deserve a Business Secretary who can campaign with his heart as well as his head?

Sajid Javid: It is a shame that that is the best the hon. Lady can come up with. One would think she would want to make a positive case. I think she should focus on speaking to her own boss and asking him about the contribution he wants to make to this debate.

T3. [904077] Andrea Jenkyns (Morley and Outwood) (Con): I was a comprehensive school girl who left school at 16, so social mobility is very important to me, and I am pleased to be involved in the new inquiry by the all-party parliamentary group on social mobility

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into getting people from diverse backgrounds into top professions. Will my hon. Friend tell me what steps the Government are taking to ensure that more people, regardless of their background, can secure further education or employment?

The Parliamentary Under-Secretary of State for Life Sciences (George Freeman): I am delighted to have the opportunity to set out the Government’s support for our apprenticeship programme. We have committed to doubling spending on it and to see the number of apprenticeships rise to 3 million this year. They are a crucial platform for providing opportunity and social mobility in areas too often left behind in the past.

T2. [904076] Diana Johnson (Kingston upon Hull North) (Lab): Small care home providers in my constituency are telling me that their businesses will not be viable from April because they face the living wage increase but no chance of an increase in fees from Hull City Council. Given Hull’s low council tax base, even the 2% social care levy will not close the funding gap. What advice can Ministers give to these small but valuable businesses in my constituency?

The Minister for Skills (Nick Boles): I have had a number of meetings with various providers of social care. I do not entirely accept the hon. Lady’s assessment that the increase in council tax specifically to create extra funding for social care will not be able to address the higher costs resulting from the national living wage. I note that, in a week when we had a significant increase in the national minimum wage and a month before the national living wage comes in, the Opposition are attempting to say that these interventions will actually be damaging for the people they represent, rather than substantially boosting their incomes.

T8. [904084] Craig Tracey (North Warwickshire) (Con): Like many in the House, I welcome the Chancellor’s moves to develop a northern powerhouse, but my constituents are also interested in the Secretary of State’s work to drive forward the midlands engine. Will he assure me that tomorrow’s Budget will contain welcome news for my constituents and people across the west midlands?

Sajid Javid: I can reassure my hon. Friend that the Government are absolutely committed to a long-term economic plan for the midlands engine, and he will know that I was involved in the launch of the midlands engine prospectus. We are looking for a £34 billion increase in the local economy and 300,000 jobs by 2030, which will benefit his constituents as well as mine.

T4. [904078] Greg Mulholland (Leeds North West) (LD): I welcome the Minister’s reiteration last Wednesday of her and the Department’s view that they will abide by the will of the House of Commons regarding the pubs code, which currently includes an outrageous measure whereby tenants have to surrender the length of their lease for the market rent only option. To ensure that she abides by the will of the House, will she see that that measure is taken out at the final stage of drafting?

The Minister for Small Business, Industry and Enterprise (Anna Soubry): As I have said before, I will undertake to be true to all we promised we would do when this matter was considered last year during the passage of

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the Small Business, Enterprise and Employment Bill, and that is what we will do. I hope that the hon. Gentleman might now adopt the words of the British Institute of Innkeeping, which has welcomed the appointment of Mr Paul Newby as the Pubs Code Adjudicator, saying he has fantastic integrity and that he will be both feared and respected by pub companies. It sounds to me like a job well done.

David Rutley (Macclesfield) (Con): Given the large number of young people interested in becoming self-employed or setting up their own business, will my right hon. Friend tell the House what steps are being taken to help the next generation of entrepreneurs achieve their ambitions?

Anna Soubry: I am grateful to my hon. Friend for that question, because as he will know we have had a real look at how the self-employed work and the sorts of changes that might be made to improve their conditions and to ensure greater fairness with those who are not self-employed. As somebody who was self-employed for many years, I am fully aware of this issue. We are looking at the excellent report that has been produced and seeing how we can encourage more people to start up their own business and, if they are self-employed, ensure they get a better deal.

T5. [904081] Gavin Newlands (Paisley and Renfrewshire North) (SNP): In February, the Cabinet Office announced its intention to insert a new clause into grant agreements for charities. Many universities, including my local University of the West of Scotland, are worried that that will prevent them from being able to advise Government, Parliament and political parties. Will the Minister confirm whether universities will be exempt from any new clause, and if so, what form the exemption might take?

The Minister for Universities and Science (Joseph Johnson): We are discussing with Cabinet colleagues exactly how we might treat universities with respect to that proposal.

Andrew Griffiths (Burton) (Con): The Secretary of State will know that the beer and pub industry in the west midlands employs 86,000 people in 5,000 pubs, has 124 breweries and contributes £1.3 billion in tax. Given his support for the brewing industry when he was in the Treasury, when he led the call for the duty cut, will he outline what his Department is doing to support the beer and pub industry—and will he pick up the phone to the Chancellor and ask him for another cut?

Sajid Javid: My hon. Friend has been an excellent advocate of that industry, helping it to grow and create thousands of jobs. He will have just heard from the Minister for Small Business, Industry and Enterprise, my right hon. Friend the Member for Broxtowe (Anna Soubry) about the Pubs Code Adjudicator, which I think is a very positive development. I have heard my hon. Friend loud and clear on the desire for a further cut, and I know he has made his representations to the Chancellor. When I was Economic Secretary to the Treasury, I recall getting a beer named after me—Sajid’s Choice, which was a fine brew—so there are many reasons to cut beer duty.

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T6. [904082] Jim McMahon (Oldham West and Royton) (Lab): As Government spend on small and medium-sized businesses topped £2.1 billion last year, I wrote to the Government to ask how much was spent in the north-west and particularly in Oldham. With an average UK spend of £188 per head of population, why does the north-west get just £29 per head of population and Oldham, at the heart of the northern powerhouse, just £15?

Anna Soubry: I am happy to discuss the figures with the hon. Gentleman, but as we know, we have a Chancellor and indeed a Government who are absolutely committed to the northern powerhouse, with hand and with heart—and that is what we continue to do.

Tom Pursglove (Corby) (Con): As Ministers know, the steel industry is a very important employer in Corby, and with the final pre-Budget discussions taking place, would Ministers impress on the Chancellor that a business rates holiday for the industry would be very welcome news?

Anna Soubry: We will always continue to fight for our steel industry. My right hon. Friend the Secretary of State and I understand the need to look at business rates and particularly plant and machinery, and we continue to put these important arguments forward. Whether or not we will be successful, we can only know tomorrow.

T7. [904083] Anna Turley (Redcar) (Lab/Co-op): Last week, I met a large number of companies that are currently involved in securing and maintaining the former SSI site in my constituency. They expressed extreme and urgent concern about the environmental situation on the site, particularly in view of the hazardous waste, which they believe is affecting the environment. Will the Minister commit to an immediate and urgent environmental review of the site, ahead of the implementation of the mayoral development corporation?

Anna Soubry: I am always keen to make sure we do the right thing by the site. I shall be revisiting Redcar on 21 March, as I promised to do, six months on from the unfortunate closure. The hon. Lady makes a good point. I am keen to ensure that we have this mayoral development company, but it must not be a white elephant. If we need to take decisions now to secure a proper future for it, we will do that.

Martin Vickers (Cleethorpes) (Con): Businesses in my constituency are continually telling me that their plans for expansion are hampered by excessive and over-regulation, much of which emanates from the European Commission. Will the Minister give an assurance that the Government will always fight on behalf of businesses rather than regulators?

George Freeman: My hon. Friend is a doughty campaigner for small businesses, and I am delighted that in the last Parliament we reduced the cost of regulation on small businesses by £10 billion. Furthermore, we are committed to turbo-charge our deregulation initiative: it is not just one in, one out; it is one in, three out.

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Owen Thompson (Midlothian) (SNP): A recent report from PricewaterhouseCoopers highlighted innovation as a key driver of growth across the global economy. It also found that UK companies were less innovative and less focused on innovation as a driver for growth than the global average. With UK gross domestic product growth revised down by OECD and the IMF, is it not time that the Minister paid greater attention to supporting innovation in our economy?

Joseph Johnson: Since 2010, the UK has risen from 14th to second place in the global innovation index, behind only Switzerland. We continue to support innovation in this country through Innovate UK and our expanding Catapult network.

Kit Malthouse (North West Hampshire) (Con): The most promising sector in the British economy at the moment is life sciences, yet historically start-ups in this sector have had difficulty attracting venture capital. Will the Minister update us on progress he is making on getting this vital resource into this vital sector?

George Freeman: That gives me a chance to congratulate my hon. Friend on his leadership as deputy Mayor of the MedCity initiative in London. The life sciences sector is growing fast. Last year, we hit a 17-year financing high, with more than £1.7 billion raised for early-stage companies. The challenge now is to make sure that those emerging businesses grow into substantial global companies, which is where my focus lies.

Mr Iain Wright (Hartlepool) (Lab): I welcome National Apprenticeship Week, which gives us a great opportunity to praise all apprentices, and to promote apprenticeships as a means of securing training skills and jobs for the future.

In a statement on apprentices last Thursday, the Minister of State said:

“We do not expect all companies that pay the levy to use up all the money in their digital accounts”.—[Official Report, 10 March 2016; Vol. 607, c. 454.]

What does that mean in practice? Can large and small companies take up any unspent levy? What estimate have the Government made of the number of companies involved, and of the proportion and value of the levy that will not be used by larger firms?

Nick Boles: As ever, the Chair of the Select Committee has asked some penetratingly good questions, but I fear that I must ask him to wait until tomorrow, when he will hear more, as he will during the next few weeks.

Michelle Donelan (Chippenham) (Con): Does the Minister agree that we need to give more training support to small businesses to encourage them to hire women who are re-entering the labour market after significant career breaks post-children?

Sajid Javid: I absolutely agree with my hon. Friend. We are focusing strongly on the issue, and we are working on it with the Women and Equalities Minister. We want to ensure that women have the same opportunities as men to re-enter the work force, and we will treat that as a big priority.

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Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP): The Government have pledged to halve the disability employment gap. What is the Minister doing to ensure that disabled people have access to apprenticeship opportunities and can fulfil their potential?

Nick Boles: It gives me great pleasure to be able to agree entirely with the hon. Lady. This is incredibly important. The current rate of participation in apprenticeships is not too bad—I think it is about 8.8%—but we can always do more. We need to ensure that the requirements for the qualifications, particularly in English and maths, that some people have to acquire as part of their apprenticeships do not discriminate against those who are disabled.

Neil Carmichael (Stroud) (Con): Does the Secretary of State agree that, given that Conservatives In is keen to promote the economic case for our remaining in the European Union, it is excellent news that the CBI has said that 80% of its members support the EU?

Anna Soubry: Absolutely. It is incredibly important that an organisation of the CBI’s standing is backing the Stronger In campaign. Indeed, we hear an increasing number of voices from business standing up for British companies, and not just saying how bad it will look if we leave—pointing out that what Brexit offers is very little and very confusing—but making the positive case for our staying in a reformed European Union, which is in our better interests.

David Simpson (Upper Bann) (DUP): Further to an earlier question, the Minister will know that we have many young entrepreneurs with innovative ideas in our universities throughout the United Kingdom. What more can the Government do to encourage them to stay in this country and produce their goods?

Joseph Johnson: We continue to support innovation all over the country. Scotland is doing particularly well at present, with an 11% share of Innovate UK’s budget. Its population and GDP shares are both 8%, so it is punching above its weight, and I hope it will continue to do so.

Michael Ellis (Northampton North) (Con): What is my hon. Friend doing to deal with the appalling anti-Semitism at the Oxford University Labour club? We are

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now also hearing about an anti-Semitic play being performed at York University. Those are both appalling examples of disgraceful, blatant and rabid anti-Semitism.

Joseph Johnson: I have, of course discussed the matter with the Vice-Chancellor of Oxford University, and also with the chief executive of the Higher Education Funding Council for England. Anti-Semitism has no place in our universities, or anywhere else in our society. Last November, we asked Universities UK to lead a review of harassment and hate crime in higher education; the Union of Jewish Students is represented on that body. We expect university leaders to deal with anti-Semitism without hesitation, taking disciplinary action and involving the police whenever that is necessary.

Conor McGinn (St Helens North) (Lab): In this glorious week of the Cheltenham festival and St Patrick’s Day, will the Secretary of State join me in paying tribute to the Irish business community in Britain, and to all who work to promote trade between our two countries? Will he also acknowledge, and pay tribute to, the fact that the relationship has been cultivated within the European Union—and long may that continue?

George Freeman: On behalf of the Secretary of State, it is a great pleasure for me, as the son of a national hunt jockey who had a winner at Cheltenham, to join the hon. Gentleman in congratulating the Irish racing industry on what it does for the global economy and indeed for the UK economy.

Mr Speaker: Last but not least, Mr Alan Mak.

Mr Alan Mak (Havant) (Con): Havant is a national centre for aerospace and engineering excellence. Will the Minister join me in congratulating everyone involved in the ExoMars space programme?

Joseph Johnson: I certainly will. The UK space industry is indeed booming, with average growth rates of 8% over the past eight years. The ExoMars rover has been built in Stevenage, and I look forward to seeing the results from the Mars methane sniffer once it has completed its seven-month journey to Mars. I would like to tell the House that this morning I received an update from the UK Space Agency to say that a signal has now been received at mission control, so we can safely say that the launch has been a success.

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Syria: Russian Redeployment and the Peace Process

12.35 pm

Hilary Benn (Leeds Central) (Lab) (Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the announcement by Russia that it is redeploying the main part of its force from Syria, and on the implications of this for the peace process.

The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond): We have, of course, seen the media reports of a Russian withdrawal of forces, including a report this morning that the first group of Russian planes has left the Hmeimim air base to return to Russia. However, I should tell the House that, as far as I have been able to determine, none of the members of the International Syria Support Group had any advance notice of this Russian announcement, and we have yet to see any detailed plans behind Russia’s announcement yesterday.

We do not yet have any independent evidence to verify Russia’s claims that military withdrawals have already begun. We are monitoring developments closely, and it will be important to judge Russia by its actions. It is worth remembering that Russia announced a withdrawal of forces in Ukraine which later turned out merely to be a routine rotation of forces. If this announcement represents a genuine decision by Russia to continue to de-escalate the military conflict, to ensure compliance with the cessation of hostilities and to encourage the Syrian regime to participate in peace negotiations in good faith, it will be welcome.

Now is the time for all parties to focus on the political negotiations, which resumed in Geneva yesterday. Only a political transition away from Assad’s rule to a Government representative of all Syrians will deliver the peace Syrians so desperately need and so ardently desire and give us a Government in Damascus able to focus on defeating terrorism and rebuilding Syria. There can be no peace in Syria while Assad remains in power. Russia has unique influence to help to make the negotiations succeed, and we sincerely hope that it will use it.

Since it came into force on 27 February, the cessation of hostilities has resulted in a significant reduction in violence in Syria. However, there have been a significant number of reports of violations, including the continued use of barrel bombs, which we have been discussing with our partners in the ISSG ceasefire taskforce in Geneva. We have serious concerns that the Assad regime has been using the cessation of hostilities to pursue its military objectives and that it is not serious about political negotiations. Swift action to address these violations is therefore vital to reduce the violence and show the Syrian people, including the Syrian opposition, that both Russia and the Assad regime are abiding by the terms of the cessation of hostilities. Failure to do so threatens the prospects for continued political negotiations.

We look to Russia, as guarantor for the regime and its backers, to use its unique influence to ensure compliance and to make clear to the Assad regime its expectation that it must negotiate in good faith. After investing so much in Assad, Mr Putin must show the world that he can exercise control over his protégé. At the same time,

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we call for complete and unfettered humanitarian access across Syria and an end to all violations of international humanitarian law, in accordance with UN Security Council resolution 2254.

We are relieved that desperately needed aid convoys are now arriving in some besieged areas of Syria, including some of those named in the International Syria Support Group agreement of 11 February in Munich. It is imperative that that continues and, in particular, that access is provided to Darayya, which has not yet seen any deliveries. The Assad regime must lift all sieges and grant full and sustained humanitarian access across Syria.

No one will be more delighted than I if, after five months of relentless bombing, Russia is genuinely winding down its military support to the brutal Assad regime, but, as in all matters relating to Russia, it is the actions, rather than the words, that count. We shall be watching carefully over coming days to see whether the announcement’s potential promise turns into reality.

Hilary Benn: I am grateful to the Foreign Secretary for that reply. The conflict in Syria has now raged for five years. Half the population have fled their homes. Neighbouring countries have borne the brunt of the refugee crisis. According to the Syrian Observatory for Human Rights, over 360,000 people have lost their lives, mostly at the hands of President Assad, and Russian airstrikes have killed 1,700 civilians in the past six months alone.

Yesterday’s announcement of the withdrawal of Russian forces will be cautiously welcomed by all of us, but I agree with the Foreign Secretary that it needs to be carried through, in particular if it is going to support the ceasefire and de-escalate tensions. The Foreign Secretary has told the House that he has received no direct information about the likely timescale and extent of the withdrawal, but will he comment on the statement attributed to a Russian Defence Minister, who said that Russian forces will continue to attack so-called terrorists, a term which Russia has used in the past to cover airstrikes on the Syrian opposition? Will the Foreign Secretary tell us what discussions, if any, he has had with Foreign Minister Lavrov about this?

How might the withdrawal of Russian aircraft change the type of missions that the RAF and others in the anti-Daesh coalition are undertaking in Syria? Given the Foreign Secretary’s latest assessment of the ceasefire, the extent to which it is holding and the violations to which he referred, what action are the British Government and other Governments proposing to take? Does he agree that a full withdrawal would improve opposition forces’ confidence in the ceasefire and help to ensure their full participation in the peace process?

Given the continuing concerns expressed by the International Committee of the Red Cross and others, what will be the impact of both the ceasefire and any withdrawal on the international community’s ability safely to provide the humanitarian aid to which the Foreign Secretary referred, in particular to the towns and areas that have been besieged? With the UN commission of inquiry on Syria due to report this week to the United Nations Human Rights Council on potential war crimes committed by all sides, what prospect does

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he see for any suspected war crimes being referred to the International Criminal Court by the UN Security Council, given that Syria is not a signatory to the Rome statute?

Finally, what recent discussions has the Foreign Secretary had with other members of the ISSG and Staffan de Mistura about the prospects for the latest round of peace talks taking place in Geneva? Does he agree that both Russia and Syria need to ensure that all the issues are on the table if the Syrian people are to see peace and stability finally return to their war-torn country?

Mr Hammond: I am grateful to the right hon. Gentleman. As he rightly says, it is now five years since this terrible civil war began, and he correctly set out the scale of attrition that the Syrian people have faced over that time. He referred to the remarks attributed to Defence Minister Shoygu that Russia would continue to attack terrorists. As the right hon. Gentleman said, that is exactly the formula used by the Russians in the past when attacking the moderate opposition. They have always asserted that they conduct airstrikes against terrorists only, so it is not terribly reassuring that, a few hours after the announcement of the withdrawal of their military forces, their Defence Minister is saying that they will continue to attack terrorists.

The right hon. Gentleman asked about discussions with Foreign Minister Lavrov. I have had no such discussions since the announcement was made, although I have spoken to American colleagues to assess what information they have. The UK mission in Syria will not change as a result of withdrawal of Russian forces; UK airstrikes are exclusively targeted against Daesh, primarily in the east of the country, and will continue to be so targeted.

The right hon. Gentleman asked about the latest assessment of the ceasefire. We held a meeting in Paris on Sunday, in which we reviewed the situation on the ground. The reality is that, after a lull in the level of airstrikes immediately after the beginning of the cessation of hostilities, they have grown steadily. On 10 March, we assessed that Russian airstrikes were at the same level as they were before the cessation of hostilities, but there is evidence that the Russians had redirected the focus of their airstrikes so that they were more convincingly targeted against Daesh and al-Nusra targets than had previously been the case. If Russia carries out a full withdrawal of its forces—and I do not think even the Russian announcement is suggesting that would take place—that will certainly change the balance of power and military advantage on the ground in a very significant way.

It is not the Russians who have been impeding access for humanitarian aid, but the Syrian regime, and so the question is about how much leverage the Russians have over the regime and how much of that leverage they are prepared to exercise. One could speculate about whether this announcement is, in fact, an exercise by Russia in reminding the regime of its position as a client, operating at Russia’s will.

On the ICC, there are two major impediments. The first, as the right hon. Gentleman rightly says, is that Syria is not a signatory to the ICC convention. The second is that Russia holds a veto in the Security Council. Therefore, although we all seek to bring those responsible for the terrible crimes that have been committed in Syria to justice, I would advise him not to hold his breath just for the moment.

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Finally, on ISSG discussions, the ISSG has not met in ISSG format recently, but we have had opportunities to talk to Staffan de Mistura about the agenda for the peace talks in Geneva. We are very satisfied with the sensible approach he is taking, which recognises that, to put it bluntly, as soon as we get to the difficult subjects, the talks may run into extreme difficulty, and which therefore seeks to begin by discussing some less controversial subjects to try at least to generate some momentum before we come to the more difficult issues. I have to say again that the sticking point is transition. We are clear, and resolutions of the ISSG are clear, that the way forward has to be through a transitional regime, which moves us from the current position with Assad in power to a new position with Assad out of power. The Russians, the Syrian regime and the Iranians still do not accept that principle, and unless and until it is accepted, the talks going on in Geneva may linger for a while but they will not ultimately be able to make significant progress.

Crispin Blunt (Reigate) (Con): The Foreign Secretary refers to Russia sending a message to Assad. Does he agree that this is potentially helpful as far as the peace process is concerned by ensuring that Assad does not overplay his hand in the peace talks? Does the Foreign Secretary also agree that the actual threat to the peace process comes from across the border in Turkey, which is no longer led by a constructive and rational partner in the process? The actions of President Erdogan should be giving all of us the gravest concern as he presides over a disintegrating democracy and a war on part of his own people.

Mr Hammond: It is possible that the Russian announcement is intended as a message to the Assad regime to say, “Don’t overplay your hand. Get to the negotiating table and engage.” It is also possible that it is intended as a message to the moderate opposition to do what is expected of them, because it has not been that easy to persuade them to attend the Geneva talks when Russian bombs have still been raining down on their positions. That is all positive, but unfortunately none of us knows what the intent of Mr Putin is when he carries out any action, which is why he is a very difficult partner in any situation such as this.

On the question of Turkey, I will just say this to my hon. Friend: Turkey remains an important NATO ally and a vital security partner for the UK. When we look at events in Turkey, we can refer, as he did, to recent legislative changes and actions of the Administration, but we should also acknowledge the terrible challenge that the Turkish people are facing from terrorism, with multiple deaths from the attack in Ankara on Sunday, hundreds of security force members killed over the past nine months, and many civilians—more than 100—also killed. We must understand the challenge that Turkey faces, and I assert, as we do in relation to every country, the right of the Turkish people and the Turkish Government to defend themselves when they face that kind of terrorist attack.

Alex Salmond (Gordon) (SNP): It is almost five years to the day since the uprising against Assad. Hundreds of thousands of people have been killed, 11 million people displaced, and 80% of Syria’s children damaged by the civil conflict. When the House debated these issues two weeks ago, there was a huge amount of

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scepticism across the Chamber about the ceasefire. There have been significant breaches, but it has resulted in a huge diminution of violence. It is the only ceasefire we have. Following on from the question from the Chairman of the Select Committee, the hon. Member for Reigate (Crispin Blunt), is not the most credible explanation for the Russian announcement that it will pressurise the Assad regime into taking a more flexible attitude in the peace talks? If that is the case, instead of having the caveats first and then the welcome, would it not be better if the Foreign Secretary had the welcome and then the caveats, since it is not only the only ceasefire we have; it is the only peace process we have.

Mr Hammond: I think that we all start out with hope and we end up with experience. In dealing with Russia, putting the caveat first is probably always sensible. That is a credible interpretation of what Mr Putin has done, but, unfortunately, unlike with almost every other party with which we work in these situations, we have no insight at all into Russia’s strategy, Russia’s thinking and Russia’s tactics, so we are left guessing. Here we are, 24 hours later, none of us, including the Americans, with whom Russia apparently craves a bilateral partnership over Syria, has any real insight into what the purpose of this move is.

Sir Alan Duncan (Rutland and Melton) (Con): May I invite my right hon. Friend to admit that we have probably been unwise to have become hooked on the rather simplistic notion that the removal of Bashar al-Assad is a prerequisite for any solution at all in Syria? Is it not the case that, even with this change in Russian tactics, any progress towards peace is bound to retain many messy elements within it? Where does the Foreign Secretary think that his supposed Government for all the Syrian people—be it transitional or long-term—will come from?

Mr Hammond: I cannot agree with my right hon. Friend. We assess that the removal of Bashar al-Assad is an absolutely essential prerequisite for peace. That is not just a moral judgment that someone who has presided over the displacement of 12 million of their own people, barrel-bombed them, poison-gassed them, and killed 360,000 of them should be removed from any power; it is also a pragmatic judgment that we want a reconciliation between the different factions within Syria. The truth is that those fighting against the regime are not going to lay down their arms unless and until they are given an assurance that Bashar al-Assad will not be part of the future in Syria. Of course, my right hon. Friend is right that it will be messy, and that there will be many stumbling blocks along the way, but it is possible to envisage a transition that will see the infrastructure of the state remain in place, but with Bashar al-Assad replaced with another figure, possibly from within the Alawite minority community, as head of a transitional Administration.

Mr Ben Bradshaw (Exeter) (Lab): The Foreign Secretary is quite right to treat this Russian announcement, along with all Russian announcements, with extreme caution. However, if this move does turn out to be positive, will that not vindicate both the robust approach that Britain

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and the European Union have taken towards President Putin, and the decision taken by this House to extend the highly successful RAF mission in Iraq to Syria?

Mr Hammond: Yes, I am quite convinced that President Putin recognises only strength; he does not do shades of grey. Everything is black and white. You are either standing up to him or you have caved in in front of him. The action that the European Union took in imposing sanctions against Russia over Ukraine surprised the Russians; they did not expect that the European Union would be able to establish unanimity to do that. It surprised them even more that we have managed to renew those sanctions twice, and we are coming up to the point where we will renew them again. It has also surprised the Russians that the coalition has held together in respect of the battle against Daesh. Therefore, doing what we know is right, sticking to our guns, working with the Russians where they are prepared to align with our objectives and being clear about our requirement of the Russians to comply with their obligations under international law is the right way in which to proceed. I do not think that seeking concessions to or favours from Mr Putin is a way forward; it simply does not work like that with him.

Wendy Morton (Aldridge-Brownhills) (Con): In these very early days of the ceasefire and the talks in Geneva, does my right hon. Friend agree that, in cautiously welcoming this reported withdrawal of Russian troops, we should not lose sight of the need for the ongoing humanitarian aid to be delivered to those who need it in Syria and the region, and for securing a peaceful long-term political solution to the problem?

Mr Hammond: My hon. Friend is absolutely right. There are two reasons why the humanitarian aid must go on being delivered and getting into parts that it has not yet reached. The first and obvious reason is that people on the ground desperately need it, but, secondly, it is to enable the opposition who are at Geneva to stay there and carry on talking. They find it very difficult to maintain their legitimacy and credibility with their supporters on the ground if no humanitarian aid is getting through and regime bombs and Russian bombs are still falling on them.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Foreign Secretary said that he has not talked to Mr Lavrov. Is that because Mr Lavrov is refusing to take his call, or that he has not yet tried? If it is the latter, why not?

Mr Hammond: Again, experience is the answer. I have not tried to make the call, and I am in no doubt that I could predict quite confidently the outcome of such a call to Foreign Minister Lavrov. I have had many conversations with him over the course of our regular meetings at Syria-related events, none of which has been fruitful.

Richard Benyon (Newbury) (Con): It is depressing to calculate the sum total of human misery that has resulted from Russia’s intervention in this bloody civil war, which has gone from vetoing attempts by countries to get an early resolution to Assad and a transition Government in place through to, as one non-governmental

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organisation put it to me, the bombing of a hospital four times by Russian planes. May I re-emphasise what my right hon. Friend says by asking him to treat with huge caution this move and to hold Russia responsible for any war crimes that it commits in the future?

Mr Hammond: My hon. Friend reminds us of an important fact. If somebody who has gone into another country, bombed civilian populations and destroyed hospitals and schools then decides, five months later, that they have done enough, let us not give them too much praise. It is a bit like that question, “Did he stop beating his wife?” The fact that the Russians are there in the first place is something that we must continually protest about, and we certainly should not give them any credit for simply withdrawing from those illegal activities.

Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP): Despite Russia’s announcement, many countries remain committed to military action in Syria. In the past five years, we have seen an escalation in the humanitarian crisis in Syria and the wider region, and the refugee crisis across Europe. Will the Secretary of State therefore tell the House what proportion of Government spending relating to the crisis has been spent on military action as compared with the provision of humanitarian aid and the building of a long-term peace solution for the people of Syria?

Mr Hammond: I cannot give the hon. Lady the precise figures, but we have contributed over £1.1 billion of humanitarian aid to Syria and the neighbouring countries to support displaced persons and refugees. Our military operation, which has been running in Syria since the vote in this House a mere three months ago, has so far cost a tiny fraction of that. I do not want to mislead the House by giving a figure, but I am certain it will only be in double figures of millions.

Tom Tugendhat (Tonbridge and Malling) (Con): Given Russia’s history over the past 30 years of changing horses at the last moment in order to seek a different outcome, would my right hon. Friend now be advising President Assad to double his bodyguard?

Mr Hammond: The relationship between President Assad and President Putin is a subject of great speculation among colleagues on the International Syria Support Group circuit, but I am clear that the situation is the same as it has always been. I have said this in the House before. President Putin could have ended all this years ago by a single phone call to President Assad, offering him some fraternal advice about his future health and wellbeing.

Derek Twigg (Halton) (Lab): I agree with the Foreign Secretary that we should be cautious about these latest developments, but does he believe that Assad is now in a stronger position than he was six months ago?

Mr Hammond: In military terms, certainly. The Russian intervention has prevented the collapse of regime forces, has restored morale among regime forces, has allowed the regime to take ground, consolidate positions, move forces around in a strategically significant way, and has damaged and demoralised opposition groups. There is

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no doubt at all about that. If there is a genuine withdrawal of Russian air cover, the question is how long that improvement can be sustained, because we know that the Syrian regime forces are fundamentally hollowed out after five years of civil war, and without the Russians there to stiffen their spine it is not clear how long they will be able to maintain the initiative.

Mr Jonathan Djanogly (Huntingdon) (Con): Assuming that the Russian withdrawal does take place—I understand there is no certainty in that—will UK and US air forces take over Russian targets against Daesh with the intention of ensuring that there is no reduction in the intensity of action against Daesh as a result of Russian withdrawal?

Mr Hammond: I do not think I can comment at the Dispatch Box on what will drive US and UK targeting decisions, but I can say this. The Russian air force operates largely within a part of Syria that is heavily protected by the Syrian integrated air defence system. The Russians can fly there because they are operating in what is for them a permissive environment, not least because Russian technicians control the Syrian air defence system. It would not be the same for US, UK and other coalition partners. I do not think there can be an assumption that western members of the coalition will be able to take over all the targeting activity against Daesh that is currently being carried out by the Russians.

Tom Brake (Carshalton and Wallington) (LD): While I acknowledge that Assad is principally to blame for the starvation of his own citizens, and therefore the departure of the Russians is unlikely to have much effect on humanitarian aid, does the Foreign Secretary envisage there being any new humanitarian aid initiatives to ensure that aid reaches the parts of Syria that are currently being starved?

Mr Hammond: The humanitarian aid is there. It is ready to move; it is in trucks. The World Food Programme has the resource it needs. The food, the medical supplies and so on are ready to go in. The issue is simply access. Principally, that is to do with regime obstruction. In some places it has been overcome; in others it is still a problem. UN people are working day and night on the ground to try to resolve it, but it is a case of literally progressing through one checkpoint and then trying to negotiate the next.

Mark Pritchard (The Wrekin) (Con): Following on from the question by my hon. Friend the Member for Huntingdon (Mr Djanogly), the Kremlin says that the Russian presence in Syria is to counter terrorism, although there are no terrorist groups with fighter jets. Is it not the case that if Russia is serious about de-escalating the situation in Syria and moving towards a peaceful and political solution, it will also withdraw its surface-to-air missiles—the S-400 system?

Mr Hammond: Our understanding is that the S-400 system was probably deployed to protect Russian installations and was part of the protective bubble that the Russians put around their installations in Syria—their air bases and naval port. We will obviously have to wait to see the extent, if any, of the withdrawal that has been announced and whether it includes those weapons.

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Jo Cox (Batley and Spen) (Lab): In seeking further clarity on this deeply cynical announcement, can the Secretary of State or his US allies clarify whether the Russian Government have set out any conditions linked to their withdrawal that would negatively impact on the political negotiations? Given the tens of thousands of incredibly vulnerable Syrians who exist up and down the country, is it not time to think again about a NATO-backed no-bombing zone, particularly along the border with Turkey, to protect civilians?

Mr Hammond: As far as we are aware from the Russian statement, there is no conditionality attached to it. Just as the Russian intervention was a unilateral action, announced by Russia, so the withdrawal is a unilateral action—no negotiations or conditionality.

The hon. Lady asks me about no-bombing zones. The problem with a no-bombing zone is the same, essentially, as the one I identified for my hon. Friend the Member for Huntingdon (Mr Djanogly). Syria has a very capable ground-to-air integrated defence system, which makes it difficult for anybody’s air force, in a non-permissive environment, to enforce a no-bombing zone. It is not impossible that, with the use of stand-off weapons, some kind of no-bombing zone around the borders of Syria would be enforceable, but it would involve complex issues. It has been raised; it has been discussed; but so far volunteers to police a no-bombing zone have not been rushing forward.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): The Foreign Secretary mentioned Iran. He knows that the two regional powers, Iran and Saudi Arabia, have vastly contradictory views of Syria, especially on the future of President Assad. Will he use his good offices to ensure that those two countries get around the table to negotiate, as we saw in Vienna, because until there is greater dialogue between those two regional powers, the tensions that we have witnessed over the past five years will continue?

Mr Hammond: My hon. Friend is right that Iran and Saudi Arabia have fundamentally different views about the future trajectory of Syria, but they are both part of the ISSG. They did both come to the table in Vienna and sit there for two days, or whatever it was, and talk to each other, and they are both still showing up to regular ISSG meetings. It does not mean they agree with each other once they get there, but it is progress that they are at least sitting around the same table.

Nick Thomas-Symonds (Torfaen) (Lab): The Foreign Secretary mentioned the humanitarian convoys on the ground in Syria. More of them are getting through, but it is nowhere near the continuous and unimpeded access that both international law and the United Nations need. What is his assessment of how this latest Russian announcement will provide further opportunities to put pressure on the Syrian regime to allow more humanitarian aid through?

Mr Hammond: As I said, even if the Russians do withdraw forces, I do not think that will have a direct impact on the ability to get humanitarian supplies into the country. Obviously, the thing that will most assist in that is a continuation of cessation of hostilities. What happens on the ground next depends on how any Russian

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withdrawal takes place, over what time period, and how the regime responds to that. The cynic may suggest that the Syrian regime has used the last two weeks to prepare for this moment; although we did not know it was coming, perhaps the Syrian regime did and perhaps it is prepared for it.

Helen Whately (Faversham and Mid Kent) (Con): The intervention by Russia in Syria was a surprise to the west, and this withdrawal, if it is genuine, is also a surprise. Russia’s interventions have been unhelpful but influential. Can my right hon. Friend advise me what steps we can take and are taking with our allies to stop Russia setting the agenda in Syria?

Mr Hammond: That is a good question and a very difficult one to answer. All the western partners in this enterprise play by the rules of the international system and are transparent about their intentions. We had a debate in this Parliament—a discussion that went on for a couple of years before we got to the point of deciding to engage in airstrikes in Syria. The entire world knew about the debate in the UK and where the fault lines were in that debate. Unfortunately, Russia is a state in which all power is concentrated in the hands of one man. There is not even a politburo any more, just a single man. Decisions are made apparently arbitrarily, without any advance signalling and, as we are now seeing, can be unmade just as quickly. That is not a recipe for enhancing stability and predictability on the international scene. It makes the world a more dangerous place, not a less dangerous place.

Mark Durkan (Foyle) (SDLP): The Foreign Secretary is right not to seek to spin Putin’s announcement, but to wait for sound evidence. If, however, it does serve to recondition some of Assad’s assumptions about the negotiations, and if it also means that elements in the opposition feel a bit more encouraged about the worth of their purpose in the negotiations, should we not take the opportunity to make the dialogue more inclusive, not least in respect of women? I note that the UN special envoy met the women’s advisory group at the weekend.

Mr Hammond: Yes, our intention is that the dialogue should be inclusive, representative of all faith groups and all ethnicities within Syria, and also representative of civil society including, of course, women. We should not forget that before this horror started, Syria was, bizarrely, one of the most “liberal” countries in the middle east in terms of tolerance of religious minorities, tolerance of secular behaviour, and the role of women and their participation in society, the professions and employment. We would certainly need to get back to that as Syria re-normalises in the future.

Alec Shelbrooke (Elmet and Rothwell) (Con): Does my right hon. Friend agree that one of the greatest problems we face is that we have no idea of the military resource that Russia put into Syria, and therefore have no way of understanding whether it has withdrawn or not? Does my right hon. Friend agree that the western allies must take this into consideration when moving forward in the next weeks and months?

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Mr Hammond: I am not sure that I entirely agree with my hon. Friend. I think we have quite a reasonable assessment of the military resource that Russia has in Syria and we will be able to now monitor whether that resource is being genuinely withdrawn or simply rotated.

Mr Philip Hollobone (Kettering) (Con): Given that Daesh has not been the main focus of Russian airstrikes, to what extent does my right hon. Friend think the Russians would advocate a partition of Syria?

Mr Hammond: It is a subject of speculation whether the immediate objective of the Assad regime and of the Russians is to carve out some kind of Alawite mini-state in the north-west of Syria, but as I have said several times, because we have no dialogue on these things, and because Russia is completely untransparent about its motives and its plans, we can only speculate.

Rehman Chishti (Gillingham and Rainham) (Con): For any peaceful transition in Syria, along with the Russian withdrawal, Iran would need to withdraw its militias, military personnel and military advisers who have been supporting the brutal Assad regime. Do we have any news on that? I declare my interest, as recorded in the register.

Mr Hammond: Our views are that my hon. Friend is right. Clearly, for a sustainable peace in Syria, the Shi’a militias and their Iranian sponsors and advisers will have to be stood down, just as the Russians will have to withdraw their forces. But we have no indication yet that we are going to see a matching announcement from Tehran, announcing the withdrawal of Iranian-backed forces from Syria.

Kevin Foster (Torbay) (Con): Given the experience in Crimea and the eastern Ukraine when forces that looked like Russian forces, were armed like Russian forces and behaved like Russian forces arrived but were disavowed, what confidence do we have that this will be a genuine withdrawal and that we will not see forces carrying a Russian flag disappear, only to be replaced on the ground by forces that look suspiciously like them?

Mr Hammond: I cannot rule that out, but what we are primarily talking about here is air forces, and that trick is a little more difficult to perform in the case of advanced strike aircraft. We cannot rule out the possibility of Russian-sponsored irregular forces playing some future role in the conflict.

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Points of Order

1.16 pm

Andrew Griffiths (Burton) (Con): On a point of order, Mr Speaker.

Mr Speaker: Before we come to points of order, I need to make a short statement which I hope will help the House in the matter to come.

Owing to a printing error an incorrect version of the programme motion has been printed on the Order Paper. A corrigendum will be in the Vote Office and online shortly. The significant difference is that two days are proposed for consideration and Third Reading, rather than the one day referred to incorrectly on the Order Paper. The motion will be moved in the correct form after Second Reading. My understanding is that two days were wanted by all parties, so there should be rejoicing about this matter.

Mr David Davis (Haltemprice and Howden) (Con): Further to that point of order, Mr Speaker.

Mr Speaker: It was not a point of order, it was a statement, but the right hon. Gentleman usually has points of order before breakfast, before lunch and before dinner, so I am happy to hear his point of order.

Mr Davis: Between lunch and tea, now. In your statement, Mr Speaker, you said that two days had been agreed by all parties, but that was actually agreed by those on the Front Benches. Many of us believe that this enormous constitutional Bill balancing privacy and security requires four days on the Floor of the House, as there are at least a dozen major topics in the Bill that need to be dealt with and we will not be able to do so in Committee. Can you advise us as Back Benchers, not Front Benchers, how on earth we get this Bill debated properly?

Mr Speaker: That is a fair point. I am not sure that it is a point of order, but the right hon. Gentleman knows me well enough to know that I respect his sincerity on these matters. What is wanted by Front Benchers is not necessarily the same as what is wanted by Back Benchers, as he has just demonstrated. I have no control over the programme motion. That is a matter for the House. All I can say is that if there is very strong cross-party feeling, I have a sense that Ministers will inevitably be on the receiving end of it. I do not have the list in front of me, but in so far as the right hon. Gentleman is subtly in the process of advertising his own interest in being called to speak, I think his effort has been successful.

Andrew Griffiths: On a point of order, Mr Speaker. A few moments ago in Business questions, amid all the excitement of hearing what the Government are doing to support the pubs and brewing industry, I inadvertently forgot to draw the attention of the House to my entry in the Register of Members’ Financial Interests. Can the Chair explain to me how I can get that on the record and rectify the mistake?

Mr Speaker: As the hon. Gentleman knows, he has found his own salvation and we are deeply indebted to him, as is the House.

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Paul Flynn (Newport West) (Lab): On a point of order, Mr Speaker. On 8 March my hon. Friend the Member for Birmingham, Yardley (Jess Phillips) made a powerful speech in the Chamber which you described as “moving”. The most striking part of that speech was when she read out a list of the names of women who have died in the past year as a result of domestic violence. In 2009, after lists of those who had fallen in Iraq and Afghanistan had been read in this Chamber, a prohibition was introduced from the Chair so that Members would no longer be allowed to read out lists of the fallen. We are now in the strange position where it is permissible to read out the names of those who have died as a result of domestic violence, but it is prohibited to read out the names of those who have fallen in the service of this country. Will you reflect on this and perhaps introduce a rule that would allow Members to make the speeches that they desire to make, rather than those limited by conditions laid down from the Chair?

Mr Speaker: I thank the hon. Gentleman for his point of order and, indeed, for his characteristic courtesy in giving me advance notice of it. I appreciate that he feels that there is inconsistency between the latitude allowed by the Chair to the hon. Member for Birmingham, Yardley (Jess Phillips) in the debate to mark International Women’s Day on 8 March and earlier rulings from the Chair on his own attempts to read out the names of members of the armed forces who had died in operations overseas. These are matters of judgment for the Chair, and my immediate response to him—I am happy to reflect upon it further—is that they are best approached on a case-by-case basis. My concern is that there should be reasonableness and balance in these matters. I do not think the House would receive it well if list reading became a very regular phenomenon or, indeed, if I may say so, a repetitive campaign tool. However, I simply say to the hon. Gentleman that it is open to Members to seek my thoughts in advance on these matters if they have such an intention in mind. I will, if I may, leave it there for today. I appreciate his sincerity, and I hope he appreciates mine.

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Multinational Enterprises (Financial Transparency)

Motion for leave to bring in a Bill (Standing Order No. 23)

1.21 pm

Caroline Flint (Don Valley) (Lab): I beg to move,

That leave be given to bring in a Bill to require certain multinational enterprises to include, within their annual financial reporting, specified information prepared in accordance with the Organisation for Economic Cooperation and Development’s requirements for Country-by-Country reporting; and for connected purposes.

I thank you, Mr Speaker, for the opportunity to present this modest Bill, which seeks to move with the grain of Government policy in tackling tax avoidance, but which takes that policy one step further—one small step for this House, but a huge step forward for those who believe in tax justice, fairness and transparency in the UK and globally.

My Bill will ensure that important information about large companies’ revenues and tax planning is published via Companies House—information that, by UK law, such companies have to provide to Her Majesty’s Revenue and Customs from 1 January this year. I am delighted that it has received cross-party support and is being backed by the Tax Justice Network, Fair Tax Mark, Oxfam, Christian Aid, the Catholic Agency for Overseas Development and ActionAid.

We all share concerns at the way in which multinational companies shift profits to low-tax dominions, sometimes even when the number of their employees there is zero. The headlines caused by the recent Google tax deal reflected public consternation. How could a company with thousands of UK employees, five offices and a new £1 billion headquarters to be built near King’s Cross, and whose UK business is second only to its US business in terms of revenues, pay only £130 million in tax after six years’ investigation into a tax period of 10 years? We should bear it in mind that its global revenues for 2015 were $74 billion. I and my colleagues on the Public Accounts Committee questioned Google and HMRC, but we are still unclear whether the £130 million represented a good deal.

I do understand the need to protect tax privacy, especially when it comes to individuals, but we live in a world where multinationals use transfer pricing and shell companies to shift profits from one country to another, usually to a low or no-tax country. Is not it extraordinary that, in 2010, Bermuda had total reported corporate profits equivalent to 1,643% of its GDP? Could that be because Bermuda has a zero rate of corporation tax? Is not it extraordinary that Google sales staff in the UK sell an advert to a company in the UK, yet the transaction is confirmed online via Ireland, where the prevailing corporate tax rate is 12.5%, as opposed to 20% in the UK? The problem is not confined to Google or even to online businesses. What coffee chains, oil companies, drinks companies and pharmaceuticals all have in common is that they are multinationals.

The impact of the entirely lawful manipulation of different countries’ tax rules is that countries find their corporate tax base is undermined and profits are shifted, not through any real economic activity, but through

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arbitrary internal charges between different units of the same company. As the OECD has rightly pointed out in its work on base erosion and profit shifting, that creates unfair competition, providing a competitive advantage over, say, a domestic UK rival paying 20% tax on its profits.

It is such strange arrangements that enabled Facebook to pay just £4,327 in corporation tax in 2014—the same year it paid £35 million in bonuses to UK-based staff. That is a very strange form of performance pay. AstraZeneca paid no UK corporation tax in 2014-15, yet

“2014 was a remarkable year for AstraZeneca”,

according to its chief executive officer—it did, after all, have full-year revenues of more than $26 billion. I could also mention Vodafone and British American Tobacco—the list of corporate giants with light UK tax bills goes on.

It is because of that that I fully support the Chancellor’s legislation to require financial reporting to HMRC from UK-based multinationals with revenues in excess of approximately £600 million, and from the UK units of such companies, where the parent company is based in a country that does not yet agree to country-by-country reporting. Such reporting, in accordance with OECD guidelines, would require multinationals to show, for each tax jurisdiction in which they do business, their revenue, their profit before income tax and the income tax paid and accrued, as well as their total employment, capital, retained earnings and tangible assets. They will also be required to identify each entity in the group that is doing business in a particular tax jurisdiction and to provide an indication of the business activities in a selection of broad areas that each entity is engaged in.

The Government’s proposals would make about 400 companies share information on some or all of their activity worldwide, but we can do more. By requiring the information to be published, not only will HMRC see the bigger picture, but so will we. Publication is one way to persuade these companies to come clean and to explain their tax planning, but also to restore their tarnished reputations. I believe it would deter them from using tax havens and shell companies.

Publication would also send a strong signal to developing countries, which are often short-changed by corporates that have huge undertakings there, but that pay little or no tax to support their developing economies. Charities say that developing countries lose more in potential revenue each year because of corporate tax dodging than the amount given annually in overseas aid by all the richer countries. That made me stop and think about how much more we could do through measures such as my Bill to enable developing countries to prosper and be more self-sufficient. Aid is vital for poorer nations, but it is just as important that we provide a hand up, not just a handout, and that will not happen unless we force these companies to come clean.

I wrote to the Chancellor last week seeking support for my Bill, and who knows, I may be on to a winner when the Budget is announced tomorrow. In my letter, I reminded him that this Bill is in keeping with his own sentiments, given that he told an international meeting of Finance Ministers in February:

“I think we should be moving to more public country-by-country reporting. This is something which the UK will seek to promote internationally”.

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I agree with the Chancellor, but I say to him: why wait? The tide is turning against secrecy, with business-led organisations such as Fair Tax Mark encouraging firms to be open about their taxes and not to use tax havens. In tomorrow’s Budget, or in the Finance Bill that follows, the Government can adopt this measure and be at the front of the pack— leading and setting a new standard in multinational financial transparency.

We all want successful companies in the UK, as do our constituents, but we want them to pay fair tax. Too many multinational companies seem to be choosing the tax they want to pay, using complicated international arrangements, rather than paying the tax they should pay.

The winners from public reporting are the Government, HMRC, businesses and taxpayers already paying fair taxes, and developing countries that are losing out. Multinationals should see this not as a threat, but as an opportunity to restore the reputation of their brand. They can be winners too.

My Bill has received support from right hon. and hon. Members across the House. I am also delighted to have received support from 10 of my colleagues, reflecting all the political parties, on the Public Accounts Committee. Members from separate five parties—Labour, Conservative, Liberal Democrat, Scottish National party, and Social Democratic and Labour party—have agreed to sponsor the Bill, and I thank them for that.

It is time for multinational corporations to come clean and play fair with Governments and the public—and we can start with the UK. In the interests of social justice, fairness, and yes, good business, I commend the Bill to the House.

Question put and agreed to.


That Caroline Flint, Meg Hillier, Karin Smyth, Mrs Anne-Marie Trevelyan, John Pugh, Nigel Mills, Dame Margaret Hodge, Stephen Kinnock, Catherine McKinnell, Jeremy Lefroy, Dr Philippa Whitford and Mark Durkan present the Bill.

Caroline Flint accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 22 April and to be printed (Bill 152).

Mr Speaker: We come now to the Second Reading of the Investigatory Powers Bill.

Sir Edward Leigh (Gainsborough) (Con): On a point of order, Mr Speaker.

Mr Speaker: Oh, very well.

Sir Edward Leigh: Have you, Mr Speaker, received a communication from the Government about the interception of communications of Members of Parliament? Under this Bill, if the Government decide to intercept the communications of Members of Parliament, they have to consult the Prime Minister. Is it not wise that we should consider your being consulted as well, because your primary duty is to ensure the independence of this Parliament and of Members of Parliament, and their freedom to hold the Government to account? It is surely not right that one part of the Executive should decide to intercept communications with MPs and the head of that Executive should authorise it.

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Mr Speaker: I am very grateful to the hon. Gentleman for his point of order. No one should be judge in his or her own cause. As he knows, I am here merely to serve. It is very good of the hon. Gentleman, who has always shown great faith in me, to volunteer me for an enhanced role, but modesty prohibits me, frankly, from saying that that role should be mine; others can be the judge of that. However, I note the substantive point that he has made. At least as importantly, I feel sure that the Home Secretary, not least because she is sitting not very far away from him, will have heard what he has to say. I have a sense that if she does not respond to his point, he will probably make it again, and quite probably again, and conceivably again after that.

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Investigatory Powers Bill

[Relevant documents: Report of the Joint Committee on the Draft Investigatory Powers Bill (HC 651); Intelligence and Security Committee of Parliament Report on the draft Investigatory Powers Bill (HC 795); Third Report from the Science and Technology Committee, Investigatory Powers Bill: technology issues (HC 573); and Investigatory Powers Bill: Government Response to Pre-Legislative Scrutiny (Cm 9219).]

Second Reading

1.31 pm

The Secretary of State for the Home Department (Mrs Theresa May): I beg to move, That the Bill be now read a Second time.

Before I begin, I am sure that right hon. and hon. Members will be aware of the death of a prison officer who was attacked 10 days ago in east Belfast. I am sure that the whole House will wish to send its deepest sympathies to his family, friends and colleagues at this time.

The Government are committed to updating and consolidating our country’s investigatory powers in a clear and comprehensive new law that will stand the test of time. Over the past two years, there has been detailed analysis of those investigatory powers through three independent reviews; consultation with law enforcement, the security and intelligence agencies, civil liberties groups, and industry; and now, following the publication of the draft Bill last autumn, scrutiny by a Joint Committee of both Houses of Parliament, the Intelligence and Security Committee, and the Science and Technology Committee. I would like to place on record my gratitude to the Chairs of those Committees—Lord Murphy of Torfaen, my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), and my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood)—for the invaluable work that they, and their members, have undertaken over recent months. Their thorough scrutiny has helped to shape and improve the Bill, which today reflects the majority of their recommendations.

The revised Bill is clearer, with tighter technical definitions and strict codes of practice. It includes stronger privacy safeguards, bolstering protections for lawyers and journalists’ sources; it explicitly prevents our agencies from asking foreign intelligence agencies to intercept the communications of a person in the UK on their behalf unless they have a warrant approved by a Secretary of State and a judicial commissioner; it reduces the amount of time within which urgent warrants must be reviewed by a judicial commissioner, cutting it from five days to three; and it strengthens the powers of the new Investigatory Powers Commissioner. Alongside the introduction of the Bill, we published six draft codes of practice in order that they could be reviewed by the House.

Sir Edward Leigh (Gainsborough) (Con): Under this Bill, the current system of three oversight commissioners is to be reduced to one commissioner. Given that there have been miscarriages of justice in the past, not least with the Maguire seven and the Guildford four, can the

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Secretary of State convince the House that it is in the interests of freedom and democracy that we reduce the number of commissioners from three to one?

Mrs May: Although one person will oversee the Investigatory Powers Commission as the Investigatory Powers Commissioner, they will have under them a number of judicial commissioners who will have extensive experience and will undertake certain tasks—first, on the new process of the double-lock authorisation for warrantry that we are introducing. They will also undertake the inspection and review of the operation of the agencies in the same way that the three commissioners have done so far. Far from reducing oversight, this Bill will enhance the oversight that is available.

The pre-legislative scrutiny that the Bill has undergone builds on the previous work of the Intelligence and Security Committee in its “Privacy and Security” report; the independent inquiry into surveillance practices by a panel convened by the Royal United Services Institute; and the review of investigatory powers carried out by David Anderson QC, the independent reviewer of terrorism legislation. All three reviews made it clear that legislation relating to interception and communications data needed to be consolidated and made subject to clear and robust privacy safeguards. Taken together, the scrutiny that this Bill has received may well be without precedent. Three authoritative reports informed the Bill’s drafting, three influential Committees of Parliament then scrutinised that draft, and now the Bill proceeds to full and proper consideration by both Houses of Parliament.

The Bill will provide world-leading legislation setting out in detail the powers available to the police and the security and intelligence services to gather and access communications and communications data. It will provide unparalleled openness and transparency about our investigatory powers, create the strongest safeguards, and establish a rigorous oversight regime.

As the House is aware, the Data Retention and Investigatory Powers Act 2014, which the Bill is intended to replace, contains a sunset clause requiring us to pass legislation by the end of 2016. That is the timetable set by Parliament, and the grave threats we face make it imperative that we do so. Today terrorists and criminals are operating online with a reach and scale that never existed before. They are exploiting the technological benefits of the modern age for their own twisted ends, and they will continue to do so for as long as it gives them a perceived advantage. We must ensure that those charged with keeping us safe are able to keep pace. The Bill will provide the police and the security intelligence agencies with the powers they need, set against important new privacy protections and safeguards. It will ensure that they can continue in their tremendous work, which so often goes unreported and unrecognised, to protect the people of this country from those who mean us harm.

I turn now to the contents of the Bill. In its scrutiny of the draft Bill, the Intelligence and Security Committee quite rightly concluded that

“privacy protections should form the backbone”

of legislation in this most sensitive area. That is indeed the case, and privacy is hardwired into the Bill. It strictly limits the public authorities that can use investigatory powers, imposes high thresholds for the use of the most intrusive powers, and sets out in more detail than ever

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before the safeguards that apply to material obtained under these powers. The Bill starts with a presumption of privacy, and it asserts the privacy of a communication. Part 1 provides for an offence of unlawful interception, so that phone tapping without a warrant will be punishable by a custodial sentence, a fine, or both. It creates a new offence of knowingly or recklessly obtaining communications data without lawful authorisation, so misuse of those powers by the police or other public authorities will lead to severe penalties. It abolishes other powers to obtain communications data. Subject to limited exceptions, such as court orders, public authorities will in future be able to obtain communications data only through the powers in the Bill, with all the accompanying safeguards.

Christian Matheson (City of Chester) (Lab): We know that internet service providers and telecoms companies are vulnerable to hacking, and that some newspapers are not averse to passing brown envelopes to their sources in order to obtain information. Is the Home Secretary satisfied that the provisions in the legislation will prevent such hacking and such unauthorised, and perhaps salacious, access to individuals’ personal information?

Mrs May: As I have just said, the Bill sets out new, enhanced safeguards and oversight arrangements for the investigatory powers that are available to the authorities. As the hon. Gentleman will be aware, inappropriate access to information that is held has been the subject of court cases recently. It is entirely right that if information is being accessed in a criminal fashion, that should be dealt with in the appropriate way. I have just set out that there are new offences in the Bill to deal with the question of people obtaining, knowingly or recklessly, communications data without lawful authorisation.

Mark Pritchard (The Wrekin) (Con): The Home Secretary knows that I am a supporter of the Bill, but does she share some of my concerns about international human rights law, emerging European privacy law and the collaboration with partners such as the United States on its domestic data and privacy laws vis-à-vis Apple and the FBI? If the Bill becomes an Act of Parliament, does she foresee any problems internationally or with collaborators?

Mrs May: My hon. Friend raises an important point. Many internet service providers, for example, offer services here but they are predominantly based in other countries. That is why the Government have been progressing, and continue to progress, discussions with the United States’ authorities about the whole question of the circumstances under which warrants issued lawfully in the United Kingdom can be exercised in the United States. We have always asserted territorial jurisdiction of those warrants under the Regulation of Investigatory Powers Act 2000. In fact, the previous Labour Government, who introduced RIPA, also established that territorial jurisdiction. It has never been tested, but we are putting that discussion with the United States into place.