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Helen Jones (Warrington North) (Lab): I feel sorry for the Minister today, because he has clearly been sent here as the fall guy. Speaking as a parent and on behalf of the parents in my constituency, I should like to ask him a question. We have a Secretary of State who botched up the Building Schools for the Future programme, who had to do a U-turn on school sport partnerships and who cannot spot errors in the funding programmes of his own Department. Why should any parent have confidence in his running the education system when he cannot even run his own Department?

Mr Gibb: I know and like the hon. Lady; I have known her for many years. She is trying to create a theme here, but there is no theme. The problem that was reported in the Financial Times today occurs every year. It arises from the complexity of the funding system, which we are trying to simplify. It is as simple as that, and we will sort it out.

Stephen McPartland (Stevenage) (Con): I congratulate the Minister on moving the focus on to the 200 worst-performing primary schools. Does he agree with Nick Pearce, the head of the Institute for Public Policy Research and Tony Blair’s former policy adviser, that this is something that the previous Government did not focus on enough?

Mr Gibb: Yes, I do. When we were in opposition, we proposed extending academy status to primary schools. The schools Minister at the time thought it was an appalling idea. However, we have to do something about the 200 underperforming primary schools. Indeed, we have to do something about all the underperforming primary schools, because primary school is where children learn the basics of reading and arithmetic. If we do not get it right in those early years, the life chances of all those thousands of children attending those underperforming schools could be blighted. We intend to sort those schools out.

Ian Mearns (Gateshead) (Lab): The Secretary of State has made it plain that if schools do not buy a raffle ticket by going for academy status, they will not be able to get involved in the raffle to get capital out of the future school funding. He has already admitted to the House that 100 staff in his Department are engaged in the expansion of the free schools programme. How many staff are engaged in this botched expansion of the academies programme, and how much is that costing the Department?

Mr Gibb: This is an important part of raising standards in our school system; indeed, it is a crucial element. When 9% of boys leave primary school with a reading age of seven or under—they are basically unable to read—it cannot be said that applying staff in the Department to deliver the academies programme is a waste of taxpayers’ money. This is good money that is being diverted to a programme designed to raise standards in our least-performing schools, and I think that it is a good use of taxpayers’ money.

Nadhim Zahawi (Stratford-on-Avon) (Con): Does my hon. Friend agree that it is extraordinary for the Opposition to quibble about accounting errors? Is this not a smokescreen to distract attention from Tony Blair’s comments during the past two weeks supporting this Government’s policies on academies and primary schools?

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Mr Gibb: My hon. Friend raises a point that I was too sensitive to raise with the Opposition spokesman—namely, that our policies were endorsed in The Sun yesterday by the former Prime Minister, Tony Blair. Furthermore, the former schools Minister, Lord Adonis, voted for our Academies Bill in the other place, supporting our expansion of the academies programme. I wish that the official Opposition would now support it too.

Mr Tom Watson (West Bromwich East) (Lab): Is the Minister familiar with the maxim that a Minister can delegate power but not responsibility? Why does he not just say sorry to parents and pupils?

Mr Gibb: We are not denying responsibility. We are taking action to simplify the over-complex funding system that we inherited, which led to problems such as these in previous years.

Brandon Lewis (Great Yarmouth) (Con): In Great Yarmouth, we have seen the benefit and freedom resulting from the transformation of schools such as the Ormiston academy. Does the Minister agree that it is that freedom and the potential for transformation that are encouraging at least one in three secondary schools to apply for academy status?

Mr Gibb: My hon. Friend is absolutely right. He will know, as I am sure the Opposition do, that academies are improving at twice the pace of the rest of the schools system. That is why we are so determined to expedite the process of conversion to academy status.

Kerry McCarthy (Bristol East) (Lab): Turning underperforming schools into academies in Bristol was, for the most part, a great success. Free schools, however, are not needed and, for the most part, not wanted there. When are the Government going to get their priorities right, get a grip on their finances and help Bristol to address the real problem that it is facing at the moment—namely, the chronic under-provision of primary school places?

Mr Gibb: The hon. Lady seems to be contradicting herself. There is a shortage of primary school places, yet she says that there is no need for the free school programme, which could be used to create more school places. We want not only more school places but more high-quality school places, and that is what the free school programme, in particular, is designed to achieve.

Mr Mark Spencer (Sherwood) (Con): The Dukeries college in Ollerton and the Joseph Whitaker school in Rainworth are just two of the large number of schools that are applying for academy status. Is not the fact that the numbers have reached such a high level a ringing endorsement of the Minister’s policy?

Mr Gibb: Yes, and it demonstrates that the teaching profession values that autonomy and the trust that the Government are putting in them. That is in enormous contrast to the top-down, prescriptive approach taken by the previous Government. That is why I believe that our system will work. In contrast, Labour did not manage to achieve a significant rise in standards in the schools system during its 13 years in office.

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Diana Johnson (Kingston upon Hull North) (Lab): Can the Minister tell the House how many times the previous Labour Government were taken to court over their education policies?

Mr Gibb: The Sharon Shoesmith case springs to mind. I will write to the hon. Lady and let her have those figures.

Richard Fuller (Bedford) (Con): Financial and accounting errors are a serious matter, and it is not surprising that the shadow Secretary of State for Education has raised the issue, given his direct experience of the catastrophic financial and accounting errors under the last Government. Does the Minister not agree that, on a day when this Government have thrown a lifeline to children trapped in underperforming primary schools, it is odd that Labour has once again turned its back on those children?

Mr Gibb: My hon. Friend is right. The Secretary of State has announced that we are taking urgent action to convert the 200 least-performing primary schools in this country to academy status, transforming those schools and giving the youngsters who attend them a significantly better start to their education, and I would have thought that that should be the issue to be raised today.

Nic Dakin (Scunthorpe) (Lab): Given the Department’s serial bungling, can the Minister tell us how much it has spent on defending legal challenges in the past year?

Mr Gibb: These issues are faced by all Governments and all Departments—[Hon. Members: “How much?”] I do not have those figures to hand, but if I am able to get them, I will write to the hon. Gentleman.

Charlie Elphicke (Dover) (Con): Three of the 704 new academies are in my constituency. We are seeing an education revolution, so why are we not discussing that and the success of our schools, rather than accounting errors that are a car crash left by the previous Government?

Mr Speaker: Order. The simple answer to the hon. Gentleman’s inquiry is that we are discussing this matter because an urgent question application was submitted to me and granted by me. No further discussion of that point is required.

Neil Carmichael (Stroud) (Con): Is it not the case that this urgent question has certainly underlined the need for a full investigation and inquiry into the discredited system that the last Government used for the funding of

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schools, which was unfair and inefficient? Is it not ironic that this issue has been raised when schools want more autonomy from such systems? Is it not also the case that we should support—

Mr Speaker: Order. That is enough. The hon. Gentleman has had a good outing and I am sure he has enjoyed it.

Mr Gibb: My hon. Friend is absolutely right and asked a good question. Many local authorities have been raising this issue for many years; they campaigned on it and lobbied the previous Government about the unfairness of the school funding system. That is what we are determined to sort out with the school funding review.

Anna Soubry (Broxtowe) (Con): I visited Foxwood special school in my constituency on Friday and learned how keen it is to obtain academy status. Will the Minister help Foxwood and other special schools by encouraging them to apply for that status, and will he particularly assist Foxwood school?

Mr Gibb: I am grateful to my hon. Friend. One of the changes proposed in the Education Bill is to allow academy status to apply to special schools as well. I would be very happy to help my hon. Friend; if she and the head teacher of that particular special school would like a meeting in the Department to discuss academy status, I would be delighted to arrange it.

Mr Philip Hollobone (Kettering) (Con): The new academies in Kettering are hugely welcomed by local residents. Can the Minister confirm that the proportion of education funding that goes into teaching pupils will go up under this Government, with a lesser proportion being spent on bureaucracy in local town halls and in his Department?

Mr Gibb: My hon. Friend raises an important point about bureaucracy in the education system. We are devoting a huge amount of resources within the Department to clamping down on bureaucracy and removing bureaucratic burdens on schools. It is a large amount of work; it involves rewriting reams of guidance. The guidance on bullying runs to something like 400 or 500 pages, and I think it is rarely read in schools. We are streamlining it and slimming it down to about 25 pages, and we are doing the same thing with all the guidance so that it becomes efficient, quick to read and of high quality. Schools will then be able to use it without having to read through reams of lever arch files emanating from the Department. We are putting a stop to that.

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Business of the House

12.42 pm

Hilary Benn (Leeds Central) (Lab): Will the Leader of the House give us the forthcoming business?

The Leader of the House of Commons (Sir George Young): The business for next week will be:

Monday 20 June—Second Reading of the Pensions Bill [Lords].

Tuesday 21 June—A motion relating to the partial recommittal of the Health and Social Care Bill, followed by remaining stages of the Scotland Bill.

Wednesday 22 June—Opposition Day [18th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.

Thursday 23 June—A motion relating to review of congenital cardiac services for children followed by a motion relating to wild animals in circuses. The subjects for these debates were nominated by the Backbench Business Committee.

The provisional business for the week commencing 27 June will include:

Monday 27 June—A debate on House of Lords reform.

Tuesday 28 June—Opposition Day [19th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.

Hilary Benn: I am grateful to the Leader of the House for that reply.

The whole House will have welcomed this week’s successful meeting of the Global Alliance for Vaccines and Immunisation, which showed why the last Government were right to prioritise the vaccination of children from a rising aid budget and why this Government are right to continue to show leadership to save children’s lives.

Will the right hon. Gentleman confirm that the current Session will end in March next year, with a Queen’s Speech before the end of that month so that it is all done before the Easter recess and pre-election purdah?

On the Health and Social Care Bill recommittal motion, will the right hon. Gentleman confirm that it will be debatable and tell us for how long? The House must have the opportunity to discuss how the Bill will be scrutinised because the Health Secretary has said that only the relevant parts of the Bill will be recommitted. That is completely unacceptable, and it will make life only more difficult for the Government in the other place where, as we know, they already have problems with time. In the case of the last two Bills to be recommitted, the whole of the Bill was sent back. When are we going to see the draft amendments? How many clauses are going to be changed? What about the knock-on effects on other clauses? The reason why the Bill is in chaos is that the Government really messed it up first time round. That is why trust is in very short supply, making it essential that, this time round, the House and all those who care about the health service have the time and scope they need to look again at the Bill in detail.

As well as reconsidering the Health and Social Care Bill, can we also have a debate on why the Prime Minister got this so catastrophically wrong in the first

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place, with staff being sacked and then re-hired at great expense? As we saw yesterday—and it was really rather embarrassing—the Prime Minister does not do his homework and he does not even know what is in his own legislation. While no one wants to take responsibility for the mess, everyone is trying to claim credit for the changes. The Lib Dems think they have saved the NHS from the Tories, which has irritated those on the Conservative Benches, while the Prime Minister thinks he has saved the NHS from his Health Secretary, who is no doubt pretty cross, too. However, the people who really count, the public, think what we have known for a very long time—that you can’t trust the Tories on the NHS.

Following the comments of the First Sea Lord this week about the effects of the Libya campaign on the Royal Navy and bearing in mind that we could have saved both time and money if we still had our Ark Royal and its Harriers, when are we going to have a statement from the Defence Secretary about looking again at the strategic defence and security review? The review has proved incapable of surviving contact with real events, and it has left this country in the extraordinary position of being an island nation that cannot put an aircraft carrier to sea.

Having heard the Government’s pathetic excuses for refusing to bring in a ban on the use of wild animals in circuses, during the course of which the House was told, wrongly, that this was because of a non-existent legal case, has the Leader of the House had any indication from Department for the Environment, Food and Rural Affairs Ministers that they plan to make a statement dumping the policy before next Thursday’s debate? If not, will the right hon. Gentleman join my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick), the hon. Members for The Wrekin (Mark Pritchard) and for Colchester (Bob Russell), me and many other Members in voting to do the right thing?

Finally, can we have a debate on weekly rubbish collections? Although it was the Secretary of State for the Environment, Food and Rural Affairs who answered Tuesday’s urgent question, we really want to hear from the Secretary of State for Communities and Local Government as we all know that this was his pet project and his great cause, so he must be very disappointed. Brimful of nostalgia for the clink of glasses of warm beer, the thwack of willow on leather and the clang of weekly bin collections, he had proclaimed that having the rubbish taken away every seven days was

“a basic right for every Englishman and woman”—

Shami Chakrabarti and Liberty, please note. Jumping heroically on a passing bin-wagon, the Communities Secretary pledged to bring back weekly collections. In fact, he has been defeated by his own Conservative councillors who, after all, have introduced more alternate weekly collections than anyone else—Conservatives like Andrew Nunn, an environment cabinet member in Suffolk, who said bluntly:

“Eric Pickles should spend less time reading the newspapers. He’s got it wrong.”

I agree, but with one exception. After all the policies that the Government have had to throw away in the last few weeks, there is one address that desperately needs to keep a weekly collection of rubbish—No. 10 Downing street, where there is even enough room for a bin lorry to do a U-turn.

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Sir George Young: I thank the right hon. Gentleman for that response. The House will note that his performances at business questions are attracting the attention of powerful friends. Last Friday, he was praised by the Daily Mail, which announced:

“Hilary Benn for Labour leader. The campaign starts here”.

After that intoxicating but unlikely endorsement, I looked up the odds on the right hon. Gentleman becoming the next Labour leader. I was disappointed to see him some way behind the pack at 33:1, but if I were a betting man, I would say it was worth a pony on the shadow Leader of the House.

I welcome what the right hon. Gentleman said about the conference on Monday. He will have noted the extra £800 million that the Government have invested in vaccination, and he will have heard the Secretary of State’s statement on Wednesday about our overall policy on aid.

The right hon. Gentleman should not believe everything that he reads in the press. The end of the Session will depend on the progress that we make with legislation. I remind him that the then Government were not telling us 10 months before March last year—in 2009—when that Session would end. According to my recollection, we did not know when it would end until March, when the Government hit the buffers.

The motion to recommit the Health and Social Care Bill would normally have been taken forthwith under the Standing Orders. We propose to make time available for the Bill to be debated, and to recommit the parts that were amended by the Government in their recent statement.

Chris Bryant (Rhondda) (Lab): They were not.

Sir George Young: I mean the parts that we propose to amend. The recommittal motion will be tabled in good time for the House to debate it on Tuesday.

As for the right hon. Gentleman’s comments on the Bill, I hope that he read what Lord Darzi said about our policy. He said:

“I certainly don’t see it as a U-turn. I see it as a continuum of reform that the health service has witnessed for the last decade under Labour and it’s moving on into the next decade very much based on the changes in the demand on the health service.”

I hope that that view will be reiterated by Opposition spokesmen as the Bill proceeds through its remaining stages.

The Prime Minister dealt with the First Sea Lord’s comments yesterday when he referred to the statement by the Chief of the Defence Staff that we had the resources to continue the exercise in Libya for as long as it took. I remind the right hon. Gentleman that his party in government deferred the conducting of a strategic defence and security review for a long time. We have conducted one, and we have no plans to revisit it.

I announced that there would be a debate on circus animals next Thursday, in Government time, and the Government will make their position clear during that debate. I remind the right hon. Gentleman that that is yet another issue on which his party in government failed to take any action, leaving us to sort it out.

I was slightly surprised when the right hon. Gentleman raised the subject of bin collection. I remember his rather humiliating U-turn on waste only two years ago

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when, as Environment Secretary, he had to back down on his own proposals. As my right hon. Friend the Secretary of State said, we are backing local authorities that want to increase the frequency and improve the quality of their bin collections, and we have abandoned Labour’s guidance to the Audit Commission which penalised local authorities that carried out weekly collections.

Philip Davies (Shipley) (Con): When can we expect a statement and a debate on sentencing? According to new assault guidelines, an assault on a police officer which involves a punch to the stomach that winds a police officer, when the criminal attempts to evade arrest and has previous convictions for public order offences, can now be punished with only a fine. That kind of soft, lily-livered approach to sentencing is driving my constituents mad, and it is time that the Government got a grip on the issue once and for all.

Sir George Young: I have some good news for my hon. Friend. The Government will shortly be introducing a legal aid and sentencing Bill, which will give him an opportunity to share his views with the House at greater length.

Vernon Coaker (Gedling) (Lab): Will the Leader of the House find time for an urgent statement enabling the Business Secretary to explain to the House why the Government are refusing to sign a United Nations convention that protects the rights of domestic workers? On the day of the announcement to that effect, the Secretary of State for Work and Pensions was supporting an inquiry into modern-day slavery. It is about time that the Government got their act together.

Sir George Young: Questions to my right hon. Friend the Business Secretary will take place on 14 July, but in the meantime I will draw my right hon. Friend’s attention to the hon. Gentleman’s question and ask him to reply to it.

Nigel Mills (Amber Valley) (Con): Will the Leader of the House find time for a statement by the Secretary of State for Transport explaining this morning’s decision to award the contract for Thameslink trains to Siemens, which will manufacture them in Germany, rather than to Bombardier, which would have manufactured them in Derby? I think that the whole House would like to understand how we reached the position of having to export those jobs to Germany.

Sir George Young: I believe I am right in saying that my right hon. Friend the Secretary of State for Transport issued a written ministerial statement today on two subjects, one of which was the award of that contract. Next Thursday, when my right hon. Friend responds to oral questions at the Dispatch Box, my hon. Friend will have an opportunity to press him, or more likely her—the Minister of State, Department for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers)—on the reasons for a particular decision to award the contract to a particular company.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): Earlier today, during questions to the Secretary of State for Culture, Olympics, Media and Sport, the future of

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Supporters Direct was raised. Since its creation 11 years ago, that organisation has been at the forefront of community involvement in football clubs, but its future is very much in doubt following the decision to rescind funding from the Football Stadia Improvement Fund. I believe that, whether one is a supporter of co-operatives, a supporter of the big society or just a football supporter, the excellent work done by Supporters Direct cannot be lost.

I understand that my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) has applied for a Westminster Hall debate on the subject. I do not know whether the Leader of the House is a football-supporting man, but I wonder if he will support my hon. Friend’s request.

Sir George Young: He is. He has supported Queen’s Park Rangers for a very long time, and welcomes its recent promotion.

I understand that during the exchange at Question Time, the Minister for Sport and the Olympics, my hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson) was very supportive indeed of the hon. Gentleman’s proposition. I hope that it will be pursued further in Westminster Hall, and I will ask my hon. Friend whether he can add to what he said earlier.

Karen Bradley (Staffordshire Moorlands) (Con): Many of my constituents have contacted me because they are concerned about the disruptive effect that industrial action by teachers will have on their children’s education. May we have a debate on that important issue?

Sir George Young: I understand my hon. Friend’s concern, which I am sure is shared by many Members on both sides of the House. I think it regrettable that two teachers’ unions have decided to take industrial action at a time when the Government are still negotiating with them about the future of pensions. That will be bad news for the children, and bad news for parents who go out to work.

Responsibility for contingency planning rests with individual employers, and at this stage the Government have no plans to change the legislation, but I will bring my hon. Friend’s concern to the attention of the Secretary of State for Education, and will see whether there is any further action that he can take.

Mr Andrew Love (Edmonton) (Lab/Co-op): In his Mansion House speech last night, as well as pre-empting the final report of the Independent Commission on Banking, the Chancellor announced the sale of Northern Rock to the highest bidder. I do not know whether that will be considered in the statement that will follow business questions, but, if not, may I urge the Leader of the House to arrange a debate, or indeed a statement, on the issue? That would enable the House to be told why, in this instance, the Government have chosen not to implement the pledge in the coalition agreement

“to foster diversity in financial services, promote mutuals and create a more competitive banking industry.”

Sir George Young: Let me respond to the direct question posed by the hon. Gentleman by saying that whether a question about Northern Rock would be in

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order in the statement that is to follow would be a matter for you, Mr Speaker. I see that you are reflecting on it as we speak.

It has always been the Government’s policy to return Northern Rock to the private sector, and that is what my right hon. Friend the Chancellor announced yesterday evening.

Mr Andrew Turner (Isle of Wight) (Con): The London Organising Committee of the Olympic Games and Paralympic Games appears to believe that the London Olympic Games and Paralympic Games Act 2006 prevents other people from even mentioning next year as a date. It says that the term “2012” is now widely used in the United Kingdom as a reference to the games. My constituent Julie Benson, founder of the Great Exhibition Company, is being threatened by that. She said that her exhibition next year

“will promote the best of Great Britain to the rest of the world —it’s not about a sporting event in London.'”

Can the Leader of the House reassure me—and Julie Benson, and printers of diaries and calendars everywhere—that the Act does not confer on LOCOG exclusive rights to any number or date, and that Members will not have to rely on the privileges of their membership of the House to talk about the date next year?

Mr Speaker: I am sure the ingenuity of the Leader of the House is such that he will fashion a way to relate his answer to the business of next week.

Sir George Young: Or, indeed, next year.

I endorse my hon. Friend’s general proposition: that there is no monopoly on 2012, and we are at liberty to refer to it. However, I would hesitate before engaging in what appears to be a legal dispute between two companies, as I believe that would be better sorted out by the courts than by Ministers.

Chris Bryant (Rhondda) (Lab): May we have a debate on the fiduciary responsibility of members of boards of directors? Both UK and United States law makes it clear that directors are bound to

“exercise reasonable care, skill and diligence”

in ensuring companies act lawfully, yet this clearly has not happened in relation to News Corporation, the owner of the News of the World, where criminality has gone on extensively. That now leaves people such as José Maria Aznar, Andrew Knight, Kenneth Cowley, Rod Eddington, Thomas Perkins and Stanley Shuman in real legal peril.

Sir George Young: I believe that the hon. Gentleman has just asserted that somebody had acted unlawfully. If that is the case, it is a matter for the police.

Nick de Bois (Enfield North) (Con): May we have a debate on the ownership and effectiveness of local and regional newspapers—including mine, T he Enfield Advertiser and the Enfield Independent—since many editors throughout the country feel they are unable to scrutinise local public bodies? While it is not our role to run newspapers, I believe that, given the pressures on the industry, we should debate the implications of this serious matter.

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Sir George Young: I would welcome a debate in Westminster Hall, or initiated by the Backbench Business Committee, on the health of local newspapers, in which we all have an interest. My hon. Friend’s question did not make it clear why they were impeded from reporting on certain matters, but if he writes to me, I will see what I can do, in conjunction with my right hon. Friend the Culture Secretary.

Mr Denis MacShane (Rotherham) (Lab): May we have an early debate on nannies? I think the Leader of the House is now beyond the nanny-using stage of his life, but for many of us he is a kind of generous nanny within the House. However, as I speak, in Geneva, British representatives, instructed by the Prime Minister, are seeking to vote against a vital International Labour Organisation convention to protect domestic workers, and we are the only democracy so to do. This is not a matter for Department for Business, Innovation and Skills questions; it goes to the heart of this Government and, as with the EU trafficking directive, their contempt for international conventions to protect the most weak and vulnerable in our nation.

Sir George Young: We did, of course, sign up to the EU trafficking convention. I think the right hon. Gentleman’s question is the same as that asked a few moments ago by his party colleague, the hon. Member for Gedling (Vernon Coaker), in answer to which I undertook to raise the concerns with my right hon. Friend the Business Secretary, who has responsibility for these matters, and then to communicate that answer to the hon. Gentleman. I will send that response to the right hon. Gentleman as well.

Gavin Williamson (South Staffordshire) (Con): Will my right hon. Friend support me in getting Ministers to answer questions on the dreadful treatment of my constituent, Julie Roberts? She has worked for Royal Mail for 21 years in the villages of Seisdon and Trysull. She recently had her mail van stolen. She immediately jumped on to its bonnet and held on for a mile while the thief tried to make a getaway. She was able to get the van stopped, and regain control of the vehicle. How does Royal Mail treat this lady? It suspends her, and she is under threat of losing her job. People in South Staffordshire want her back in work and Royal Mail to show some common sense and common decency.

Mr Speaker: I am unsure whether that is a request for a statement or a debate.

Sir George Young: Julie sounds like a courageous lady who was doing her best to defend Royal Mail property, and I will certainly draw my hon. Friend’s remarks to the attention of the Royal Mail chairman, and make sure this lady is recognised, if appropriate, rather than penalised.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): It used to be the case that after the G8 summit the Prime Minister would make an oral statement to the House, which would allow us to question him on what he had done on the nation’s behalf, but we appear not to be having such a statement this year. Will the Leader of the House ensure that we reinstate this practice in future years, and not just for the G8 summit coming up shortly in the year that cannot be mentioned, but for

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other events such as the G20 summit, so we can properly hold the Government to account on what they do on our behalf in the international arena?

Sir George Young: My right hon. Friend the Prime Minister has made more statements from the Dispatch Box than his predecessor and has reported after most major conferences, and he is more than happy to hold himself to account. I will make some inquiries, including about the particular point the hon. Gentleman mentioned, but my right hon. Friend is certainly more than prepared to come to the House and answer questions after major international conferences.

Mr David Nuttall (Bury North) (Con): May we have a statement on the continuing debt crisis in the eurozone and its effect on our International Monetary Fund contributions?

Sir George Young: I think my hon. Friend might be referring to a wholly misleading article that appeared in The Sun this morning. A resolution referring to our contribution to the IMF is before the House, and it will go upstairs to a Committee. The move to increase the IMF’s resources was first agreed by the G20 in April 2009, which was before any eurozone support, and I am sure the proposition will receive the attention it deserves from the House.

Joan Walley (Stoke-on-Trent North) (Lab): Further to today’s written statement from the Department for Environment, Food and Rural Affairs saying that the Government will extend buying standards for food and catering across Whitehall, may we have a debate on such regulation? We need a national framework that applies to all public sector bodies, and it is wrong for hospitals to be excluded, particularly when we have made so much progress in the fish campaign.

Sir George Young: I commend the campaign. The next DEFRA questions will take place a fortnight from today, but in the meantime I will see if I can get an answer to the hon. Lady’s point.

David Rutley (Macclesfield) (Con): Community groups play a vital role in helping to regenerate town centres and in attracting people to them by holding events such as the Barnaby festival, which will take place this weekend, and to which all Members are welcome. Will my right hon. Friend consider holding a debate on the important role community groups play in the regeneration of town centres, and will he join me in wishing the Barnaby festival every success this weekend?

Sir George Young: I am sorry that I cannot attend the Barnaby festival, but I am sure my hon. Friend will be present. This is an example of the big society in action. It is an opportunity for the community to come together and celebrate its history, and to promote Barnaby. I hope that the Barnaby festival will create opportunities for further regeneration and renewal, and I wish it every success this weekend.

Kevin Brennan (Cardiff West) (Lab): On recommittal of the Health and Social Care Bill, why should not all Back-Bench and Front-Bench Members of any party have as much opportunity as the Government to table amendments, and to any part of the Bill they choose?

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Sir George Young: They will have exactly that opportunity when the Bill reaches its Report stage; any Member will be able to seek to amend any part of the Bill when it comes back to the House on Report.

Mr Peter Bone (Wellingborough) (Con): Saturday marks the 196th anniversary of the battle of Waterloo. May we have a statement from the Leader of the House on what plans are in place to mark the day when Britain, led by a future Conservative Prime Minister, defeated the French and ended their domination of Europe—and is there any likelihood of history repeating itself?

Sir George Young: One of my ancestors, Admiral Sir George Young, was a contemporary of Nelson, so I have a particular interest in my hon. Friend’s question. I will refer the matter to my right hon. Friend the Secretary of State for Defence, in order to find out whether there are any proposals to commemorate this important anniversary.

Ian Mearns (Gateshead) (Lab): Will the Leader of the House consider finding time for a debate on the proposed sale of Northern Rock? I understand that the Treasury has this morning told reporters that retention of the Northern Rock Foundation, which does important big society work in the north-east of England, will not be a condition of the sale, which is a great concern to many of my constituents, and to people across the north-east of England.

Sir George Young: I have had a very quick conversation with my hon. Friend the Financial Secretary to the Treasury, who is sitting beside me, and I understand that he has the answer to the questions the hon. Gentleman has just posed somewhere in his red folder.

Angie Bray (Ealing Central and Acton) (Con): Later this afternoon, a plaque is being unveiled at the excellent Brentham club in Ealing to commemorate Fred Perry, who started his tennis career there. Does the Leader of the House agree that we want more of our young tennis players to get into the top rankings and that it might be helpful to spend some time in a debate working out how we can help to achieve that?

Sir George Young: I have happy memories of the Brentham club, which used to be in my Ealing constituency, and I am delighted to hear of the event commemorating Fred Perry. I also have happy memories of the Ealing lawn tennis club, which I hope is also surviving. I would welcome a debate on sport and how we might do more to encourage young people, not only in tennis, but in other activities. I very much hope that 2012—I hope I may mention that date without getting into serious trouble—will provide an opportunity to raise the profile of sport and encourage more young people to get involved.

Diana Johnson (Kingston upon Hull North) (Lab): May we have a debate on the decision that the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) took this week to increase the Humber bridge toll to £3 per car per crossing, which is now the most expensive in Britain? The decision was taken without waiting for the Treasury’s review on

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bridge tolls. Such a debate would allow us to discuss what this will mean for the regeneration of the Humber bridge area.

Sir George Young: The hon. Lady will know that in a week’s time that Minister will be at this Dispatch Box, ready, willing and able to answer questions about the Humber bridge toll.

James Morris (Halesowen and Rowley Regis) (Con): May we have a debate about unemployment and jobs growth? Yesterday’s jobs figures showed a substantial increase in private sector jobs growth in the last quarter, which is of vital importance to my constituency, as it needs to get more, sustainable private sector jobs.

Sir George Young: My hon. Friend reminds the House of the very encouraging set of figures we saw yesterday, which showed that there were an extra 500,000 jobs in the private sector, more than counterbalancing any decline in the number of public sector jobs. Particularly good news was the decline in youth unemployment—that is now at a lower level than we inherited from the outgoing Government.

Mr Philip Hollobone (Kettering) (Con): Given that the demand for Adjournment debates in Westminster Hall regularly outstrips supply, could we have sittings in Westminster Hall on Monday afternoons and Thursday mornings?

Sir George Young: That is an ingenious suggestion. As my hon. Friend will know, the Procedure Committee is examining the calendar. His proposition would certainly be within the terms of reference and I am sure that he has given evidence along those lines.

Alun Cairns (Vale of Glamorgan) (Con): The Chancellor has talked about the need for a cultural change in banking regulation, given the failed system that was set up and led by the previous Administration. What plans does the Leader of the House have to allow a full debate on these issues, given that a White Paper has been published?

Sir George Young: That debate will be initiated in a few moments’ time by my hon. Friend the Financial Secretary to the Treasury, who will make a statement. My hon. Friend the Member for Vale of Glamorgan (Alun Cairns) is right to say that we need to reform the financial services regime, which manifestly failed, if the City is to continue to be a centre of wealth, enterprise and encouraging employment. I hope that he will remain in his place for a few minutes longer, so that he can get a more authoritative reply from the Financial Secretary.

Harriett Baldwin (West Worcestershire) (Con): As this is carers week, may we have a debate on the support for carers? I understand that the chief executive of Carers UK has welcomed the fact that the carer’s allowance will remain non-means-tested outside the universal credit. In that debate, we could discuss the extensive additional support that the Government are putting into respite care for carers.

Sir George Young: My hon. Friend rightly reminds us that this is carers week. Tomorrow, I will be at the Princess Royal Trust for Carers’ Andover branch, praising

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those carers, who save this country a huge sum. My hon. Friend is also right to say that we have found additional resources for respite care for parents of disabled children and also for others via the NHS. We have also ring-fenced the carer’s allowance, so that it is not subsumed within universal credit.

Robert Halfon (Harlow) (Con): Will the Leader of the House find time for a debate on harsh practice by the Royal Bank of Scotland? Louisa Allen is the latest of my constituents to be treated very toughly by RBS, which is risking an unnecessary court case and threatening her with bankruptcy even though she has the funds to pay for a reasonable settlement. Will my right hon. Friend speak to the chairman of RBS to see what can be done?

Sir George Young: I will certainly convey what my hon. Friend has just said to the chairman of RBS. My hon. Friend will know that under Project Merlin a clear commitment was given to increase bank lending. Although the banks are on target to hit the overall figure of some £190 billion, they are falling a bit behind on the small and medium-sized enterprises side of things. We made it clear that we reserve the right to return to the issue and take further measures should that be necessary. Not only will I pursue the matter with RBS, but the Financial Secretary has heard the question.

Bob Blackman (Harrow East) (Con): Can my right hon. Friend find time for a debate on energy policy and the performance of the regulator? Like my constituents, I am fed up to the back teeth of a situation where the retail price of gas increases when the wholesale price does, but never comes down when the wholesale price drops. We clearly need urgent action on this because it is combating our work on our inflation targets.

Sir George Young: I understand my hon. Friend’s concern that retail prices go up faster than they come down. Hon. Members will have an opportunity to question Ministers from the Department of Energy and Climate Change on 7 July, so this question can be raised then. I know that this is concerning many hon. Members as we read about fuel prices increasing. We have introduced a number of measures to help, including the green deal, which is going through the House.

Mr Mark Spencer (Sherwood) (Con): The community of Ollerton has for a number of years been seeking to redevelop its former miners’ welfare building. The project is being held up by the siting of a communications mast, which is the property of a company called Cornerstone, a subsidiary of Vodafone. Will the Leader of the House find time for a debate to discuss the power of communications companies to hold communities to ransom over projects such as this?

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Sir George Young: I would be misleading my hon. Friend if I said that I could find time for such a debate, but it does sound to be a worthwhile subject for an Adjournment debate. I am sure that other Members of Parliament have similar concerns to those that he has outlined. I will draw his concerns to the attention of the Minister with responsibility for planning and Ministers at the Department for Culture, Media and Sport.

Andrew Bridgen (North West Leicestershire) (Con): May we have a debate on the progress being made by the Government on the essential rebalancing of, and restoring of health to, our economy? Will my right hon. Friend ensure that Ministers have time in that debate to address the warnings issued last night by the Governor of the Bank of England that changing the mix of tight fiscal and loose monetary policy would “make little sense”?

Sir George Young: I entirely endorse what my hon. Friend has said and, indeed, what the Governor of the Bank of England said last night, which makes it all the more extraordinary that we heard a speech this morning demanding yet further tax cuts that are wholly underfunded.

Andrew Stephenson (Pendle) (Con): Will the Leader of the House grant us a debate on the Independent Commission on Banking report and the specific proposal for more competition in the retail banking sector, so that healthy competition can be a powerful defender of the interest of consumers?

Sir George Young: As I said to one of my colleagues a few moments ago, there will be an opportunity after the Financial Secretary has made a statement for questions about our proposals to maintain the City of London as a thriving centre of enterprise that concentrates on serving its customers. There will be an opportunity to question the Financial Secretary on the ICB’s proposals.

Brandon Lewis (Great Yarmouth) (Con): Will my right hon. Friend find time for an urgent debate on trade union reform laws, in order to give this House a chance to discuss the appalling way in which unions such as the Public and Commercial Services Union are threatening this country with strike action? That is happening even though that union had a turnout of only just over 32% in its ballot.

Sir George Young: Indeed, under 20% of that union’s members actually voted for industrial action. So far, we have had a good record on days lost through industrial action—the level has been one of the lowest. As of now, we have no plans to reform trade union legislation, but if we see a wave of irresponsible strikes, we would want to re-examine this again very carefully.

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Regulatory and Banking Reform

1.18 pm

The Financial Secretary to the Treasury (Mr Mark Hoban): With permission, Mr Deputy Speaker, I should like to make a statement.

It is now well known that the tripartite system set up by the last Government failed spectacularly in its mission to maintain stability. The decision to divide responsibility for assessing systemic financial risks between three institutions meant that, in reality, no one took responsibility. The crisis dramatically exposed that flaw and cost the taxpayer a vast amount of money. We cannot allow another crisis such as the one we have just witnessed. Shortly after taking office, this Government set in train a consultation on reforming our system of financial regulation. Today, after two extensive rounds of consultation, I am presenting to the House a White Paper, including draft legislation, setting out the blueprint for a completely new system of regulation. Let me summarise the main proposals.

A permanent Financial Policy Committee will be established within the Bank of England. Its job will be to monitor overall risks in the financial system, to identify bubbles as they develop, to spot dangerous inter-connections and to stop excessive levels of leverage before it is too late. It has already started operating on an interim basis and is having its first formal meeting today. Subject to legislative process, the permanent body will be in place by the end of next year.

We will abolish the Financial Services Authority in its current form and transfer its significant prudential functions to a new Prudential Regulatory Authority that will sit in the Bank of England. The Prudential Regulatory Authority will focus on microprudential regulation and will bring judgment to the vital task of regulating the soundness of individual firms that manage risk on their balance sheet, particularly banks and insurance companies. We recognise, of course, that such firms engage in very different businesses, which is why we are proposing to provide the PRA with a specific statutory objective for its insurance responsibilities.

We are also bringing in a new approach to protecting consumers. A financial conduct authority will oversee the conduct of financial services firms, the operation of markets and the protection of consumers, with new powers to ban the sale of toxic products. I can confirm that as an integral part of its mission to secure better outcomes for consumers and investors, the authority will also have a new duty to promote competition. Judgment, discretion and proactive intervention will be the hallmark of our new regulators.

We are bringing forward the draft Bill for pre-legislative scrutiny, for which a Joint Committee of both Houses will shortly be convened. We are seeking valuable input from Members on both sides of the House as it is in all our interests to get this right.

Last week, we also established under Sir John Vickers an Independent Commission on Banking to resolve the debate about the structure of the banking sector in the UK. I am sure that the whole House will join me in paying tribute to Sir John and his fellow commissioners for the excellent job they are doing. The commission’s interim report made two particularly important proposals: bail-in, not bail-out, so that private investors, not taxpayers,

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bear the losses when things go wrong; and a ring fence around better capitalised high street banks to make them safer and protect their vital services to the economy if things go wrong. I can confirm that the Government agree in principle with both proposals.

Of course, we will await the commission’s final report, but I can tell the House that any reforms will need to meet the following principles: all banks should be allowed to fail safely without affecting vital banking services, without imposing costs on the taxpayer, through reforms that are applicable across our whole banking industry and in a manner consistent with EU and international law. I can also confirm today that we welcome the commission’s recommendations on increasing competition in retail banking and we are working closely with it to achieve this aim.

We are also taking the first steps towards normalising the Government’s involvement in the financial sector. One legacy of the crisis is that today’s taxpayers have a direct interest in several banks through large-scale guarantees and shareholdings. We do not believe the Government should be a long-term investor in financial institutions. It will take some time—possibly several years—before we can make a complete exit from our investments in the banks, but today I can confirm the start of that process.

On the advice of UK Financial Investments, we have decided to launch a sale process for Northern Rock. This follows extensive work over the past three months to consider potential options for returning Northern Rock to the private sector while generating the best possible taxpayer value. The sale process will be open and transparent and in line with state aid rules. I have already written to the chair of the all-party group on building societies and financial mutuals, my hon. Friend the Member for Cardiff North (Jonathan Evans), to reassure him that any interested parties can bid for it, including mutuals. This reaffirms the Government’s commitment actively to promote the mutuals sector. That does not mean that other options to return Northern Rock to the private sector have been ruled out, but I believe that at this point in time a sale process is the most promising.

I also want to make the House aware that following an application by the Bank of England to the High Court today, Southsea Mortgage and Investment Company Ltd, a very small bank, has been placed into the bank insolvency procedure. That follows a decision by the FSA that Southsea no longer satisfied its threshold conditions for operating as a deposit taker. The Financial Services Compensation Scheme has been triggered and eligible depositors with balances up to the limit of £85,000 are safeguarded. Eligible depositors with amounts in excess of the insured limit of £85,000 may be entitled to receive a share of their savings above this limit as part of the insolvency process.

Finally, I want to update the House on the ongoing negotiations on international financial regulation. When I was in Brussels yesterday, my message was clear. We must learn the lessons of the crisis and create the foundations for stable and sustainable economic growth without fragmenting global markets. That is why global standards are in our national interest. Much of the debate has focused on the implementation of Basel III and we have been busy making the case for implementing it in full right around the world, including here in

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Europe. Last week’s International Monetary Fund assessment supported our arguments for minimum standards here in the EU, with discretion for national authorities to increase them where necessary.

When the coalition Government came into office, questions were being asked about the future of banking and regulation but they had not been answered. It has been our job to resolve them. Our goal should be a new settlement between our financial system and the British people; a new settlement where the banks support the people, instead of the people bailing out the banks. The statement today sets out the progress we have made towards building this new settlement and the actions we are taking to complete it and I commend the statement to the House.

Chris Leslie (Nottingham East) (Lab/Co-op): What utter contempt the Government are showing to Parliament by announcing these major proposals first to the bankers in the City yesterday and only today to elected representatives. Time and time again, Ministers give policy speeches outside this place and the House of Commons is merely an afterthought. Why is the Chancellor not here to make these announcements today?

That total disregard for the democratic process is reflected in the draft legislation, which hands vast new powers over the lives of all our constituents to the unelected Bank of England and leaves a gaping accountability deficit, with no mention of parliamentary accountability in all its 408 pages. Why are Ministers still so sketchy about the detail of these new powers for the Bank of England, with nothing on the face of the Bill, and is it true that there may be no further clarity on the toolkit for the Financial Policy Committee until next year?

Why is there still no clarity about the crisis management memorandum? Why have the Government not yet published the consolidated Financial Services and Markets Act 2000 draft for Parliament to see? Why is there no clarity about where consumer credit regulation will fit into this alphabet spaghetti of new quangos? Why are they still fumbling around with the composition of the Financial Policy Committee? Why have they failed to negotiate the flexibility needed from the European Union and the European banking regulators to ensure that all these new UK structures are allowed discretion to use the macro-prudential tools in the first place?

There will be significant concern, especially in the Portsmouth area, about the news on the Southsea mortgage bank—Southsea is perhaps a name that resonates in other ways—but we will need to watch developments closely.

Although there are clear inadequacies in the proposals published today, we will consider them carefully, and there are areas where we agree with the Government. The Chancellor is right that this was not a financial crisis made in Britain. It was caused by a failure in the banking industry in every major financial centre and a global failure in banking regulation. Families and businesses worldwide have paid a heavy price for the irresponsible actions of the banks, but Governments and regulators failed to see this coming and we in the Opposition must accept our part in that. Thankfully, however, we ignored the advice of the Chancellor, who called for lighter regulation and opposed the previous Labour Government’s decisions to step in to prevent

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financial catastrophe by nationalising Northern Rock and Royal Bank of Scotland and by cutting VAT to get the recovery moving.

Today’s announcement vindicates the rescue measures taken by my right hon. Friends at the time and shows that taxpayers always had a good chance of recouping the lion’s share of the sums involved. But on Northern Rock, can the Minister explain the haste in the sale? We hope he is not playing politics and rushing for a fire sale when a measured approach to maximising value and diversifying the banking system would be better. Why has the Treasury failed to consider mutualising Northern Rock and is the Minister really content to see it return to business as usual as yet another plc without exploring the benefits that a new building society might bring?

There are three tests by which the Chancellor and the Minister should be judged. First, are taxpayers and bank customers adequately protected from future bail- outs by the so-called firewalls in the bank structures? How can the Chancellor say he agrees with the conclusions of the Vickers Banking Commission before it has even published its final report?

Secondly, has the Minister secured sufficient international agreement on regulation and bank restructuring to secure a workable system protecting jobs here in Britain? Sadly, the Treasury has already shown a woeful lack of leadership internationally on pay transparency and bankers’ bonuses, which, by the way, should be taxed to pay for jobs and businesses here at home.

Thirdly, will we end up with a banking system that delivers the goods for our economy as a whole? Are small businesses getting the bank loans they need and why is Project Merlin already unravelling with confusion between the Department for Business, Innovation and Skills and the Treasury over so-called “stretch” targets, or capacity targets, how they are going to be enforced and whether the banks are really participating wholeheartedly? We need a diverse banking system, which should include a strong mutual sector—something that was promised in the coalition agreement but that the Government seem uninterested in delivering. We need clear and comprehensible regulatory structures with far clearer lines of accountability, and we need a Government who put customers, taxpayers and the real economy first.

Mr Hoban: That response clearly demonstrated the emptiness of the Opposition’s thoughts on these matters. They have had a year to consider whether these reforms are in the interests of strengthening financial regulation and whether they will strengthen the banking system, but here they are today, a year later, with no idea on the best way to proceed. That is not surprising given that the shadow Chancellor was a champion of light-touch regulation when he was the City Minister and he presented that argument not just in London but across the world. It is time for the Opposition to make their mind up: are they prepared to acknowledge the mistakes of the past and accept the tougher regulatory regime we have proposed, or are they going to cling to the legacy and wreckage of the previous Government’s financial regulation system?

Let me deal with one or two of the points that the hon. Gentleman raised. It has been clear from the outset that one of the roles of the interim Financial Policy Committee, which is meeting formally for the first time this afternoon, is to provide advice to the

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Treasury on the macro-prudential tools that it believes would be appropriate for the FPC. Until the interim FPC has concluded its work it is very difficult to give the House information on that, but what we are doing in the Bill is making sure there is a process in place to ensure there is consultation and that there is discussion in the House. Those tools will not be given to the Bank until we have gone through a legislative process in this place.

The hon. Gentleman raised the issue of Northern Rock. As someone who was born and brought up the north-east, I understand his concern and the importance of Northern Rock to the regional economy. We have, as part of our review, considered remutualisation and our financial adviser Deutsche Bank is reporting to UK Financial Investments on Northern Rock. The advice is to proceed in the first instance with a sale option and the option of remutualisation has been explored with Co-operatives UK and the Building Societies Association, which commissioned the report by Professor Michie. The final decision will be judged against such other options as an initial public offering or a stand-alone remutualisation, but I remind the Opposition that it is important to secure taxpayers’ interests, as we have invested £1.4 billion in Northern Rock.

On the Independent Commission on Banking, we have indicated that we would support the proposal, but we have said that we want to see the final proposal that Sir John Vickers makes. We have dealt with an issue that the previous Government failed to tackle. They closed down the topic of whether there were some structural issues in the UK banking sector that put taxpayers at risk. They were not prepared to confront that debate, but this Government have been prepared to do that and to take some serious and difficult decisions on that matter.

On the issue of bank lending, it is all very well the hon. Gentleman preaching, but the previous Government did not in any way attempt to get the big banks together to talk about increasing lending to small businesses. As the banking sector and the economy deleverage, it is important that those businesses seeking finance have that opportunity. That is why we secured commitments from the banks, and they are held to account on the published targets that were announced earlier this year. The package of measures we have announced demonstrates the progress we are making towards a new settlement on financial regulation and banking, and it is a pity that the Opposition are not prepared to face up to their responsibilities and take part in this debate.

Mr Peter Bone (Wellingborough) (Con): I thought that the shadow Minister let the Government off far too lightly regarding Parliament. This place should hear new policy from the Government first. Yesterday, this was published by the BBC first and was then announced at Mansion House. I am afraid that the Government have failed on this occasion. Will the Minister please publish the media grid?

Mr Hoban: I would just point out to my hon. Friend that last night the Chancellor did not read out the White Paper—the blueprint for reform that we have before us today. That is the centrepiece of today’s

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announcement. We have engaged fully with Parliament on this and he will be aware that what we are doing is starting a process of pre-legislative scrutiny to ensure that Members across the House can take part in debate on this. Throughout this whole process, we have sought to keep Parliament informed of the actions we are taking and to ensure that Parliament has a chance to scrutinise the decisions that the Government have made.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): Northern Rock is headquartered in my constituency and my predecessor MP, Jim Cousins, played an important role in saving the bank when the Conservative party had no understanding of the crisis and would have let it go to the wall. Could the Minister explain how the auction will be structured so as to promote Northern Rock’s mutualisation, which he says he wishes to see? Could he also say what guarantees he will offer on the name, headquarters, jobs and community contribution of Northern Rock?

Mr Hoban: The hon. Lady raises some important points about how a potential bidder would seek to maintain employment in the north-east, how they would use the Northern Rock name and how the headquarters would be structured. That is a case that the bidders will need to make in putting together their bid. I would encourage all those who have an interest in bidding for Northern Rock to engage with the people of the north-east and present to them why they believe that their deal would secure the best future for Northern Rock and its employees.

Sajid Javid (Bromsgrove) (Con): Drawing on my 19 years as a banker—[ Interruption. ] I was far more popular then than I am now. Drawing on that experience, may I say that the Minister has rightly identified some deep structural problems with the UK banking system? Although over the coming weeks and months he will hear some howls of protest from certain sections of the UK banking community, may I reassure him that the principles he has outlined today will lead to a safer and more stable UK banking system?

Mr Hoban: I am grateful to my hon. Friend for his support. I am not quite sure at times which is the more popular profession, MP or banker, but he has experience of both. He is absolutely right that we need to stick to our course on this. There are some important issues that we need to tackle to make sure that the banking system is safer, to improve the regulatory structure and to ensure that the style of regulation is much more interventionist and proactive than in the past. That will doubtless cause some institutions some difficulty, but we have to recognise that it is in the long-term interests of the stability and sustainability of our economy for there to be better regulation of the banking sector and the financial services sector more broadly.

Mr Andrew Love (Edmonton) (Lab/Co-op): The Government set up the Independent Commission on Banking last year. The commission produced its interim findings in June and its final recommendations will not come out until September, but the Chancellor yesterday in his Mansion house speech and the Financial Secretary today in this Chamber have pre-empted two of those decisions, although it was made clear by the commission

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that it had not reached its final conclusions. Do not the Government owe an apology to members of the commission of inquiry?

Mr Hoban: Is that it? I really did wonder. The hon. Gentleman has played an important role in the Treasury Committee in challenging both this Government and the previous Government and holding them to account on banking reform and I should have thought he would welcome the fact that we are taking action to strengthen regulation of the banking system and to make sure that our banks are more secure. It would have been great if he had supported those measures.

Mr Brian Binley (Northampton South) (Con): I welcome the Minister’s statement, but may I remind him that the reorganisation of the regulators or, indeed, of the banking structure will do little to stimulate demand quickly? Mortgages were down 9% in April on the same period last year and other sectors are seriously under pressure. Will the Government think more seriously about stimulating demand?

Mr Hoban: My hon. Friend makes an important point and one reason why it was important to reach agreement with the banks on Project Merlin was to send a clear signal to businesses that there was credit available to viable businesses, as well as encouraging businesses to come forward to banks with applications for loans. Also important is the work that the British Bankers Association taskforce is doing to commission an independent survey to look at the relationship between banks and their customers. One concern is the amount of discouraged demand in the system and I believe that by looking very carefully at the relationship between banks and their customers, we can see whether banks are putting off businesses from making those applications.

Ian Mearns (Gateshead) (Lab): I listened with care to the Minister’s statement, but he has not mentioned the Northern Rock Foundation, which has disbursed millions to deserving causes in the north-east over several years. That disbursement is about 1% of profits, yet Treasury officials told a reporter from Newcastle’s Evening Chroniclethis morning that the retention of the Northern Rock Foundation will not be a condition of sale. How will the big society survive in a region such as the north-east, let along thrive, without such a guarantee?

Mr Hoban: The hon. Gentleman raises an important point, and I am pleased that he gave prior notice during business questions. We all recognise, particularly those of us with strong roots in the north-east, the important work that the Northern Rock Foundation has done not only in the north-east, but in Cumbria. An agreement was reached that Northern Rock would continue to contribute 1% of its profits to the foundation between now and December 2012, but I am sure that any bidder looking for support from the north-east will think very clearly about the role that the foundation will play in future.

Mr Mike Hancock (Portsmouth South) (LD): Will the Secretary of State give an assurance to the House and to the country that the sell-off of Northern Rock will not proceed unless there is absolute certainty that every penny of taxpayers’ money that was put into it

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will be recouped, plus interest, and that the proposed transformation of the banking system will begin to give people some trust in the system again?

Mr Hoban: My hon. Friend makes two important points. In the process of selling Northern Rock and returning it to the private sector, we are seeking to get the best possible deal for the taxpayer, given the investment we have put in so far. He is absolutely right that one of the challenges is to restore trust and confidence in the banking system, which has taken a blow in recent years for a range of reasons, including the mis-selling of payment protection insurance and the financial crisis itself. There is a big challenge for banks. The best way that they can establish trust and confidence is by demonstrating to the people of this country that they are doing what they should be doing, which is helping families and businesses realise their full potential by ensuring that credit is flowing to our businesses and that our constituents have opportunities to buy their own homes.

Mr Kevan Jones (North Durham) (Lab): The Minister, who knows the north-east very well, will be aware that when Northern Rock was a building society it was a highly respected institution, not only because of its prudent lending, but because it was the first choice for many small savers. Although he reaffirmed in his statement the Government’s commitment to mutualisation, will he not be straight with the people of the north-east and say quite clearly that mutualisation is not an option and that Northern Rock will be privatised, as was spun out in the newspapers this morning?

Mr Hoban: As I said earlier, re-mutualisation is an option. The advice we have received is to proceed with the sale process, which could be to a proprietary business or another mutual. Once that process is under way, we will be able to compare that outcome with the other two possible outcomes, which are an initial public offering or a stand-alone re-mutualisation. I am keen that United Kingdom Financial Investments engages with this, as it has done already, to see whether that is a viable option.

David Rutley (Macclesfield) (Con): I welcome the Chancellor’s move to put an end to the failed tripartite model. What steps will be put in place to enhance the working relationship between the Treasury and the Bank of England, given the Bank’s enhanced role?

Mr Hoban: My hon. Friend makes an important point, and one that the hon. Member for Nottingham East (Chris Leslie) noted in his remarks. It is absolutely vital that the Bank has a good and robust relationship not only with the Treasury, but with this House. I think that we all agree that the relationship between the Treasury Committee and the Monetary Policy Committee, for example, is one of the most transparent between any central bank and any legislature across the world. We want similar standards of transparency and openness to apply in the relationship between the FPC and the House.

The White Paper sets out how the relationship between the Treasury and the Bank will be strengthened and how the Governor will meet the Chancellor to discuss the outcome of the financial stability review. We are also in the process of developing a crisis memorandum

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of understanding to ensure that the proper channels of communication are open between the Treasury and the Government. That is a much better set of arrangements that will ensure that the House is kept informed and that we can hold the Bank to account for its new responsibilities.

Mr Iain Wright (Hartlepool) (Lab): Is there not an inherent contradiction in Government policy? On the one hand there is stricter ring-fencing of banks’ capital reserves, and on the other there are the Business Secretary’s proposals, via Project Merlin, for banks to lend more to small businesses. Who will win this battle of economic policy—the Chancellor or the Business Secretary?

Mr Hoban: There is no dispute between the two. It is very clear that we need banks to hold more capital and, based on the work done at Basel III on the implementation of the higher level of capital, that should not restrict the amount of credit available. Yes, we need to see banks deleveraging and reducing the size of their balance sheets, but that should not be at the cost of businesses in our constituencies and across the country that need capital in order to grow and expand. Banks should be reducing their lending to each other, rather than reducing the exposure to businesses in this country.

Mrs Anne Main (St Albans) (Con): I welcome the Financial Conduct Authority if it genuinely gives consumers greater protection. Under the current regulations, a constituent of mine, Mr Joseph Choonos, was pressured into taking out a Barclays loan in the most inappropriate way by a course provider, which then dumped the course. Barclays is now pursuing him dreadfully for the loan, which he has no way of paying back. He has no way of having a good dialogue with Barclays. If the proposals help vulnerable consumers in any way, I will be truly grateful.

Mr Hoban: I cannot comment on the case my hon. Friend raises, but we have corresponded about it. We need to see better outcomes for consumers of retail financial services. As she may be aware, we are also consulting on the future regulation of consumer credit and will announce our response to the consultation proposals shortly. One of the challenges we face is the disjointed regulation of consumer financial services. Credit, in the situation she raises, is regulated by the Office of Fair Trading, and other aspects of financial services are currently regulated by the Financial Services Authority and, in future, the Financial Conduct Authority. Whatever body is the regulator, we need to see better outcomes for our consumers, which will help to restore the trust in regulation that we all recognise is so vital.

Stella Creasy (Walthamstow) (Lab/Co-op): Further to that point about the powers of the Financial Conduct Authority, will the Minister clarify whether it will have oversight of the consumer credit market, particularly the high-cost credit market, which is a source of concern for many Opposition Members? Perhaps he will take the opportunity to confirm whether the FCA’s powers of intervention could include capping the total cost that lenders can charge for lending where it is detrimental to consumers so that we can deal with the toxicity of the legal loan shark market.

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Mr Hoban: The hon. Lady will have an opportunity later this afternoon to quiz me on this in more detail as we are meeting to discuss it. She will recognise that credit, particular the high-cost credit to which she refers, is currently regulated by the OFT, not the FSA. We will announce shortly our response to the consultation on who should regulate consumer credit in future.

Joseph Johnson (Orpington) (Con): Many of my constituents depend on the existence of a thriving financial services industry in London. They are hard-working, responsible and diligent employees and not at all deserving of the opprobrium that is often heaped on people who work in the sector. Like Professor Willem Buiter of the London School of Economics, they are very much of the view that the financial crisis damaged London’s prestige and international standing much more than it did other leading financial centres around the world. Does the Minister share that view?

Mr Hoban: The financial crisis clearly had an impact on London’s standing as a global financial centre, but my hon. Friend will be pleased to note than in the most recent survey of global financial centres London still came top. That is a recognition of London’s continued strength. It is important to ensure that we have a well-regulated and well-functioning financial services sector that can not only meet domestic demand, but serve the interests of an array of international companies. I believe that the package we have announced today, coupled with further regulatory changes being made in the European Union and internationally, will help to ensure London’s continued pre-eminence as a centre for financial services.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Before the general election, the Chancellor and the Business Secretary were involved in a verbal fistfight about who was going to be toughest on the banks, so it is not surprising that neither is here today to make this business-as-usual statement. If the previous Government were charged with light-touch regulation, are not this Government guilty of light-touch reform?

Mr Hoban: The reforms we have set out are proportionate, and the recognition of the need to strengthen the banking sector through structural reform is a significant move. We, unlike many other economies, were exposed to a financial sector challenge of some scale, and it is right to respond to that. We have ensured a proper debate about those issues, which the Independent Commission on Banking has led, and the reforms announced in its interim report have been widely welcomed. That gets the balance right. It is not about being tough or about being light touch; it is about getting things right.

Steve Baker (Wycombe) (Con): Do the Government agree that the best form of regulation is exit from the market? Does the Financial Secretary agree with me and my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) that there should be a primary duty on the regulator to promote competition?

Mr Hoban: My hon. Friend makes an important point about exit. One area on which we are all working, not just in the UK but elsewhere, is to ensure that, when

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an institution fails, the matter can be resolved and that the resolution can take place without an impact on the taxpayer. That will help with competition and to tackle the broader issues, whereby taxpayers have to stand behind banks. We need to get that right.

On competition, we need to recognise that the role of regulation in financial services is quite broad. Some of it is about promoting competition, and some of it is about consumer protection when there are asymmetries of information. In the blueprint that we have published today, we see an acknowledgement of the role that competition will play, and that is why we have given the Financial Conduct Authority a primary duty to use competition in pursuit of its regulatory objectives. That gets the balance right between the different roles that the FCA has to play.

Keith Vaz (Leicester East) (Lab): In three weeks’ time, 5 July marks the 20th anniversary of the closure of the Bank of Credit and Commerce International. The Minister on that day 20 years ago was a young accountant working for Price Waterhouse, the much-criticised auditors of BCCI. For 20 years, the bank has been in liquidation and for 20 years we have been asking for the publication of the confidential parts of the Bingham report, which, as the Financial Secretary will know, was the basis on which we had the system of regulation that he has just changed. Is he absolutely certain that the best way of dealing with these matters is to hand them back to the Bank of England? If he is, will he please do what the previous Government failed to do and ask the Chancellor to publish the confidential parts of the Bingham report?

Mr Hoban: I hear the right hon. Gentleman’s request, and his right hon. Friend the Member for Edinburgh South West (Mr Darling) has made a similar request, to which he did not seem to accede when he was Chancellor of the Exchequer. The new regulatory regime does learn the lessons of the past, and the supervisory style and confused mandate of the FSA mean that we need to change.

The lesson that we have learned from the financial crisis is that, importantly, the Bank of England’s expertise in market surveillance and in understanding macro-prudential trends can best work with the needs of a micro-prudential supervisor by ensuring that that micro-prudential supervisor is an independent subsidiary of the Bank. And, just so the right hon. Member for Leicester East (Keith Vaz) does not get the wrong impression, I did not work on the audit of BCCI.

Mark Garnier (Wyre Forest) (Con): My hon. Friend will know that the financial services industry in this country employs some 1 million people and generates £50 billion a year in tax revenues. Will he assure me that these proposals strike the right balance between protecting the consumer, whom the Financial Services Authority failed so much, and maintaining our leading position in the global financial marketplace?

Mr Hoban: My hon. Friend is absolutely right to highlight the numbers of people employed in financial services not just here in London, or in Edinburgh and Glasgow, which are well-known financial services centres, but throughout the country. We need to ensure that the industry continues to be a strong contributor to employment, to economic growth and to tax revenues, and to ensure a balance so that it does not pose an

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excessive risk to the strength of the UK economy. The measures that we have put forward today strike the right balance between encouraging the industry to continue to be a wealth and employment creator and ensuring that the right protections are in place for consumers, so that they buy the products that those companies sell. Those companies will not thrive unless there is consumer appetite for buying pensions, for investing in their futures, for taking out deposit accounts and for buying life insurance policies. We need to get that balance right between consumer interest and business interest, but businesses will be best served if consumers feel happy about buying products from them.

Toby Perkins (Chesterfield) (Lab): The Minister rightly says that a key part of the recovery of the banking sector’s reputation is an increase in the public’s confidence in the system, and he is putting a lot of power and confidence in the role of the Bank of England. What specific new powers will the Bank have to enable more public confidence in a safer banking system in future?

Mr Hoban: The Bank of England and the FSA published a couple of weeks ago a document setting out the new regulatory approach that the PRA will set. They were clear that, rather than waiting for a bubble to burst and for problems to emerge, they will intervene earlier to force firms to take action to correct problems, and that shift in style—from waiting for a problem to happen to trying to pre-empt its creation—is absolutely vital. We are reliant on the judgment and the discretion of the regulators in following through that new regulatory approach, but rather than waiting until it is all too late, as happened in so many different examples over the past 10 years, giving the regulator the power to intervene early will have a significant benefit on outcomes for our constituents.

Mr David Nuttall (Bury North) (Con): I welcome the Minister’s statement. Does he agree that the best way to protect consumers is to have a fully functioning and competitive free market, and that the best way for the free market to work efficiently is, ultimately, for all companies, including banks, to be allowed to fail?

Mr Hoban: My hon. Friend makes an important point, which goes back to the point that my hon. Friend the Member for Wycombe (Steve Baker) made about exit from the financial system. That is why it is important that resolution tools are in place to enable firms to be wound up in an orderly fashion, rather than being reliant on taxpayers’ money to keep them going.

Katy Clark (North Ayrshire and Arran) (Lab): The Minister is well aware that savers are getting a very low interest rate, while for those who try to borrow there are high interest rates and unattractive terms—not just for individuals but for businesses. That must be stifling the economic recovery. The banks are not meeting Project Merlin’s targets, so should not the Government use regulation and their ownership of banks to address those issues?

Mr Hoban: The hon. Lady is absolutely right to say that it is important that banks lend to businesses. If the economy is to continue to recover and to pick up momentum, banks need to be able to lend. That is why

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we introduced the lending commitments under Project Merlin, and we will monitor them very carefully. We have said that we will not be afraid to use any tools at our disposal if those targets are not met.

Paul Uppal (Wolverhampton South West) (Con): Continuing the theme of competition, and being mindful that the Vickers report will be published in September, will the Minister assure the House or provide guidance on how any future framework will provide genuine competition? In the US, in particular, banks fail without adverse publicity or at any cost to the public purse because there is a larger proliferation of smaller banks, and that would swim against the tide of mega-super-banks, on which we have been over-reliant.

Mr Hoban: My hon. Friend makes an important point about diversity in the financial system. One of the points that the Governor of the Bank of England made in his Mansion House speech last night was about the need to reduce the barriers of entry to the banking system in order to encourage more competitors to come forward. That is an excellent way in which we can promote choice and competition and get a better outcome for consumers, whether individuals or businesses.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): I, like many hon. Friends, believe the Government’s decision to proceed so quickly with a sale process for Northern Rock shows that they are willing to miss a golden opportunity to learn the lessons of the financial crisis and diversify the UK banking sector. On remutualisation, will the Minister undertake to release all the advice he has received, information on all the meetings he has been to and all the rest of the paperwork, so that we can decide—Co-operative MPs such as myself, and other Members—whether remutualisation has been taken as seriously as it should have been?

Mr Hoban: The hon. Gentleman makes an important point. I reiterate what I said before. Yes, Northern Rock has been put up for sale. The purchaser could be a proprietary company or another mutual. An acquisition by another mutual could actually help strengthen the mutual sector. I have made it clear that as the sale process proceeds, we will compare the outcome with either an initial public offering or a stand-alone remutualisation. The challenge that those supporting a stand-alone remutualisation need to address is how we ensure that the taxpayer gets value for money from that.

Nigel Mills (Amber Valley) (Con): Although I warmly welcome the long-term direction that the Government are taking, may I press the Minister a little further on the short-term problem of the regulators’ demands for banks to improve their balance sheets? That is leading to deleveraging, which is starving businesses of the funds that they need to provide the growth that we need. Is there any way in which we can force—or encourage, at least—the regulator to go against the cycle and, when times are tough, to be a little more relaxed and allow banks to lend more in these difficult situations?

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Mr Hoban: My hon. Friend makes an important point. The Chancellor was very clear last night. Yes, we do want the banks to deleverage, but one way of doing that is to reduce their exposure to other banks and to the financial sector. That will give them the capacity within their capital, as they build up their capital levels, to continue to lend to small and medium-sized enterprises and larger corporates. That is one of the reasons why we set out to establish a commitment from the banks to lend up to £190 billion this year to businesses of all sizes, including £76 billion to SMEs. I think we have the right approach. We want a stronger, more sustainable banking system but we need one that will lend to small and larger businesses. Project Merlin helps us to achieve the right balance. We need the banks to deliver on that commitment.

Thomas Docherty (Dunfermline and West Fife) (Lab): Does the Minister now regret having voted against the saving of Northern Rock?

Mr Hoban: The challenge is to make sure that we tackle the legacy that we have been left and that we get the banking system back on a firm footing. What we have announced today is a process in which the Government will cease to be a long-term investor in the banking system. We would all agree that that is the right approach.

Angie Bray (Ealing Central and Acton) (Con): I welcome the reforms, particularly the separation of investment banking from retail banking. However, do we not still have the problem that some of our banks are literally too big to fail?

Mr Hoban: The package of proposals that the Independent Commission on Banking is developing is aimed at tackling that. It is one of the reasons why it proposed a retail ring-fence and increased capital so that the ring-fenced retail business will continue to be strong. But we need to make sure that we have the right resolution tools in place in the event of a bank failure. I commend the previous Government for their introduction of the special resolution regime, to which I referred in my statement in the context of Southsea Mortgage and Investment Company Ltd. We need to continue to work on tools that will help us resolve a bank failure without the taxpayer having to pick up the bill. That is the position that we ought to be in.

Mr Philip Hollobone (Kettering) (Con): My constituents in Kettering want to know that the household savings that they have deposited in their local high street bank are safe from financial speculation and that never again will large banking groups imperil the UK economy through unsustainable banking practices. How far does the Minister’s statement today go to reassure my constituents?

Mr Hoban: My statement today has demonstrated the action that we have taken over the past year to create a more stable and sustainable banking system. That should give comfort to my hon. Friend’s constituents in respect of the safety of their savings. Savers and depositors should be mindful of the limits on deposits imposed through the financial services compensation scheme, but the range of interventions that we are making, through this statement and further reforms,

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will ensure that we have a safer, more sustainable banking sector in the future—one that does not impose a burden on the taxpayer, but makes sure that it continues to meet the needs of businesses and households across this country.

Harriett Baldwin (West Worcestershire) (Con): Does the Financial Secretary share my astonishment at the selective recollection of historical facts by Opposition Members? The run on Northern Rock started well over a year before the global financial crisis, and it was the first run on a bank in this country for more than 100 years. In rebuilding the stability of the financial system, will the Financial Secretary repeat for my constituents the reassurance that their deposits up to £85,000 are now effectively guaranteed by the Financial Services Compensation Scheme?

Mr Hoban: My hon. Friend makes two important points. The first is to recognise the role played by the Financial Services Compensation Scheme in protecting depositors up to that £85,000 limit. The other point is that there is collective amnesia among the Opposition about their role in the financial crisis. Yes, Northern Rock took place before the global financial crisis—and they were the champions of light-touch financial regulation and introduced the tripartite system of regulatory reform that was shown to fail during the crisis. The Opposition need to recognise their responsibility; until they do so, it will not be possible for them to move on.

Andrew Bridgen (North West Leicestershire) (Con): Does my hon. Friend agree with the recent report from the other place saying that the tripartite authorities

“failed to maintain financial stability and were found wanting in dealing with the crisis, in part because the roles of the three parties were not well enough defined and it was not clear who was in charge”?

Mr Hoban: My hon. Friend makes an absolutely vital point. The failure of the financial regulatory system put in place by the Labour party when in government was hard-wired into the system. It was destined to fail because of the failure to identify a clear match between

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the people who had the power and those who had the responsibilities for managing financial stability. My hon. Friend is absolutely right. The previous system was destined to fail. We have learned the lessons from that crisis; I am not sure that the Labour party has.

Bob Blackman (Harrow East) (Con): I welcome the statement and the announcements today. However, will my hon. Friend elucidate on the expected time frame for the setting up of the new regulatory bodies? There must be at least a risk that one or more bodies that are being abolished will take their eye off the ball while they are doing their work, and there will be a time frame before the new bodies are set up.

Mr Hoban: My hon. Friend makes an important point. We hope that the pre-legislative scrutiny of the Bill will start shortly. It is programmed to take 12 sitting weeks. We want to make sure that the legislation progresses through this House and the other place as quickly as possible and that it is properly scrutinised. We need to make sure that we do not make mistakes in haste that we repent of at leisure. It is also important to recognise that the FSA is starting to adopt the new style of supervision that we would like to see it exercise, and that should give us some comfort that the lessons have been learned and are now being put into practice.

Alun Cairns (Vale of Glamorgan) (Con): I welcome my hon. Friend’s statement, which I am sure will go a long way towards reintroducing stability within the economy in general and the banking system. What reassurance can he give that the stability will apply to the banks as well as consumers, so that the banks can go on generating wealth? That will reduce the risk that banks’ headquarters will leave the UK to establish elsewhere.

Mr Hoban: It is important that the UK should remain a global financial centre. We need to get the regulation and supervision in place that ensures that London can continue to prosper and grow and also that there is no wider threat to the economy and taxpayers.

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Tamils (Deportation)

Application for emergency debate (Standing Order No. 24)

2.8 pm

Siobhain McDonagh (Mitcham and Morden) (Lab): I seek leave to move the Adjournment of the House to discuss a specific and important matter that should be given urgent consideration—the deportation by the UK Border Agency of my constituent Mr Jenach Gopinath back to Sri Lanka, whose Government are suspected of war crimes against Tamils, including the killing of 40,000 Tamil citizens.

Later today, a plane chartered by the UKBA will deport 40 asylum-seeking Commonwealth citizens of Tamil ethnicity back to Sri Lanka. One of the passengers is my constituent Mr Gopinath. I have just learned that another, Miss Tharmalingham, is also my constituent. Mr Gopinath was formerly employed by a leading Tamil MP, and in Sri Lanka he was arrested and detained by the authorities. He believes that he would be in danger if he returned there, as does Miss Tharmalingham. I have just learned that another passenger, Mr Najandarajah, hanged himself with his prison duvet last night, and is now in hospital; a passenger on an earlier flight did kill himself.

These people are desperate, and understandably so. A lawyer has told me that his client was tortured after he was deported. Luckily, the client escaped back to the UK. Amazingly, the UKBA tried to deport him again, but he was eventually allowed to stay on appeal. This week, Channel 4 screened a devastating documentary showing definitive evidence of war crimes and routine atrocities by Sri Lanka against Tamils, including video of summary executions. The UN has reported a wide

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range of serious violations of international humanitarian law. Forty thousand Tamils were killed; they were all Commonwealth citizens. Seventeen thousand are still held in camps, and even those who have got out are still under canvas as they are not allowed back to their homes. There is evidence of continuing abuse against Tamils, including torture and extra-judicial killings. The President of Sri Lanka, a probable war crimes suspect, has taken on enormous powers over the judiciary and policing.

The British Government are supposed to be one of the leading forces in the Commonwealth, yet they are not only turning a blind eye but sending plane-load after plane-load of Tamils back. They are taking no measures to monitor them, and Sri Lanka does not allow any journalists or independent observers. The people on these planes, such as Mr Gopinath, have identified themselves as Tamils and as being against the Sri Lankan Government. Britain is flying them on specially chartered flights; it is not as though they are arriving incognito. Even worse, UKBA has shared documents about these passengers with the Sri Lankan authorities. We might as well paint targets on their backs. To me, it is obvious that Tamils have a reason to fear for their safety in Sri Lanka; given the emergence of yet more evidence of atrocities, how could they be safe?

Mr Deputy Speaker, the British Parliament needs to say whether we want our country to continue with these deportations and to continue to have Tamil blood on our hands.

Mr Deputy Speaker (Mr Lindsay Hoyle): I have listened carefully to what the hon. Lady has said. I have to give my decision without stating any reasons. I am afraid that I do not consider that the matter she has raised is appropriate for discussion under Standing Order No. 24. I cannot therefore submit the application to the House.

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Armed Forces Bill

Bill, as amended in the Committee, considered .

Third Reading

2.11 pm

The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan): I beg to move, that the Bill be now read the Third time.

I have in front of me a four-hour speech because I did not quite manage to cover everything that the hon. Member for West Dunbartonshire (Gemma Doyle) and the shadow Defence Secretary raised with me two days ago.

As hon. Members will know, in essence, our purpose in this debate is to agree that the Bill has been scrutinised by the House and to wish it well as it moves to the other place. The Ministry of Defence does not often introduce legislation, so this is a task that very few Defence Ministers have the pleasure of performing. As is the custom, I should like to use this occasion to pay tribute to a number of people who have helped during this House’s consideration of the Bill. Before I do so, I should like to discuss some weightier matters.

For the Ministry of Defence, the Bill represents an important step regarding the armed forces covenant. For the very first time, the armed forces covenant has been recognised in statute. Some 10 years ago, people did not talk about a military covenant; that is a relatively recent development. However, everybody, over centuries, has recognised what is meant when people refer to it. The Prime Minister said that the armed forces covenant would be recognised in law, and it will be so recognised through this Bill.

The Bill will have an enduring legacy. Under its provisions, annual reports on the covenant will be required. We are very serious about the covenant. It is not a political fad—something that will be allowed to wither away in a year or so as political fashions change—because the armed forces are far too important for that. We expect that Parliament will want to debate the issues that are highlighted in the report, and I certainly do not see any way in which anything will be covered up. It is right that Governments, of whatever political hue, should be held to account for the way in which they uphold the covenant.

We discussed the covenant at length during the Select Committee stage. Hon. Members have expressed differing views, as have people outside Parliament. The Government have listened to those views and tabled the amendments that were accepted on Tuesday.

Angus Robertson (Moray) (SNP): The Minister will be aware that many, if not most of the public services covered in the covenant are devolved. I am sure that he will join me in commending the work of Major-General David McDowall, the Scottish Government’s expert adviser on veterans’ affairs, for his efforts in this field. Will the Minister confirm that there has been correspondence between the First Minister and the Secretary of State for Defence to confirm the delivery of the covenant in Scotland?

Mr Robathan: I pay tribute to Major-General McDowall. Although I do not know him, I am sure that he does a very good job. I have of course met Alex Neil, as the hon. Gentleman will know. There has indeed been

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correspondence. That will not be a surprise to him, as he was in the House on Tuesday when I read out half the letter, but there we go.

The House has agreed that the amendments bring clarity about the principles that the Secretary of State must take into account in preparing his report. I was particularly pleased that they were accepted in all parts of the Committee on Tuesday without a Division, and that they have also been welcomed outside Parliament. The result is clause 2, which establishes the annual report as a route towards achieving real benefits for armed forces personnel, former members of the armed forces and their families.

As hon. Members will know, the Bill has been used to amend the legislation governing the reserve forces. This is an important change, because it will allow us to call out reservists for service in the United Kingdom in a wider range of circumstances than is permitted at present. For instance, we discussed on Tuesday the recent floods following snowfalls in Cumbria, where reservists would have been ideally placed—particularly medical reservists to deliver blood supplies. We also discussed the forthcoming Olympics. There are a huge number of occasions where we currently do not have the power to call out reservists, even should they volunteer.

Mark Lancaster (Milton Keynes North) (Con): Does my right hon. Friend agree that this is long overdue change, and that given the ongoing review of the reserve forces, it will make them much more relevant in years to come?

Mr Robathan: I do think it is overdue. It provides the opportunity to call people up in the same way that we can use the regular forces. It also fits in well with the reserve forces review, Future Reserves 2020, which we are undertaking to ensure that this country makes proper use of the reserves. The amendments that we made this week anticipate some of the changes that may be proposed in the review and that the study is likely to recommend when it is published later this year.

When we debated the amendments earlier this week, the hon. Member for West Dunbartonshire raised a point about the Reserve Forces (Safeguard of Employment) Act 1985. She rather threw me because I was not an expert on that Act, but I have now looked up the details, so I should like to take this opportunity to respond to her point. It concerned the Cabinet Office’s red tape challenge, which is a welcome initiative to look at legislation and identify where it is no longer required. One area of legislation to be reviewed relates to employment law. I gather that on the website, under the heading, “Managing Staff”, 127 pieces of legislation are listed for review. I congratulate her on having studied this website, or perhaps on having a very assiduous researcher who has done so for her. The list includes the 1985 Act, which appears at the top of the list only because that is how the list has been ordered, not because it is a particular target for rationalisation. Of course, we carry out reviews from time to time to ensure that our existing employment legislation is appropriate, and we will continue to do so. However, I can assure her that for the foreseeable future it is absolutely our intention that the protection that this Act provides for reservists and employers will continue to remain available.

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Mr Mike Hancock (Portsmouth South) (LD): If the review that is being carried out into the reserve forces comes up with recommendations that would need to be written into the covenant, would it be possible to update it in the yearly report, or would the covenant, as now written, have to await the five-yearly report under the Bill?

Mr Robathan: The hon. Gentleman raises two points. First, should things change as a result of the reserve forces review that might give rise to something different, that would not necessarily be covered in the Bill as enacted but might require some other form of legislation. Secondly—I am delighted to see the coalition acting as one on this—we have argued all along that we want broad guidelines within the covenant report, not boxes to tick, so the Secretary of State can consider almost anything he likes when preparing his report. Furthermore, the external reference group, or anybody else, can raise whatever they like under the covenant report and our subsequent discussions about it.

To return to the protection of employment for reservists, the 1985 Act will apply to the amendment that we passed to widen the use of reserves in the UK and to all other current operations. I hope that the hon. Member for West Dunbartonshire will accept that assurance as a response to her earlier point, and I will not send her a letter if that is okay.

I think that this is a good Bill. It is the first Bill that I have taken through the House.

Mr Kevan Jones (North Durham) (Lab): And the last.

Mr Robathan: I might concur. I am proud to have served on the Select Committee that scrutinised the Bill and would like to thank my fellow Committee members, most of whom are here, for the serious and careful way in which they went about their work.

Mr Tobias Ellwood (Bournemouth East) (Con): Where are the Labour ones?

Mr Robathan: I will resist the cry from behind me to be partisan on this occasion, although I would not usually.

The Committee undertook visits to Chilwell, Headley Court and Colchester, which helped Committee members in their consideration of the Bill. I thank everybody who put themselves out to arrange those visits for us, both here and in those places.

I thank the Select Committee Chairman, my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), for his good humour and wise guidance and I thank the Committee staff for their work behind the scenes. There is a gap in my brief because my civil servants said that they could not possibly put in that I would like to thank them. I would like to thank the Ministry of Defence Bill team for the work that they have done on our behalf. Sometimes, they found things marginally fraught, but most of the time they just got on with doing their work in a good-natured way. One has to take tranquilisers if one works for me. [ Interruption. ] I thought I would get that in before anybody else. I still have not got the letter from the mayor of Bradford, by the way.

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We have a good Bill, which has benefited from the scrutiny it has received. I believe that the Bill we send to the other place is in good order. Above all, it contains much that will benefit the many people who have served, do serve or will serve in our armed forces. I wish the Bill well in its remaining parliamentary stages, and I commend it to the House.

2.22 pm

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): The Minister has surprised me by giving a much shorter speech than I expected, considering his contribution on Tuesday.

Mr Robathan: I am awfully sorry, but I think we need to get it on the record that my speech on the group of amendments on Tuesday was shorter than the hon. Lady’s.

Gemma Doyle: I think the Minister will find that I spoke for a shorter time than he did, but, on the basis that my speech was rather more engaging, I took a number of interventions. As such, my speech took up a greater amount of parliamentary time. I shall move on.

I very much welcome and support the Bill, just as I welcome all measures designed to improve welfare for the armed forces, their families and veterans. I appreciate the Minister’s commitment to this issue. As has been said by the shadow Secretary of State for Defence, this Opposition will always act in the interests of what is right for our country and will always support the Government when they do the right thing by our forces. In this Bill and the amendments to it, the Government have made progress in the welfare of our armed forces and all service families. The Government have committed to stronger provisions to enshrine the covenant in law. As we have done throughout this process, we will work with Ministers whenever necessary to ensure that the path from rhetoric to reality is as smooth and fruitful as possible.

It is worth reminding ourselves that although the right decision has now been taken by the Government, they acted reluctantly, in the face of public pressure and following much denial from Government Members that any amendments were required. Indeed, on 10 February, at the first sitting of the Select Committee on the Armed Forces Bill, the Minister stated:

“The covenant is a conceptual thing that will not be laid down in law.”––[Official Report, Select Committee on the Armed Forces Bill, 10 February 2011; c. 21.]

He went on to say that it is a “conceptual, philosophical statement”. I imagine he wishes that he could eat his words now. Although we support the Government, we will scrutinise and form judgments based on their actions and not their words, which have been proved in this process to sometimes be two different things.

Many provisions in the Bill concern the welfare, well-being and management of our service personnel. The previous Government had a strong record in this area, not just through the introduction of the Armed Forces Bill in 2006, but by ensuring that the forces’ pay increases were among the highest in the public sector; investing in accommodation and rehabilitation facilities; increasing access to the NHS for dependants; and introducing the personnel Command Paper, the first ever cross-Government package of benefits.

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The military covenant is the bond between the nation and our services. It says that the United Kingdom’s commitment to its armed forces is made in recognition that a career in the armed forces differs from all others. The covenant recognises that service personnel agree to sacrifice certain civil liberties, to follow orders and to place themselves in harm’s way in defence of others. In return, the United Kingdom shall help, support and reward our armed forces, their families and, of course, former serving personnel.

I am still somewhat new to this place—I am not sure how much longer I will get away with saying that—but I firmly believe that one of the most difficult decisions we are asked to make is to ask our service people to put themselves in harm’s way for the protection of this country and to safeguard human rights around the world. I felt that responsibility strongly when we voted on 21 March on action in Libya. I know that Members who have been here longer than me have been even more greatly vexed about these issues in recent memory.

Upholding the covenant is now more important than ever. At a time of unprecedented cuts to the defence budget, when we have seen allowances and pensions cut and personnel made redundant in record numbers, and when there are warnings about the capacity of our forces to perform at the current tempo for 90 days longer, it is vital that all service people have the protection to which they are entitled. The principle that no member of the service community, including dependants, should suffer disadvantage arising from service and that special provision may sometimes be needed to reflect their sacrifices is vital. We support the introduction of that principle to the Bill.

It is important, however, that such principles apply to policy making and implementation in all public bodies to ensure that all action undertaken by public servants is in tune with our commitments to the armed forces. I am still concerned, therefore, that the Government amendments did not go as far as they could have gone. As the Bill stands, the Secretary of State must only “have regard” to the principles in

“preparing an annual armed forces covenant report”.

That is a limited application of the principles, which we have all agreed are vital. Rather than applying across Government to all issues, the principles will apply to only those issues the Secretary of State deems fit to include in his report. There is, therefore, ministerial judgment about where the principles of the covenant apply, rather than an obligation on all public servants to take heed of them. I hope that the Minister appreciates the difference that I am pointing out.

I support the action that the Secretary of State is taking, and I believe in the Prime Minister’s desire for a genuinely enshrined covenant, but I fear that we will not fully achieve that unless the principles of the covenant are given due regard in all aspects of public policy making. As the Minister knows, I tabled amendments at earlier stages to try to achieve that. I am sorry that we have not persuaded the Government to go quite as far as we would have done, but as you would imagine, Mr Deputy Speaker, we are delighted that the Minister has come as far as he has. Having stated in Committee, as I said, that the covenant would not be enshrined in law, he has now been forced to support amendments that ensure it will be.

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When I asked the Minister on Tuesday what had changed his mind, he stated that he had engaged in a listening process. I have to say, we saw very little evidence of that in the Committee’s debates or evidence sessions. I am sure that everyone would be grateful if, at some stage, he provided an explanation of his change of direction.

To ensure that the ambitions that we all hold for the covenant are realised, it is vital that there is sufficient accountability between members of the armed forces and the public servants charged with its implementation. I fear that the Government’s proposed annual report, in which Ministers will report on what they deem fit to report on rather than being obliged to provide an update on all aspect of forces’ welfare, may still be somewhat inadequate.

An annual debate in the House on the covenant is very welcome, but it should not be at the expense of real scrutiny. For the report to be meaningful, the Minister knows that I believe that there needs to be a greater number of fields on which Ministers are compelled to report. I have asked the Minister to explain why he has chosen only the three subjects that are specified in the Bill for inclusion in the report, but he has not yet given a rational explanation of why other welfare issues for which the Secretary of State is directly responsible are not included.The original intention behind the introduction of a covenant report was clearly to allow Ministers to say that they were enshrining the covenant in law, whereas their actions now demonstrate that they knew all along that that was not what they were doing. As such, the Minister will forgive me for being concerned that the Secretary of State will decide which issues to put into and leave out of his report.

My bigger worry is that without a duty on public bodies to give regard to the principles of the covenant, and without a responsibility on the Secretary of State to report on a wider set of concerns than is currently included in the Bill, there will not be a thorough examination of the possible issues of disadvantage that we have discussed, covering all relevant responsibilities of the Government.

On accountability, we welcome the Secretary of State’s confirmation that the external reference group, which I understand may now have had a name change, will publish its comments on the annual report alongside the report itself, and that as such its terms of reference will be updated. It would therefore be useful if the Minister confirmed at the earliest opportunity that the change means that the group will now be a permanent body, charged with overseeing the implementation of all policies that relate to forces welfare. I also look forward to his advising us of when updated terms of reference will be ready, and whether they will be placed in the Library for Members to view.

For the enshrinement of the covenant principles to be genuinely meaningful, there must be a proper system whereby service people can report on whether those principles are being upheld. All would agree that the Bill must be about people’s lives, not simply about securing the safe passage of legislation. When asked in a recent parliamentary question who was the legal arbiter of any complaints by service people about the principles of the covenant, the Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff), stated that the chain of command or the

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Service Complaints Commissioner was responsible. That is surprising, because in her annual report last year the commissioner said the existing complaints mechanism was a

“most ineffective system. It causes extreme delay and fails to deliver justice. It also leads to inconsistencies.”

The very arbiter whom the Government recommend that armed forces use to determine whether the covenant is being upheld says that the system is not good enough.

This is not about creating new rights, it is about the accountability of those charged with upholding the principles that the Government are enshrining in the Bill. The commissioner recommended that an armed forces ombudsman be introduced, and I would be interested to hear what consideration was given to that recommendation. As the Minister did not support amendments earlier in the week regarding the creation of an ombudsman to oversee these issues, I am anxious to find out what measures will be introduced to ensure that our forces have the opportunity to make their own judgments.

Mr Robathan: I just wish gently to point out to the hon. Lady, apropos our altercation at the beginning of her speech, that she has now spoken for rather longer than me on Third Reading as well.

Gemma Doyle: I am not really sure that that was a substantive intervention, so I will carry on.

The three fields specified in the Bill as being covered by the annual covenant report are devolved, so Scottish and Welsh armed forces or veterans are potentially excluded from any recommendations at all to be made in the report. We need clarification of whether the report will apply to all UK forces and what the devolved implications of the Bill are. On Tuesday, the Minister produced a letter from the First Minister of Scotland. I do not doubt the First Minister’s intentions with regard to this matter, but I know that the Minister will be shocked to hear that the First Minister does not always do exactly what he says he will. I therefore look forward to the Minister confirming his own view of what the devolved implications of the Bill are.

There was some confusion in Committee on Tuesday about the Government’s position on the reserve forces’ employment rights. I very much welcome the Minister’s commitment, which he reiterated today. Indeed, I congratulate him on standing up to the Secretary of State for Defence, who refused to give such a commitment just a matter of weeks ago. However, it would be welcome if the Minister confirmed what discussions he has had with the Cabinet Office to ensure that all his colleagues are on the same page.

As I said initially, the Opposition will judge the Government on the military covenant on their actions and not on their words. One of the Government’s first major acts since their U-turn on the military covenant is their decision to abolish the Chief Coroner’s Office. The Royal British Legion has called that “a betrayal” of armed forces families that “threatens the Military Covenant.” That very neatly demonstrates the need for accountability and the need for the principles of the covenant to apply to all Government policy.

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The Bill would not have prevented that decision, and nor does it provide for servicemen and women who feel disadvantaged as a result to seek redress. The Minister said earlier this week that he could not speak for the Secretary of State for Justice, but I am asking the Minister to speak to him—I urge him to persuade the Secretary of State for Justice to do the right thing for service families. However, the Minister should also look at this carefully as an example of why the Bill does not go as far as it could, or indeed should.

In conclusion, the principles of the military covenant ensure that we do our bit for the men and women of our armed forces who serve this country and their families. I welcome the Bill, which has been much improved since we started out. I am delighted that the Government have come so far on this issue, and I look forward to pushing them a little further forward at the earliest opportunity.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. May I just remind hon. Members that we have only two hours—the Bill must be done and dusted by 4.11 pm?

2.36 pm

Dr Andrew Murrison (South West Wiltshire) (Con): I am grateful, Mr Deputy Speaker. You can be sure that my remarks will be brief.

I must confess to three interests. First, I am a medical officer in the Royal Naval Reserve. Secondly, I am a potential beneficiary of the naval medical compassionate fund, which is in clause 27—“potential” because one must decease before benefiting. Thirdly, I have a non-pecuniary interest in my book, which was published today, by happy chance, on the military covenant.

I am pleased to support the Bill, which has gone a long way. There are two authorities in this field that we should not upset: one is the Royal British Legion and the other is Joanna Lumley. Consecutive Governments understand the truth of that. It is quite something when the Royal British Legion writes to MPs, as it did on 9 June, to say that the Bill represents an historic agreement. Notwithstanding the reservations that it has expressed as the Bill has gone through the Commons, it is clearly of the view now that the Bill represents a positive measure that will materially benefit the welfare of the men and women to whom we owe so very much.

I should like briefly to address the subject of the chief coroner. I have an interest, in that Mr Masters has sat in Trowbridge in my constituency, and I have visited his court and discussed the matter of military inquests with him at some length. I gently point out to the Opposition that both Mr Masters and Mr Walker in Oxford have done a wonderful job over the past several years in highlighting the plight of men and women in the armed forces and in standing up for the families of those who have sadly deceased. It is not clear to me that an office of the chief coroner would have added to that process. Indeed, I would go further: there is every prospect that such an official could be more biddable than local coroners because he is more central.

The big thing that has stood out over the years from those inquests is their independence and their willingness to find out what is happening on the ground. I pay tribute to both those two gentlemen.