The Minister of State, Department for Work and Pensions (Steve Webb): Between 2004 and 2008, our estimates of life expectancy at pension age rose by more than a year. For those who reach pension age this year alone, that will add £6.5 billion to their expected pensions over their lifetimes.
Steve Webb: My hon. Friend is absolutely right. We have taken forward plans introduced by the previous Government for automatic enrolment into workplace pensions, so that as people are working for longer, they can still retire on decent pensions, through more workplace saving.
Tony Lloyd (Manchester Central) (Lab): Everybody recognises that increasing age has an impact on the funding of pension schemes, but does the Minister accept that there is a huge difference between a population such as the one that I represent, in which life expectancy is some 10 years less for males and roughly the same for women, and those populations with the highest life expectancy in the country? Simply increasing the state retirement age has an unfair impact on communities such as mine.
Steve Webb: The hon. Gentleman raises an important point, and it is one that we are aware of. However, he will be encouraged to learn that in the past decade, life expectancy for both manual workers and non-manual workers, for example, has risen by two years for men. Although there are still differences, both groups are seeing improvements in life expectancy.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Her Majesty's Revenue and Customs is continuing to consult with employers on how best to collect real-time pay information. I should stress that the information required for the universal credit is already being collected by HMRC as part of its reforms to the pay-as-you-earn system, which are on track. The adoption of the new real-time information system, for the benefit of employers, universal credit customers and taxpayers, is already well on track.
Mrs McGuire: Can the Secretary of State tell the House what proportion of the £2 billion allocated in the comprehensive spending review to implement the universal credit will go to support HMRC's IT project, and what proportion will go as compensation, so as to avoid losers in the transition to the new universal benefit?
Mr Duncan Smith: The right hon. Lady will forgive me if I do not give her the absolute details. We will be publishing the details shortly-well, soon, anyway-but I can tell her now that she can expect to see a significant amount, as a proportion, for the computer change. All this is covered by the money already granted through the settlement in the spending review-more than £2 billion-which will go to protect those who would have nominally been losers and to implement all the necessary IT changes, and to cover every other detail too.
Mr Julian Brazier (Canterbury) (Con): I welcome my right hon. Friend's earlier answer. In the light of several terrible cases in my constituency, does he agree that it is extraordinary that the whole system of credits was introduced at all without a proper real-time information system?
Mr Duncan Smith: The PAYE system is ultimately the responsibility of my colleagues at HMRC, although we will obviously require an element of that to implement the change. That change will make life considerably easier for us in delivering those benefits without the normal mistakes that are made-mistakes that have caused overpayments to people, followed by attempts to claw them back that cause hardship for many people on low incomes. I believe that in due course the change will deliver a net benefit to everybody.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab): Under the Secretary of State's proposals, councils are to use the real-time data to calculate entitlement to council tax benefit, although the entitlements will vary according to each local authority. What is his estimate of the cost to the Department for Work and Pensions of supporting councils in creating their own mini-benefits system in each locality?
Mr Duncan Smith: I will give those details soon. I will not give them today, but I can say that we have already been working on the issue. We believe that, as things stand right now, we will manage the cost within our present budgets-it will not require anything extra for us. Of course, as the right hon. Gentleman said, it forms a challenge to us-I accept that-but localising elements of benefits is important to local people, and councils have very much wanted to do this. I will definitely give him the figures for that in due course, but we believe that we will be able to manage it, and I am more than happy to discuss that with him.
The Minister of State, Department for Work and Pensions (Chris Grayling):
As the right hon. Lady knows, involving the specialist skills of the voluntary and social enterprise sectors in delivering the Work programme is extremely important, particularly where they have expertise in helping the hardest-to-help groups. Across the summer, we held a series of consultation events across the country, and we have had meetings through some of the professional organisations that represent different elements of the
voluntary sector. The Minister for Welfare Reform-Lord Freud-and I have held meetings in the City to try to encourage financiers to support the voluntary sector in its approaches to the Work programme. I cannot give the right hon. Lady information about the specifics of the process today, because we will be publishing more details in due course, but I can assure her that we are keen to keep those organisations present.
Hazel Blears: I am grateful for the Minister's reply. He knows that many social enterprises, such as Work Solutions, which does a fantastic job in the Ordsall area of Salford to get people back into work, have very tight margins, and often struggle with cash flow. If the national system is to be about payment by results, what measures will he take to ensure that small organisations, which are often without a financial buffer, can survive within the system and provide the specialist services that only they can provide?
Chris Grayling: We have introduced the Merlin standard, a new code of conduct for suppliers to the Department for Work and Pensions, which will apply to the prime contractors for the Work programme. They will be obliged to do the right thing to support their subcontractors appropriately financially. If they fail to do so, and treat their subcontractors financially inappropriately, they could lose their contracts. The system has just won an award for its role across Whitehall-there is potential for it to be used elsewhere in Whitehall-as best practice for dealing with small subcontractors. We must protect them, because they have a huge role to play.
Paul Maynard (Blackpool North and Cleveleys) (Con): Will the Minister join me in congratulating Progress Recruitment on its work in Blackpool? It is a social enterprise that works with many of the hardest-to-reach people in my constituency to get them back to work. Will he do all he can to encourage local government, when it again considers its service provision, to look at whether it can spin off organisations such as Progress Recruitment as social enterprises, as part of reconceptualising that service provision?
Chris Grayling: I certainly praise the work that has been done in Blackpool, and I praise my hon. Friend's work in supporting that activity. Not many people understand the scale of the social challenge in Blackpool, and the work that is done by organisations such as the one in his constituency is extremely important. I very much hope that the framework that we are creating for the Work programme will give local authorities and local organisations the scope to work alongside providers to deliver local solutions to some of the problems. I have no doubt that social enterprise should be and will be part of that. Local authorities can help to make that happen.
Mr Frank Field (Birkenhead) (Lab):
Does the Minister accept that there is considerable support on the Labour Benches for the point that my right hon. Friend the Member for Salford and Eccles (Hazel Blears) raised? Does he accept that if we are to protect social enterprises, and if they are to play a greater part in welfare reform, that will require almost a total change in attitude from the big providers? Birkenhead had one of the best organisations-A&P Group-but it did not win the
larger contract, and did not want to, and the large provider had no interest in making sure it survived. It was a huge loss to young people in the area who, until then, had had a Rolls-Royce service.
Chris Grayling: I am grateful to the right hon. Gentleman for highlighting such an important point. I have been very clear to people who are bidding for the Work programme that we expect them to demonstrate their ability to assemble a consortium or organisations with the specialist skills to help the hard-to-help groups. Many of those organisations are in the voluntary sector or the social enterprise sectors. If they do not demonstrate that ability and if they do not have those networks, they will not get the contracts. It is as simple as that.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): The coalition Government are determined to ensure that all parents meet their financial responsibility for their children. At present, around 50% of separated parents have no maintenance arrangements in place. We are working with colleagues in the Department for Education, the Ministry of Justice and the voluntary sector to ensure that we deliver a seamless approach to supporting parents pre- and post-separation.
Maria Miller: First, I pay tribute to my hon. Friend's immeasurable work, particularly with the Croydon family justice centre. She is an expert in such matters, and raises an important matter. The Child Support Agency's performance is improving, with more children benefiting from more money collected. However, the present system does not do enough to provide effective child maintenance support as soon as possible after parental separation, nor does it do enough to promote positive relationships between parents. Making those improvements to the system is in the best interests of children, as is ensuring that we have more enduring financial support for them.
5. Mr Frank Roy (Motherwell and Wishaw) (Lab): What recent discussions his Department has had with disability organisations on proposals to remove the mobility component of the disability living allowance from residents in publicly funded care homes. 
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I have had discussions with a number of disability organisations on the proposals to modify eligibility for DLA following the Chancellor's spending review announcements. Specific spending review measures, along with those in other Departments across Government, have not been subject to public consultation, but they will of course be subject to full parliamentary scrutiny.
Mr Roy: Of all the proposals on welfare reform, this is absolutely the most brutal and cruel. Disabled people in publicly funded care homes deserve much better than is being offered at the moment. What will the Minister do when she has to meet a disabled person in one of those homes face to face, and how will she explain why she is taking away their much-needed lifeline to the outside world?
Maria Miller: I think that the hon. Gentleman is referring to the measure on mobility. Local authorities, working with care homes, have a clear duty to promote, where practical, independence, participation and community involvement for every single disabled person living in such care homes. The proposed change to DLA eligibility should not leave disabled people more isolated. Importantly, we have to ensure that there is clarity in funding streams as we move towards personalisation, which is something that almost every disabled person welcomes.
Duncan Hames (Chippenham) (LD): Constituents of mine in Atworth have come to see me about their 30-year-old daughter who suffers from cerebral palsy and will be affected by the changes. In her care home, different residents have very different mobility needs to maintain their independence, as well as experiencing different challenges. Can we expect care homes to meet those needs in an individually tailored way?
Maria Miller: My hon. Friend raises an important point. It is important that we have personalised care for disabled people. Every disabled person has different needs and, working with colleagues in the Department for Communities and Local Government and the Department of Health, we will ensure that the correct level of support is being delivered locally.
Miss Anne Begg (Aberdeen South) (Lab): Will the Minister take this opportunity to clarify exactly who will lose the mobility element of their DLA? There is quite a lot going around the blogosphere about who might be affected. Will the changes affect children in residential schools? Will they affect those in residential care who are self-funders as well as those who are funded by the local authority? Will there be exemptions, or will everyone in residential care lose the mobility element of their DLA?
Maria Miller: I thank the hon. Lady for her question. This does not affect self-funders, and we will be making clearer as we get towards the Bill exactly how the measure will affect all other groups. I reiterate that it is important to get clarity in the funding streams as we move towards personalisation, which is overwhelmingly welcomed by disabled people.
Richard Fuller (Bedford) (Con): My hon. Friend makes a good point about the need for clarity and clarification as we move towards the universal benefit, but we must also consider the issue of decency. The measures that she is taking are having deleterious effects on the well-being of people in my constituency. Many of the families concerned have looked after their children for many years outside care. Will she take the opportunity to meet me so that we can discuss some of these constituency issues?
Maria Miller: I thank my hon. Friend for his question, and I am very happy to meet him to discuss this matter further. I would draw hon. Members' attention to the fact that colleagues in the Department of Health have put £2 billion into social care, which will be available to ensure that local authorities and social care providers are able to meet people's needs.
"where such costs are already met from public funds."
Perhaps the Minister will take the opportunity to reassert that this afternoon. However, Scope and other leading disability organisations have established that removing the mobility component will hit thousands of disabled people. They have described the change as "callous", and called on the Government to think again. Will the Government listen to those organisations, or do they believe-and can they guarantee-that there will be "no losers" as a result of this policy?
Maria Miller: I thank the hon. Lady for her question. She will obviously realise that one reason for having to look at these sorts of measures is that we were left an immense fiscal deficit by the previous Administration. I can confirm to her today that we will, of course, listen to the concerns and thoughts of voluntary organisations and disabled people-indeed, I am already doing so-and that the measure we are putting in place will ensure that the existing duties of care homes and local authorities, which are to ensure that disabled people are able to live independent lives, will be fully enforced so that the correct level of support can be delivered locally.
6. Michael Dugher (Barnsley East) (Lab): What estimate he has made of the likely effects on his Department's expenditure on out-of-work benefit payments to residents of Barnsley East constituency of implementation of the changes announced in the comprehensive spending review. 
The Minister of State, Department for Work and Pensions (Steve Webb): Although estimates of expenditure savings are not available at constituency level, the impact of the changes has been published at the UK-wide level on the website of Her Majesty's Treasury.
Michael Dugher: Is the Minister aware of last week's report by Professor Steve Fothergill of Sheffield Hallam university, which showed that in areas like my own, private sector employment is unlikely to rise significantly in the next few years? Is it not the case that unemployment will increase, as will benefit payments, in areas like my own, because of the ending of the future jobs fund, the ending of the working neighbourhoods fund and the massive cuts to the local authority, with consequent effects on local employment?
Steve Webb: The hon. Gentleman is right to stress the importance of private sector employment, which is why I looked at the situation in Barnsley East. I found that the year to March 2010 saw an increase in employment of more than 3,000. I therefore think that it is vital not to talk down economic growth, because the private sector is creating jobs, including in Barnsley East.
The Minister of State, Department for Work and Pensions (Steve Webb): The Government remain committed to involving disabled people when developing their policies, and I can tell my hon. Friend that we discussed the care homes measure with a number of disability organisations at the Department for Work and Pensions policy and strategy forum on 16 November.
Jenny Willott: We have already heard a number of concerns raised today about these particular proposals. I understand the Government's rationale, but what consideration has been given to ensuring that residents in care homes who currently receive mobility disability living allowance will still be able to buy Motability cars, and scooters where appropriate, so that they can remain as independent as possible?
Steve Webb: As the hon. Lady may be aware, when elements are included in primary legislation, statutory equality impact assessments are published at the time that the legislation is published-and will be available to the House.
The Minister of State, Department for Work and Pensions (Chris Grayling): The commercial delivery of the Work programme is on track. Before the end of the month, we will be releasing a list of those organisations that have successfully bid to be part of the framework for employment-related support services. Shortly after that, in early December, we will publish the full invitation to tender for the Work programme. We are still on course to launch the programme next summer.
Henry Smith: Regrettably, my constituency has one of the worst records for its over-50 unemployed people ever getting back into work. I would be interested to hear some specific advice about what the Government are planning for that age group.
Chris Grayling: Of course, this was one of the great failings of the Labour Government, who failed to understand the challenge that older workers faced. Their employment programme offered none of the personalised support that is necessary to deal with the specific challenges that my hon. Friend mentions. What we will do through the Work programme is offer personalised support by paying providers by results; they will have a full incentive to do the right thing by older workers and ensure they get into work.
Richard Harrington: Last week, Leavesden studio in my constituency was given a £125 million investment by Warner Bros. Will my right hon. Friend assure me that the Government's new Work programme will help local unemployed people to get off the register and get jobs in this fantastic opportunity?
Chris Grayling: That is a great example of new private sector investment in the United Kingdom, which proves that the private sector can indeed create the jobs that we all want to see for the future. I congratulate my hon. Friend and his constituents on the work that they have done in bringing the investment to the United Kingdom. I hope that the local provider for the Work programme will forge a close partnership with Warner Bros to ensure that it delivers people with the right mix of skills and capabilities to fill vacancies, and I hope that my hon. Friend will help to facilitate that partnership.
Anas Sarwar (Glasgow Central) (Lab): In the last four months alone, an employment agency in my constituency has helped more than 300 long-term jobseeker's allowance claimants and single parents into work under the employment zone programme. Four such agencies operate in the constituency, but long-term JSA claimants and single parents will no longer be able to apply for that extra support after 31 December as a result of the transition to the Work programme. What specialist support will the Minister give thousands of my constituents, and thousands of others throughout the country, to help them back into wok?
Chris Grayling: We will provide enhanced support for people in that position through Jobcentre Plus for a short period, but I hope and expect that providers who are already in the framework and who win Work programme contracts will be able to take up some of the challenges that those people face and help them before the formal launch of the programme in the summer.
Stephen Timms (East Ham) (Lab): There are some good ideas in the Work programme, and all of them were in the last Government's flexible new deal. What proportion of the payment to be handed over to a Work programme provider in respect of a jobseeker will be handed over when that person obtains work, and how long will he or she need to remain in work before the whole payment is handed over?
I will publish the full details of the contractual arrangements for the Work programme in a few days' time, but I can tell the right hon. Gentleman that we will not be paying up front as the flexible new deal did. Last year, the flexible new deal paid providers £500 million for 16,000 starts. That is £30,000 per job start, and in my opinion it was an inefficient use of
public money. Even as the programme becomes more mature, the previous service fee arrangements would still mean a huge up-front cost. We will do things differently: we will pay providers when they succeed, and not before they have done so.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): The Government are committed to increasing the employment rate for disabled people by giving them the help that they need to follow fulfilling, mainstream careers whenever possible. The Work programme will provide more personalised back-to-work support for unemployed people, including disabled people, from next year. Work Choice, which began on 15 October, provides specialised support for disabled people who face more complex barriers, and the access to work programme provides financial help with reasonable adjustments for the workplace above and beyond what the employer could reasonably provide.
Mr Buckland: Does the Minister agree that for far too many disabled young people, both in my constituency and elsewhere, the transition into adulthood and the jobs market can be very challenging? What steps are her Department taking to ease the process into adulthood and jobs?
Maria Miller: The transition from education to work can be difficult for all young people, but particularly for disabled people. I am impressed by the work that has already been done by employers whom I have visited in recent months, who are already focusing on the importance of disabled young people in their work forces, but the specific support that the Government have provided through Work Choice and the Work programme will help-particularly the differential pricing that is available through the Work programme, which will enable more organisations to work with disabled young people to get them into work.
Jackie Doyle-Price: My constituent Nigel Freeman has suffered a very aggressive bout of cancer, and his best efforts to re-enter the world of work have been frustrated by the operation of the benefits system. Can my hon. Friend assure me that she will end the "one size fits all" approach to health conditions, so that people no longer find themselves trapped on benefits?
Maria Miller: My hon. Friend has raised a subject about which we are all eager to hear-people who are committed to returning to work despite very difficult personal circumstances. Under the Work programme, we shall be able to provide more personal and individual back-to-work support for those who face more significant barriers. We want to provide a system of Government support that treats people in a dignified way and assesses them for what they can do, not for what they cannot.
Eric Ollerenshaw: I welcome Government moves to help those who can work to get back into work and off incapacity benefit, but how will the Minister use the expertise of existing disability organisations such as One Voice in my constituency, which is run by the disabled for the disabled, so that we can begin to end the present waste of talent?
Maria Miller: Local user organisations have a vital role to play in providing that sort of grass-roots support, and the Shaw Trust and other organisations are already bringing their expertise into play in Work Choice. Several of them will also be involved in making the Work programme available next year.
Mr David Lammy (Tottenham) (Lab): May I draw the Minister's attention to the case of Mr Spivack in my constituency, who is autistic and relies on his mobility scooter? Is it not fatuous of her to suggest that she is keen to help the disabled into employment if she is withdrawing the means for them to get to work?
Maria Miller: I can assure the right hon. Gentleman that the support his constituent will need in order to get to work will be available through either his disability living allowance or access to work. There are clear opportunities for his constituent to get the support he needs.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): How do the Government believe that removing the mobility component of DLA for people living in residential care homes helps disabled people back into work, or enables disabled people who-like a number of my constituents who came to see me in my surgery last week-currently depend on their mobility allowance to get to and from work, to stay in work?
Maria Miller: The hon. Lady is right to be concerned that constituents of hers should be able to get to work, and that is why we have support in place for those not in residential care through DLA and also through access to work. That is an important programme that helps many thousands of people get into employment, and we will be supporting more people into employment through access to work this year than last year.
Clive Efford (Eltham) (Lab): The Government have stated their intention to reduce the number of people on incapacity benefit in order to reduce the welfare bill, but some of us were concerned that the tests the previous Government applied for incapacity benefit were already very strict. What checks and balances will the Minister put in place to ensure that people with severe disability are not impoverished by stricter guidelines for staff conducting assessments of those on incapacity benefit?
Maria Miller: Obviously, this is a situation that we inherited, and my right hon. Friend the Secretary of State will soon bring forward proposals to address just the sort of issue the hon. Gentleman raises. I am very aware of the fact that we need to make sure we have an assessment process that identifies people's real needs for support, and I know that my right hon. Friend is committed to that too.
The Minister of State, Department for Work and Pensions (Chris Grayling): Professor Harrington will publish his report on the work capability assessment tomorrow. He will be available to take questions and I hope Members will come forward and put any issues and concerns to him, and indeed to me, during the course of the day.
Tracey Crouch: I thank the Minister for that reply. Can he assure the House that those who have varying support needs because they have fluctuating conditions will be considered accordingly during the assessment process?
Chris Grayling: I am very happy to give my hon. Friend that assurance. This issue-along with that of people with mental health issues-has been of paramount importance to me, and it is one of the subjects to which I asked Professor Harrington to pay the closest attention. I hope my hon. Friend will see tomorrow that he has recommended a number of measures that will help in that respect, but I can also assure her that we will continue to review this issue. We will continue to study the process as it unfolds, and we will make further improvements as and when necessary.
Rachel Reeves (Leeds West) (Lab): I thank the Minister for that answer, which we welcome. He knows that there is support from both sides of the House for Professor Harrington's review and Labour will support the Government in taking forward meaningful reform, particularly in identifying mental health problems such as depression and schizophrenia. What assurances will the Minister give the House that reforms to the work capability assessment will better support people with mental health conditions get back to work?
Chris Grayling: One of the things I made sure to do when we set up the review was invite the chief executive of Mind to take part in one of the support groups for Professor Harrington. That input has been hugely valuable. I have also invited the mental health charities to make recommendations about possible changes to the descriptors, which might also help enhance the process. They are due to respond shortly. We will make sensible changes as and when we can. I intend to brief the hon. Lady and her colleagues about the contents of the Harrington review tomorrow morning, and perhaps we can talk briefly behind the Speaker's Chair about how best to arrange that. I want them to be part of the process, and I am very happy to take suggestions from Opposition Members as well. As the hon. Lady rightly says, this is a cross-party issue. We have to get it right. It is in all our interests that we get it right, and I think we share the aspiration that this process should be fair and firm.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): We believe that universal credit will make work pay. We have done some assessment and we can announce that we believe we should reduce by 1.3 million the number of workless households facing a participation tax rate of more than 70%. We also believe that we will improve earnings incentives for some 700,000 people and that we could reduce the number of workless households by about 300,000.
Karen Bradley: I thank the Secretary of State for that response. Caudwell Children is a charity that has significant experience in helping the parents of disabled children back into work. Could he give some assurances as to how the universal credit will make that process easier?
Mr Duncan Smith: I hope and believe that if we implement universal credit correctly, it should allow people with caring responsibilities to meet those responsibilities with greater flexibility in the number of hours they can work. At the moment, it is very difficult for many of them to work the sort of hours they need to work without damaging their ability to fulfil their caring responsibilities. We think that flexibility would be most effective for them and, strangely enough, for lone parents.
Ms Karen Buck (Westminster North) (Lab): The universal credit has the desirable and indeed the shared objective of reducing the rate at which tax and benefits are withdrawn as earnings rise. But for every pound that will go into the universal credit, £8 is being removed as a result of the June Budget and the comprehensive spending review. When the Secretary of State says that nobody will be worse off, is he making the comparison with the period before or the period after those cuts come into effect?
Mr Duncan Smith: What I said originally was that we believe that from the position we inherited, the implementation of the universal credit will have a net beneficial effect for the poorest people in this country who are trying to achieve work. So it is not just a case of people not being worse off; we believe that people will be far better off than they were when the hon. Lady's Government left us.
14. Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): Whether his Department plans to publish a gender impact assessment of the changes to be made to the benefits regime as a result of the comprehensive spending review. 
The Minister of State, Department for Work and Pensions (Chris Grayling): The Department for Work and Pensions assesses the equality impacts of any new policies or changes to existing policies and practice. In line with that commitment to transparency, equality impact assessments are published when they are available, and gender impacts are included as part of those documents.
I thank the Minister for that answer. What assessment are the Government making of the needs of vulnerable women, particularly those who receive housing benefit and are aged between 25 and 35? How will the Government ensure that their needs are
met and, in particular, that if they have disabilities, they do not end up inappropriately in shared accommodation?
Chris Grayling: As the hon. Lady will know, exemptions are already in place for the most vulnerable people, and those will continue. The package of reforms set out in the spending review, particularly the introduction of the universal credit, will make a huge difference to women on some of the lowest incomes, particularly lone parents seeking to get back into work. The credit will make that journey much easier and mean that they are better off going back to work than they would otherwise have been.
Stephen Hammond: I listened carefully to my right hon. Friend's previous answer. Given the benefits for so many of the introduction of the universal credit, what chance is there that the Government might be able to accelerate its introduction beyond the 2017 time scale currently announced?
Mr Duncan Smith: I will resist the temptation to accelerate anything. I simply say to my hon. Friend that the plan we have put in place allows us to spend the right amount of time making sure that we are integrating those on the current benefits correctly and that we are not making any mistakes. We do not plan to accelerate that, but clearly we hope that this process will go smoothly-we believe it will. That is the most important thing.
Graham Jones (Hyndburn) (Lab): Can the Secretary of State give an estimate as to how many parents with young children will return to work under his universal credit, and can he explain the incentives?
Mr Duncan Smith: We believe that we will lift some 350,000 people in that category out of the poverty that we inherited. I am not going to give any significant answer to the second part of the hon. Gentleman's question, simply because I am happy to write to him in due course and give him the figures. His party says it accepts and supports this process, and the reality is that the universal credit has the biggest effect on the poorest people trying to get back into work. That surely has to be welcomed by him and the whole of his party.
The Minister of State, Department for Work and Pensions (Chris Grayling): My message to my hon. Friend would be that we are doing everything we can to promote volunteering for jobseekers, both before they enter the Work programme and, once the programme is in place, after they enter it. We have set out plans to allow jobseekers to do up to eight weeks' work experience and I think that that gives them an important opportunity to take a step into the workplace that they would not otherwise have taken.
Jo Swinson: I thank the Minister for that reply. Many people who are out of work or who have fluctuating medical conditions already undertake part-time voluntary work but that was not previously recognised by Jobcentre Plus officials as part of the flexible new deal. What assurances can he give me that those people, who are already participating in the big society, will have their voluntary work positively recognised under the new Work programme?
Chris Grayling: I see volunteering as extremely important, particularly in helping those who have been on sickness benefits or incapacity benefit in the long term to make the step into work. I can assure my hon. Friend that we will give Work programme providers maximum flexibility to use volunteering as one of many vehicles to help people get into employment.
18. Mr David Ward (Bradford East) (LD): What assessment he has made of the likely effects of his proposed reductions in housing benefit entitlement on jobseeker's allowance claimants who have been unable to find work for more than 12 months. 
The Minister of State, Department for Work and Pensions (Steve Webb): The detailed design of the measure is still being developed and we are carefully considering its impact. We will publish a full impact assessment to accompany the relevant legislation when it is introduced in Parliament.
Mr Ward: The proposal is obviously designed as a work incentive measure, but it could be argued that any claimant affected will represent a failure of the measure to get people back into work. What steps is the Minister taking to ensure that anyone who is affected is genuinely unwilling to find work?
Steve Webb: My hon. Friend raises an important point. The key is to try to stop people being unemployed for 12 months. He will be aware that 90% of those who come on to JSA flow off before the end of 12 months. My right hon. Friend the Minister of State is bringing forward the Work programme, which will help the most hard-to-help groups before the end of the 12-month period to give them the maximum chance of not being in that position in the first place, which is our priority.
Glenda Jackson (Hampstead and Kilburn) (Lab): There are already single parents in my constituency-not exclusively but in the majority female-who are experiencing serious difficulty in convincing employers that they must have flexible working to maintain their child care. What are the Government doing to ensure that employers are aware of their responsibility, given the draconian effects of the proposed reduction in JSA?
Steve Webb: The hon. Lady is right to point out the importance of a flexible jobs market. The good news is that a large proportion of the new jobs that are being created are part-time jobs that will be of particular benefit to lone parents. The Government will consult on the right to request flexible working in the coming year.
Hywel Williams (Arfon) (PC): The number of job applicants and the number of posted job vacancies varies widely from constituency to constituency and country to country. Is it fair to apply a universal rule to all claimants when their ability to comply with that rule varies so widely?
Steve Webb: The hon. Gentleman will know that Jobcentre Plus advisers already have a good deal of discretion in how they respond to individuals to reflect individual circumstances. We are keen to see that measures such as the Work programme are tailored to the individual so that they can address the particular problems that they face. If those problems involve transport or a lack of very local job vacancies, they can be addressed through the Work programme.
The Minister of State, Department for Work and Pensions (Chris Grayling): The flexible new deal began in October 2009. Results of its full evaluation will be published in 2012. However, the initial figures, published last week, certainly give rise to concern that it represented poor value for money and that the arrangements set out by the previous Government were extremely expensive.
Caroline Dinenage: People in my constituency are concerned about the transition to the Work programme. What assurances can the Minister give me that the Government will take measures to ensure that people are not disadvantaged during the transition period?
Chris Grayling: I can absolutely give my hon. Friend that assurance. That is a priority for me at the moment. As it becomes clear who is on the framework and who is not, it will become increasingly clear where we might have issues with the transition. In those areas where the flexible new deal will continue to run until the summer, it is not an issue, and in those areas where the flexible new deal does not exist, it is a concern. We will take urgent measures in the next few days, as we have completed work on the framework and identified the gaps, to ensure that we put in place the necessary support, probably through Jobcentre Plus, to ensure that we look after those who are affected.
20. Simon Danczuk (Rochdale) (Lab): What effects he expects the introduction of the proposed universal credit to have on marginal deduction rates experienced by households currently in receipt of tax credits only. 
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): I repeat that the universal credit will benefit a large number of people, improving work incentives for some 700,000 people who will see their marginal deduction rates fall from about 96% to 76%. The specific group that the hon. Gentleman is talking about will have their withdrawal rates rise marginally, although that will be met by our guarantee that nobody will be a loser in the course of this.
Simon Danczuk: I genuinely welcome the Secretary of State's attempts to get more people incentivised and back into jobs, but does he accept that his proposals are more likely to fail because the regional development agencies that created many jobs in Rochdale and other parts of the country are to be replaced by what Lord Heseltine has called a "high-risk" regional growth fund?
Mr Duncan Smith: I do not accept that point. We recognise that it is critical to create those jobs and we expect them to be created as the economy grows. The big problem with creating jobs under the previous Government was that 70% of all the jobs created in 15 years went to people from overseas and not from the UK. The big issue for us is getting people in the UK ready and able to do that work, which the Minister with responsibility for employment, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is busy doing through the Work programme.
Andrew Bridgen (North West Leicestershire) (Con): The Opposition seem convinced that the introduction of the universal credit will be dogged by IT difficulties. Does that not reflect their lamentable experience in this area? What reassurance can the Secretary of State give us that we will succeed where the previous Government failed so badly?
Mr Duncan Smith: The previous Government had problems with IT development, as did lots of Governments-both sides accept that. To be fair, I have spoken to the shadow Minister, the right hon. Member for East Ham (Stephen Timms), who has been very positive about general developments. In his time, the development of the employment and support allowance computer was a very positive development, for which I compliment him. That is a very good example of the scale of computer development that we can undertake with the universal credit.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): We are busy working very hard on employment programmes. I draw my hon. Friend's attention to the very positive employment figures from last week, which indicate that the Government's direction of travel places employment growth at the heart of all we do.
I thank the Secretary of State for his answer and I note the earlier comment by the Minister of State, Department for Work and Pensions, the hon.
Member for Thornbury and Yate (Steve Webb), that economic growth should not be talked down and that jobs are being created. How are the providers of the Work programme going to work with employers to identify those jobs and make sure that people are placed in private sector jobs as we go forward?
Mr Duncan Smith: My hon. Friend is absolutely right. The difference between this Government and the previous Government will be that the Work programme-the most comprehensive, integrated work programme in existence, certainly, since the war-will make a huge effort to get those who have been out of work for the longest periods ready for work so that they actually get to work. As the economy grows, those jobs will be greater in number. A key point that I made earlier is vital to her question: for all the growth under the previous Government, prior to the mistakes they made that brought us the recession, most of those jobs went to people from overseas because British people simply were not capable of doing that work. That has to change.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab): May I take the Secretary of State back to his claim that job creation will be vital and ask him specifically about what the Office for Budget Responsibility has stated will be the estimated saving from threatening the long-term unemployed, about whom he has just spoken, with the 10% figure? Do the OBR's estimates on how much that policy will save include an expectation that it will move more people into work, or is no significant saving in terms of work incentives expected? Do the calculations simply show OBR figures for the number of people who are going to continue with no job but less money? What do the OBR figures indicate?
Mr Duncan Smith: The OBR figures show two things: significant growth during the course of this Parliament and significant growth in private sector employment. Our changes in housing benefit will get rid of a disincentive to taking those jobs, which a significant number of people failed to take under the previous Government, who failed to do anything about it.
T2.  Mark Lancaster (Milton Keynes North) (Con): My constituent Rachel Clark, who has learning difficulties, enjoys working as a volunteer at a coffee shop run by the charity MacIntyre. Until recently, she received a therapeutic allowance but unfortunately that practice has had to stop for fears that it is in breach of national minimum wage legislation. Given that all parties were happy with the arrangement and that Rachel is happy to carry on as an unpaid volunteer, can we look into this grey area of the law?
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I thank my hon. Friend for his question. We can be clear that individuals such as his constituent are able to undertake volunteering opportunities. Indeed, that is something we have been encouraging as part of the Olympics and Paralympics, and it does not cause any problems if they are in receipt of state benefits.
T4.  Miss Anne Begg (Aberdeen South) (Lab):
May I ask Ministers to look again at the proposal to reduce housing benefit by 10% for people receiving
jobseeker's allowance for a year? The Minister for Housing and Local Government said this morning that people in social rented housing will be kicked out of their homes if they go into work, and under the proposal on housing benefit, people will be kicked out of their homes if they do not go into work.
Mr Duncan Smith: I always appreciate the hon. Lady's advice. We certainly keep all that under review and intend to do so all the way through until we introduce the Bill. However, having said that, there is a lot of good evidence out there to show that we have to give people some sort of incentive not to decide to refuse that work. We believe that that is one of the areas where a lot of international evidence shows that such a spur actually helps people to do that.
T5.  Karen Bradley (Staffordshire Moorlands) (Con): What can the Secretary of State do to assure unemployed people in Staffordshire Moorlands that the Work programme will help them to find not just employment, but sustainable employment?
The Minister of State, Department for Work and Pensions (Chris Grayling): One of the key differences in the Work programme, compared to previous programmes, is that it will pay providers not simply for getting someone into work, but for supporting them while they are back in work over an extended period. That is crucial to ensuring that people do not come off benefits, stay in work for a few weeks and then return to the unemployment registers, as has so often happened in the past.
T9.  Mr William Bain (Glasgow North East) (Lab): Is the Minister aware that his own Department's statistics show that the impact of restricting local housing allowance to the 30th percentile in Glasgow is that 92% of recipients in one-bedroom properties will lose out by, on average, £7 per week? The Glasgow Housing Association told me on Friday that that is likely to lead to higher levels of rent arrears and lower levels of available investment for its properties. Does not that show how unfair and badly designed the proposals are?
The Minister of State, Department for Work and Pensions (Steve Webb): I can only agree entirely with the hon. Gentleman on the manifesto on which he stood for election, which stated that we have to cap the rents that we are paying. His analysis assumes a static situation in which rents do not change. The Department puts more than £21 billion into the local housing allowance. If we changed the rules for that, we would change the market. We are trying to put pressure on rents so that they will go down, which will improve the situation.
T6.  Guy Opperman (Hexham) (Con): The whole House will welcome the news that unemployment is on the decline and look forward to the introduction of the Government's Work programme. However, my right hon. Friend will be aware of the particular issues facing the north-east. What steps is he taking to ensure that there is support in the meantime for those seeking employment in the region?
My hon. Friend will be aware that I am always extremely concerned about the employment situation in the north-east. I was therefore extremely
pleased this summer to see an increase in private sector employment of 17,000 in the region. I was disappointed, however, that the number of people claiming jobseeker's allowance barely changed, which simply underlined for me the need for the Work programme to deliver real change in that area. However, the introduction of the new enterprise allowance and some of the other measures that we are taking to support small businesses, as set out in the Budget by my right hon. Friend the Chancellor of the Exchequer, will help to continue the process of job creation in the private sector in the north-east, which is what we all want.
Malcolm Wicks (Croydon North) (Lab): As the Secretary of State and his team develop their longer-term thinking on social security, including for state pensions, what emphasis and importance will they place on the contributory principle?
Steve Webb: I am grateful to the right hon. Gentleman for his question. We believe that a link between what people put into the system and what they get out of it is important, and we are looking at ways of modernising that principle. He will know that the contributory principle, as it currently exists, was invented in the 1940s when the assumption was that men worked and women stayed at home. We live in a modern world and need to modernise the contributory principle.
Chris Grayling: One of the benefits of working with smaller organisations as well as the larger prime contractors is that we can get the input of specialist organisations with expert knowledge of the rural community and the rural jobs market. I believe that the contracting structure we have set up maximises the likelihood of prime contractors identifying the right organisations to deliver support in rural areas.
Fiona O'Donnell (East Lothian) (Lab): My constituent, Mr Edwards, is in receipt of the independent living fund, which empowers him to buy services to meet his needs. Uncertainty over the future of the fund is causing him and his family great concern. When will the Government end that uncertainty?
Maria Miller: As the hon. Lady knows, the uncertainty is a result of the previous Administration not having correctly financed the independent living fund. That led to the trustees of the fund having to close it to new applicants. We have already undertaken an informal consultation about the future of the fund, and will shortly come forward with a formal consultation. My overwhelming requirement will be to make sure that existing recipients continue to be well supported.
T8.  Richard Ottaway (Croydon South) (Con): Will the Minister confirm that barriers to employment vary from one part of the country to another, that he has abandoned the one-size-fits-all policy of the previous Government, and that personalised help is being given to people seeking to get back into the employment market in accordance with their needs?
Chris Grayling: I can absolutely give my hon. Friend that assurance. It is particularly true for areas of the country that have high levels of incapacity benefit dependency. For the first time, we will be attempting to provide real support to people who have been on incapacity benefit long term and are found fit for work or potentially fit for work through the work capability assessment. I am convinced that the specialist support that we can bring to bear for those people will make a particular difference in those parts of the country where the problem is substantial.
Kate Green (Stretford and Urmston) (Lab): Most jobseekers will become eligible for entry into the Work programme after they have been on jobseeker's allowance for a period of 12 months. Can the Minister explain how it is sensible that at precisely the moment at which they become eligible for the extra support of the Work programme, they will see a cut in their housing benefit because of the period that they have spent on JSA?
Chris Grayling: The hon. Lady must understand that we are seeking to maximise the incentives in the system. What we inherited from the previous Administration is a system that is full of disincentives to go back to work. If we do not remove some of those disincentives, create a push to get people back into work and combine that with support to do so, we will end up with the same 13 years of failure as we saw under the previous Government.
T10.  Alun Cairns (Vale of Glamorgan) (Con): The Barry branch of the mental health charity Mind often advocates in favour of service users at work assessment appeals, with a very high success rate. This demonstrates the difficulty in assessing people with mental health illnesses. What action is the Minister taking to ensure that they are treated fairly in the new work capability assessment?
Chris Grayling: My hon. Friend will see tomorrow, with the publication of the Harrington review, some innovative suggestions about how we can deal with that problem. It is a very real problem. I am determined to ensure that we do everything we can to avoid people with mental health problems being wrongly diagnosed by the assessment. I pay tribute to Paul Farmer of Mind, whose input into the process has been hugely valuable.
Toby Perkins (Chesterfield) (Lab): May I bring the Minister back to the question asked by my hon. Friend the Member for Glasgow North East (Mr Bain) about the cuts to housing benefit? The cuts to local housing allowance are the same cuts that will make people in Chesterfield up to £11 a week worse off. Will the Minister confirm that that was not in the Labour party manifesto and is nothing to do with the cap? Will he set the record straight?
Steve Webb: On the contrary. The Labour party manifesto said that people who were in work should not be in worse accommodation than people who are out of work. That implies the 30th percentile change, and that is what we have implemented.
Dr John Pugh (Southport) (LD):
What are the Government doing to prevent hardened drug addicts with consequent mental health issues claiming DLA in
the normal way, which goes straight into their veins and up their noses? What are the Government doing to improve the situation and stop this waste of public money?
Chris Williamson (Derby North) (Lab): Does the Secretary of State accept that the Government's plans to accelerate the increase in pension age will come as a cruel blow to a whole generation of women in this country, because the financial reality of motherhood and family life makes it much harder for many women to build up a pension comparable to those of men? What provision is being made for women aged 54 to 59?
Steve Webb: I can assure the hon. Gentleman that no woman aged 59 or 58 is affected at all by the changes. However, we are equalising men's and women's state pension ages somewhat more rapidly. No one will be affected until 2016, and those who are most affected and who have the longest increase in working life will have a period beyond 2016, so they will have at least seven years' notice of the change.
Greg Mulholland (Leeds North West) (LD): I warmly welcome the long-overdue review of the work capability assessment, but does the Minister agree that there are problems after the assessment, and that the time spent going through appeals and tribunals is far too long? What steps is his Department taking to rectify that?
Chris Grayling: There are two aspects to what we are doing. First, we are seeking to improve the process not simply within the assessment itself, but before and after, in the way that individual cases are handled. I hope that that will make a difference. Secondly, my Department is working with the Ministry of Justice to ensure that we streamline and improve the appeals process, create extra capacity to deal with any appeals that result from next year's migration and have a system that works as effectively as possible.
Thomas Docherty (Dunfermline and West Fife) (Lab): The Secretary of State knows how vital Remploy and other supportive workshops are in helping people back into work. Will he outline the steps that the Government are going to take to promote that through public procurement, and will he or one of his Ministers meet me and trade union representatives to discuss the matter?
Maria Miller: The hon. Gentleman knows from the recent spending review settlement that Remploy's modernisation plan and funding are in place, and we will continue to monitor its performance against that. I have already met trade union officials about Remploy's future, and I will continue to do so as we move forward with the modernisation plan.
Stephen Metcalfe (South Basildon and East Thurrock) (Con): I, like many other hon. Members, have been contacted by a number of constituents whose pension provision has been seriously affected by the collapse of the former Ford UK parts manufacturer, Visteon. Will the Secretary of State meet me to explore how we might best help those who have been most adversely affected?
No one can doubt that NATO has played an absolutely critical role in preserving peace in Europe since it was founded in 1949, but the test for NATO now is whether it can meet the challenges of the present and of the future. That means real change-not just signing communiqués about change, but showing real political will to bring the necessary changes about. I believe that NATO can be just as relevant to protecting our security in the future as it has been in the past, and my interventions were focused on that future.
Effectively, there were three summits: a meeting of all the coalition countries involved in Afghanistan; a summit on the planned reform of NATO; and a NATO-Russia Council. I want to take each briefly in turn.
First, on Afghanistan, the summit with President Karzai, the UN Secretary-General and countries from across the globe represented there was a powerful visual reminder that Britain is part of an international coalition of 48 nations in Afghanistan. We are there because the Afghans are not yet capable of securing their own country from terrorists, and those terrorists threaten the security of the rest of the world. So, it is for our own national security that we help them.
At the NATO summit, each and every one of the 48 nations in the coalition reaffirmed its "enduring commitment" to the mission in Afghanistan. Britain is the second-largest contributor to that mission, with over 10,000 troops, many of them risking their lives in the most dangerous parts of the country. The arrival of additional international security assistance force troops in the south has allowed us to transfer Musa Qala and Sangin to the US Marines. That in turn has allowed us to focus our forces in central Helmand, sharing the burden more sensibly and removing the overstretch our forces have suffered since 2006. Working alongside Afghan forces, that has helped us to drive the insurgents out of population centres in central Helmand, and, as hon. Members have heard in the House from reports by my right hon. Friends, we are making good progress.
We want to transfer security responsibility for districts and provinces to Afghan control as soon as the Afghan security forces are ready, and the summit reached important conclusions about the timetable for this transition. It will begin in early 2011 and meet President Karzai's objective for the Afghan national security forces to lead and conduct security operations in all provinces by the end of 2014.
This commitment on transition is entirely consistent with the deadline we have set for the end of British combat operations in Afghanistan by 2015. By 2015, Britain will have played a huge role in the international coalition and made massive sacrifices for a better, safer and stronger Afghanistan. We will have been in Helmand, by some way the toughest part of Afghanistan, for nine years-a period almost as long as the first and second world wars combined. Last week, we lost the 100th member
of our armed forces in Afghanistan this year. This is the second year running that we have reached such a tragic milestone.
The bravery and sacrifices of our forces are helping to make this country safe. But having taken such a huge share of the burden, and having performed so magnificently since 2001, I believe that the country needs to know that there is an end point to all this, so from 2015 there will not be troops in anything like the numbers there are now, and, crucially, they will not be in a combat role. That is a firm commitment and a firm deadline that we will meet.
The NATO summit also committed to a long-term relationship with the Government of Afghanistan, and Britain will be at the forefront of this commitment. Beyond the end of combat operations in 2015, we will go on having a relationship with Afghanistan based on aid, development, diplomacy, trade and, if necessary, military training and support.
On the reform of NATO, we agreed a new strategic concept to equip NATO for the security challenges of the 21st century. Just as in our new national security strategy, NATO will shift its focus and resources still further from the old, cold wars of the past to the new, unconventional threats of the future, including counter-terrorism, cyber-security, failing states and the proliferation of chemical, biological and nuclear weapons. Crucially, NATO agreed to develop a new ballistic missile defence system for Europe. This will help to protect the UK and our other European allies from the growing threat from countries such as Iran that are developing ballistic missiles. It will be in place by the end of the decade, paid for within NATO's existing resources.
Just as Britain's strategic defence and security review set out plans to make the Ministry of Defence much more commercially hard-headed in future, and to adopt a much more aggressive drive for efficiencies, so this summit agreed significant efficiencies for NATO itself. These include cutting the number of command posts from 13,000 to fewer than 9,000, reducing the number of NATO agencies from 14 to just three and ensuring that all decisions taken at this summit are funded from within NATO's existing resource plans. These changes will save Britain tens of millions of pounds and will allow NATO to focus its efforts on the front line.
There was also a discussion at the summit on co-operation between the EU and NATO. It is crazy that, because of procedural wrangling, the only security issue these two organisations can discuss when they meet is Bosnia. Everyone wants a solution to the Cyprus problem, but we simply should not allow it to go on holding up practical co-operation between the EU and NATO.
It was a very powerful sight to see countries that came together to protect themselves from the Soviet Union now sitting down and discussing sensible co-operation with Russia and with the Russian President. Although the Soviet Union broke up years ago, relations between NATO and Russia have been strained in recent years. Two years ago, missile defence for Europe caused a major split in relations with Russia, but now it is an issue on which we are actually working together.
The NATO-Russia Council also agreed practical co-operation on Afghanistan, enabling NATO to use routes through Russia to support our armed forces on
the ground and working together to develop improved helicopter capabilities for Afghan security forces.
There will remain challenges in working with Russia. President Obama and I both raised the issue of Georgia. Two years after that conflict started, it is time for Russia to abide by the ceasefire agreement and withdraw its troops from Georgian territory, but I judge it right that we do not let this and other bilateral concerns prevent us from working together where it is in our interests, so we will work with Russia on countering drug trafficking, on tackling Islamic extremism and on countering proliferation, and in the G8 and the G20. The summit also praised the courage that Presidents Obama and Medvedev have shown in agreeing a new strategic arms reduction treaty, and agreed that early ratification would be in all our interests.
In 1949, the alliance first said that "an...attack against one" is "an attack against...all." Today, the threats that we face are different, and the world is more uncertain, but NATO remains the bedrock of our collective defence. The future of this alliance is vital for our national security, and the summit was focused on that future: on securing an Afghanistan able to look after its own security; on reforming NATO for the 21st century; and on establishing co-operation with Russia on our vital security interests. Above all, I believe that this summit has shown that our alliance remains rock solid and that Britain's commitment to it is as strong as ever. I commend this statement to the House.
Edward Miliband (Doncaster North) (Lab): I thank the Prime Minister for his statement. As the main part of it focused on Afghanistan, I want to take this opportunity to pay tribute to all our troops, including the 345 who have died during the conflict. They showed the most extraordinary courage, and we honour them. I also pay tribute to the thousands who have been wounded; they cope with the most serious injuries with an extraordinary bravery and courage.
The best way we in this House can support our troops is by seeking at all times to build unity of purpose, and I am determined to do that on the issue of Afghanistan. In that context, we support the outcome of the NATO summit on Afghanistan. We strongly support the Afghan security forces taking full security responsibility in 2014, which was originally agreed at the London conference at the beginning of this year and was reiterated at the NATO summit. I also agree with the Prime Minister that his objective of ending combat operations by British troops by 2015 is right, and indeed is a logical counterpart to the plan that was set out for full security responsibility.
I do, however, have three questions to ask the Prime Minister about Afghanistan. First, as I am sure he will agree, the point is not simply to set a timetable but to ensure that it can be set successfully, so we must do all we can to improve the conditions on the ground. He mentioned the difficulties in Helmand province and said it was one of the hardest provinces to hand over to Afghan control. May I therefore ask him to tell the House what milestones he will use to track progress in the transition plan for Helmand? Clearly, key to that will be building up the Afghan army and, indeed, making it more representative. That has been a particular issue in the south, including the under-representation of the southern Pashtuns.
Secondly, the Prime Minister said after the summit that we might continue to play a training role for Afghan forces after 2015. May I ask him to say a little more about that? As he will know, the nature of training in Afghanistan is such that it often involves front-line exposure, so perhaps he will say more about whether troops may effectively be in some fighting role beyond that date.
Thirdly-I know the Prime Minister will agree with this, as well-a political settlement is clearly essential to achieving a stable Afghanistan by 2015. We warmly welcome NATO's endorsement of the Afghan-led reconciliation programme. Does he agree that that requires reconciliation with those elements of the Taliban willing to abide by Afghanistan's constitution, as well as engagement with Afghanistan's neighbours, including, of course, Iran and Pakistan? What discussions has he had with President Karzai about ensuring that that reconciliation moves forward rapidly over the next 12 months?
I turn to the other major item of discussion at the summit, the relationship between NATO and Russia. The Prime Minister is clearly right that we should seek to improve our relationship with Russia but continue to raise the concerns that he mentioned, including on Georgia. We welcome the joint work on the new missile defence system, and he is right to say that that development shows how the world has changed since the cold war, as it will involve co-operation with, rather than the isolation of, Russia.
Britain is of course a nuclear power, and in our view will remain so in a world in which others possess nuclear weapons, but that also brings responsibilities. Does the Prime Minister agree that the starting point for the discussion on nuclear weapons should be serious and committed multilateralism, with the ambitious long-term aim, originally set out by President Obama in 2009, of a world without nuclear weapons? May I not only invite the Prime Minister to give support to the new START treaty with Russia, but ask him what his position is on the aim of removing tactical nuclear weapons-essentially a cold war legacy-from continental Europe and Russia?
Finally, the "new strategic concept" for NATO, as it is called, is also to be welcomed, because it understands the new threats that the world faces. The post-war Labour Government, as the Prime Minister indicated, were a founder member of NATO, and our belief in the importance of multilateral co-operation is enhanced, not diminished. Does he agree, though, that the lesson of Afghanistan is that although NATO is a military alliance, when it comes to dealing with fragile states and preventing terrorism, it must pursue its objectives in the knowledge that military means can be successful only alongside political, civilian and humanitarian development?
I end by saying to the Prime Minister that we welcome the outcomes of the summit and will work co-operatively when he seeks to do the right thing, working through NATO for British security and international peace and stability, most importantly in Afghanistan.
The Prime Minister:
I thank the right hon. Gentleman for his questions and for the way in which he put them. He is absolutely right to pay tribute to our armed forces and to mention the wounded. It is absolutely clear that people are coming back from Afghanistan with very
bad injuries-often they have lost one, two and, sometimes, three limbs. We must not just look after and rehabilitate them now, but be thinking now about how we are going to help these people for the rest of their lives. They want to lead extremely active lives, and so they should.
The right hon. Gentleman said that he wanted to have unity of purpose on Afghanistan. I hope that we can keep that up. I will do everything I can to try to help make that possible. It is very powerful, when we go to speak to our troops in Afghanistan, and in maintaining public support, that there is genuine bi-party consensus.
The right hon. Gentleman asks three questions; let me try to answer each of them. First, on the milestones for progress between 2011 and 2014, there are, effectively, three different things. We have to look at the build-up of the Afghan army and police, and check that that is on track. We have to look at the progress of governance in the districts and provinces of Afghanistan. We also have to ask ourselves whether what we are about to transition is genuinely irreversible. What we do not want, which is why I have avoided setting short-term deadlines, is to make a move that is then somehow reversed.
On the future training role, we have done very well to staff up the training mission-allies made a lot of commitments on that at the NATO summit. Britain has added another 320 trainers. I very much see this as training and not combat. By that stage, we will be looking at something that is much more a training mission, and not quite as much embedding as we have now.
Reconciliation is vital. Almost all insurgencies the world over have been ended by a combination of military means and a political settlement. It is the moment at which one is hitting the nail very hard in a military sense that one should be taking steps towards reconciliation. This is for the Afghans to lead. The three vital things are that anyone who wants to reconcile must break with al-Qaeda, must renounce violence and must accept the broad outlines of the Afghan constitution. I discussed this with President Karzai at some length. He is enthusiastic about this agenda. If we follow those guidelines, we can make real progress, and that is exactly what we should aim to do.
On Russia, yes, I think we should be serious and committed to multilateral disarmament. The statement spoke about moving towards a world without nuclear weapons. I have always believed that Britain should not give up weapons in the hope that it might somehow unlock this process and make it come about. We should be absolutely clear: we are a nuclear power for very good reason. We should work towards that goal, but we should not be naïve in throwing away our weapons in the hope that others will do so.
In terms of Afghanistan, there are many lessons to learn, but one of the points that the right hon. Gentleman made is absolutely right: we need to make sure we are effective militarily, but at the same time we always have to look at development, governance and political processes. I think NATO is quite well equipped to do that. We should be thinking also about how we can make sure that we reform what we do so that the battalions that we send in are able to do so-called "hot" development, as well as actual war fighting. It is in the early days when
the military goes in that it can form a real impression that it is going to be digging wells, building schools and making a country more pleasant to live in, at the same time as securing it from terror. That is one of the big lessons to learn, as the right hon. Gentleman says.
Sir Malcolm Rifkind (Kensington) (Con): While we can warmly welcome the NATO-Russia agreement to co-operate on ballistic missile defence, is it not disappointing that NATO and Russia have not yet decided to begin talks on the multilateral disarmament of tactical nuclear weapons in Europe? Does the Prime Minister recollect that it was the previous Conservative Government who abolished British tactical nuclear weapons on the grounds that they had become militarily useless? Is it not now time for NATO and Russia to look at that at the European level?
The Prime Minister: I think that is possible. The problem has been, as my right hon. and learned Friend well knows-he has great expertise in this-that relations between NATO and Russia have been extremely strained in recent years. At the weekend, I observed a proper thawing of that situation, with President Medvedev happy to sit down and discuss what NATO and Russia could do together. I think his view is very much that this should be an expansive agenda whereby we can look at more and more areas that we can discuss.
Mr Bob Ainsworth (Coventry North East) (Lab): I agree with so much of what the Prime Minister has said, but there is one area about which I continue to be concerned. Why did he feel he had to say publicly that there would be a deadline of 2015? A timetable for 2014 had already been set, and he knows that some Government Members, including even some Ministers, have struggled and still struggle to use the same words as he does. Why did he feel that he had to say publicly that there is to be a complete end to the combat mission in 2015?
The Prime Minister: That is absolutely the right question to ask; let me answer it as clearly as I can. I think that the British people, having paid such a high price in Afghanistan, want some certainty that there is an end point. That is the first reason. I wanted to be clear that the operation will not go on for ever. I am confident that we will succeed in our goals by 2014, which will enable end-of-combat operations and much lower numbers in 2015, but I wanted to make it clear to people so that they can see that there is an end point.
There is a second reason. I think the alternative to having that deadline is endless pressure to set very short-term deadlines for transitioning this province or district at this time. I would rather we had a proper, worked-out process and plan to deliver that. I think that the 2015 deadline helps us to do that and that it gives people confidence that, 14 years after going into Afghanistan in 2001, there is an end point. I am glad I think I heard support from the Labour Front Bench for that.
Sir Menzies Campbell (North East Fife) (LD): May I press the Prime Minister again on the deadline? Can he conceive of any circumstances in which he would modify or depart from the deadline for the withdrawal of British combat troops that he has again confirmed today?
The Prime Minister: No, I do not see any reason to modify it-that is part of the reason for setting it-but I am confident, looking at the tactical progress that we are making on the ground, where the concentration of forces in central Helmand has made a real difference, and with the increased number of US forces and the great commitment made by the 48 ISAF partner countries, that we will be able to complete that transition between 2011 and 2014. However, the deadline is a deadline.
Tony Lloyd (Manchester Central) (Lab): The Prime Minister rightly emphasised that NATO is committed to a world without nuclear weapons, if that is achievable, but he also mentioned biological and chemical weapons. Is NATO as seized of the importance of getting rid of those weapons systems, because in many ways they-certainly biological weapons-are far more likely to fall into the hands of terrorists?
The Prime Minister: I can give that assurance, and not just NATO but the G8 has a good programme on that front. That is vital, and it is exactly the sort of forum in which such weapons can be discussed.
Mr James Arbuthnot (North East Hampshire) (Con): Please will my right hon. Friend clarify the extent of the agreement between Russia and NATO on ballistic missile defence, because having a jointly developed and jointly deployable system would be a major breakthrough?
The Prime Minister: Let me clarify this point. For some time, NATO has wanted a defensive system, partly because of the threat of new ballistic missile states such as Iran. We believe that it is in NATO's interest to provide that territorial defence for our own countries. That was a great source of tension with Russia, but now it is a source of co-operation. Russia has its own ideas for combining its system with ours, and we have our own ideas on what co-operation should take place. Those sets of ideas are still some way apart, but the positive thing is that discussions are under way on how we can work together.
Mike Gapes (Ilford South) (Lab/Co-op): The Prime Minister told us that the Afghans are not yet capable of securing their own country from terrorists. Does he seriously believe that the Afghans taking a lead role in provinces within four years will mean that Afghanistan will be secure from terrorism?
The Prime Minister:
I am a little bit more optimistic than the hon. Gentleman. The case today is that Afghanistan ground is forbidden to al-Qaeda and al-Qaeda training camps. Post-2001, there were training camps in Afghanistan, but there is none now because of the action that the allies and the Afghan security forces have taken. The question is this: if the allies withdrew now, would the Afghans be able to sustain that? The answer today is no, but the answer by 2014 should, we believe, be yes. Of course there is a lot more help to be
given and a lot more capacity to build, and a lot more troops and police need to be trained up, but we can see some success already, because the number of plots that we face from that part of the world has declined, partly because of the action we have taken.
Richard Ottaway (Croydon South) (Con): I congratulate the Prime Minister on the positive outcome of the summit and, in particular, on the fact that the United States has moved away from 2011 as the date for withdrawal, and towards 2014. However, is not Iran the elephant in the room? It does not appear in the declaration-at least not in substance. Will my right hon. Friend say what the attitude of his partners is towards Iran and, in particular, towards sanctions, which, at the end of the day, is the only weapon that we have?
The Prime Minister: There has been good progress on that. The UN Security Council resolution on Iranian sanctions was helpful. The European Union went beyond that and introduced further sanctions. When you look around that room, with all those NATO partners and ISAF partners, you see that there is a pretty good consensus on the need for sanctions and the need to apply them properly. There is a conversation that we go on having with allies such as Turkey about the importance of not seeing any slippage in the sanctions. There are some early signs that they are having some effect on the Iranian regime, but we have to keep that up. As my hon. Friend says, we do not have many other weapons to force a change of mind on the Iranians. The sanctions are a weapon that we have, and we should use them to the best of our ability.
Jeremy Corbyn (Islington North) (Lab): Does the Prime Minister not agree that the greatest causes of problems in this world are poverty, instability and the competition for resources? The NATO summit has set itself on a path of nuclearisation, a missile defence system and an alliance that includes virtually all the major industrial countries of the world. Should we not be looking in the other direction, towards peace, disarmament and a stable world based on those objectives, rather than towards vast expenditure on new nuclear weapons and missile defence?
The Prime Minister: Let me be clear about where I think the hon. Gentleman is right and where he is wrong. He is right that we should be doing more to tackle poverty the world over. That is one of the reasons why we have committed to spend 0.7% of our gross national income on aid. Britain has very effective aid programmes, and we should be encouraging other NATO allies to do the same. However, where he is wrong is to believe that all conflict and problems come from poverty. Some of the problem of Islamic extremism is related not to poverty but to ideology. We have to recognise that we have to confront and defeat that ideology.
Bob Russell (Colchester) (LD): The Prime Minister said that every one of the 48 nations in the coalition had reaffirmed its enduring commitment to the mission in Afghanistan. On sharing the burden and removing the overstretch of our forces in Helmand province, which of the other 46 countries, apart from the United States, have service personnel serving alongside our personnel in Helmand?
The Prime Minister: In Helmand, there have been very courageous efforts by the Estonians and the Danes, who have fought very effectively alongside our troops. The Canadians, as someone mentioned, were stationed in Kandahar, and they will be moving from a combat role to a training role. It was not that long ago that France had an uplift in its troop numbers, so I do not think that it is right to cast too many aspersions about other NATO allies. We are certainly the second largest contributor by quite some way. It is important that we encourage others to do what they can, even where countries are pulling back from a combat role. It was quite notable that the Canadians invested more in a training role than people were previously expecting. There is a good spirit among the ISAF nations, as we want to see this through successfully and everyone has to play their part.
Mr Geoffrey Robinson (Coventry North West) (Lab): Is the Prime Minister aware that there will be widespread support in the country for the deadline-the end time-that he has fixed for the conflict? However, even if we can successfully withdraw after four years, for British troops that means another four years of bloody fighting in what he himself calls the most dangerous part of Afghanistan-Helmand. I appreciate that we cannot push him on the details now, but over those four years will there be a continued effort to see, rather than a military outcome, an overall political accommodation with the Taliban?
The Prime Minister: There are two elements to the reconciliation process. There is what is called reintegration, at the lowest level, where tribes that have perhaps taken up arms against the Afghan national army and the allies are being encouraged to put down those arms and join a political process. Sometimes tribes took up arms not because they were Taliban supporters, but because of local conflicts. The higher level-reconciliation, as it were-is much more like a political process. That has to be Afghan-led, and, as I said, it has to be based on de-linking from al-Qaeda, giving up violence and accepting the basic tenets of the Afghan constitution. In the end, those people want the same as everyone else, which is an Afghanistan that is not stationed full of foreign troops, so I hope that we can make progress on the political front, as the hon. Gentleman says.
Mark Lancaster (Milton Keynes North) (Con): Like any serviceman or woman who has spent time in Afghanistan, nothing would make me happier than seeing a speedy resolution to this conflict. Does the Prime Minister agree, however, that if we are to meet this ambitious timetable, we must focus on capacity building in the provinces, which is key if we are to have a sustainable future in that country?
The Prime Minister: My hon. Friend has served in Afghanistan and knows the country well, and he is completely right. As I have said, there are two elements involved. The first is the security forces training the police and the army, but on its own that does not provide enough capacity. We also need good governance, and one feature that we should look at closely is the progress of better governance in Helmand province itself. Governor Mangal has done an extremely good job there and is well supported by the British, and it is important to have good governors in place to ensure the stability that will enable us to leave.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Prime Minister mentioned the EU-NATO partnership and the fact that there had been discussions. The French press reports said that it was still completely unclear what we were doing. Can he shed any more light on what this now amounts to, post-summit?
The Prime Minister: There was a very lively exchange at the NATO leaders' dinner on this issue. I am a pragmatist, and it just seems to me that, given that there is an EU mission to train the police in Afghanistan and a massive NATO mission to train the army and the police there, the fact that NATO and the EU cannot talk to each other on these issues because they do not have permission to do so, apart from in Bosnia, is simply crazy. One of the reasons for this problem is the fact that the issue of Cyprus is used by both sides in the debate, and the EU-NATO relationship is used as a proxy for that. I am sure that everyone in this House wants to see a settlement of the Cyprus dispute, but we should not allow that to bung up relations between the EU and NATO. An outbreak of pragmatism is required and, because this was discussed at the dinner, we all instructed our NATO ambassadors to go back and try to do better, so that we can try to unfreeze that conflict.
Rory Stewart (Penrith and The Border) (Con): I congratulate the Prime Minister on setting such a firm deadline for the ceasing of combat operations but, given the problems that we had in Basra in 2006, how will we use the next three years to ensure that we pin down the United States and British military to facilitate the transition?
The Prime Minister: I pay tribute to my hon. Friend, who knows a huge amount about that country-I do not want to give an advert for his book, because I am sure that it has sold well enough already. The point is that by setting the deadline early, we are giving a clear signal to our friends and allies in NATO about the role that Britain has played-we should remember that we have played a very big role and taken a very large number of casualties-and about our intentions. The key to a successful transition is focusing on training the Afghan army and police, as well as the governance that I have spoken about, and being clear about our intentions. We cannot make it up with only six months to go; we need to say now what Britain's commitment is and what it will be in the future.
Mr Dennis Skinner (Bolsover) (Lab): So, to sum up, does the Prime Minister agree that he has done a dodgy deal with Karzai and the Taliban, got into bed with that ex-KGB man, Putin, and already done a deal with the French to share our defence? Was that rainbow coalition in the Tory manifesto?
Dr Julian Lewis (New Forest East) (Con):
The new NATO strategic concept approved at Lisbon rightly states that, as long as other countries have nuclear weapons, so will the NATO alliance. Some of us would like to see the same apply to the United Kingdom. What
reassurance was my right hon. Friend able to give to our NATO allies that Britain's Trident replacement programme will go ahead after the next election, given that, if the Liberal Democrats were again to hold the balance of power, that would almost certainly not happen?
The Prime Minister: My hon. Friend and I go back years on this issue, to the time when we almost shared an office. At that time, we were fighting a very unilateralist Labour party that wanted us to give up our nuclear weapons and get nothing in return. The assurance that I can give my hon. Friend is that I believe that while others have nuclear weapons, we should retain ours. That is why I said what I said in the statement. He is being a little unfair, however, because in this Parliament, we will be spending many tens or even hundreds of millions of pounds on the preparation for our Trident replacement-which is on schedule to go ahead-to ensure that there is continuous at-sea deterrence and no capability gap between the deterrent that we have now and the deterrent of the future. The Government, including the Liberal Democrats, are fully committed to that.
Chris Bryant (Rhondda) (Lab): I warmly congratulate the Prime Minister on raising the matter of Georgia with President Medvedev. When the right hon. Gentleman visited Tbilisi in 2008, he said that this was an illegal invasion. It certainly was, and it still is today. May I urge the Prime Minister to be a bit more robust in some other respects with the Russians? Corruption is so endemic at the very highest level in Russia that British businesses find it very difficult to do business there. Will he expressly raise the human rights issues, particularly in respect of the trial of Mikhail Khodorkovsky and Platon Lebedev?
The Prime Minister: I take what the hon. Gentleman says very seriously. We are trying to have better relations with Russia-that is, I think, in our interest-but without trying to gloss over the bilateral impediments to those relations. When I have met President Medvedev, I have raised the Litvinenko case and other concerns, which is also right. At the same time, we must try to overcome some of these problems and raise the cases that the hon. Gentleman mentions. The impediments to relations between Britain and Russia are well known, but that does not mean that we should fail to speak about those and other things and try to have a slightly better relationship than we have had up to now.
Dr Andrew Murrison (South West Wiltshire) (Con): The Prime Minister rightly touched on the importance of guaranteeing Afghanistan's northern distribution network. Does he agree that security in Tajikistan is particularly important if we are to have any prospects of withdrawing within a reasonable time frame, and that it is also important in developing NATO's relationships with Russia?
The Prime Minister:
My hon. Friend makes an extremely good point. If we want to leave behind a secure and stable Afghanistan, relations with its neighbours are crucial. Many people make the point that NATO and ISAF are making a tremendous effort in Afghanistan and that many of the country's neighbours will benefit from a stable Afghanistan, but are not making a contribution. I think it is up to them to contribute, but
also up to us to try to bring the neighbours together to make sure they demonstrate the equity they have in a stable Afghanistan for the future.
Mr Frank Roy (Motherwell and Wishaw) (Lab): Is it not apparent that the number of trainers for the Afghan police and army is woefully inadequate? Will the Prime Minister tell us what the timeline will be and what priority will be given to increasing the number of trainers by all the countries concerned?
The Prime Minister: We are making very good progress in training up the Afghan police and army. We are a little ahead of schedule. The key thing about this NATO summit was to get other countries to commit to adding to the training mission. There were some very welcome developments, such as the Canadians who, in pulling back on the combat forces front, committed to the training mission. As I said, Britain added another 320 trainers. I think we are on target to deliver the sort of Afghan national security forces we need to complete our drawdown by 2014.
Mr Edward Leigh (Gainsborough) (Con): To be honest, I have always questioned whether foreign combat troops can ever win a war in Afghanistan. What does the Prime Minister say to those who argue that setting a deadline just incentivises the Taliban never to negotiate?
The Prime Minister: I think it incentivises the Afghan Government to recognise that we are serious about handing over a country for them to run. It also shows the Afghan security forces that they are going to have to learn to stand on their own two feet. Let me make two additional points. First, there is a serious amount of time to elapse between now and the end of 2014 when all this has to be completed. This is not some rapid deadline; there are a lot of years between now and then to make it work. Secondly, Robert Gates, the US Defence Secretary has said about the US forces:
"I think anything that remains after 2014 would be very modest and very much focused on the kind of train and advise and assist role".
Thomas Docherty (Dunfermline and West Fife) (Lab): Further to the answers given to both my hon. Friend the Member for Motherwell and Wishaw (Mr Roy) and to the hon. Member for Colchester (Bob Russell), will the Prime Minister provide some specific figures-either to the House today or later through the Library-on how many additional trainers and instructors each of the NATO countries has committed to Afghanistan?
The Prime Minister: I should be happy to place that information in the House of Commons Library or write to the hon. Gentleman. In the run-up to the summit everyone was asked to make extra contributions, and my understanding is that we made ours and that a number of other countries did the same. However, I should be happy to provide the information so that the hon. Gentleman can see exactly how we will secure the size of Afghan security forces that we need.
The Prime Minister: My hon. Friend is right to raise that issue, which is a difficult one. Not only has there been an insufficiency of Pashtuns in the security forces, but there has been an insufficiency of Pashtuns from Helmand and elsewhere in that part of the country. That means that we must make a greater effort to recruit and retain them, but I think that as they see progress on the ground they will be more likely to want to serve.
Let me make clear that we are on track to achieve the 2011 goal of 171,600 in the Afghan national army-the current force is 138,000-and to reach the October 2011 target of 134,000 in the Afghan national police, who currently number 120,000. Plainly, those are not unrealistic objectives, but the point about the ethnic make-up is important.
Toby Perkins (Chesterfield) (Lab): The Prime Minister is right to say that the country has paid a tremendous debt to Afghanistan in terms of the cost to our country. He said earlier that he would send a message to our friends and allies by setting a deadline, but he also sends a message to our enemies by setting that deadline. What impact does he think the deadline will have on al-Qaeda and the Taliban? Does he think that it will make them more likely to want to negotiate?
The Prime Minister: The point is that the Taliban have suffered huge reverses in Helmand and southern Afghanistan, particularly over the past year, and a serious attrition in their numbers. As for what I have said, I have not been talking about 2010, as my predecessor did, or about 2011; I have been talking about 2015.
I think the Taliban know that they are losing militarily and suffering huge attrition in their numbers. They should also know that, as well as the military hammer that is hitting them, there is the option of a political process allowing them to reintegrate at a low level, and that, with the Afghan Government, there are opportunities for reconciliation at a higher level. If we look across the world at the way in which counter-insurgencies have ended, we see that they have normally ended through a combination of military might and a political process, and I believe that the same applies in this instance.
Tony Baldry (Banbury) (Con): Turkey has always been important to the defence of NATO's southern flank, and, given the ongoing concerns about Iran's intentions, it will continue to be so. Does that not confirm that it is in all our interests for the United Kingdom to be the best possible friend to Turkey in Europe?
The Prime Minister:
My hon. Friend is entirely right. I think it important for us to send a message to the Turks that, as far as we are concerned, they should be sitting in the tent as well as guarding the camp, and I therefore believe that, as well as being good NATO members, they should be encouraged into the European Union. They are a key ally-a key NATO ally. Given our relations with Iran, it is important for them to be
staunch in terms of sanctions and trade with Iran, because that will send the clearest possible message to their neighbour.
Mr Speaker: Order. Any Member who was not present at the start of the statement should not expect to be called to ask a question. That is the position in the House, and it is important that we adhere to that standard.
Mr Peter Bone (Wellingborough) (Con): Sometimes the Prime Minister just cannot win. If he sets a deadline, they say that he is encouraging the Taliban; if he does not set a deadline, he is accused of drift. Does he agree that our brave men and women in Afghanistan will warmly welcome his statement?
The Prime Minister: I am grateful to my hon. Friend for his support. There is another point to be made. The Taliban trade on the idea that foreign forces will never leave Afghanistan. By setting a deadline such as this and being clear about transition, we are saying to Afghans throughout the country, "We want good relations with your country-we think that it is an important country for Britain to have strong relations with-but we do not want our forces to be there for ever, and neither do you." That is a very important message.
Laura Sandys (South Thanet) (Con): In the context of NATO reform and NATO into the future, does the Prime Minister see a growing role for NATO in relation to such matters as securing trade routes and counter-piracy, which are essential to our domestic economic prosperity?
The Prime Minister: My hon. Friend is entirely right. NATO was for years focused very much on territorial defence of Europe against the Soviet Union and, sadly, when we look at the defence postures of different countries in NATO, including our own to some extent, we see that there is still too much legacy-asset thinking-about tank battles in Europe, for instance, rather than securing sea lanes, fighting cyber-attack, combating terrorism and securing failed states on the other side of the world. So a big shift needs to take place in NATO, and I think this weekend's summit was important in helping bring that shift about.
Nadhim Zahawi (Stratford-on-Avon) (Con): Did the Prime Minister have a chance to discuss with President Obama and others in NATO the very worrying news coming out of North Korea of the discovery of a state-of-the-art uranium enrichment plant?
The Prime Minister: I discussed that issue with President Obama and others at the G20 summit in the Republic of Korea, because obviously that country is so close to the line of control that what happens in North Korea is very much on everybody's minds. What we want is a return to the six-party talks and to put pressure especially on North Korea's neighbours to try to get that country to go down a more sensible path.
Mr Julian Brazier (Canterbury) (Con):
Does my right hon. Friend agree that no amount of skill and courage by our troops at the sharp end can substitute for muddled
command and control structures, especially at the military-political interface, and that to avoid the kind of mistakes that disfigured the early years in Afghanistan we need the kind of reforms that he introduced nationally with the National Security Council and which he is now pressing for, and got a first stage for, at the NATO conference?
The Prime Minister: My hon. Friend has huge expertise in this area. I think that NATO in Afghanistan did initially suffer from having a slightly divided command between an ISAF mission to secure Afghanistan and Operation Enduring Freedom to combat al-Qaeda, particularly in the Tora Bora. It has taken some time to have a more unified command and a greater focus on what was necessary not only militarily, but politically and diplomatically. I think that the whole process is now much better run and managed, but we must make sure we make the most of the remaining few years that we have in order to ensure we can hand over a stable and secure Afghanistan.
I hope Members will understand that an announcement had to be made at the weekend, ahead of markets opening this morning. Last night, I spoke to the Chair of the Treasury Committee and the shadow Chancellor to keep them informed of the latest developments.
The United Kingdom, alongside the International Monetary Fund, the European Union, the eurozone and other member states, is participating in the international financial assistance package for Ireland announced last night. We are doing this because it is overwhelmingly in Britain's national interest that we have a stable Irish economy and banking system.
The current Irish situation has become unsustainable. Its sovereign debt markets had effectively closed and had little prospect of reopening. While Britain's market interest rates had fallen over the past six months, Ireland's had risen to record levels, and Ireland's banks had become completely reliant on central bank funding to maintain their operations. In the judgment of the Irish Government, as well as of the IMF and others, this situation could not go on.
Members will understand that it would not have been appropriate for us in recent weeks to have engaged in public speculation about whether Ireland should request assistance from the international community, but I can now report that we have been engaged in intensive private discussions with the G7, the IMF, the EU and the Irish Government on plans for the eventuality that Ireland would request support. At the G20 meeting in South Korea two weeks ago, I was one of the European Finance Ministers who issued a joint statement that provided a brief respite. At the ECOFIN meeting last Wednesday, my colleagues and I discussed the Irish situation with Finance Minister Brian Lenihan, with whom I have also kept in touch directly. Following meetings in Brussels, the Irish Government committed to engage in a short and focused consultation with the IMF and the EU. On Thursday a joint mission arrived in Dublin, and in the last few days I engaged with my counterparts in the G7, the euro area and the EU about the way forward.
Following intense work over the weekend between the Irish and international authorities, last night Ireland's Prime Minister, Brian Cowen, made a formal request for assistance. This was followed by statements from the G7, the IMF, the Eurogroup and European Finance Ministers that they would
"provide the necessary financial resources for Ireland to implement its fiscal reform plans and stabilise its banking system."
The statements made it clear that there were two components to the rescue package. The first puts beyond doubt Ireland's ability to fund itself. The international assistance package will support an ambitious four-year fiscal strategy which the Irish government will set out later this week. This will see a fiscal consolidation of €15 billion by 2014, of which €6 billion will be implemented next year, as part of a strategy leading to a target budget deficit of 3% of GDP in four years' time. The second part of the assistance package is a fund for
potential future capital needs of the banking sector. This will support measures to promote deleveraging and ensure restructuring of Ireland's banks, so that its banking system can perform its role in supporting the economy.
Let me turn to how the package will be financed. This is a joint programme, with funding from both the IMF and the EU. The amount of money involved will, in part, depend on the IMF's analysis of what is needed, and Prime Minister Cowen has said that he expects it to be less than €100 billion. The international community is working on the rough assumption that the IMF will contribute about one third of the total. The total European package will provide the other two thirds. Based on the significant reform of the IMF agreed by G20 Finance Ministers last month, the IMF is well placed to play a leading role in this international effort. The UK, of course, is an important shareholder of the IMF and we will meet these multilateral obligations. I would like to reassure the House that the IMF is currently well resourced and able to meet the cost of the package for Ireland.
The European element of this package will primarily come from two sources of funding agreed in May before this Government came into office: the €60 billion European financial stabilisation mechanism; and the €440 billion European financial stability facility. The balance between the European mechanism and the eurozone facility will be determined in the coming days. The United Kingdom is not a member of the euro, and will not be a member of the euro while we are in government, and so we will not participate in the eurozone stability fund. To be fair to my predecessor, he kept us out of that fund, but he did agree to the UK's involvement in the European mechanism two days before we took office. I made it clear at the time that I did not believe he should make that commitment. However, it operates according to qualified majority voting and so we cannot stop it being used, and to exercise that vote at this time would, I judge, be very disruptive. So the EU will lend money to Ireland on behalf of all 27 member states, and the UK must accept its share of this contingent liability, which would arise in the unlikely scenario that Ireland should default on its obligations to the EU.
On top of this, I have agreed that the UK should consider offering a bilateral loan to Ireland, as part of the IMF and European package. I judge this to be in Britain's national interest. Let me explain why. We have strong economic relations with Ireland. Ireland accounts for 5% of Britain's total exports-indeed, we export more to Ireland than to Brazil, Russia, India and China put together. Ireland is the only country with which we share a land border, and in Northern Ireland our economies are particularly linked, with two fifths of its exports going to the Republic.
Just as our two economies are connected, our two banking sectors are also interconnected. I should stress that the resilience of our own banks, which are now well capitalised, means that they are well placed to manage any impact from the situation in Ireland. But two of the four largest high street banks operating in Northern Ireland are Irish-owned, accounting for almost a quarter of personal accounts. The Irish banks have an important presence in the UK. What is more, two Irish banks are actual issuers of sterling notes in Northern Ireland. It is
clearly in Britain's interest that we have a growing Irish economy and a stable Irish banking system. By considering a bilateral loan, we are recognising these deep connections between our two countries and, crucially, it has helped us to be at the centre of the discussions that have shaped the conditions of an international assistance package that is of huge importance to our economy. Of course, this is a loan and we can expect to be repaid. In fact, Sweden has already deemed it to be in its national interest to consider a bilateral loan to Ireland.
Now that the Irish Government have requested assistance, a lot of the detailed work of putting together the package can take place. I understand that Members are keen to hear the specifics, such as the rate of interest on the loans, the repayment periods and the contribution from each of the various elements of the package. I shall keep the House informed.
Later this week, the Secretary of State for Northern Ireland and my hon. Friend the Financial Secretary to the Treasury will be in Northern Ireland to discuss the situation there. I will ensure there is a specific discussion in the House if there is a bilateral loan, and we will need to take primary powers.
Finally, let me say something about the future of the various European support funds, which are being discussed later this year. Both the Prime Minister and I are very clear that when it comes to putting in place a permanent eurozone bail-out mechanism, the UK will not be part of that.
This is a situation of great difficulty for Ireland and it is a tragedy when it did so much to improve its competitiveness with low taxes and flexible labour markets, but the truth is that it had a hugely leveraged banking sector that was badly regulated-a pattern that we have had to deal with in our own country. In addition, because Ireland is a member of the euro, exchange rate flexibility and independent monetary policy were not tools available to it when the crisis took hold. The arguments against Britain joining the euro are well rehearsed, not least by me, but although "I told you so" might be correct, it does not amount to an economic policy.
When the coalition Government came into office, Britain was in the financial danger zone. We have taken action to put our house in order. We were once seen as part of the problem, but we are now part of the solution. Ireland is a friend in need and it is in our national interests that we should be prepared to help at this difficult time. I commend the statement to the House.
The Opposition agree with the Chancellor's basic argument that Ireland is a friend in need and that Britain should not simply ignore the plight of one of our biggest trading partners because it is in the eurozone and we are not. So we are in principle content to support a role for the UK in assisting Ireland to secure economic stability.
The Chancellor talked about the resilience of our banks, and the question that many people will be asking today is why he thought it was wrong for the previous Government to support British banks but right for his
Government to support Ireland's banks. On the crucial question of ensuring that Britain's contribution is fair and balanced, will he first explain how our relative share of the burden will be calculated and what his definition of "fair" will be?
Secondly, will the Chancellor give his expectation of the proportion of UK support that will go through each European route-the European financial stability facility, the stabilisation mechanism and the bilateral arrangements-and the rationale for that distribution? He said that he disagreed with the agreement that my right hon. Friend the Member for Edinburgh South West (Mr Darling) made in May to enter the European stabilisation mechanism, yet the Chancellor is seeking to provide bilateral support. Why does he need to provide bilateral support when the other routes are available? Will he also tell the House how, when and where each element will appear in Government accounts?
Thirdly, what interest rate is to be charged on our loans, what form will it take and when does the Chancellor expect to receive full repayment? I understand the issues he mentioned about not being able to tell us now, but if he cannot give us any indication, when and how will that information be reported to the House?
Fourthly, what conditions will the Chancellor seek to apply, and is he preparing this proposal unilaterally or in conjunction with our European partners? Will there be any attempt to interfere with Ireland's right to set its own tax rates? Will the Chancellor tell us to what degree he believes the difficulties are a consequence of Ireland's adoption of the euro? What does he think this will mean for the future of the single currency? When his right hon. Friend the Foreign Secretary was asked if he thought the euro would survive, he shrugged his shoulders and said, "Who knows?" That strikes me as being at the least undiplomatic and at most unworthy of the great office he holds. It could even be said to be making "I told you so" into an economic policy. How would the Chancellor answer the question about whether the euro will survive?
Finally, it is clear that Ireland's efforts to cut its deficit so deeply and quickly have failed to lead to growth in the economy. The private sector has not taken up the slack caused by the huge cuts to public services, so will the Chancellor agree that growth is crucial to Ireland, Europe and, indeed, to the UK's full recovery and tell us what steps he is taking to encourage growth as part of this package? In 2006, he said that we should "Look and learn from across the Irish Sea". In a eulogy of the deregulation of the financial services sector, he asked:
"What has caused this Irish miracle, and how can we in Britain emulate it?"
Now he needs to assure us that he has learned other lessons from across the Irish sea. The last time he made a statement from that Dispatch Box, he said that Britain was on "the brink of bankruptcy", but that was clearly not the case. Now he is proposing to make a substantial contribution to a country that really is on the brink. One lesson from Ireland should be salutary: exaggerated rhetoric affects confidence and loss of confidence can lead to economic disaster.
I certainly agree with that last statement. First, I welcome the support in principle that the Opposition have given to this decision and I well understand that the shadow Chancellor, like everyone
else in the House, will want to see the specific terms and conditions. The IMF-EU team hope to conclude those in the next couple of weeks and then, of course, I will bring those details to the House.
On burden sharing between the different European channels, we will make no contribution through the stability facility-the eurozone facility. In relation to the mechanism-money lent off the back of the EU-if Ireland were, in an extraordinary situation, to default on that then we, as one of the 27 members of the European Union, would have a contingent liability. That is how the mechanism operates. On the terms of the bilateral loan, we have not yet set a figure on that, but it will be in the billions, not the tens of billions. On that, too, I will come to the House when I have a specific figure. As I have said, we will be required to take primary powers to make that bilateral loan and I would hope to have Members' support in doing that.
The shadow Chancellor mentioned the mechanism. In the period between the general election and the creation of this Government, to be fair, as I said in the statement, the former Chancellor of the Exchequer made it clear that he did not want the UK to be part of the eurozone facility, but he did agree to the use of the mechanism. It is based on article 122, the original intention of which was to provide support to eurozone members in dealing with natural disasters. At that time, I said that I did not think that we should be committing to that, but that debate was had in May. The mechanism exists and, frankly, for the UK to say now that we will vote against its use would, as I have said, be very disruptive.
The question of the accounts is for the Office for National Statistics and the Office for Budget Responsibility. My understanding is that the loan will of course add to borrowing but that we will get an asset in return-an Irish commitment to pay back the loan-and that it will not add to the deficit.
On the conditions attached to the loan, I would expect them to be part of the international package agreed with the IMF and European Union contributions, so I would not expect radically different conditions for the UK.
I think it is well known that corporation tax has been the subject of discussion in some European Union capitals, but not here-we believe that countries should be free to set their own tax rates. The Irish Government have to make some very difficult decisions about their fiscal package over the next four years, and how that package is composed should be a decision for them-provided, of course, that the international community is satisfied that it is credible, and I am absolutely sure that we will be satisfied.
Finally, the right hon. Gentleman asked two questions, one about the future of the euro and so on. As I have said, we made lots of arguments about not joining the euro 10 years ago and I do not- [Interruption.] I cannot remember what the Opposition's official policy is, but it probably does not bear consideration. I would just make the point that I am dealing with the situation as I find it today. We can debate the merits of the euro at another time; I have to deal with the Irish situation.
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