Pete Wishart: As usual, the hon. Gentleman is making a powerful case. He, like me, will remember the debates of years ago when we argued the same type of case. In those days, we would be joined by the Liberals, but today

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we have heard not one speech by a Liberal Member on a very important issue that they used almost to scream about. We have not had even one intervention by a Liberal Member. Two of them came wandering into the Chamber, had a little look around, and disappeared again. Is the hon. Gentleman as surprised as I am that we have heard nothing from the Liberals today?

Jeremy Corbyn: I am sorry to disappoint the hon. Gentleman, but I cannot help him by describing what the Liberal Democrats are doing today, because I am not responsible for them. However, having been involved in a lot of human rights, anti-terrorism and immigration debates over the many years I have been in Parliament, I know that there are different allies in different Parliaments. Sometimes there are Conservatives one agrees with, sometimes there are Liberals one agrees with, and sometimes there is nobody one agrees with, but that’s life, and we plough on.

Mr Cash: The hon. Gentleman makes a good point, because he and I have agreed on several matters, including the Chagos islanders. May I offer him the thought that absence of the Liberal Democrats may have something to do with the lack of clarity in the motion? If it was as clearly expressed as I would like, notwithstanding the Human Rights Act and all that goes with it, I rather suspect that there might be some difficulty for those on the Liberal Democrat Benches, because they would want it to be less clear than I would.

Jeremy Corbyn: I thank the hon. Gentleman for his intervention. I respect him for standing up for his principles and acknowledge that he and I have agreed on quite a lot of occasions, particularly on the disgraceful treatment of the Chagos islands by all Governments over very many years. We hope that the European Court of Human Rights, which is now hearing that case, will come to a good judgment, which we expect imminently.

When I intervened on the hon. Member for Esher and Walton (Mr Raab) about the torture and ill-treatment of people in other jurisdictions, he did not agree with me, and that is fair enough; he does not have to. However, he should understand that the European convention was a very important step in improving human rights standards around the world. The principle of a continent-wide human rights court has been copied to some extent on other continents—for example, central America has such a court. The idea of an international convention such as the United Nations convention against torture is a very powerful one. That is why I disagreed so very strongly with Tony Blair, when he was Prime Minister, on his agreeing to the deportation of people to jurisdictions that had not signed the international convention on torture. That undermined the convention, damaged the human rights of the individual, and damaged us as a country that is supposed to stand up for human rights and justice.

I cannot really describe what we are debating today, and I do not think that the Home Secretary can either. I look forward to a full debate on her proposed immigration rules, because some of them will have a devastating effect on the family life of very poor people in this

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country who have migrated here, work hard, clean our floors, look after our children, drive our trains, and help our industries to get along. We should also remember that immigration in this country has helped to create our relatively high standards of living. It does the House no credit when people condemn all immigration as an economic problem. Immigration is an economic benefit to our society, and it is about time we publicly recognised that.

7.15 pm

Mr William Cash (Stone) (Con): I agree with what the hon. Member for Islington North (Jeremy Corbyn) said about some of the benefits of economic immigration, but there is something else that I would like to put on the record. As many of us know, the best way to keep a secret is to make a speech in the House of Commons. I sincerely hope that that does not apply to the speeches that I have heard today—particularly, if I may say so without any disrespect to Opposition Members, those by my hon. Friends the Members for Esher and Walton (Mr Raab), who made a superbly forensic speech, and for Witham (Priti Patel), and my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox).

Although my remarks will not necessarily be entirely consonant with wholehearted support for these proposals, for reasons that I will explain, I still genuinely support the idea that it is important to give an indication of the Government’s views. A great deal of hard work has been put into this. The more I look at it, the more I realise that the Government’s advisers have really applied themselves to it. As we now know, the immigration rules were tabled on 13 June but have not yet been decided on by the House and will, I suspect, be subject to an annulment prayer because Labour Front Benchers will decide that that is what they want to do.

Irrespective of that general sense of support for these proposals, there is also a rather unfortunate element that was indicated in the excellent speech by my hon. and learned Friend. He said, using very carefully chosen words, that the proposals will create an impression or perception whereby, in some of the national tabloid press and elsewhere, they will be construed, as we have already read, as being simply about slamming criminals and unacceptable persons who should not be allowed in this country in the first place and should be deported. I think that that general perception has been conveyed and that, given that the best way to keep a secret is to make a speech in the House of Commons, the spin that is put on this will carry the day.

However, that will not affect the courts, which will make their own decisions. Moreover, the proposals are geared in the direction of indicating to the courts that the general will of Parliament is to move away from the free-for-all of applying Strasbourg precedents, and that Parliament is making a statement that must be had regard to. Indeed, in line with what I said in an intervention, that has been a matter of concern in the generality of judicial interpretation, which has been criticised by the Lord Chief Justice in a series of very measured speeches. On one occasion about two years ago, he strongly advised his brothers and sisters in the judicial profession in the High Court that the most important matter for a judge is to uphold the common law. I think that he said it in those terms. He went on to say that they had to be much more careful about not simply adopting Strasbourg

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precedents in the application of their judgments in English courts and, by implication, that they should have more regard to what Parliament has said.

This exercise is being conducted with great complexity. One only has to look at the new immigration rules, which I have in my hand, to notice that they contain strong gearing elements. Whether they will have any effect on certain members of the judiciary remains to be seen. Individual cases, some of which have been mentioned, raise difficult questions of family law and relationships. As has been said, we hear about such cases in our constituencies. I do not think that what we heard earlier was a rant. There is an important point here. I have been confronted by some difficult family issues in the field of immigration. We ought not to be dismissive of the importance of forming a proper and proportionate judgment about these questions.

Important questions have been raised in the debates in which I have taken part over the past few years on the interpretation of statute law. An example is the Jackson case, which was not to do with human rights in the same context as this matter, but was to do with interpretation by the judiciary. Tom Bingham, the late, lamented Lord Chief Justice, took to task two Law Lords in the Jackson case. He said not only in the judgment but in his speech that they were exceeding their role by asserting judicial supremacy over Parliament.

It is therefore essential that we pay tribute to the intentions that lie behind this exercise, while at the same time being clear that the proposals lack clarity. The intentions that lie behind this extremely careful operation will not necessarily produce the results that many people expect. Given the latitude that will still be conferred on judges and the rules of proportionality that have to be applied, I anticipate that there will be ructions down the line when the rules are applied by individual judges.

I suspect that the lack of clarity has something to do with the attitudes of some in government, some in the civil service and some in the higher reaches of the judiciary and in certain chambers, who have no doubt been consulted. It might also have some connection to the attitude that would have been adopted by the Liberal Democrats if they had been confronted with the kind of clarity that could be provided, but that certainly is not. I can do no more than speculate on that. When I pressed an amendment in the Lisbon treaty debates that stated, “notwithstanding the European Communities Act 1972”, on which 55 of my hon. Friends followed me into the Lobby with enthusiasm, despite the suggestions from the Whips that they should do no such thing, the Liberal Democrats said that if I had pressed the other amendment that I had tabled, which stated “notwithstanding the Human Rights Act 1998”, they would have supported it. I therefore ask whether we are always entirely clear as to what the Liberal Democrats are up to at any given point in time.

There is a further point regarding the motion, although I do not want to be too pedantic or legalistic. It states that article 8 is a “qualified right” and that

“the conditions for migrants to enter or remain in the UK on the basis of their family or private life should be those contained in the Immigration Rules.”

I hope that you will forgive me, Mr Deputy Speaker, for pointing out that as we are debating this matter today,

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on Tuesday 19 June, I construe those words to mean the immigration rules as they now are, not as they are anticipated to be under the proposals printed on 13 June.

On page 1 of the statement of changes, which I suspect will be debated, there is a provision titled “Implementation”, which states that, with the exception of an awful lot of paragraphs,

“the changes set out in this Statement shall take effect on 9 July 2012.”

The other paragraphs

“shall take effect on 1 October 2012.”

It goes on to say:

“However, if an application for entry clearance, leave to remain or indefinite leave to remain has been made before 9 July 2012 and the application has not been decided, it will be decided in accordance with the rules in force on 8 July 2012.”

Therefore, the new immigration rules will not, I am glad to say, have retrospective effect. The implication of the wording in the motion might not be as clear as it should be. That leaves us with the reasonable position that the motion relates only to the immigration rules that are in force at this time. That is a technical point.

I regard the proposals as a steer. The Government are hoping that they will succeed and I wish them well if it is possible for them to do so. However, I think that there will be difficulties of interpretation. The harder the case, the more likely it is that an individual judge will say, “I am not bound by this motion. I am bound by what the law says.” The law that they are construing, from 9 July and 1 October 2012, will be the new rules.

The explanatory memorandum states:

“The new Immigration Rules provide a clear basis for considering family and private life cases in compliance with Article 8. To accompany the new rules, a statement of ECHR compatibility is being published on the Home Office website”.

It goes on to say, although I doubt whether this can be taken for granted:

“The new Immigration Rules will reform the approach taken as a matter of public policy towards ECHR Article 8…in immigration cases.”

It goes on to say—the distinguished Immigration Minister is sitting on the Front Bench and knows this backwards:

“The Immigration Rules will fully reflect the factors which can weigh for or against an Article 8 claim. The rules will set proportionate requirements that reflect the Government’s and Parliament’s view of how individuals’ Article 8 rights should be qualified in the public interest to safeguard the economic well-being of the UK by controlling immigration and to protect the public from foreign criminals. This will mean that failure to meet the requirements of the rules will normally mean failure to establish an Article 8 claim to enter or remain in the UK, and no grant of leave on that basis. Outside exceptional cases, it will be proportionate under Article 8 for an applicant who fails to meet the requirements of the rules to be removed from the UK.”

Why have I bothered to read all that out? So far, none of it has been mentioned in the debate, but it is what we are actually debating. It is about whether the courts will be steered by Parliament and apply its decisions—hopefully the right decisions—as a matter of proportionality.

As a number of Members have said, article 8 already provides a qualified right. As ever, I am afraid that the qualification simply has not been explained. Article 8 states:

“There shall be no interference by a public authority with the exercise of this right”—

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and then the crucial words, which the shadow Home Secretary conveniently left out—

“except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

The words

“except such as is in accordance with the law and is necessary in a democratic society”

prompt the very question that we have to debate. Until I hear the Minister’s reply, I have to say that we are doing so without any confidence that “the law” means the law of this Parliament.

In the democratic society in which we in this country live, those words must mean the law passed in this Parliament. In certain instances, that will exclude decisions taken by the judges in Strasbourg and/or principles adumbrated in Strasbourg but applied in our courts that are contrary to the views expressed by, for example, the Lord Chief Justice. In the context of article 8, it would be nonsense if “the law” meant anything other than the law of the United Kingdom.

We have to resolve that question in the interests of Parliament, which will decide how this country is to be governed. We must decide whether it is to be governed under the European convention on human rights. I believe that we should withdraw from the convention altogether, because we have been continuously besieged by interpretations of it that are contrary to the views expressed by the people of this country as a whole. We can perfectly well legislate to protect human rights, which I would be the first to defend, by passing appropriate laws in our own land according to our own wishes. Many of those laws may well be parallel, if not identical, to those passed under the convention and the Human Rights Act.

The reason I called for the repeal of the Act 10 years ago, when I was shadow Attorney-General, was precisely because of the mess that we are now in. I hesitate to say so, but I anticipated that we would be in this position, as I did over the Maastricht treaty. By keeping ahead of the curve, whether on the convention or the issue of Europe as a whole, we would have saved ourselves a great deal of trouble. We would have defended Parliament’s right to legislate on behalf of the people of this country, who in a democratic society have a right to govern themselves. That is the central principle at the heart of our Parliament. The debate raises questions about that matter but does not entirely resolve them.

I do not say that the courts should in any way be inhibited from making a decision based on their interpretation of the law. However, the law is made here. We have to decide what the law is, and it behoves us to make that law clear. In this case it could have been made clearer by our simply saying, “Notwithstanding the European convention on human rights and the Human Rights Act 1998, we legislate for these immigration rules accordingly.” There would have been absolutely no argument about that in the courts, because the courts would have had to say, “We have no option but to administer the law as laid down by Parliament.” That is the crucial issue at the heart of this debate.

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Although I will support the general steer that we are providing, I am afraid that there may yet be difficulties and ructions further down the line, with the courts taking disconsonant decisions that are contrary to the intentions behind the rules, which are supposed to represent a clear basis but do not.

Several hon. Members rose

Mr Deputy Speaker (Mr Nigel Evans): Order. The wind-ups will start at six minutes past 8. Three more Members wish to participate, so I ask Members to give some consideration to others.

7.36 pm

Lisa Nandy (Wigan) (Lab): I am grateful for the opportunity to raise my concerns about the impact that the immigration rules will have on children in particular. Before I came to this place I had the privilege of working with the Minister, and I know that he is committed to the welfare of children in the immigration system. We worked together to ensure that there was a commitment to ending the immigration detention of children, which has been hugely important to many children. We also both worked hard to ensure that the last Government extended the Children Act duty to those children, which is particularly relevant to today’s debate.

The statement of intent on family migration, which was published in advance of the new article 8 immigration rules to which the Home Secretary referred extensively, takes heed of the duty on the UK Border Agency under section 55 of the Borders, Citizenship and Immigration Act 2009 to have regard to the need to safeguard and promote the welfare of children while they are in the UK. Many of us fought very hard for that legislation, because immigration officials have been given increasing powers over the years without a counterbalance in law to ensure the protection of children. That section created a duty to consider a child’s best interests in decisions that affect them, and to weigh those interests against other considerations such as criminal convictions, which we have talked so much about today. That already happens in article 8 determinations.

My concern is about how narrowly a child’s “best interests” are defined in the statement of intent that was published in advance of the new immigration rules. It states:

“The best interests of the child will normally be met by remaining with their parents and returning with them to the country of origin, subject to considerations such as long residence in the UK and exceptional factors.”

During the many years in which I worked with refugee and migrant children in the Children’s Society, I dealt with many cases in which that was plainly not the case, as I am sure have other Members. I will give a few examples.

I dealt with countless cases in which girls would have been subjected to female genital mutilation if they were returned to their home country. I also dealt with the case of a young girl whose father was from Eritrea and whose mother was from Ethiopia. Huge consideration had to be given to her safety and welfare, given the state of relations between those two countries. There were also many cases of child abuse. One in particular really sticks in my mind. There was a child who we believed may have been subjected to abuse by her own parent,

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and in the end that did turn out to be the case. In that sort of occurrence, it is clearly not in the interests of the child to be removed with the adult. The Minister might say, “There is an exception. Discretion is written into the rules,” but my concern is that marking out a clear presumption that it is in the best interests of a child to be returned will direct UK Border Agency and court officials and deter them from making proactive decisions.

Since the tragic death of Victoria Climbié and the Lord Laming report that followed, we have come a long way in ensuring that all agencies, including the UK Border Agency, the courts and others, understand that they have a shared responsibility to safeguard children. That involves not only the reactive child protection approach, but a proactive approach. The measure might well unravel a great deal of the progress that has been made with the UK Border Agency and such children.

I am sure Ministers will say that discretion remains with the courts, even if there were no such concerns, but I share the view put forward forcefully by Amnesty International—that, effectively, the measure seriously limits the courts’ discretion. In the example I gave, if those factors had not been proactively investigated by UK Border Agency, it is hard to see how a decision to remove the child with the parent would be challenged in court, because the investigation would not take place and the evidence would not exist.

Furthermore, during the decade that I dealt almost daily with the UK Border Agency, I saw a culture that worked against the full investigation of human concerns. Little that I have seen since being elected to the House has convinced me that that has changed. In fact, if anything, with staffing cuts and increased pressure on UKBA staff, the situation is getting worse, not better. Case owners work to targets, and in particular to time-limited targets. Speed matters. Too often, there is a tick-box exercise rather than a full investigation of the facts. I have seen for myself how that tick-box exercise happens without a proper assessment of children’s needs prior to their detention. The Government rightly took a stance against that; I hope that they take a similar stance to protect children in respect of this measure.

When I worked for the Children’s Society, I was often called upon to deliver training for UKBA staff. One thing that struck me was their willingness to equip themselves with the skills and knowledge they needed to protect children, and to think creatively and more widely. However, people came to me time and again and said, “I’m really not sure that this is my responsibility. I am meant to be looking at so many other overriding concerns, including immigration concerns.” The child’s welfare and immigration considerations often conflict. The staff need clarity and certainty that the child’s welfare is a priority, and that they should not take actions to meet targets if it means that they do not fully and proactively investigate child protection concerns.

I hope the Minister considers that concern after the debate, but I am also concerned about the prescription in the statement of intent, which sets out that deportation will be presumed in cases involving criminality that results in a custodial sentence of between 12 months and four years unless the person has

“a genuine and subsisting parental relationship with a British citizen child or a child who has lived in the UK for at least the last

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seven years, and it would not be reasonable to expect the child to leave the UK with the foreign national criminal and there is no other family member who is able to care for the child in the UK”.

The seven-year rule, which no longer exists, was a useful indicator of whether someone had established a private life in the UK, but such detailed prescription surely has limits. I struggle to see how the seven-year prescription could be helpful to the courts. Why, for example, should a child who has been here for five years, who was born here and spent most of their life here, and who faces the prospect of returning to a country about which they know nothing, where they have no family and do not speak the language, have a less powerful claim to have established a private life than a child who has been here for eight years, but who faces the prospect of returning to country where they have family and people they know, friends and ongoing relationships, and where they speak the language? My concern is that the measure takes away the important ability to test the strength of the relationship ties that children have formed in the UK, which is the basis of article 8 decisions.

Moreover, I am concerned that hon. Members are being invited to make assumptions about the situation of children whom we know nothing about. We would never accept that for citizen children, and we should not accept it for non-citizen children. I urge Ministers to look again at the measure.

7.44 pm

Graham Jones (Hyndburn) (Lab): I rise to raise the concern of Mr Paul Houston, my constituent, who has been spoken of considerably in the debate. The case is familiar to all MPs. Mr Houston’s daughter died after being the victim of a hit and run by an asylum seeker, Aso Ibrahim Mohammed. Amy was left to die under the wheels of his car.

Mr Mohammed was granted leave to stay in the UK following his asylum case, in which he made the case for remaining here to protect his right to family life under article 8 of the Human Rights Act 1998. During the several years between the tribunal decision in 2010 and the crime for which Mr Mohammed served a paltry four-month sentence in 2003, he claimed he had established a new family with a British national and had two children with her here in the UK.

The delays in dealing with Mr Mohammed, in the words of Mr Houston, were no doubt caused by staff at the Home Office failing to find Mr Mohammed and an ineffective Border Agency. As my right hon. Friend the Member for Blackburn (Mr Straw) said, there were also problems with deportation to Iraq—Mr Mohammed is a Kurdistan national.

Mr Mohammed arrived in the UK illegally, hidden on the back of a lorry, on 31 January 2001 and claimed asylum on the same day. On 18 July 2001, his application for asylum was refused. He appealed the decision, but his appeal failed on 12 November 2002. During that period, Mr Mohammed had already been cautioned by the police for criminal damage. As a result of his failed appeal, the UK Border Agency issued a notice to Mr Mohammed that he was required to leave the UK by 28 November 2002. Had he left, the accident in which Amy lost her life would have been prevented and she would be enjoying life today.

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The Houston family have never been provided with an answer as to why UKBA did not take effective steps so that Mr Mohammed was removed from the UK on that date or why he was not at least detained pending removal. When I spoke to Paul in my constituency office, he expressed his qualified support for the Human Rights Act, but he feels that judicial processes led to the perverse outcome.

The Government say the motion will send a signal to the courts, but I am not convinced that it will have any legal impact. Why are the Government not pursuing primary legislation? Mr Houston’s most significant concern about the interpretation of article 8 is not the parameters and guidelines laid down in immigration policy that are the basis for judicial judgment, but the process of determining claims under article 8.

According to the Home Secretary, the guidelines will state that deportation will not be proportionate if an individual has a

“genuine and subsisting relationship with a partner in the UK”.

My concern, and that of Mr Houston, is how tribunals arrive at the conclusion that an individual has such a relationship.

There are fundamental differences in the application of criminal law, as in the court case at which Mr Mohammed appeared in 2002, and the application of civil law in the asylum tribunals of 2010. I question the judicial process for determining a “genuine and subsisting relationship” as laid out by the Home Secretary. In criminal law, the evidence is tested beyond reasonable doubt. In the criminal case of Mr Mohammed, the Crown Prosecution Service was unable to present a case beyond a reasonable doubt that Mr Mohammed caused Amy’s death by the more serious crime of dangerous or careless driving, partly owing to conflicting statements. He was instead convicted for having no licence or insurance.

It is worth noting that Mr Mohammed had exhausted all asylum appeals to be in the UK during 2002, a year before the incident that cost the life of that young child. Mr Mohammed was released from prison after completing just four months of his custodial sentence in early 2004. At this point, he was still an illegal asylum seeker and had no right to family life in the UK, and should have been removed from the UK. What will the Home Secretary do to ensure that those who break the law in such circumstances, but receive less than the 12 months’ custodial sentence recommended in today’s guidelines by the Home Secretary, are still deported?

Subsequently, Mr Mohammed accumulated a number of criminal convictions and police cautions over the years, and it was not until late 2008—four years later—that the authorities caught up with him and brought about deportation instructions. What will the Home Secretary do to ensure that those who have entered a deportation process are deported, and further that in cases such as Mr Mohammed’s, people cannot circumvent their deportation through a subsequent appeal under article 8? I note with concern that the number of successful deportations has fallen by 18% in the last year.

By 2008, Mr Mohammed was entitled to make a fresh claim stating that to deport him would breach his right to a family life, and legal battles through the civil

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law system commenced. Following his release, this man has been convicted of possession of cannabis, cautioned for burglary and theft, convicted of driving uninsured, banned from driving and convicted of harassment. My right hon. Friend the Member for Blackburn also mentioned a dispute between Mr Mohammed and his former wife involving a £200 fine and his being bound over to keep the peace. This does not sound like a man enjoying a family life.

Mr Houston raises a key concern with the tribunal system—what he describes as the 51% rule of probability. Under this rule, circumstantial and anecdotal evidence allowed Mr Mohammed to win his tribunal case based on the balance of probability, rather than on what we have in the criminal justice system—the “beyond reasonable doubt” rule. During 2009-10, Mr Mohammed was allowed to present evidence in support of his claim through the upper tribunal for immigration and asylum. Mr Mohammed and his knowledgeable legal representatives only had to convince a judge that the evidence of his UK relationship was true on the balance of probability. My right hon. Friend the Member for Blackburn touched on the issues with the evidence submitted to the tribunal, which was flaky to say the least.

Such critical evidence should be tested beyond reasonable doubt. Mr Houston feels aggrieved that such circumstantial and conflicting evidence for the relationship of Mr Mohammed with a British national played a huge part in the judge’s granting him asylum under article 8. As someone sympathetic to the benefits of the Human Rights Act, Mr Houston believes that this is a ludicrous application of British law.

The Government need to do far more to deport foreign criminals. The problem with the motion is that it ignores the real problems of the chaos within UKBA. The Home Secretary may be well intentioned in desiring a fairer justice system, but what are her intentions for dealing with the problems caused by cases such as Mr Mohammed’s, particularly the acceptance of hearsay evidence in the decision-making process at tribunals? What does she intend to do to ensure that justice is seen to be delivered?

I understand that there is an opportunity to challenge and contest the statements presented at tribunals under part 32.14 of the civil procedure code against a person who presents false evidence. In Mr Mohammed’s case, however, there was no challenge, despite the evidence of his relationship being flaky and suggestions that there was an arrangement to the benefit of his asylum claim.

My right hon. Friend the Member for Blackburn spoke about the dubious evidence put forward by Mr Mohammed. I agree that it was simply a means of evading deportation under article 8. In cases where individuals use article 8, on the right to family or private life, and where claims are tolerated because of inefficiencies or delays by the Home Office in dealing with cases, hearsay evidence at a tribunal should be tested and challenged beyond reasonable doubt. Fairness is about not only interpretation or immigration law but the judicial process itself.

7.54 pm

Jim Shannon (Strangford) (DUP): I congratulate the Home Secretary and Immigration Minister on bringing this matter before the House. I fully understand the

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reason for the debate, but I hope that the clarification given in the letter that hon. Members have seen will ensure that there is no Division.

Everyone has a right to respect for his private and family life, home and correspondence, as many other hon. Members have said. This has been used by many people, however, to claim that anyone has a right to live and settle, with their family, where they choose and so can come to the UK, with or without a visa, to have a private family life. It must never be forgotten, however, that the right is a qualified not an absolute right, and that qualifications are essential in respect of immigration. We must therefore retain the right of the Home Secretary to control immigration through the rules already implemented and what is proposed today.

The Home Secretary’s clarification of the rules for the courts has assured me and, I hope, the House. The Human Rights Act was a good thing in principle, but once lawyers became involved, it changed, as is so often the case. I am reminded of that great and famous Shakespearean quote, “First kill all the lawyers.” That is a bit drastic, I know—I am not saying we should do it—but it is how many people feel when they hear some European judgments. The status of our judiciary has been perpetually challenged by the European Court in cases presided over by people with questionable experience making questionable rulings. As is often the case with Europe, we sign up to something in theory that turns out to be completely different in practice. That is our frustration with Europe and many of its rulings.

The ruling on the Abu Qatada case revealed that seven of the 11 top judges at the European Court of Human Rights had little or no judicial experience; one was 33 when appointed and had no senior judging experience. British judges go through years of training in the law before their application will ever be considered. To have such under-qualified people overruling our own judges is a slight, but worse still, it is dangerous and leaves us with our hands tied on too many occasions. That is the reason for this debate, I believe.

In the past, and even this very day, article 8 issues are being raised in asylum applications or as a basis for standalone applications for leave to remain in the UK. They have also been raised in appeals against deportation or removal. This was not the reason the article was created; it was not meant to be a free pass into the UK and the benefits of living in such a great nation. According to the Courts Service, in 2010, 233 people won their appeal against deportation, and of those 102 were successful on article 8 grounds. According to figures from the independent chief inspector of UKBA, however, in 2010, 425 foreign national prisoners won their appeals against deportation, and these were won primarily on article 8 grounds.

Whichever figures are right, the matter must be addressed, which is what I think the Home Secretary is trying to do through the motion. While our immigration rules should always take note of human rights issues, they must be based on the needs of the country, which must have the right to caretake those very rights. Article 8 is increasingly difficult to impose legally; it is time to get this right, which is what the motion does.

I have received correspondence from groups stating that the removal of paragraph 395C of the immigration rules is tantamount to sacrilege. That paragraph stated that no one could be removed from the UK if it would

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contravene the UK’s obligations under the Geneva convention on refugees or the European convention on human rights. It set out a range of factors that UKBA had to consider before deciding to remove a person from the UK and reflected the considerations necessary for assessing compatibility with article 8. Those considerations included the person’s length of residence in the UK, the strength of their connections with the UK, their personal history, their character and conduct, their domestic circumstances and, importantly, any previous criminal record.

Other briefings, however, point out that deleting the paragraph has not altered the UK’s obligations under the convention. We are still bound by the rules, but that does not mean that we cannot implement our own rules. In my view, we have not yet given our sovereignty to Europe. The Home Secretary has confirmed that there will be safeguards for those who have been subjected to torture in their homeland—an assurance that many Members have sought and received. I agree with the Home Secretary in asserting her right, and the right of every UK citizen, to have control over immigration in this country.

I am not by nature someone who scaremongers. If I were, I would be reciting the figures, which are screaming out for an immigration policy change. What I will say is that if we deny ourselves the right to allow or disallow people into the country, will there even be a United Kingdom in the future, or will we be like other countries that have put their trust in the European Union only to find themselves on the brink of demise?

Ben Gummer (Ipswich) (Con): Several times in his speech the hon. Gentleman has referred interchangeably to the European Union and Europe when discussing the European convention on human rights. It is very important that we make the distinction in this House and in public, because the public are making the same association between the European Union and the European Court, and it is very damaging when trying to understand both institutions and separate them in the public mind.

Jim Shannon: I thank the hon. Gentleman for his intervention. Clearly we want to focus on where the responsibility for this issue lies.

I want to make a quick comment about what the hon. Member for Perth and North Perthshire (Pete Wishart) said. We agree on many things. I am a descendant from an Ulster Scot from the lowlands of Scotland, so I have an affinity with the Scottish nation. It is very obvious which papers he does not read in his house, but it is also obvious what his concerns are, and they are rightful concerns. I disagree with him on independence for Scotland, and I also disagree with him on the issue we are discussing, but I am sure that there are many other issues on which we will agree in future.

We have the right to make immigration control rules. As a nation, it is not in our nature to abuse human rights—that is not what this debate is about—and we will certainly not start doing that with these rules, especially when there is an underlying onus to consider the human rights implications in every decision our judiciary makes. I therefore support these rules and the guidance, as well as the clarification that the Home Secretary and the Minister for Immigration have provided. I believe they are necessary and important, and the people I represent want to see them in place.

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8.1 pm

Chris Bryant (Rhondda) (Lab): I am grateful for the opportunity to speak in this debate, which I think we would all agree has been interesting. I note that several of the Members who have spoken are not in their seats, but I will none the less refer to their contributions.

The hon. Member for Canterbury (Mr Brazier) spoke about a great number of the wider immigration issues that he believed needed addressing. However, it is important to remember that that is not the subject at hand this evening.

My right hon. Friend the Member for Blackburn (Mr Straw) referred to a constituency case, involving Mr Mohammed, to which my hon. Friend the Member for Hyndburn (Graham Jones) also referred. I think everybody would agree—the Home Secretary tacitly referred to this, albeit without naming the case—that that case is one of the most heinous examples of where it has felt as though the judges were out of step with public opinion, and certainly the opinion in this House. I do not think that one has to be a supporter of The Daily Telegraph or the Daily Mail to hold that view; it seems to me a fairly commonsensical one. Indeed, my right hon. Friend and my hon. Friend detailed what were some pretty horrific incidents and the way in which fairly flimsy excuses were used to remain in this country.

The hon. Member for Keighley (Kris Hopkins)—he, too, is not in his place, so I hope that I do not misrepresent him—said, “I want to see all criminals deported as soon as possible.” That would return us to a rather 19th-century understanding of what should happen to criminals in this country. I think he meant that all foreign criminals should be deported as soon as possible, but—[Interruption.] I think that returning to what happened to the Tolpuddle martyrs would—

Mr Tom Harris: We are reviewing the policy.

Chris Bryant: No; we, at least, are certainly not reviewing it.

However, the hon. Member for Keighley did say something with which I wholeheartedly agreed. He said that it was not racist to want to debate immigration. I have said this at the Dispatch Box before, and I will say it again: just because someone wants to talk about immigration does not make them a racist. There are certainly some people who want to talk about immigration because they are racists, but I believe that everybody has a perfect right to debate this issue, and we should be able to do so calmly and reasonably.

My hon. Friend the Member for Hayes and Harlington (John McDonnell) expressed a view about the motion before us which I think a lot of us had come to when he said, “I no longer know what this debate is about,” and when he referred to the unusual process that has been used. I will refer later to why I think this is not the process for us to go through. I think we have come to a much greater understanding of what the legal implications will be of the decision we take this evening, but he was right to highlight the fact that some of the water had been somewhat muddied by earlier contributions.

Pete Wishart: What about the Liberal contribution?

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Chris Bryant: We did not have a Liberal contribution—I was going to point that out earlier—but I am sure that the Liberals will be reserving their position for when they form a Government on their own, without the Conservative party.

The hon. Member for Esher and Walton (Mr Raab) made a thoughtful contribution, as usual. He was right to say that the European convention on human rights was never originally intended to have any kind of extra-territorial effect. However, I would merely point out to him that it was not intended to have any effect on whether homosexuals could serve in the military in any country in the United Kingdom or how marriage law should be interpreted. There are undoubtedly aspects of how the ECHR has been interpreted by the Court in Strasbourg that have been significantly beneficial, not only to people in the United Kingdom, but to people in Russia and other signatory countries.

The hon. Gentleman also referred to the shifting goalposts of article 8. That is another area where there is some agreement across the House, and certainly between the two Front Benches. He also pointed out that it would be difficult to be precise about what constituted success in the terms to which the Home Secretary referred at the beginning of the debate. How will we know whether what we are doing today has been successful? It is difficult to be precise.

I would not call the speech by the hon. Member for Perth and North Perthshire (Pete Wishart) a rant, but it had—

Pete Wishart: It was barnstorming.

Chris Bryant: I would not call it that, either. I thought the hon. Gentleman’s speech was just wrong, and in some areas inappropriate, although he did unite the House in condemnation of himself—I think that is mostly what he seeks to achieve in politics—so it was quite a success.

The hon. Member for Witham (Priti Patel)—again, she is not in her place—spoke about a whole range of wider immigration issues. All I would say is that today’s debate is not about those wider issues; rather, it is about the specific set of issues that are incorporated in the motion—a motion that is tightly drawn and does not have any papers tagged to it.

My hon. Friend the Member for Glasgow South (Mr Harris) did a very good job of demolishing the argument of the hon. Member for Perth and—is it “Perth and Perthshire”?

Pete Wishart: Perth and North Perthshire.

Chris Bryant: I see; otherwise, I would have thought that it was a rather tautological name for a constituency.

My hon. Friend is absolutely right: many of our constituents, in many different parts of this country—in Wales, just as in Scotland and England—have significant concerns about matters relating to the deportation of foreign criminals, and they want them addressed better in the criminal justice system.

I always enjoy listening to the hon. and learned Member for Torridge and West Devon (Mr Cox), not least because I see him as a very successful barrister, and I am aware that there is a convention in this House

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that if an hon. Member were to ask another Member who practises at the Bar to represent them in court, that Member would be required to provide their services, free, gratis and for nothing. I therefore look forward to him representing me one day in some action, free, gratis and for nothing.




I think he is mouthing something at me, but I am not quite sure what it is. I know that he was seeking to be helpful to the Government and to support the direction of travel in which they are moving, but I noted that he said, “I do not hold out an enormous amount of hope.” I think he was referring to whether this proposal is going to be a successful manoeuvre, which is partly our concern as well. It is not a concern about the direction of travel, but a concern about whether this measure is precisely the right way in which to steer ourselves in that direction of travel.

The hon. Member for Stone (Mr Cash) is one of my favourite Members, because I have debated with him so many times—and he also told me once that he loved me, so I cannot dislike him. He referred to the application of the rules of the European Court’s decisions in relation to the courts in the United Kingdom. He, too, said that whether the decisions we make today will have any effect remains to be seen. I say that—and I think he said it, too—not out of a desire to undermine where we want to go, but to ensure that we securely get change in the direction to which many hon. Members have referred.

My hon. Friend the Member for Wigan (Lisa Nandy) made a moving speech about some of the experiences that she has had personally and in dealing with her constituents. In particular, she mentioned the situation facing many women and children. We would do ourselves a disservice if we were to pretend that the European convention on human rights had done nothing to protect the sorely abused rights of women around the world. In many cases, it has acted as a beacon for what a decent society should look like and how a decent society should go about its business.

The hon. Member for Strangford (Jim Shannon) said that he thought that there would be no Division on the motion. I thought that he might have been having a dig at the hon. and learned Member for Torridge and West Devon when he said that everything goes wrong when lawyers get involved. He was also critical of some of the judges in the European Court of Human Rights because they sometimes did not have the level of qualifications or the amount of experience that we would expect of a British judge. I am certain of the need for reform of the way in which the judges are appointed and the way in which the Court does its business and comes to its decisions, but that is not a reason for us to leave the European Court or to abandon the convention, not least—I might not be able to carry the hon. Gentleman with me on this—because it is a requirement of membership of the European Union that we should be a signatory and adhere to the Court.

The hon. Member for Ipswich (Ben Gummer), who has just fled the Chamber, made a tiny intervention on the hon. Member for Strangford, in which he pointed out the difference between the European Union, the European Court and the European convention on human rights. He was absolutely right to say that that difference was often not recognised.

The Home Secretary made several issues crystal clear in her speech. First, she made it clear that Pepper v. Hart was right, and that it is absolutely right for the

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courts to bear in mind what is said by a Minister or in a debate in the House of Commons—or, for that matter, the House of Lords—when legislation is ambiguous and the court is uncertain of how to proceed, without breaching article IX of the Bill of Rights, which states that a court is not able to question or impeach a proceeding in Parliament.

Mr Cash: In regard to interpretation, certainly in the field of European law—whether in the European Court of Justice or the European Court of Human Rights—the travaux préparatoires, as they are called, include all sorts of explanatory memorandums and so on. So when we talk about a clear basis, the question is whether it will stand up in due course. I hope that it will, but I am not sure.

Chris Bryant: I am not entirely sure whether I agree with that, so I am afraid that I am going to gloss over it. Perhaps the hon. Gentleman will give me a better lecture on the matter later.

We agreed with the Home Secretary’s point on Pepper v. Hart. We also agreed when she effectively said that she accepted the judgment in the Pankina case of 2010 that the mere tabling of new immigration rules is often not enough to provide legal or political clarity to the courts. We agree with that, which is why we would wholeheartedly welcome a debate in Parliament on these matters. There are those who would say that the process that the hon. and learned Member for Torridge and West Devon referred to earlier has been inadequate in the past.

The Home Secretary also referred to changes in the operation of article 8 in relation to the deportation of prisoners. Again, we completely agree with the direction of travel that she is taking and with what she is trying to do. In a sense, that is what we tried to do in 2007 with the changes in the law, but we accept that further work needs to be done. She said specifically that foreign criminals had used flimsy human rights arguments to remain in this country, and we agree. She said that the broader issue of the other changes, tabled last Wednesday, was a separate issue. We wholeheartedly agree with that, too.

We have some concerns about the process, but I do not want to overstate them. The motion expressly refers to “the Immigration Rules”. It therefore stands to reason that we are debating the rules that are in force today, rather than any that have been tabled but will not come into force until 9 July and could, in theory, be annulled in the future. So I am not sure that this motion provides quite the level of legal clarity that the Home Secretary would like.

Furthermore, there is the question of exactly how much influence a motion of the House has. We have already heard from the shadow Home Secretary about the ruling from the Clerks on that point. A few weeks ago, a motion of the House, which was agreed unanimously, stated that nobody wanting to come to this country from Russia should be allowed a visa if they had had anything to do with the death of Sergei Magnitsky. That motion has no force in law, however; it is just an interesting statement from the House of Commons. It has not been agreed by the House of Lords, and it has not gone through any kind of primary or secondary legislative process.

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It might have been better if the measures had been taken in a different order, with the full set of rule changes being followed by the motion that we are considering today. Indeed, many hon. Members have said that there might well be a need for primary legislation to provide the courts with the absolute clarity that they need.

I want to make it absolutely clear that we are supporting the motion today on the understanding that it applies solely to the operation of article 8 in relation to the deportation of foreign criminals. In the words of the Home Secretary, the rest is a “separate issue”.

8.16 pm

The Minister for Immigration (Damian Green): I am grateful to Members on both sides of the House who have treated this important subject seriously today. I am also grateful for the support for the Government’s approach that eventually appeared from the Opposition Front Bench, although I was rather doubtful about it earlier, when the shadow Home Secretary was speaking. I am also grateful to the right hon. Member for Blackburn (Mr Straw) and the hon. Members for Glasgow South (Mr Harris) and for Strangford (Jim Shannon), as well as to those on the Government Benches who have spoken.

Let me deal with the central question. The motion clearly sets out for the agreement of the House where we believe the balance should lie between the right to respect for family and private life under article 8 of the European convention on human rights and the legitimate aims of our immigration controls. That view is reflected in the new immigration rules that we laid before the House last week. We are in complete agreement that article 8 is a qualified right. Article 8 sets out the basis on which the public interest can justify proportionate interference in individual rights to family and private life. It is the responsibility of the Government, and of Parliament, on behalf of the public, to set out when and how the public interest should qualify those individual rights. The immigration rules are the appropriate vehicle for the expression of the views of the Government and Parliament.

Pete Wishart: I am beginning to get confused all over again. I thought that we had received clarification on this earlier, but the Minister is now inviting us to support all the Government’s immigration rules, which will be unacceptable to many people in the House.

Damian Green: No sensible person would put that interpretation on what I have just said. No sensible person would put that interpretation on the motion that is before the House, which the hon. Gentleman has shown, over the past three and a half hours, he is incapable of reading. Read the motion, and you will see what we are debating.

The immigration rules are the appropriate vehicle for the expression of the views of the Government and Parliament. They are a statement of the normal practice to be followed by the Secretary of State’s caseworkers in making immigration decisions under the statutory framework that Parliament has provided.

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Since the Human Rights Act 1998 was implemented in 2000, it has become increasingly apparent that the existing immigration rules do not provide a sufficiently clear and comprehensive framework for considering family and private life cases in line with article 8. The rules have not reflected adequately the factors that can weigh in favour of, and against, an applicant’s article 8 claim. The courts—understandably, as the Government have never set out for Parliament’s agreement a clear position on article 8 in the immigration rules—have had to decide for themselves on the facts of the cases before them whether article 8 did or did not provide a basis for the applicant to come to or stay in the UK.

The courts have therefore not been able to give due weight to Government’s and Parliament’s view of where the balance should be struck between individual rights and the public interest, as they have not known fully what that view is. As the Government and Parliament have not established the correct balance in the rules, the courts have arguably been as well placed as the Secretary of State’s caseworkers to assess the case and make a decision. In the absence in the rules of a comprehensive statement of public policy in these matters, the courts have developed the policy themselves through case law on issues such as the required level of maintenance for family migrants.

The changes to the immigration rules that we laid before Parliament on 13 June fill the public policy vacuum we inherited by setting out the position of the Secretary of State on proportionality under article 8. The new rules state how the balance should be struck between the public interest and individual rights, taking into account relevant case law and evidence. They provide clear instructions for caseworkers on the approach they must normally take, and they therefore provide the basis for a consistent, fair and transparent decision-making process.

As the immigration rules will now explicitly take into account proportionality under article 8, the role of the courts should focus on considering proportionality in the light of the clear statement of public policy reflected in the rules. They should not have to consider the proportionality of every decision taken in accordance with the rules on every immigration application. The starting point from now will be that Parliament has decided how the balance under article 8 should be struck, and although Parliament’s view is subject to consideration by the courts, it should be accorded the deference rightly due to the legislature on the determination of public policy. That is the approach that the new immigration rules seek to put in place in the immigration system.

By subjecting the public interest that the rules reflect to debate and approval in Parliament today, we are making good the democratic deficit we inherited on the operation of article 8 rights in the immigration sphere. We are also responding to the need that the courts have themselves identified for the Government and Parliament to take proper responsibility for these matters of public policy.

The hon. Member for Hyndburn (Graham Jones), who is not in his place, raised the important Mohammed case, which precisely illustrates why we are proceeding in this way. He asked a specific question about what would happen in a case like that where the sentence was not for 12 months or more. I am happy to repeat what

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my right hon. Friend the Home Secretary said in her opening remarks, that “even if a criminal has received a shorter sentence, deportation will still normally be proportionate if their offending has caused serious harm.” There is that additional power.

My hon. Friend the Member for Stone (Mr Cash) raised an interesting point, which was repeated by the shadow Immigration Minister, about which rules we should look at—the rules as they stand today or the new rules. Again, I am more than happy to repeat what my right hon. Friend the Home Secretary said, this time in her statement last week:

“I will shortly ask the House to approve a motion recognising the qualified nature of article 8 and agreeing that the new immigration rules should form the basis of whether someone can come to or stay in this country”.—[Official Report, 11 June 2012; Vol. 546, c. 50.]

That is what she told the House last Monday; that is what we are debating today.

The shadow Home Secretary and, indeed, my hon. Friend the Member for Canterbury (Mr Brazier) made points about the importance of removing more foreign national offenders, on which we agree. She asked why the numbers had come down. The simple fact is that fewer cases are arising that fit the deportation threshold. The numbers in this category are down approximately 12% in 2011 in comparison with 2010, while the overall prison population has not fallen. The number of people forcibly removed or departing voluntarily during the first quarter of 2012 has remained steady. It is slightly higher than in the fourth quarter of 2011, so I hope the right hon. Lady will be reassured that action is being taken on the very important point she raised about removals.

In what might be described as the less serious part of the debate, the hon. Members for Hayes and Harlington (John McDonnell), for Perth and North Perthshire (Pete Wishart) and for Glasgow South (Mr Harris) and my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) raised the issue of whether the courts would take any notice Parliament. What the new rules do are respond to what the courts have said about the lack of a clear framework in immigration cases for balancing individual article 8 rights and the wider public interest. The House of Lords—this was before we had the Supreme Court—observed in the Huang case back in 2007 that immigration lacks a clear framework representing the competing interests of individual rights and the wider public interest because the immigration laws

“are not the product of active debate in Parliament”.

That is precisely the purpose of today’s debate. We are having an “active debate in Parliament” on immigration rules as they affect the balance between individual rights and collective rights on article 8.

Frankly, this House ought to welcome the fact that Parliament becomes the central part of a debate on an issue that is important to our constituents. I am genuinely surprised that so many Opposition Members appear to think it inappropriate for Parliament to act in this way. I shall take up what must be a luxury for any Home Office Minister under any Government and pray in aid Liberty, which said today:

“Any fair immigration policy will be a combination of rules and discretion, allowing both for clarity and compassion in the handling of individual cases and the system as a whole. On that

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basis, Immigration Rules are the obvious way for any Home Secretary to seek to guide both her officials and the judiciary in their handling of cases.”

I think Liberty is exactly right in its interpretation. As I say, that is what we are doing today.

My hon. Friend the Member for Keighley (Kris Hopkins) can be reassured that we are indeed, as he urged, trying to deport as many criminals as possible. I hope he will be reassured by the figures that I read out a few moments ago.

My hon. Friend the Member for Esher and Walton (Mr Raab) has huge legal expertise in this matter and spoke with much wisdom. I was glad to hear from him that my answers to all his parliamentary questions have done some good in providing him with facts and figures. He asked what will happen if the courts do not respond. As my right hon. Friend the Home Secretary said previously, if we need to take further steps, we will, but we do not anticipate that happening.

My hon. Friend the Member for Witham (Priti Patel) eloquently pointed out how the distortions of human rights law have indeed created real problems in this country. She said she would like to see people taken straight from jail to the airport to be deported. I cannot quite promise her that, but I hope she is reassured to some extent that the average number of days between a foreign national prisoner finishing their sentence and being removed has decreased markedly. In 2008, it was 131 days; by 2011, we had got it down to 74 days, so we are indeed speeding up that process.

The hon. Members for Islington North (Jeremy Corbyn) and for Wigan (Lisa Nandy) talked about the best interests of children. The hon. Lady is quite right that she and I worked closely together for some time on these matters during the dark days of the previous Government when they were trying to do bad things through immigration legislation. Of course we recognise the importance of the statutory duty under section 55 of the Borders, Citizenship and Immigration Act 2009

“to safeguard and promote the welfare of children…in the UK”.

It is precisely for that reason that we have reinforced our approach by bringing a consideration of the welfare or the best interest of children into the new immigration rules. In assessing that best interest, the primary question in immigration cases involving removal is whether it is reasonable to expect the child to leave the UK. The best interests of the child will normally be met by their remaining with their parents. As the hon. Lady predicted, I make the point that in these rules, exceptional factors are allowed for.

There will be exceptional factors. I do not entirely share the hon. Lady’s view of the box-ticking nature of the way in which the UKBA and individual caseworkers approach these cases, not least because of the training that they have been undertaking—training to which, as she rightly said, she has contributed in the past. We are continuing to train so that our caseworkers act in a sensitive way, but exceptions can certainly be made in extreme cases.

In these rules we are introducing clear, proportionate requirements relating to who can enter or remain in the UK on the basis of their family life. They are requirements that reflect case law, evidence, independent advice and public consultation. We invite the House to agree that they are requirements which reflect the fact that family

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migration should be controlled in the public interest, and the fact that the best interests of a child in the UK should be taken into account.

Article 8 will cease to be an afterthought in the decision-making process, considered only after a decision has been made under the immigration rules. Instead, the determination under article 8 will be made according to the immigration rules which the Government have put in place, and which Parliament has agreed correctly reflect the public interest. We have set clear and transparent requirements as the basis for the ability of a partner, child or adult dependant of non-European economic area nationality to enter or remain in the UK because of his or her relationship with a British citizen or a person with settled status in the UK.

Applicants will have to meet clear requirements in the rules which reflect an assessment of the public interest. Those requirements are a proportionate interference with article 8 because they draw on the relevant case law, because there is a strong rationale and evidence for the fact that they will serve the public interest, and because, if Parliament agrees to the motion—as I hope and expect that it will—they will reflect the correct balance between individual rights and the public interest.

No set of rules can deal with 100% of cases, and there will be genuinely exceptional circumstances in which discretion is exercised outside the rules. However, it is in the interests of both the public and applicants for there to be a clear system to ensure fairness, consistency and transparency. The public, applicants and caseworkers need to know who is entitled to come or stay, and on what basis, and who is not. If there is to be a system of that kind, there must be rules: rules that deliver sustainable family migration to the UK that is right for the migrants, for communities and for the country as a whole, rules that properly reflect individual rights and the wider public interest, and, above all, rules that are set in Parliament, and not by individual legal cases. With that in mind, I commend the motion to the House.

Question put and agreed to.


That this House supports the Government in recognising that the right to respect for family or private life in Article 8 of the European Convention on Human Rights is a qualified right and agrees that the conditions for migrants to enter or remain in the UK on the basis of their family or private life should be those contained in the Immigration Rules.

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Financial Services (Market Abuse)

8.32 pm

The Financial Secretary to the Treasury (Mr Mark Hoban): I beg to move,

That this House takes note of European Union Documents No. 16010/11 and Addenda 1 and 2, relating to a Draft Regulation on insider dealing and market manipulation (market abuse), No. 16000/11 and Addenda 1 and 2, relating to the Draft Directive on criminal sanctions for insider dealing and market manipulation, and No. 8253/12, relating to the European Central Bank Opinion on market abuse legislation; recognises that an efficient financial market that aids economic growth requires market integrity and public confidence; welcomes the UK’s leading role in combating market abuse; and supports the Government’s decision not to opt-in to the Criminal Sanctions Directive until it is clear that related provisions within the Markets in Financial Instruments Directive Review and the Market Abuse Regulation are further progressed in order to enable the Government to evaluate the implications for the UK, and ensure high standards in tackling market abuse are maintained.

I welcome the opportunity to open the debate. It is important, before I deal with the details of the motion, for me to reinforce our commitment to ensuring that there are efficient financial markets which assist economic growth. If markets are to be efficient, however, they must command public confidence and demonstrate their integrity. Central to that is the sense that those who are trading in shares, whether they are retail customers or our largest fund managers, are doing so in possession of, or with access to, the same information. We must also ensure that markets are not manipulated against the interests of those who are trading in shares.

It is the recognition of the importance of markets that have integrity and command public confidence that has led to the UK’s leading role in tackling the problems of market abuse. We established our own civil market abuse regime in 2000, ahead of the EU market abuse directive of 2003. The Financial Services Authority has made considerable strides in recent years since launching its “credible deterrence” strategy for market abuse in 2008, particularly as a result of the financial crisis. Our no-nonsense approach to market abuse is now a regular feature of national and international news. The FSA levies increasingly large penalties, and exercises its criminal powers. Abuse of this sort will not be tolerated. In 2003, the FSA handed down fines relating to market abuse totalling just over £1 million; halfway through this year, the figure is £8.9 million. The FSA is bringing the full weight of the law against perpetrators of abuse, and that includes the £7.2 million imposed in the Punch Taverns case.

The hard-line stance that we have taken on market abuse is one of the reasons London flourishes as a global financial centre. Investors and other market participants value the cleanliness of our market, which is why they use London to carry out their business. Market abuse is a blight on financial markets. It destroys confidence. It puts typically sophisticated financial actors at an unfair advantage over ordinary investors and savers. Those who manipulate the markets or abuse their position to trade on inside information undermine the efficiency and safety of the financial marketplace.

Mr William Cash (Stone) (Con): I am sure my hon. Friend is in no way trying to divert attention away from the fact that jurisdiction is now, effectively, with the

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European Court of Justice. I am not going to ask him to be precise, but does he not agree that for the purposes of interpreting financial services regulations within the framework of the supervisory authorities that have been created, all these matters are ultimately matters of European law as applied by our Parliament so long as it continues voluntarily to accept them?

Mr Hoban: I am not sure I agree with my hon. Friend. I do not want to be diverted along that path, but I point out to him that, as he will know as Chairman of the European Scrutiny Committee that put forward this motion for debate on the Floor of the House, the criminal sanctions directive acts as a minimum harmonisation directive, and this House can impose more stringent penalties than the minimum required.

Mr Cash: I did not talk about the extent of the criminal sanctions. I talked about the question of general jurisdiction, and I do not think that there can be any dispute about what I said.

Mr Hoban: My hon. Friend missed out on the opportunity that I and the hon. Member for Nottingham East (Chris Leslie) had of serving on the Financial Services Bill Committee. We spent a considerable amount of time developing the details of jurisdiction in the UK, through giving powers to the Financial Services Authority. There are areas where rules are made at a European level, but, equally, there are areas where rules are made in the UK, and it is not appropriate to say, “There’s only European law.” There is a whole raft of UK law on these matters.

To date, the UK has used the flexibility of the minimum harmonisation EU directive to create a stronger standard, applying the regime to more venues and having stronger rules. Now we have the opportunity to have a better framework applied across the whole of the EU, and that is in our interests.

It is clear that market abuse can take place beyond our borders and yet still affect securities traded within our borders. For that reason, the Government support the Commission’s objective to revise the EU market abuse framework. Improving the strength and consistency of the framework is vital to investor confidence.

There are challenges and opportunities in shifting to a regulation. There are challenges if the UK’s own practices are compromised. There are opportunities from having a more consistent and stronger EU regime and potentially reducing the cost and complexity of compliance for market actors.

Clearly, our prime objective is to ensure that the powers currently available to competent authorities are not weakened, which would damage the UK and the creditable work of the FSA. Secondly, we wish to deliver a robust framework for tackling market abuse within Europe.

Interest in changes to the market abuse framework extends beyond this House. In March, the European Central Bank published its opinion of the market abuse proposals. Its commentary focused largely on the new provision in the regulation for competent authorities to be able to delay the publication of inside information with systemic consequences. The Government echo the ECB’s support for seeking the legal framework to be

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improved in this respect. This is a key provision for the Bank of England and the FSA following the financial crisis and the difficulties experienced surrounding the disclosure of emergency lending assistance.

I want to outline briefly the EU market abuse package proposed by the Commission. In October 2011, the Commission published a regulation and an accompanying directive on criminal sanctions for market abuse. Those proposals together update the framework formerly established by the market abuse directive 2003, including proposing EU harmonisation of criminal law for market abuse for the first time. The legal basis for the criminal directive is article 83(2) of the treaty on the functioning of the European Union. This is the first use of the relevant provision since the Lisbon treaty was agreed. It means that the directive is subject to a justice and home affairs opt-in. The UK and Ireland have discretion on whether it should apply to them. Denmark is automatically opted out. In light of the fact that this was the first use of the article, it was important that the Government carefully contemplated the issues and came to the appropriate decision.

The European Scrutiny Committee also considered the use of the opt-in. In its 52nd report of the last Session, the Committee noted that the full potential impact for the UK of the draft directive will become certain only once negotiations are concluded. The European Affairs Committee concurred with that opinion, but we are, of course, bound by the regulation.

The Government’s decision not to opt in at this time is a reflection of the sequencing of the directive compared with related legislative proposals. The proposed directive is entirely dependent on the outcome of the market abuse regulation, and the markets in financial instruments directive, which are both in relatively early stages of negotiation. The Government believe that it is very challenging to assess the implications, scope and way in which the criminal directive may develop, given the broader uncertainty of the market abuse framework, which itself is simultaneously subject to a major review.

The key issue here is ensuring that the interaction between the criminal and administrative regimes is clear and workable for all member states. Above all, we need to address the flexibility of when to apply a criminal penalty and when an administrative penalty needs to be retained within member states’ national systems. That must be determined on a case-by-case basis, in the light of the evidence of an individual case. In addition, there was uncertainty about whether the powers of competent authorities would be weakened in respect of accessing telephone records in the regulation and, potentially, the accompanying criminal directive.

It is essential that competent authorities have the flexibility to determine the appropriate type of penalty—whether it is criminal or administrative—and the powers available to them to investigate suspected cases of market abuse. The Council has itself recognised the difficulties involved in trying to complete negotiations on the criminal directive, with linked proposals being negotiated simultaneously. Therefore, the presidency decided to pause progress on the directive, in order to wait for policy progress to be made in the market abuse regulation.

However, I note that although the Government have decided not to opt in at this stage, we have continued to participate fully in negotiations. It is important that we

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use our expertise in combating market abuse, including the fact that the UK already covers market abuse in its criminal law today. If we are able to do that, and further progress the related proposals in the market abuse regulation and the markets in financial instruments directive in a manner that meets our objectives, we may consider opting in to the criminal directive. We can assess this only when the trio of proposals are properly progressed.

Chris Leslie (Nottingham East) (Lab/Co-op): The Minister is giving a lucid and paced description of Government policy. Let me cut to the chase. It is important that he has the opportunity to hear my question. Are we as a nation—are the Government—opting in to the criminal sanctions market abuse directive, or is he proposing to opt out of it? Which is it?

Mr Hoban: At the moment, let me clarify the position by saying that we have not opted in. As I was saying, we need to see how discussions on three linked legislative proposals work through before deciding whether or not to opt in, but our priority is to ensure that we have a proper market abuse regime in place—one that maintains the highest standards and ensures that the Financial Services Authority, which is responsible for this area of policy, is enabled to use its powers fully to ensure that there is confidence in the integrity of markets.

So I can reassure the House that this Government will not allow legislation on market abuse to be insufficient, and we would not opt into a directive that would undermine the FSA’s current powers in this area. I welcome the opportunity to debate this issue tonight, including the opt-in decision. This is an important issue, and it is right that hon. Members have an opportunity to debate it.

8.43 pm

Chris Leslie (Nottingham East) (Lab/Co-op): This is indeed an important debate. Market abuse, insider dealing and market manipulation are issues that do not get the airtime that they deserve. It is important that white collar crime and abuses of what we might call white collar financial services activities are properly attended to. We know that in recent years the regulators, or the relevant authorities, have sometimes struggled properly to prosecute or pursue issues where allegations have been made and there are difficulties in pinning down the right level of evidence. This is an important opportunity to see how, when the European Union proposes new regulations to tighten up some of the rules, the UK Government approaches such questions. I was interested to see in the Financial Services Authority’s recent annual report the quite shocking statistics on potential market manipulation that still takes place and often goes uncaptured.

The statistic that leapt out at me concerned something called APPM monitoring—I know that hon. Members enjoy their acronyms—or abnormal pre-announcement price movement monitoring. Apparently, such movements are still at a level of more than 20% in respect of announcements of mergers or acquisitions. If we look back at share transactions and other dealings, we can see that there are palpably instances when information has leaked out and people have taken advantage of

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information asymmetry. Such market abuses are notoriously difficult to pin down and prosecute, but they are unfortunately still a feature of many of our markets and financial services and we need to do a great deal to bear down on them.

The original market abuse directive was adopted back in 2003, but the new set of regulations proposes to try to tighten up the arrangements in a number of areas. There are gaps in the new markets that have emerged, for example, particularly in commodities trading and derivatives trading. I shall talk about those in a moment. There are problems with regulatory enforcement, where outdated arrangements are in place. There is a lack of legal certainty, particularly when issues cross nation state boundaries, and a risk of regulatory arbitrage. I was not surprised, therefore, that that was one area in which the Commission made proposals.

Mr Cash: In the context of acronyms, I wanted to draw the hon. Gentleman’s attention to the fact that the market abuse directive is, of course, MAD.

Chris Leslie: I am grateful to the hon. Gentleman for showing that sanity is sometimes tested in these debates. I should also pay tribute to his work and to that of the European Scrutiny Committee, without which many of these important debates would never materialise on the Floor of the House—even if this debate is in the middle of the football, possibly with less exposure and fewer viewers watching on BBC Parliament than might normally do so. I am sure that there will be a rerun of these proceedings and people will be able to watch them at their leisure.

What is different about the market abuse regulations? We know that a parallel criminal sanctions directive is being discussed, although the Government’s position is far from clear. They are almost saying that they will not opt in at this stage, but might change their mind later depending on a number of rather strange factors. There are important reasons why we need to tighten up the criminal offences regime for market manipulation and for insider dealing, and those important steps must be taken. I agree with some of the proposals in the market abuse regulations that will broaden the definition of insider information to cover information that is not generally available for reasons of transaction opacity.

I am particularly keen to see improvements in the market abuse regulations in areas such as commodities and derivatives trading, which were not as large and significant as they are now. About 15 years ago, some £300 million of commodities trading took place in the UK, whereas that has now increased by almost 1,000%. Billions and billions of pounds are now moving from investment-based activity to speculation-based activity. These issues are serious. One might think about speculation in metals and gold and wonder where the harm is, as that is the nature of the world we are in today. However, speculation in wheat, cocoa and other basic food and commodity substances that can have a bearing on the nutrition of many millions of people in developing countries is an issue that matters in the real world.

If there is market abuse and manipulation, it can have a serious impact on real lives. That is why it is important that when we see so many giant corporations with very deep pockets so often being accused of distorting

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markets and purchasing whole monthly future contracts, potentially hurting consumers in poorer countries, we should take the opportunity to ask whether we have the right market abuse arrangements in place and whether we could make changes. If companies were cornering the market in equities or listed shares it would trigger regulatory action, but when large corporations corner the market in commodities it does not. That is a bizarre anomaly and we need to modernise the arrangements.

We need to see other important changes in the market abuse regulations. How do we identify insider dealing and market manipulation? What are the rules about information being delayed before public announcements? After the financial crisis, there were serious lessons to be learned about revealing information about abuses that might have a bearing on systemically important transactions and organisations. There are some proposals in the arrangements to deal with these issues. These are very serious questions that need to be addressed.

There is a parallel proposal for a criminal sanctions directive that defines the two offences of insider dealing and market manipulation, which should be regarded by member states as criminal offences if committed intentionally. The intention is to introduce a minimum level of harmonisation for criminal sanctions and, in particular, to provide that the competent authority should have the power to impose administrative pecuniary sanctions of up to twice the amount of profit gained or lost.

There is virtue in the criminal sanctions directive and the market abuse regulations, but we are now in this rather byzantine legislative Committee treacle trying to move these issues forward. The Minister may well be personally involved in these areas—I do not know to what extent—but if hon. Members care to take the time to look at the voluminous documentation associated with this debate they will find some interesting correspondence between the Minister and the European Scrutiny Committee. The Minister will have to forgive me if I paraphrase him incorrectly, but in that correspondence he says that the Council discussions have been somewhat fractured—I think that was the word he used—as a result of the fact that the criminal sanctions directive is taken through the Justice and Home Affairs Council whereas the market abuse regulations are taken through ECOFIN.

We then have the added little twist that the Cypriot presidency is taking over on 1 July an issue that has not been resolved and is still in abeyance. The Justice Secretary attended the Justice and Home Affairs Council at the end of April, which kept open—this is where we get into Eurospeak—the “horizontal articles” for a “partial general approach”. I know that is something that Members will be familiar with. In other words, those involved were saying, “Nothing is really going to change on this particular issue. We are just going to tread water for quite some time.”

Then we have the crazy situation in which the market abuse regulation grinds slowly forward while in a parallel universe the criminal sanctions directive enters an entirely different Council Committee. One almost, but not quite, feels sorry for the Minister trying to balance or juggle this particularly tricky set of negotiations, but rather than waiting, reacting and observing the process, he needs to grip this issue by the scruff of the neck and move it forward.

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Ultimately, this is the main question I want to ask him: what is he doing to move matters forward? Can he give a proper explanation of where he stands on the substantive elements of the market abuse regulations and of the criminal sanctions directive in particular? He says that it is difficult to assess the scope and implications so far because it depends on the review of the markets in financial instruments directive and various other factors. Difficult or not, he needs to set out the Government’s position on the substantive policy issues. That is what I expected him to do this evening. The issues are not rocket science. He should set out his position. Even if it is a negotiating position, I would like to know the Government’s starting point in this set of discussions. This is a poor way of making decisions.

Clear leadership is not being shown in sorting out the matter and getting a grip of the question. It is necessary to improve and modernise the regulations on market abuse because modern-day financial markets have left behind the old regime. I understand the Commission’s attempts to get some coherence and harmony on market abuse issues and to deal with the regulatory arbitrage issues that arise from time to time, but the Government must answer a number of questions. Why do they feel that they are still unable to set out their position on the substantive policy issues? When does the Minister expect some resolution of the issues? In particular, who does he think should be moving matters forward? Is he just a bystander, waiting for others to do that—the Cypriot presidency or someone else? When will he, as a Minister, show a lead, tackling market abuse, dealing with insider trading arrangements and ironing out some of these important questions? He is too relaxed and a little complacent on these questions. He needs to take charge and grasp the issue.

8.56 pm

Jacob Rees-Mogg (North East Somerset) (Con): I refer Members to my declaration of interests, as I am still actively involved in financial markets—though I am glad to say not in market abuse—and particularly in emerging markets, which has become more relevant in Europe. When I started in emerging markets, Greece and Portugal were such, and I have a feeling that they may soon be classified as emerging markets again.

I support the Government on not opting into the current criminal sanctions proposed by the European Commission. It is classic European Commission stuff. The Commission thinks harmonisation would be very useful because it is concerned about regulatory arbitrage. Regulatory arbitrage ignores the strength of the British position—that people want to trade in London. They are not particularly interested in trading in a Bulgarian bucket shop. Therefore we should remember the strength of our position and not be cowed by feeling that everything across Europe must be the same.

When we look at the wonderful documentation, we are reminded that the great joy of anything to do with Europe is that it provides thousands of pages to read and inwardly digest, almost always written in a form that is as impenetrable as possible, which is part of the problem with the European Union, as the hon. Member for Nottingham East (Chris Leslie) so wisely pointed out. There is such confusion in how laws are developed that very few people manage to get to grips with them.

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I wish to quote a short excerpt about why the Commission wants the criminal sanction to be brought together. It is so that member states

“can contribute to ensuring the effectiveness of this Union policy by demonstrating social disapproval of a qualitatively different nature compared to administrative sanctions or compensation mechanisms under civil law.”

That is fine, except that we are already doing it. The Government have already said that all the criminal offences that the European Union wants to bring together are covered by our own law, so it is hard to see why they then argue that it is essential that there should be harmonisation.

It is important to remember, with this opt-in at this stage, that if we opt in we cannot opt out again. This is not going to be part of the block opt-out of opt-ins that we can get by 2014. Anything that we opt into at this stage is permanent, so we would have a permanent criminal sanction agreed at the European Union level, which may not be suitable for what we want in this country.

The real problem is that Europe is the wrong area of focus for this country when it comes to financial markets. I know that we have a large market share in a whole range of financial products, that about 80% of hedge funds in the European Union are based in London and that we do more than a third of all global foreign exchange transactions. However, I thought that it would be interesting to look up where we rank across the whole range of financial services. There is an index, “The Global Financial Centres Index”, which ranks countries and capitals by a variety of measures to show how successful they are in financial services. It includes the people they have and their skills, and the depth and breadth of their markets. When we look at it, we see that London comes first, which should not surprise us. New York comes a fairly close second, followed by Hong Kong, Singapore, Tokyo, Zurich, Chicago, Shanghai, Seoul, Toronto, Boston, San Francisco and then Frankfurt. Germany, at 13th, is the first European Union country with a financial centre on the list.

We should not be worrying about co-ordination with Europe. To do so is to look at the past, at an outdated and outmoded form of competition. We need to look to the broader world, to the people with whom we really compete: Hong Kong, Shanghai and, of course, New York. Therefore, the Government must show some backbone by not giving in to more Europeanisation, because that is what has been done previously, that is what the EU is used to, and that is the comfort zone of the bureaucracy. We need to look at how our arrangements and regulations compete with the further world, not with what might be called the near abroad. If we do that, we will find that we want our own regulation and we want less European regulation, and we can negotiate from a position of strength, because the financial markets in the United Kingdom are overwhelmingly larger than those in continental Europe.

Therefore, I support the Government in not opting in, but I do not support them in qualifying it by saying “at this stage.” There is no need for any further transfer of powers to the European Union. That is part of the coalition agreement and we should never opt in to anything further in future.

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9.2 pm

Mr William Cash (Stone) (Con): I thoroughly endorse almost everything my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has said, but I would go somewhat further, because I have a complete aversion to the whole concept of the transfer of our jurisdiction over matters affecting the City of London. I have said that for many years now. In fact, when the de Larosière report was published I wrote in the Financial Timesthat I saw it as a ticking time bomb, or words to that effect, and that if matters were allowed to continue we would find ourselves mopped up by European jurisdiction.

Following the statement my hon. Friend the Financial Secretary made to the House only last week, I asked a simple question: in the light of the vast amount of commitment and time that has been spent transferring jurisdiction over matters affecting the City to the European Union, how on earth will we be able to protect the City, the related single market aspects, including financial services, and matters of the kind now before the House in the market abuse directive when they are governed by qualified majority vote? Those are the realities.

The truth is that we have made the most massive strategic mistake in relation to matters of this kind, which are governed by qualified majority vote, under directives such as the MAD directive otherwise known as the market abuse directive, which was bitterly opposed by the City of London in the early part of this century. I have to say that events then turned for the worse and those proposals have now been overtaken.

Before I turn to the specifics of the matter before us, I ought to mention that the veto on the fiscal compact, which the European Scrutiny Committee said was effectively unlawful on the evidence we received, has not been followed up. The Government and the Attorney-General are clearly of the view that the agreement on the fiscal compact between the 25 was unlawful, but in reality nothing has been done. We have just had a reply from the Government to our report on the question, and on which we held an inquiry, but in no way do they continue to do anything to put to the test the illegality that lies at the heart of the fiscal compact. We are therefore still in the position whereby the Government regard the fiscal compact of the 25 as being a matter of irregularity, but they do not do anything about it.

That is a dangerous situation, and it has gone beyond that—to the fiscal union itself being promoted and advocated by the Government. That will make things even worse, with an even deeper black hole, as I said on television yesterday. The banking union proposals, which are also now being pressed upon us, will come to fruition around the time of the summit on 28 June, and I fear that we are being taken down an extremely dangerous route.

The market abuse directive before us is one example of that tendency to legislate continuously on financial services matters, and my hon. Friend the Member for North East Somerset is quite right that we could legislate for ourselves on them. Bad markets, as I have said in articles I have written in the past, are bad business, and we have at our disposal in this Parliament every means to pass legislation on our own account, without necessarily or by any means having to leave it to the European Union. I would be going beyond the remit of this

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debate if I went into that in any further detail, but I repudiate the idea that we cannot legislate for ourselves on such matters.

I am by no means convinced that the Government intend to make it entirely clear whether or not we will opt in, and that is the problem with the opt-in. I think my hon. Friend is of the opinion that the Government have decided that we will not. I am not sure, but I thought he said that.

Jacob Rees-Mogg: I am grateful to my hon. Friend for giving way. No, that is not what I think. I think that the Government have not opted in, technically, at the moment, but hope to do so in future, and I think that will be a great mistake.

Mr Cash: In that case we are, as so often, ad idem and in agreement, and I am glad to hear that confirmation from my hon. Friend.

This whole business has one way or another been developing over the past 12 years—and before. It has been before the European Scrutiny Committee, and we have recommended it for debate, but it has been overtaken by further developments, particularly since the financial crash, which we are now in. I am extremely doubtful about whether market abuse in itself—important as the subject matter is, and something that needs to be dealt with—is in any way a contributor to the financial mess that the European Union is in.

We are in an economic crisis, we are in a black hole, and we should have a convention at which all those matters, including directives of this kind, are put before the member states with their cards on the table. We should say unequivocally that we want a different kind of Europe and put it to them, and the negotiating position that we adopt, those red lines, should then be put to the British people. We should have a referendum on those matters to make it absolutely clear that the direction of this over-legislated, over-burdensome European jurisdiction is doing no good whatsoever to the free markets—

Madam Deputy Speaker (Dawn Primarolo): Order. The hon. Gentleman took some time to set his intended comments in context, which I allowed, but I now require him to address the business before us. We do not need any more general scene-setting on his attitudes towards the European Union, so perhaps he could come back to the business before the House.

Mr Cash: I was referring to opt-ins, which are very much matters before us at this juncture. I am saying that—

Madam Deputy Speaker: Order. It is not for the hon. Gentleman to disagree with me. He thought that he was covering the subject by making general points about opt-ins, but I would like him now to refer to the documents before the House. He has been speaking for some time, and he should bring the attention of the House to his points on these documents.

Mr Cash: Well, to put it simply, the Committee is concerned that the Government might opt into the draft criminal sanctions directive once it is adopted. There would be a debate on that matter if they decided

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to do so. I do not think that we should opt in. That matter is part of the broader landscape and specific issues that are before the House.

The question of what the draft directive means by the word “intentionally” in relation to market abuse raises some very important legal issues. Then there is the question of whether the draft directive would apply automatically if there were proof of intent or whether there would be discretion to apply an administrative penalty rather than a criminal one. Those are all matters on which we could legislate on our own account if we wished to do so. I make no apology for repeating that point.

A further point concerns the practical application of the proposed new definition of “inside information”, which involves the whole issue of insider dealing. The trouble is—I say this with respect to Madam Deputy Speaker—that definitions in relation to European legislation raise the question of how this matter will be adjudicated on by the European Court of Justice. We have our own means and opportunities to pass legislation in this House that will define these questions.

Jacob Rees-Mogg: My hon. Friend has come to the absolute crux of the matter. Once we opt into something, it is then justiciable by the European Justice of Justice. That brings the ECJ into a role regarding our criminal law, and that is a very substantial step for the Government to be taking.

Mr Cash: I am deeply grateful for the support of my hon. Friend, who is also a member of the European Scrutiny Committee and who has very considerable expertise in his own right. He has developed an acute sense of British and United Kingdom interests in relation to matters of great importance to the City of London.

A further point is that there is no useful recital in the directive, as there normally would be, to indicate the parameters of the draft regulations. We are deeply concerned about that. There is no certainty that we will opt in, but that does not alter the fact that there is grave concern that we will eventually end up being told that we will do so. If that is what happens, I, for one, will undoubtedly vote against it.

The directive aims to prevent insider dealing and the misuse of financially sensitive market information in the financial markets. That cannot be separated from the broader landscape of the manner in which the European Union is interfering in matters in the United Kingdom that affect the City of London. The City of London represents some 20% of our gross domestic product. I entirely take on board the point made by my hon. Friend the Member for North East Somerset that we are at the top of the league in global financial market activity. I believe that a serious attempt is being made by other members of the European Union—with Frankfurt at No. 13—to move further up the positions. That will be done partly through regulatory collusion and the use of qualified majority voting, as Professor Roland Vaubel has indicated in his general concerns about the manner in which qualified majority voting and directives are dealt with.

The intervention of the financial crisis in 2007 delayed the implementation of the original provisions and prompted a rethink. Whether that rethink is beneficial is another issue. The new EU regulation that will replace the

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original directive, which is proposed alongside the new directive, provides for minimum harmonised standards of enforcement and sanction throughout the community. Although the UK Government are broadly supportive of the measures, there are procedural uncertainties, notably in the problem of aligning the three interlocking legislative measures at the same time. That has led the Government to conclude that the UK should not yet opt into the directive. I am interested to hear whether the Minister has a view on the words “not yet”. I do not think that he will commit himself at this stage, but there will be considerable difficulty and trouble for the City of London if we do opt in.

I do not believe that the directives are in the interests of the United Kingdom. We can legislate on these matters ourselves. There is much talk of fiscal union, banking union, supervisory authorities and the wholesale transfer of our jurisdiction over the City of London, which means so much to our gross domestic product and to our ability to compete internationally. That is being undermined by proposals of this kind, whether or not they are brought into effect.

9.17 pm

Mr Hoban: I will respond briefly to the hon. Member for Nottingham East (Chris Leslie) and to my hon. Friends the Members for Stone (Mr Cash) and for North East Somerset (Jacob Rees-Mogg).

The challenge that we face is that there are three interlocking legislative initiatives: the markets in financial instruments directive, which provides the scope of markets; the market abuse regulation, which looks at broadening the scope and is intimately linked with MiFID; and the criminal sanctions directive. Because the UK has a world-leading regime on market abuse, has historically taken a tough line and has a range of sanctions in place that few countries in the European Union can match, we are shaping the debate in this area and playing a major role in getting it right. We are trying to ensure that we maintain the high standards that the Financial Services Authority has in its investigatory powers and its sanctions.

The progress on these matters is not as quick as we would like, but that is partly because there are three interlocking initiatives. It is not quite the case that one moves at the speed of the slowest ship in the convoy on these things, but there is a challenge. The hon. Member for Nottingham East said that the matter is being passed across to the Cypriot presidency. A whole raft of things are being passed across to the Cypriot presidency. There is nothing new in stuff passing from one presidency to another. [Interruption.] The hon. Member for Nottingham East asks from a sedentary position when we will get some movement. Discussions on MiFID are proceeding and it is one of the priorities of the Cypriot presidency. That will perhaps form the keystone and get the rest of it happening.

We are reserving our position on the opt-in. It is vital to London’s continued success as the world’s leading financial centre that we have the right measures in place on market abuse. That is why we have not opted in.

Jacob Rees-Mogg: Will the Minister give way?

Mr Hoban: Very briefly.

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Jacob Rees-Mogg: I am extremely grateful to the Minister. I have just one question. What advantage is there to opting in if the rest of Europe is going to do it anyway and we already have something better in place?

Mr Hoban: We have an interest in ensuring that criminal sanctions are applied across Europe if we think the directive is appropriate, because shares and instruments that are traded within our borders can be affected by market manipulation outside our borders. It is therefore important that we have a proper regime in place, but let us leave the decision whether to opt in until the three interlocking pieces that I mentioned come closer together. Then I am sure the European Scrutiny Committee will bring us back to the topic once again.

Question put and agreed to.


That this House takes note of European Union Documents No. 16010/11 and Addenda 1 and 2, relating to a Draft Regulation on insider dealing and market manipulation (market abuse), No. 16000/11 and Addenda 1 and 2, relating to the Draft Directive on criminal sanctions for insider dealing and market manipulation, and No. 8253/12, relating to the European Central Bank Opinion on market abuse legislation; recognises that an efficient financial market that aids economic growth requires market integrity and public confidence; welcomes the UK’s leading role in combating market abuse; and supports the Government’s decision not to opt-in to the Criminal Sanctions Directive until it is clear that related provisions within the Markets in Financial Instruments Directive Review and the Market Abuse Regulation are further progressed in order to enable the Government to evaluate the implications for the UK, and ensure high standards in tackling market abuse are maintained.

Business without Debate

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Infrastructure Planning

That the draft Infrastructure Planning (Waste Water Transfer and Storage) Order 2012, which was laid before this House on 26 March 2012, in the previous Session of Parliament, be approved.—(Greg Hands.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

European External Action Service

That this House takes note of an unnumbered Report by the High Representative for Foreign Affairs and Security Policy to the European Parliament, the Council and the Commission, deposited on 4 January 2012 by the Foreign and Commonwealth Office, relating to the European External Action Service; and supports the Government’s policy of engaging actively with the European External Action Service to encourage the EU to make the best use of its collective weight in the world where the Member States of the EU agree to act together, and thus to complement national diplomatic efforts to promote British and European prosperity, security and values.—(Greg Hands.)

Question agreed to.

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Development of Greenfield Land (Irchester, Northamptonshire)

9.20 pm

Mr Peter Bone (Wellingborough) (Con): I rise to present a petition signed by 2,012 people from the village of Irchester—half its male population. It concerns development outside the village boundary to which all three political parties were opposed before the last local elections. The leading signatories are Mr Chris Stening, Mr Tony Skipper and Mr Richard Webb.

The petition states:

The Humble Petition of residents of Irchester, Wellingborough, Northamptonshire and the surrounding areas,

Sheweth, that any proposed residential development on Green Field sites, outside the village boundary policy line, would put a great strain on Irchester’s infrastructure and have a huge damaging impact on the local environment.

Wherefore your Petitioners pray that your Honourable House requests the Secretary of State for Communities and Local Government to urge the Northamptonshire County Council, the Borough Council of Wellingborough and the Parish Council of Irchester to ensure that no such development takes place.

And your Petitioners, as in duty bound, will ever pray, etc.


Change of School Name (Hemmingwell, Northamptonshire)

9.22 pm

Mr Peter Bone (Wellingborough) (Con): I have a petition from a grass-roots organisation that has grown up, concerning the change of name of an important school in my area. Its leading signatories are Emma Davies, Serena James and Julie Burgess.

The petition states:

The Humble Petition of residents of Hemmingwell, Wellingborough, Northamptonshire and the surrounding areas,

Sheweth, that the proposed change of name of the Oakway schools in Hemmingwell and the additional cost in changing the school uniform are both unnecessary and costly and that the schools in Oakway are well established and the name is well known.

Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Education to urge the Northamptonshire County Council and the Board of Governors at the Oakway schools to work together to ensure that any merged school will be named Oakway Primary School

And your Petitioners, as in duty bound, will ever pray, etc.


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Access to Water (Chillerton and Gatcombe)

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

9.23 pm

Mr Andrew Turner (Isle of Wight) (Con): I asked for this debate to highlight how Southern Water is treating residents of Gatcombe and Chillerton, two of the many delightful villages in my beautiful constituency. I also want to draw attention to the lack of any affordable route to get the dispute that exists with a monopoly supplier considered independently. I have raised those matters with Ministers before, but it seems that they fall down a deep, dark hole somewhere between the Ministry of Justice as a legal issue, the Department for Business, Innovation and Skills as a consumer protection issue, and the Department for Environment, Food and Rural Affairs, which is responsible for the supply of water. My right hon. Friend the Minister may have drawn the short straw, but I am particularly grateful that he is here to pick up the baton.

Southern Water charges some residents of the villages and surrounding areas of Gatcombe and Chillerton full rates for the supply of their water. However, owing to a number of agreements, most notably the Seely agreement of 1907, many residents in the area are entitled to free water or reduced rates for their supply. They pay full rates for sewage and waste water disposal—that is not in dispute.

The 1907 agreement was made between Sir Charles Seely and Shanklin urban district council. The Seelys are an old and distinguished family. Sir Charles was a Liberal Unionist and then Liberal MP for Nottingham, and his second son, Jack, was the Member of Parliament for the Isle of Wight from 1900 until 1906, and again from 1923 to 1924. It is said that he was in South Africa fighting in the Boer war when he received a telegram from his mother telling him he had been elected. He sent a telegram back asking, “Which party?” In fact, he served as both a Conservative and a Liberal MP. It is tempting to think that he would be comfortable with the coalition Government we have today, but all hon. Members know that the Liberals were a very different proposition from today’s Liberal Democrats.

The 1907 Seely agreement permitted Shanklin urban district council to install and maintain waterworks on privately owned land in Chillerton. In return, villagers living on that land were to receive a water supply either free or at a preferential rate, depending on where they lived. The arrangement was to continue for 999 years.

Such a clause would be typical of the Seelys. They were a philanthropic family who did many good works for the island and islanders. Southern Water is the successor in title to that agreement and bound by its terms—or at least it should be. Southern Water claims that the 1907 agreement has “run its course” and that people who live on that land today are not entitled to any discount on their water supply. In fact, some properties currently receive free water, some pay a reduced rate and others get no reduction at all. There appears to be no rhyme or reason as to who pays what.

It is clear that Southern Water is not behaving in a fair and consistent way. It has even asked my constituents for details of which of their neighbours are getting

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discounted water so it can remove the benefit. Needless to say, my constituents have not responded to such requests for information. Amazingly, Southern Water appears not even to know to whom it is giving discounts.

This issue does not affect thousands of people—there are only 352 electors, and not all of them are affected—but over the years a number of my constituents have tried to sort out the problem, including John and Adrienne Horne and George Nightingale, who have kept me up to date with what is happening. The parish council and county council have tried to help without success. I have written to Southern Water’s chief executive. Our most recent exchange was in March this year. It was unproductive.

Southern Water says that any financial loss to householders has long since expired, but seems not to understand that the benefit was always intended for the residents whether or not they suffered loss. It says that costs have gone up, that water usage has increased, and that water from the area may not meet current water quality standards. Finally, it says it would not enter into such an arrangement these days, and that it would instead make a one-off compensation payment to the landowner. All those arguments have been made before, but my constituents have received legal advice saying that none of it affects their rights as residents and Southern Water’s obligations to them.

As I said, my constituents have taken legal advice, including counsel’s opinion, all of which confirms their view that Southern Water is bound by the agreement, but all this has been to no avail, and we now seem to have reached a stalemate. Southern Water says that it is interpreting the law in a particular way, and that is that—if it says that a 999-year lease lasts for only 100 years, that, as far as it is concerned, is the end of the story.

As far as I can see, there is little basis on which Southern Water can legitimately argue that this legally binding 999-year agreement has no force in 2012 or beyond, particularly given that residents in some of the newer properties were given reduced rates on their water charges, because of the Seely agreement, as recently as 2008. Southern Water has claimed in correspondence that any benefit should have ceased many years ago.

The Seely land was given at a peppercorn price in 1907 in return for the long-term benefit to villagers, yet Southern Water sold some of it in 2004 for £50,000—houses have since been built on it—adding insult to injury. The Minister knows that Southern Water is a monopoly supplier and that my constituents cannot simply go elsewhere to get water. Ofwat, which regulates the market, states that consumers treated unfairly by water companies must go through the company’s complaints procedure. Afterwards, they have the right to complain to the independent Consumer Council for Water, which is a statutory body that should represent consumers’ interests in dealings with water companies, but the council has refused to get involved, saying it is a legal matter.

It seems that the only way my constituents can get proper consideration of their case is by taking Southern Water to court, but that would cost many thousands of pounds and is simply not feasible. That surely cannot be right. It has been suggested that residents should not pay the water rates that are not due, but Gatcombe and

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Chillerton residents are a sensible group of people and are concerned that such a course of action might have an adverse effect on their credit records.

We are left in the position where Southern Water, a financial giant of a company with a turnover of almost £650 million, is riding roughshod over my constituents. It realises that there is no realistic prospect of “the little people” taking it to court and that the regulator will not get involved, so it is applying the law as it wishes it to be applied—and tough luck to anyone who disagrees.

In short, there seems to be no way in which my constituents’ concerns can be examined independently without recourse to the courts, yet Sir Charles Seely knew, more than 100 years ago, that it was necessary to provide “the little people” with a means of settling disputes. The Seely agreement makes provision for independent arbitration of any dispute, but Southern Water is simply not interested. Sir Charles would be outraged, and so am I.

Taking into account that this is a regulated industry, I hope the Minister can help me to find a way forward that will ensure that the residents of Gatcombe and Chillerton get their legal rights. We need to find a way of getting these agreements examined and, if appropriate, enforced consistently and fairly. Furthermore, Southern Water must be made to deal properly with the residents of Gatcombe and Chillerton.

Finally, I would like to thank the Minister very much for being here to respond to this debate. I wrote only recently to his colleague the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), inviting him to come to the Isle of Wight for a number of reasons, and this was one of them.

9.34 pm

The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice): Let me start by congratulating my hon. Friend the Member for Isle of Wight (Mr Turner) on securing this debate and, as one who has known him for many years would expect, on the considered way in which he has made his points. It is probably as much a surprise to him as it is to me that I am replying to the debate, rather than the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), who deals with such issues in the Department. Unfortunately he is unwell this evening, and I volunteered to respond to the debate in his stead. I hope that my hon. Friend the Member for Isle of Wight will understand, therefore, that my depth of knowledge of the subject is a little more limited than that of my hon. Friend the Under-Secretary, who I have no doubt will respond to his invitation—to which he referred at the end of his speech—as soon as possible.

Clearly this is an issue of great importance. My hon. Friend was kind enough to furnish us with a copy of what he was proposing to say this evening, so that we could prepare for it. Having read through it several times, as well as listening to him just now, I can assure him that I fully understand the concerns that he has expressed, and which I am sure most hon. Members would share, faced with such a constituency case. Although this is an important issue, however, I am now going to have to disappoint my hon. Friend slightly, because as

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my hon. Friend the Under-Secretary said in the letter that he wrote to him on 1 June, this is a legal matter. As the case may end up in court, notwithstanding my hon. Friend’s comments, I have been strongly advised, as I am sure sometimes you are on different issues, Mr Speaker, not to say anything that could be deemed to be of use to one side or the other in such a hearing, tempting, as I can assure him, though it is for me, as he will know—sometimes I am renowned for saying what I think, rather than what I have been told I should say.

My hon. Friend also referred to the role of the regulator, Ofwat. As I think he knows, the regulator’s role is to regulate prices, so that companies can charge their customers as a whole, based on that regulation. The regulator can cap the total revenue that companies can collect from their customers, and set rules to ensure that customers are charged fairly. The regulator plays an important role in ensuring that we have resilient water resources, balancing the need for investment to maintain and improve water and sewerage infrastructure to meet water quality and environmental standards with the need to keep prices low for customers. However, as the subject of this debate centres on a legal agreement—which, as I have said, may end up in the courts—I am afraid that I am unable to comment, and I have to confirm that Ofwat does not have a role in the dispute.

Nevertheless, if my hon. Friend will permit me, I would like to spend just a moment on wider water issues, some aspects of which are relevant to this debate. There has been a lot of discussion in the country over the past two or three months, with the initial drought and then the rain over the past 10 weeks, which has brought much needed relief. However, these events demonstrate to everybody in the country the need to take action to secure sustainable water supplies, now and in the future. That action was set out in the Government’s water White Paper, which we published last year. It described a vision for future water management in which the water sector is resilient, in which water companies are more efficient and customer-focused, and in which water is valued as a precious and finite resource. The White Paper also described the actions to be taken by all of us—the water industry, businesses and agriculture, the Government, and families in their homes and gardens. The White Paper sets out the Government’s long-term vision for the water industry and the need for reforming the abstraction and competition regimes. We will also introduce a draft water Bill before the summer recess.

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My hon. Friend referred to the fact that his constituents had nowhere else to go for their water. I am sure that he will therefore welcome that part of the water Bill that will increase resilience by increasing competition for customers and stimulating a market for new water resources, precisely to address the issue of customers having no alternative. Upstream competition should encourage existing water resources to be used more efficiently, reducing the threat of drought and requiring less water to be abstracted from our rivers and boreholes in water-scarce areas.

I know that the action we are taking to ensure that our water resources remain resilient and sustainable will be close to my hon. Friend’s heart, and to those of other hon. Members. The White Paper described the things that we can all do to use water more sustainably, whatever we are paying for it. Families can use less water in their gardens by installing a water butt, by using grey water and through other methods. They can also save water, and money, in the home by fitting water-efficient devices such as dual flushes and aerated shower heads, and by repairing dripping taps. I am delighted that the Isle of Wight is leading the way on sustainability. Having strong family connections with the Isle of Wight, I am personally enthused by that fact.

Without wishing to spin this matter out any longer than I or my hon. Friend might wish, I have to reiterate that because the issues that he has quite properly raised and publicised relate to a legal matter, it would not be appropriate for the Department for Environment, Food and Rural Affairs to comment officially or for Ofwat to intervene. In the last part of his speech, however, he said that the Seely agreement made provision for the independent arbitration of any dispute. He also, rightly, said that the prospect of the cost of legal action was rearing its head for the little people. If such a clause exists in the agreement to enable the independent arbitration of the dispute, it therefore seems to me that that would be a sensible and logical step for both sides to take. Speaking personally, I would strongly urge both sides to use that facility for independent arbitration, which should provide a way to resolve this matter without further time-wasting or further cost to either side.

Question put and agreed to.

9.42 pm

House adjourned.